BUILD-TO-SUIT NET LEASE
BETWEEN
OPUS SOUTH CORPORATION
AS LANDLORD
AND
ADS ALLIANCE DATA SYSTEMS, INC.,
AS TENANT
JANUARY ___, 1998
BUILD-TO-SUIT NET LEASE
THIS BUILD-TO-SUIT NET LEASE ("LEASE") is entered into as of January __,
1998 by and between the Landlord and Tenant identified in SECTION 1.1.
1. DEFINITIONS AND EXHIBITS
1.1 DEFINITIONS. In this Lease, the following defined terms have the
meanings set forth for them below or in the section of this Lease indicated
below:
"ADA" means the Americans with Disabilities Act, as amended from time to
time.
"ADDITIONAL RENT" means all amounts required to be paid by Tenant
under this Lease in addition to Basic Rent including, without limitation,
Taxes and insurance premiums.
"AFFILIATES" means, with respect to any party, any entities or
individuals that control, are controlled by or are under common control
with such party, together with its and their respective partners,
venturers, directors, officers, shareholders, trustees, trustors,
beneficiaries, agents, employees and spouses.
"ALLOWANCE" has the meaning set forth in SECTION 3.10.
"APPROVED EXPANSION BASE BUILDING PLANS" has the meaning set forth
in SECTION 18(b).
"APPROVED EXPANSION COSTS" has the meaning set forth in SECTION
18(d).
"APPROVED EXPANSION LEASEHOLD IMPROVEMENTS PLANS" has the meaning
set forth in SECTION 18(c).
"APPROVED EXPANSION RENTABLE SQUARE FEET" has the meaning set
forth in SECTION 18(f).
"APPROVED ORIGINAL BASE BUILDING PLANS" has the meaning set forth
in SECTION 3.2.
"APPROVED ORIGINAL LEASEHOLD IMPROVEMENTS PLANS" has the meaning
set forth in SECTION 3.3.
"APPROVED ORIGINAL RENTABLE SQUARE FEET" has the meaning set forth
in SECTION 3.6.
"APPROVED TENANT'S COSTS" has the meaning set forth in SECTION
3.4.
"BASIC RENT" means the Original Basic Rent and, if applicable, the
Expansion Basic Rent.
"BUILDING" means the Original Building and the Expansion Building.
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"CORE BUILDING SYSTEMS" means the items delineated on EXHIBIT K.
"DEADLINE EXTENSION" has the meaning set forth in SECTION 3.2.
"ENVIRONMENTAL LAWS" means the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901 ET SEQ., the Comprehensive Environmental
Response, Compensation and Liability Act, U.S.C. Section 9601 ET SEQ.
(including the so-called "Superfund" amendments thereto), any other
applicable Laws governing or pertaining to any hazardous substances,
hazardous wastes, chemicals or other materials, including, without
limitation, asbestos, polychlorinated biphenyls, radon, petroleum and any
derivative thereof or any common law theory based on nuisance or strict
liability.
"EVENT OF DEFAULT" has the meaning set forth in SECTION 15.2.
"EXPANSION BASE BUILDING" has the meaning set forth in SECTION
18(a).
"EXPANSION BASE BUILDING PLANS" has the meaning set forth in
SECTION 18(b).
"EXPANSION BASIC RENT" has the meaning set forth in SECTION
18(j)(II)(B).
"EXPANSION BUILDING" has the meaning set forth in SECTION 18(a).
"EXPANSION CHANGE ORDER" has the meaning set forth in SECTION
18(e).
"EXPANSION COMMENCEMENT DATE" has the meaning set forth in SECTION
18(j)(I).
"EXPANSION COSTS" means the actual amount of those costs described
on EXHIBIT J which Landlord incurs in connection with the construction of
the Expansion Building. Expansion Costs specifically do not include any
acquisition or carrying costs for any portion of the Land, it being
understood that those costs are included in the Original Basic Rent for
the Original Premises. Landlord and Tenant further agree that Expansion
Costs will include (a) the cost of general conditions and insurance, not
to exceed three percent (3%) of the cost of the construction work,
excluding soft costs, (b) overhead, not to exceed three percent (3%) of
the cost of the construction work, excluding soft costs and the general
conditions and insurance and (c) a general contractor's fee payable to
Landlord in an amount equal to five percent (5%) of the construction
work, excluding soft costs and overhead.
"EXPANSION LEASEHOLD IMPROVEMENTS" has the meaning set forth in
SECTION 18(a).
"EXPANSION LEASEHOLD IMPROVEMENTS PLANS" has the meaning set forth
in SECTION 18(c).
"EXPANSION PUNCH LIST" has the meaning set forth in SECTION 18(h).
"FAIR MARKET RENT" has the meaning set forth in SECTION 2.5.
"FINAL COMPLETION" means that all Landlord's Original Work or
Landlord's Expansion Work, as the case may be, has been fully and finally
completed.
"FINANCED AMOUNT" has the meaning set forth in SECTION 3.10.
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"FIRST RENEWAL TERM" has the meaning set forth in SECTION 2.5.
"FIRST STAGE COMPLETION" means that Landlord's Original Work on
the first floor of the Original Building has been Substantially
Completed and the first floor of the Original Building is ready for and
can be occupied by Tenant.
"FORCE MAJEURE" means any delays due to strikes, riots, acts of
God, war, or any other causes of any kind whatsoever which are beyond the
control of Landlord or Tenant at any time during the term of this Lease,
it being agreed that the inability to perform financial obligations
(including, without limitation, paying the Basic Rent and other charges
due under this Lease), shortages of labor or materials, and governmental
laws, rules or restrictions shall not constitute events beyond the
reasonable control of Landlord or Tenant.
"GUARANTOR" means Alliance Data Systems Corporation, a Delaware
corporation, but the term "GUARANTOR" means any then-existing guarantor
of Tenant's obligations under this Lease pursuant to a guaranty agreement
substantially similar to the form attached to this Lease as EXHIBIT G or
another form reasonably acceptable to Landlord.
"HAZARDOUS SUBSTANCE" means any substance, chemical or material
declared to be, or regulated as, hazardous or toxic under any
Environmental Law or the presence of which may give rise to liability
under any Environmental Law.
"IMPROVEMENTS" means the Building, the Leasehold Improvements, and
any other structures, pavement, landscaping, lighting fixtures or other
improvements now or later constructed or installed upon the Land.
"INTEREST RATE" means the prime interest rate (as published from
time to time by THE WALL STREET JOURNAL, and with any changes in such
rate to be effective on the date such change is published) plus 5% per
annum, but if such rate exceeds the maximum interest rate permitted by
law, such rate will be reduced to the highest rate allowed by law under
the circumstances.
"LAND" means the real property located on Waterview Parkway in the
City of Dallas, Collin County, Texas (including all of its appurtenant
rights and easements) and legally described on EXHIBIT A.
"LANDLORD" means Opus South Corporation, a Florida corporation.
"LANDLORD'S EXPANSION WORK" has the meaning set forth in SECTION
18(a).
"LANDLORD'S NOTICE ADDRESS" means:
00000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000-0000
Telecopy: (000) 000-0000
with a copy to:
700 Opus Center
0000 Xxxx Xxxx Xxxx
0
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Legal Department
Telecopy: (000) 000-0000
"LANDLORD'S ORIGINAL WORK" means the construction and installation
of the Original Base Building and the Original Leasehold Improvements.
"LANDLORD'S RENT ADDRESS" means:
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
"LANDLORD'S REPRESENTATIVE" means Xxxxx Xxxxxx.
"LAWS" means any and all present or future federal, state or local
laws, statutes, ordinances, rules, regulations or orders of any and all
governmental or quasi-governmental authorities having jurisdiction.
"LEASEHOLD IMPROVEMENTS" means the Original Leasehold Improvements
and the Expansion Leasehold Improvements.
"ORIGINAL BASE BUILDING" means those portions of the Original
Building and the associated site Improvements on the Land (such as
driveways, parking areas, landscaping and exterior lighting) that are
specified on EXHIBIT B and are identified with an asterisk (*) on EXHIBIT
C under the column "Base Building Core & Shell".
"ORIGINAL BASE BUILDING PLANS" has the meaning set forth in
SECTION 3.2.
"ORIGINAL BASIC RENT" means the rent payable according to SECTION
4.1.
"ORIGINAL BUILDING" means the building containing approximately
114,419 rentable square feet to be constructed by Landlord for Tenant
upon the Land according to SECTION 3 and includes both the Original Base
Building and the Original Leasehold Improvements.
"ORIGINAL CHANGE ORDER" has the meaning set forth in SECTION 3.5.
"ORIGINAL COMMENCEMENT DATE" means the first day of the Term,
which will be the Third Stage Completion Date, unless the Original
Commencement Date is extended according to SECTION 3.6.
"ORIGINAL LEASEHOLD IMPROVEMENTS" means all leasehold improvements
and installations, in addition to the Original Base Building, that are to
be constructed or installed by Landlord for Tenant according to
SECTION 3, and which are identified with an asterisk (*) on EXHIBIT C
under the column "Tenant Improvement".
"ORIGINAL LEASEHOLD IMPROVEMENTS PLANS" means construction plans
and specifications for the Original Leasehold Improvements.
"ORIGINAL PREMISES" means the Land and the Original Building.
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"ORIGINAL PUNCH LIST" has the meaning set forth in SECTION 3.8.
"ORIGINAL TERM" means the period between the Original Commencement
Date and the Expiration Date.
"PERMITTED EXPANSION FORCE MAJEURE DELAYS" has the meaning set
forth in SECTION 18(g).
" PERMITTED ORIGINAL FORCE MAJEURE DELAYS" has the meaning set
forth in SECTION 3.7.
"PLAN APPROVAL DELAY" has the meaning set forth in SECTION 3.2 AND
SECTION 3.3.
"PREMISES" means the Land and all then-existing Improvements.
"PROJECTED EXPANSION COMPLETION DATE" has the meaning set forth in
SECTION 18(f).
"RELEASE CONDITIONS" means all of the following conditions have
been met: (a) the assignee of this Lease or sublessee of all of the
Premises has a net worth (excluding goodwill) of at least $75 million,
(b) if such assignee or sublessee is a subsidiary of any entity, Tenant
has obtained and delivered to Landlord a guaranty by such parent entity
of the assignee or sublessee's obligations under this Lease, and (c) in
the event Tenant subleases the entire Premises (it being understood and
agreed that this condition does not apply in the case of an assignment),
Tenant has obtained and delivered to Landlord a written agreement from
such sublessee assuming the obligations of Tenant under this Lease from
and after the effective date of such sublease.
"RENEWAL NOTICE" has the meaning set forth in SECTION 2.5.
"RENEWAL NOTICE DATE" has the meaning set forth in SECTION 2.5.
"RENEWAL TERM" has the meaning set forth in SECTION 2.5.
"RENT" means Basic Rent, Expansion Basic Rent (if applicable), and
all Additional Rent.
"RENTABLE SQUARE FEET" means the standard for "Rentable Area" as
promulgated by the Building Owners and Managers Association International
and approved by the American National Standards Institute, Inc. on June
7, 1996 (reference number ANSI/BOMA Z65.1-1996).
"REPORT" has the meaning set forth in SECTION 6.3(c).
"SECOND RENEWAL TERM" has the meaning set forth in SECTION 2.5.
"SECOND STAGE COMPLETION" means that the Landlord's Original Work
on the first floor and the second floor of the Original Building has
been Substantially Completed and the first floor and second floor of the
Original Building are ready for occupancy and can be occupied by Tenant.
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"SUBSTANTIALLY COMPLETED" or "SUBSTANTIAL COMPLETION" or
"SUBSTANTIALLY COMPLETE" means that the applicable portion of the
Premises is broom clean, free of construction tools and materials, and
Landlord's Original Work has been completed according to the Approved
Original Base Building Plans and the Approved Original Leasehold
Improvements Plans or Landlord's Expansion Work has been completed
according to the Approved Expansion Base Building Plans and the Approved
Expansion Leasehold Improvements Plans, as the case may be, with only
minor punch list items that will not interfere to more than a minor
extent with Tenant's use and enjoyment of the Premises remaining to be
completed or corrected pursuant to the terms of this Lease; that an
unconditional certificate of occupancy for the applicable portion of the
Premises has been issued (unless the issuance thereof is conditioned upon
any work or installations the responsibility of which is not included
within Landlord's Original Work or Landlord's Expansion Work, as the
case may be) and not suspended or revoked or amended in a manner that
would prevent Tenant from occupying the applicable portion of the
Premises for the purposes for which they were designed; and that all
utilities called for in the Approved Original Base Building Plans or
Approved Expansion Base Building Plans, as the case may be, or the
Approved Original Leasehold Improvements Plans or the Approved Expansion
Leasehold Improvements Plans, as the case may be, are installed and
operable with all hook-up, tap or similar fees paid.
"TAXES" means, subject to the terms of SECTION 5.3 below, all ad
valorem real and personal property taxes and assessments, special or
otherwise, levied upon or with respect to the Premises, the personal
property used in operating the Premises, and the rents and additional
charges payable by Tenant according to this Lease, and imposed by any
taxing authority having jurisdiction; and all taxes, levies and charges
which may be assessed, levied or imposed in replacement of, or in
addition to, all or any part of ad valorem real or personal property
taxes or assessments as revenue sources, and which in whole or in part
are measured or calculated by or based upon the Premises, the leasehold
estate of Landlord or Tenant in and to the Premises, or the rents and
other charges payable by Tenant according to this Lease. Taxes will not
include any net income, franchise, inheritance or similar taxes of
Landlord.
"TAX YEAR" means a 12-month period for which Taxes are assessed.
"TENANT" means ADS Alliance Data Systems, Inc., a Delaware
corporation.
"TENANT'S COST" means the total cost of preparing the Original
Leasehold Improvements Plans, obtaining all necessary permits for, and
constructing and installing, the Original Leasehold Improvements in the
Original Base Building, and providing any required services during
construction of the Original Leasehold Improvements (such as electricity
and other utilities and refuse removal). Landlord and Tenant agree that
Tenant's Cost will include (a) the cost of general conditions and
insurance, not to exceed three percent (3%) of the cost of the
construction work, excluding soft costs, (b) overhead, not to exceed
three percent (3%) of the cost of the construction work, excluding soft
costs and the general conditions and insurance and (c) a general
contractor's fee payable to Landlord in an amount equal to five percent
(5%) of the construction work, excluding soft costs and overhead.
"TENANT'S COST PROPOSAL" has the meaning set forth in SECTION 3.9.
"TENANT'S EXPANSION COST PROPOSAL" has the meaning set forth in
SECTION 18(d).
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"TENANT ORIGINAL DELAY" has the meaning set forth in SECTION 3.7.
"TENANT EXPANSION DELAY" has the meaning set forth in SECTION
18(g).
"TENANT'S NOTICE ADDRESS" means,
for notices given before the Original Commencement
Date:
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Telecopy: (000) 000-0000
with a copy at the same time to:
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
and
Xxxxxxx Xxxx Xxxx
Xxxx & Associates
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
and for notices given after the Original
Commencement Date:
Tenant's address at the Premises, with a copy at the
same time to:
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: General Counsel
and
Xxxxxxx Xxxx Xxxx
Xxxx & Associates
0000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
"TENANT'S REPRESENTATIVE" means Xxxxxx X. Xxxxxx.
"TERM" means the duration of this Lease, which will be
approximately 11 years beginning on the Original Commencement Date and
ending on the "EXPIRATION DATE" (as defined below), unless terminated
earlier or extended further as provided in this Lease. The "EXPIRATION
DATE" means (i) if the Original Commencement Date is the first day of a
month, the 11-year anniversary of the day immediately preceding the
Original Commencement
7
Date; or (ii) if the Original Commencement Date is not the first day
of a month, the 11-year anniversary of the last day of the month in
which the Original Commencement Date occurs. The Term will also
include any exercised Renewal Term.
"THIRD STAGE COMPLETION" means that all of Landlord's Original
Work in the Original Building is Substantially Completed and all of the
Original Building is ready for and can be occupied by Tenant.
1.2 EXHIBITS. The Exhibits listed below are attached to and
incorporated in this Lease. In the event of any inconsistency between such
Exhibits and the terms and provisions of this Lease, the terms and provisions of
the Exhibits will control, but the terms of this Lease may specifically modify
the exhibits. The Exhibits to this Lease are:
Exhibit A - Legal Description of the Land
Exhibit B - Base Building Specifications (including
Building Elevation, Site Plan, Floor Plan and
Building Specifications)
Exhibit C - Base Building/Tenant Matrix
Exhibit D - Matters Affecting Landlord's Title
Exhibit E - Memorandum of Lease
Exhibit F - NDA
Exhibit G - Lease Guaranty
Exhibit H - 2-Story Plan
Exhibit I - 3-Story Plan
Exhibit J - Expansion Cost Summary
Exhibit K - Core Building Systems
2. GRANT OF LEASE; RENEWAL OPTIONS
2.1 DEMISE. Subject to the terms, covenants, conditions and
provisions of this Lease, Landlord leases to Tenant and Tenant leases from
Landlord the Premises for the Term.
2.2 QUIET ENJOYMENT. Landlord covenants that Tenant, upon paying the
Basic Rent and Additional Rent and performing all other obligations of Tenant
under this Lease, will have quiet and peaceful possession of the Premises during
the Term, and such possession will not be disturbed by Landlord or anyone
claiming by, through or under Landlord. Upon Landlord's acquisition of the
Land, Landlord will own the Land in fee simple, subject only to the matters set
forth on EXHIBIT D. Landlord hereby represents and warrants that the execution
of this Lease, the construction of the Original Building, and the construction
of the Expansion Building will not violate the terms of any of the items
described on EXHIBIT D and that Landlord has received or will receive all
approvals necessary for the construction of the Original Building and the
Expansion Building.
2.3 LANDLORD AND TENANT COVENANTS. Landlord covenants to observe and
perform all of the terms, covenants and conditions applicable to Landlord in
this Lease. Tenant covenants to pay the Rent when due, and to observe and
perform all of the terms, covenants and conditions applicable to Tenant in this
Lease.
2.4 MEMORANDUM OF LEASE. Promptly after execution of this Lease,
Landlord and Tenant will execute and acknowledge a recordable memorandum of
lease on the form attached as EXHIBIT E, which memorandum must be recorded
immediately after the deed into Landlord (i.e., with no intervening document).
After the occurrence of the Original Commencement Date, either party will, upon
the other's request, execute and acknowledge a recordable memorandum setting
forth
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the date on which the Original Commencement Date occurred and the date on
which the Expiration Date is scheduled to occur.
2.5 TENANT'S RENEWAL OPTIONS. Subject to the terms and provisions of
this SECTION 2.5, Tenant, at its option, may extend the Original Term of this
Lease for one five-year period at the end of the Original Term (the "FIRST
RENEWAL TERM") and, if Tenant exercises its option with respect to the First
Renewal Term, for an additional five-year period at the end of the First Renewal
Term (the "SECOND RENEWAL TERM"). The First Renewal Term and the Second Renewal
Term are individually referred to herein as a "RENEWAL TERM." To exercise each
such option, Tenant must deliver written notice of the exercise thereof (a
"RENEWAL NOTICE") to Landlord no later than nine months prior to the expiration
of (i) the Original Term, in the case of Tenant's option with respect to the
First Renewal Term, or (ii) the First Renewal Term, in the case of Tenant's
option with respect to the Second Renewal Term. The dates by which Tenant is
required to deliver its Renewal Notices will each be referred to hereinafter as
a "RENEWAL NOTICE DATE." If Tenant fails to give its Renewal Notice with
respect to either Renewal Term by the applicable Renewal Notice Date, such
Renewal Notice Date will be extended until the first to occur of (A) the 15th
day after Landlord gives Tenant notice that Tenant has failed to exercise its
option with respect to the subject Renewal Term; or (B) the last day of the
then-current Term. Landlord and Tenant agree that once Tenant has delivered a
Renewal Notice, both parties will be responsible for their respective
obligations under this Lease for the subject Renewal Term, regardless of the
outcome of the Basic Rent determination for such Renewal Term as described
below. During each Renewal Term, all of the terms and provisions of this Lease
will apply, except that after the Second Renewal Term there will be no further
right of renewal, and except that the Basic Rent payable for each month of the
First Renewal Term will be 90% of the "FAIR MARKET RENT" (as defined below), but
in no event less than 100%, or more than 118%, of the monthly Basic Rent payable
during the last year of the initial Term, and the Basic Rent payable for each
month of the Second Renewal Term will be 90% of the Fair Market Rent, but in no
event less than 100%, or more than 118%, of the monthly Basic Rent payable
during the last year of the First Renewal Term. As used herein, "FAIR MARKET
RENT" will mean an amount of rent per month equal to the prevailing monthly rent
then being obtained by landlords of premises comparable to the Land and the Base
Building and the Expansion Base Building, if appropriate (I.E., the Premises,
but excluding the Original Leasehold Improvements, the Expansion Leasehold
Improvements, and any subsequent Improvements made by Tenant) in the Dallas,
Texas metropolitan area (or that such landlords would then be able to obtain)
under leases of premises comparable to the Land and the Base Building and the
Expansion Base Building, if appropriate, for terms comparable to the subject
Renewal Term. Landlord and Tenant will, for a period of 30 days from and after
the subject Renewal Notice Date, meet with each other and negotiate in good
faith to agree upon the then-current Fair Market Rent (using the criteria set
forth above) acceptable to both parties. If the parties are unable to agree
upon the Fair Market Rent during such 30-day period, then, within seven days
after such 30-day period expires, Landlord and Tenant will each appoint a
certified MAI appraiser who has at least five years' full-time commercial
appraisal experience in the Dallas, Texas market. If one party fails to so
appoint an appraiser within such seven-day period, the determination of the Fair
Market Rent by the one appraiser who was timely appointed by the other party
will be binding on both parties. The appraisers will, within 30 days of their
appointment, submit their determinations of the Fair Market Rent to both
parties. If the difference between the two determinations is 10% or less of the
higher appraisal, then the average between the two determinations will be the
Fair Market Rent. If the difference between the two determinations is greater
than 10% of the higher thereof, then within 10 days of the date the second
determination is submitted to the parties, the two appraisers will designate a
third appraiser who must also meet the qualifications described above and,
further, must not have previously acted for either party in any capacity. The
sole responsibility of the third appraiser will be to determine which of the
determinations made by the first two appraisers is more accurate. The third
appraiser will
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have no right to propose a middle ground or any modifications to either of
the prior determinations made by the first appraisers. The third appraiser's
choice will be submitted to the parties within 20 days after his or her
selection. Such determination will bind both parties, and the determination
of the Fair Market Rent made by one of the first two appraisers and selected
by the third appraiser as the more accurate will be the Fair Market Rent.
All appraisers will be instructed, in making their required determinations,
to use the criteria as to the Fair Market Rent set forth above. Each party
will pay the fees and expenses of the appraiser selected by it, and they will
pay equal shares of the fees and expenses of the third appraiser. Tenant
will have no right to extend the Term and a Renewal Notice will be
ineffective if an Event of Default exists at the time such notice is given or
at the commencement of the subject Renewal Term. Any termination of this
Lease terminates all rights under this SECTION 2.5.
3. CONSTRUCTION; DELIVERY AND ACCEPTANCE OF PREMISES
3.1 LANDLORD'S CONSTRUCTION OBLIGATIONS. Subject to and in accordance
with the provisions of this SECTION 3, Landlord will (i) at
Landlord's sole cost and expense, design (consistent with the
terms of EXHIBIT B and EXHIBIT C), construct and install the
Original Base Building on the Land in accordance with the Approved
Original Base Building Plans (as defined below); and (ii) subject
to the provisions of SECTION 3.5, construct and install the
Original Leasehold Improvements in accordance with the Approved
Original Leasehold Improvements Plans (as defined below).
Landlord must perform the Landlord's Original Work in a good and
workmanlike manner, using new materials, and in accordance with
all applicable laws, ordinances, rules, and regulations,
including, without limitation, ADA and all applicable
environmental laws, as interpreted and enforced by the
governmental bodies having jurisdiction thereof at the time of
construction.
3.2 ORIGINAL BASE BUILDING PLANS. On or before January 15, 1998,
Landlord delivered to Tenant preliminary plans and specifications for the Base
Building (the "ORIGINAL BASE BUILDING PLANS"), which plans are described as
follows: Shell Building Plans for Alliance Data Systems - Corporate
Headquarters, Dallas, Texas (dated 1/15/98) and Specifications for Alliance Data
Systems - Corporate Headquarters, Dallas, Texas (dated 1/14/98). Landlord
acknowledges that Tenant responded to such delivery within five (5) business
days. The specifications attached as EXHIBIT B are the Original Base Building
Plans described above and although there are not yet any Approved Original Base
Building Plans, neither have any Plan Approval Delays, Tenant Original Delays,
or Deadline Extensions accrued during the period before lease execution. The
revised preliminary Original Base Building Plans are due from Landlord on
January 29, 1998. Within five (5) business days after Tenant receives such
revised preliminary Original Base Building Plans, Tenant will either approve the
same in writing or notify Landlord in writing of Tenant's objections to the
revised preliminary Original Base Building Plans and how the revised preliminary
Original Base Building Plans must be changed in order to make them acceptable to
Tenant. Each day following the fifth (5th) business day after the revised
preliminary Original Base Building Plans are submitted to Tenant until Tenant
either approves them or delivers a notice of objections to Landlord will be a
day of Tenant Original Delay (as that term is defined in SECTION 3.7 hereof).
Within five (5) business days after Landlord's receipt of Tenant's notice of
objections, Landlord will cause its architect to prepare revised Original Base
Building Plans according to such notice and submit the revised Original Base
Building Plans to Tenant. In any review, Tenant cannot object to any aspect of
the proposed Original Base Building Plans if (i) subject to the next-succeeding
sentence, such objection would require material deviations from the terms of
EXHIBIT B AND EXHIBIT C attached to this Lease, or (ii) such objection was not
included within any of the previous objections made by Tenant to the Original
Base Building Plans, unless the item objected to was not included in any of the
previous
10
versions of the Original Base Building Plans or such item was so included,
but has been affected by a subsequent change to the Original Base Building
Plans. However, it is understood and agreed that Tenant has the right to
select the following items, even if such items are not consistent with the
guidelines detailed in the Base Building Specifications attached as EXHIBIT
B, as long as such items are available to comply with the schedule of
construction of the Original Building: exterior brick, glass, and metal
frames; restroom finishes (including, without limitation, ceramic tile and
toilet partitions); lobby finishes; elevator cab finishes; landscaping; and
common area interior finishes, doors and hardware. Upon submittal to Tenant
of the revised Original Base Building Plans, and upon submittal of any
further revisions, the procedures described above will be repeated until
Landlord and Tenant have reached agreement. Once they have reached
agreement, Landlord must promptly prepare permit-ready Original Base Building
Plans and submit them to Tenant for Tenant's approval. The only grounds upon
which Tenant can object to such permit-ready Original Base Building Plans is
that they materially differ from the final approved preliminary Original Base
Building Plans. Tenant's failure to respond to Landlord's submission within
five (5) business days after Landlord delivers such permit-ready Original
Base Building Plans to Tenant constitutes Tenant's approval of such
permit-ready Original Base Building Plans. The final permit-ready Original
Base Building Plans, as approved by Landlord and Tenant, constitute the
"APPROVED ORIGINAL BASE BUILDING PLANS" under this Lease. Each day following
March 1, 1998, that the Approved Original Base Building Plans have not been
approved by Landlord and Tenant for any reason other than Landlord's failure
to perform or respond as required by this SECTION 3.2 shall constitute a
"PLAN APPROVAL DELAY". Each day that Landlord does not perform or respond as
required by this SECTION 3.2 will extend such March 1, 1998 deadline by one
(1) day and will constitute a day of "DEADLINE EXTENSION."
3.3 LEASEHOLD IMPROVEMENT PLANS. On or before April 6, 1998
(extended by one (1) day for each day of Deadline Extension), Tenant will
cause its architect to prepare and deliver to Landlord preliminary plans and
specifications for the Original Leasehold Improvements (the "ORIGINAL
LEASEHOLD IMPROVEMENTS PLANS"). While these preliminary plans and
specifications are not required to be permit-ready, they must show sufficient
detail concerning all aspects of the Original Leasehold Improvements Plans so
that making them permit-ready is only a matter of incorporating technical
details. Each day following April 6, 1998 (extended by one (1) day for each
day of Deadline Extension), until Tenant delivers the preliminary Original
Leasehold Improvements Plans will be a day of Plan Approval Delay. Within
five (5) business days after receipt of the preliminary Leasehold Improvement
Plans, Landlord will either approve the same in writing or notify Tenant in
writing of Landlord's objections to the preliminary Original Leasehold
Improvements Plans and how the preliminary Original Leasehold Improvements
Plans must be changed in order to make them acceptable to Landlord. Landlord
can only object to the preliminary Original Leasehold Improvements Plans on
the grounds that they would adversely affect the structural integrity of the
Original Base Building or materially modify any portion of the Core Building
Systems and cannot object in any subsequent review to any matter not raised
in a preceding review, unless the item objected to was not included in any of
the previous versions of the Original Leasehold Improvements Plans or such
item was so included, but has been affected by a subsequent change to the
Original Leasehold Improvements Plans. However, under all circumstances,
Tenant has the right to select the following items as they apply to the
Original Leasehold Improvements, but only as long as such items are available
to comply with the schedule of construction of the Original Building:
exterior brick, glass, and metal frames; restroom finishes (including,
without limitation, ceramic tile and toilet partitions); lobby finishes;
elevator cab finishes; landscaping; and common area interior finishes, doors
and hardware. If Landlord fails to respond in the manner set forth above
within five (5) business days after the date Tenant delivers the preliminary
Original Leasehold Improvements Plans to Landlord or objects to the
preliminary Original Leasehold Improvements Plans on any grounds other than
those set forth in this SECTION 3.3, then Landlord will be
11
conclusively deemed to have approved the preliminary Original Leasehold
Improvements Plans. Within five (5) business days after Tenant's receipt of
Landlord's notice of objections (if such objections meet the requirements set
forth above), Tenant will cause its architect to prepare revised Original
Leasehold Improvements Plans according to such notice and submit the revised
Original Leasehold Improvements Plans to Landlord. Upon submittal to
Landlord of the revised Original Leasehold Improvements Plans, and upon
submittal of any further revisions, the procedures described above will be
repeated until Landlord and Tenant have reached agreement. Once they have
reached agreement, Tenant must promptly prepare permit-ready Original
Leasehold Improvements Plans to Landlord for Landlord's approval. The only
grounds upon which Landlord can object to such permit-ready Original
Leasehold Improvements Plans is that they materially differ from the final
approved Original Leasehold Improvements Plans. Landlord's failure to
respond to Tenant's submissions within five (5) business days after Tenant
delivers such permit-ready Original Leasehold Improvements Plans to Landlord
constitutes Landlord's approval of such permit-ready Original Leasehold
Improvements Plans. The permit-ready Original Leasehold Improvements Plans,
as finally approved, are referred to in this Lease as the "APPROVED LEASEHOLD
IMPROVEMENTS PLANS." Each day following April 20, 1998 (extended by one (1)
day for each day of Deadline Extension), that the Approved Original
Leasehold Improvements Plans have not been approved by Landlord and Tenant
for any reason other than Landlord's failure to perform or respond as
required by this SECTION 3.3 shall constitute a Plan Approval Delay. Each
day that Landlord does not perform or respond as required by this SECTION 3.3
will constitute a day of Deadline Extension.
3.4 TENANT'S COST PROPOSAL. At such time as Landlord and Tenant
have approved the Approved Original Leasehold Improvements Plans (and in any
event within fifteen (15) days thereafter), Landlord will (i) obtain at least
three bids for each of the major trades that will be involved in the
construction of the Original Leasehold Improvements (with Landlord agreeing
to solicit and consider bids from subcontractors selected by Tenant), unless
less than three qualified subcontractors exist for a given trade, in which
case Landlord will obtain a bid from all qualified subcontractors of such
trade; (ii) using the lowest qualified bid (which, in order to be qualified,
must fully comply with all bid requirements, including but not limited to any
time requirements specified) from each of the bids so received (unless (a)
Landlord advises Tenant in writing within five (5) business days after the
bids are received that Landlord believes the lowest bidder will be unable to
perform the work upon which it has bid in a timely manner or to the quality
required by Tenant, giving written evidence of its reasons for such belief,
it being understood and agreed that if Landlord fails to so notify Tenant
within such five (5) business day period, Landlord will be deemed to have
waived any objection to any subcontractor, and (b) Tenant has consented to
the use of a bidder other than the lowest bidder, which consent Tenant will
not unreasonably withhold and which consent shall be deemed granted unless
Tenant expressly denies such consent by written notice to Landlord within 3
business days after Landlord's notice of objection to the subcontractor),
prepare a proposed budget for all items to be included in Tenant's Cost
("TENANT'S COST PROPOSAL"); and (iii) submit copies of all bids and the
Tenant's Cost Proposal to Tenant for Tenant's review and approval. Tenant, at
Tenant's option, may either approve the Tenant's Cost Proposal in writing, or
elect to eliminate or revise one or more items of Original Leasehold
Improvements shown on the Original Leasehold Improvements Plans, or request
additional bids so as to reduce the costs shown in the Tenant's Cost
Proposal. Tenant may then approve in writing the reduced Tenant's Cost
Proposal (based on revised Original Leasehold Improvements Plans (which will
be deemed the Approved Original Leasehold Improvements Plans for all purposes
under this Lease) prepared by Tenant's architect or revised bids, as the case
may be). However, each business day following May 1, 1998 (extended by one
(1) day for each day of Deadline Extension) until the day on which Landlord
has received Tenant's written approval of the Tenant's Cost Proposal will be
a day of Plan Approval Delay. The Tenant's Cost Proposal, as finally
approved, is referred to in this Lease as the "APPROVED TENANT'S COSTS."
Each day that Landlord does not perform or respond as required by
12
this SECTION 3.4 will constitute a day of Deadline Extension.
3.5 ORIGINAL CHANGE ORDERS. Tenant's Representative may request
and authorize changes in the Landlord's Original Work as long as such
changes (i) are consistent with the scope of Landlord's Original Work, and
(ii) do not affect the Original Base Building or any portion of the Core
Building Systems. All other changes will be subject to Landlord's prior
written approval, which approval Landlord cannot unreasonably withhold,
delay, or condition. Within five (5) business days after Tenant requests a
change in the Landlord's Original Work and prior to commencing any change,
Landlord will prepare and deliver to Tenant, for Tenant's approval, a change
order ("ORIGINAL CHANGE ORDER") identifying the total cost or savings of such
change, which will include associated architectural, engineering and
construction contractor's fees, and the total time that will be added to or
subtracted from the construction schedule by such change. Once Landlord
delivers an Original Change Order to Tenant for Tenant's approval, Tenant
must either affirmatively approve or disapprove of the Original Change Order
within three (3) business days following Tenant's receipt of the Original
Change Order. In the event Tenant fails to respond within the three (3)
business day period, then each day thereafter that Tenant fails to respond
shall be a Tenant Original Delay. Alternatively, Landlord may deliver to
Tenant, within the same five (5) business day period, an estimate of the time
and costs to be expended in calculating the Original Change Order. In the
event Tenant does not respond or fails to affirmatively authorize Landlord to
proceed on the third (3rd) business day following Tenant's receipt of such
estimate, then it shall be conclusively deemed that Tenant withdrew its
request for any change in Landlord's Original Work. If Tenant authorizes
Landlord to proceed with calculating the cost of the Original Change Order,
then Tenant shall be responsible for all reasonable costs associated
therewith (and pay same to Landlord within 30 days following Landlord's
written request) and any delay in connection with such calculation shall be a
Tenant Original Delay, whether or not Tenant ultimately approves the Original
Change Order.
3.6 DELIVERY OF POSSESSION. Landlord acknowledges and agrees that
Tenant is terminating an existing lease on a specific date in reliance upon
Landlord's commitment to deliver the Original Building to Tenant in
accordance with the schedule set forth below, subject only to Plan Approval
Delays (as defined in SECTIONS 3.2 AND 3.3 above), Tenant Original Delays
(as defined in SECTION 3.7 below) and Permitted Original Force Majeure
Delays (as defined in SECTION 3.7 below), which exceed, when taken together,
ten (10) days:
First Stage Completion: August 31, 1998
Second Stage Completion: September 10, 1998
Third Stage Completion: September 20, 1998
Final Completion: Thirty (30) days after Original Punch List
delivery
Therefore, Landlord must deliver the Original Building to Tenant in accordance
with the foregoing schedule as such scheduled dates have been delayed due to
Plan Approval Delays, Tenant Original Delays and Permitted Original Force
Majeure Delays which exceed, when taken together, ten (10) days only, it being
understood and agreed that such dates cannot be extended for any reason other
than Plan Approval Delays, Tenant Original Delays and Permitted Original Force
Majeure Delays which exceed, when taken together, ten (10) days. If Landlord is
unable to deliver possession of the Original Building in accordance with the
foregoing schedule, as it may be extended, (i) the Original Commencement Date
will be extended automatically by one day for each day of the period after the
Third Stage Completion Date to the day on which Landlord tenders possession of
the Original Building to Tenant with Landlord's Original Work Substantially
Completed, less any portion of that period attributable to Tenant Original
Delays; and (ii) Landlord will pay Tenant, as liquidated damages, an amount
equal to $2,000.00 per day for each day after August 31, 1998 (as such date may
be extended) that the First Stage Completion has not occurred; and (iii) if the
First Stage
13
Completion has occurred, Landlord will pay to Tenant, as liquidated damages,
$2,000.00 per day for each day after September 10, 1998 (as such date may be
extended) that the Second State Completion has not occurred; and (iv)
Landlord will pay to Tenant, as liquidated damages, $4,000.00 per day for
each day after September 20, 1998 (as such date may be extended) to the day
upon which Landlord tenders possession of the Original Building to Tenant
with Landlord's Original Work Substantially Completed; and (v) if Landlord
has Substantially Completed the Original Building, Landlord will pay to
Tenant $500.00 per day for each day after the thirtieth day after Tenant
delivers the Original Punch List to Landlord that the Final Completion has
not occurred; and (vi) if Landlord does not tender possession of the Original
Building to Tenant with the Landlord's Original Work Substantially Completed
on or before December 1, 1998 (plus any period of delay caused by Plan
Approval Delays, Tenant Original Delays or Permitted Force Majeure Delay
which exceed, when taken together, ten (10) days), Tenant will have the right
to terminate this Lease by delivering written notice of termination to
Landlord not more than 30 days after such deadline date. Upon a termination
under clause (vi) above, each party will, upon the other's request, execute
and deliver an agreement in recordable form containing a release and
surrender of all right, title and interest in and to this Lease; neither
Landlord nor Tenant will have any further obligations to each other,
including, without limitation, any obligations to pay for work previously
performed in the Original Building through the date of such termination
except as set forth in this sentence; all improvements to the Premises will
become and remain the property of Landlord; and Landlord will refund to
Tenant any sums paid to Landlord by Tenant in connection with this Lease,
including, without limitation, any payments to Landlord of portions of
Tenant's Cost and pay to Tenant the amounts that have accrued under clauses
(ii) through (v) above. Such postponement of the commencement of the Term,
payment of liquidated damages and termination and refund right will be in
full settlement of all claims that Tenant might otherwise have against
Landlord by reason of Landlord's failure to have complied with the schedule
set forth above. If Landlord delivers possession of the Original Building
with the Landlord's Original Work Substantially Completed prior to the dates
specified in the schedule set forth above, then Tenant may either accept such
delivery (in which case such date will be the Original Commencement Date
hereunder) or may refuse to accept delivery until any date selected by Tenant
that is no later than the dates specified in the schedule set forth above.
Within sixty (60) days after the Original Commencement Date, Landlord will
provide to Tenant a complete set of as-built drawings of Landlord's Original
Work and manuals for all equipment incorporated into the Improvements as a
part of Landlord's Original Work. Landlord and Tenant have sixty (60) days
after Landlord notifies Tenant that the Original Building has been
Substantially Completed in which to remeasure the Original Building, but
after the expiration of such sixty (60) day period, neither Tenant nor
Landlord may remeasure the Original Building. Landlord and Tenant agree that
provided the Original Building is otherwise Substantially Completed, a
variance in the size of the Original Building (as the same may change due to
any Original Change Order) by more or less than one percent (1%) shall be
permitted and shall have no effect on the Original Building being
Substantially Completed, nor on the calculation of the Original Basic Rent,
Allowance or Financed Amount. In the absence of such remeasurement or the
right to do so, it shall be conclusively deemed that the Original Building
contains 114,419 Rentable Square Feet (subject to any approved revisions to
the Approved Original Base Building Plans, with the final Rentable Square
Feet as shown in the Approved Original Base Building Plans being sometimes
referred to as the "APPROVED ORIGINAL RENTABLE SQUARE FEET"). If Tenant does
timely elect to remeasure the Original Building, and the variance is greater
than one percent (1%) but less than two percent (2%), the variance shall be
permitted and have no affect on the Original Building being Substantially
Completed, but (A) the Basic Rent (as provided in SECTION 4.1) will be
adjusted to be $5.95 per Rentable Square Foot under clause (a) of SECTION
4.1, $11.98 per Rentable Square Foot under clause (b) of SECTION 4.1 and
$13.45 per Rentable Square Foot under clause (c) of SECTION 4.1, (B) the
Allowance (as provided in SECTION 3.10) will be adjusted to be $20.00 per
Rentable Square Foot and (C) the Financed Amount (as provided in SECTION
3.10) will be adjusted to be $5.00 per Rentable Square Foot. If the
14
Original Building contains more than 102% of the Approved Original Rentable
Square Feet, then the Allowance and Financed Amount will be adjusted based on
the actual amount of square feet in the Original Building, but all other
amounts will be calculated as if the Original Building contains 102% of the
Approved Original Rentable Square Feet. If the Original Building contains
less than 98% of the Approved Original Rentable Square Feet, then Landlord
must make all alterations necessary to increase the size of the Original
Building to at least 98% of the Approved Original Rentable Square Feet and
the Original Building will be deemed to be not Substantially Complete. If, in
such event, Tenant fails to terminate this Lease pursuant to SECTION 3.6(VI)
above, then Tenant will be deemed to have accepted the size of the Original
Building and the Original Building will be deemed to have been Substantially
Complete on the day Landlord delivered the Original Building to Tenant with
Landlord's Original Work (other than the area of the Original Building)
Substantially Complete. In such event, the Allowance and Financed Amount will
be calculated based on Approved Original Rentable Square Feet, but all other
amounts will be calculated on the actual size of the Original Building.
3.7 PLAN APPROVAL DELAYS, TENANT ORIGINAL DELAYS AND PERMITTED
ORIGINAL FORCE MAJEURE DELAYS. As provided in SECTION 3.6, the Term of this
Lease (and therefore Tenant's obligation for the payment of Rent) will not
commence until Landlord has Substantially Completed Landlord's Original Work;
provided, however, that if Landlord is delayed in causing Landlord's Original
Work to be Substantially Completed as a result of: (a) any Plan Approval
Delays described in SECTIONS 3.2 AND 3.3, (b) any Tenant Original Delays
described in SECTIONS 3.2, 3.3, 3.4 AND 3.5, or any Original Change Orders or
changes in any drawings, plans or specifications requested by Tenant or any
other act or omission of Tenant or Tenant's architects, engineers,
constructors or subcontractors, all of which will be deemed to be delays
caused by Tenant (with each individual occurrence constituting a "TENANT
ORIGINAL DELAY" and the cumulative occurrences constituting "TENANT ORIGINAL
DELAYS"), or (c) force majeure delays with such force majeure delays being
referred to in this Lease as "PERMITTED ORIGINAL FORCE MAJEURE DELAYS"),
then, if such delays exceed, in total, ten (10) days, the Original
Commencement Date will only be extended under SECTION 3.6 until the date on
which Landlord would have Substantially Completed the performance of
Landlord's Original Work but for such delays. The aggregate delays described
in this SECTION 3.7 will be reduced by the number of days deducted from the
construction schedule on account of Original Change Orders. As a condition to
claiming a Permitted Original Force Majeure Delay or a Tenant Original Delay,
the day of delay must have otherwise been a day upon which Landlord intended
to work on the item affected by the delay and Landlord must advise Tenant of
the circumstances giving rise to the claim within ten (10) business days
after they arise, the estimated cost that Tenant can pay at that time to
effect any available remedy to eliminate or reduce such delay (for example,
overtime work), and the cumulative total number of Permitted Original Force
Majeure Delays, Tenant Original Delays, and Plan Approval Delays through the
date of each event. If the number of Permitted Original Force Majeure Delays
exceeds ninety (90) days then Tenant may terminate this Lease by written
notice to Landlord at any time before the Original Commencement Date
actually occurs and in such event Landlord must return to Tenant all amounts
previously paid by Tenant and must pay Tenant $350,000.00, but will not be
required to make any payment of liquidated damages under SECTION 3.6 of this
Lease (and if Landlord has done so, Landlord will be permitted to offset the
amount so paid against the $350,000.00 due to Tenant). If, under such
circumstances, Tenant does not terminate this Lease as set forth above, then
the maximum amount Landlord would be required to pay to Tenant as liquidated
damages under SECTION 3.6 above would be $350,000.00.
3.8 ORIGINAL PUNCH LIST. Tenant's taking possession of any
portion of the Original Building will be conclusive evidence that such
portion of the Original Building was in good order and satisfactory
condition, and that all of Landlord's Original Work in or to such portion of
the Original Building was satisfactorily completed, when Tenant took
possession, except as to any patent defects
15
or uncompleted items identified on a punch list (the "ORIGINAL PUNCH LIST")
prepared by Tenant's Representative after an inspection of the Original
Building by both Tenant's Representative and Landlord's Representative
(unless Landlord's Representative fails to attend an inspection scheduled by
Tenant's Representative, with Tenant acknowledging that Tenant's
Representative must cooperate with Landlord's Representative in attempting to
establish a mutually-acceptable date and time of inspection) made within
thirty (30) days after Tenant takes possession, and except as to any latent
defects in Landlord's Original Work. Landlord will not be responsible for
any items of damage caused by Tenant, its agents, independent contractors or
suppliers, except that in connection with Tenant's "phased" move-in to the
Original Building, Landlord must repair damage caused by Tenant as part of
its move-in and cannot claim such damage and repair constitutes any form of
permitted delay, unless caused by Tenant's gross negligence or wilful
misconduct. No promises to construct, alter, remodel or improve the Original
Building, and no representations concerning the condition of the Original
Building, have been made by Landlord to Tenant other than as may be expressly
stated in this Lease.
3.9 REPRESENTATIVES. Landlord appoints Landlord's Representative
to act for Landlord in all matters covered by this SECTION 3. Tenant
appoints Tenant's Representative to act for Tenant in all matters covered by
this SECTION 3. All inquiries, requests, instructions, authorizations and
other communications with respect to the matters covered by this SECTION 3
will be made to Landlord's Representative or Tenant's Representative, as the
case may be. Tenant will not make any inquiries of or requests to, and will
not give any instructions or authorizations to, any other employee or agent
of Landlord, including Landlord's architect, engineers and contractors or any
of their agents or employees, with regard to matters covered by this SECTION
3. Either party may change its representative at any time by three days'
prior written notice to the other party.
3.10 PAYMENT OF TENANT'S COST. Landlord and Tenant acknowledge that
the Basic Rent has been computed based on Landlord's allowance of
$2,288,380.00 (the "ALLOWANCE") towards the cost of the Original Leasehold
Improvements. To the extent the Approved Tenant's Costs (as increased or
decreased by Original Change Orders): (A) are less than the Allowance, the
"savings" will be credited to the next installment(s) of Original Basic Rent
due after such determination, (B) exceed the Allowance, Tenant will pay such
excess to Landlord as herein required. Any such excess sums owing by Tenant
to Landlord pursuant to this SECTION 3.10 (up to a maximum of an amount equal
to $572,095.00 (the "FINANCED AMOUNT") shall be paid by Tenant to Landlord in
monthly installments, amortized over the remaining months of the initial
11-year term of this Lease at a rate of nine percent (9%) per annum, with the
Original Basic Rent to be increased by an amount equal to such amortized
installments. Landlord and Tenant will, upon request of the other, promptly
enter into an amendment to this Lease to evidence the increase in the
Original Basic Rent. Any such excess sums owing by Tenant to Landlord
pursuant to this SECTION 3.10 in excess of the Financed Amount shall be paid
by Tenant to Landlord within thirty (30) days following the determination of
the sum due to Landlord by Tenant and delivery to Tenant of supporting
documentation of the entire amount paid. Tenant will own all of the Original
Leasehold Improvements until the end of the Term, at which time the Original
Leasehold Improvements will become Landlord's property in accordance with
SECTION 14.1. During the Term, Tenant may, in its sole discretion, remove or
replace any of the personal property, equipment, trade fixtures or movable
partitions owned by Tenant and placed or installed in the Premises at
Tenant's expense. Subject to SECTION 10.1, Tenant may also remove or replace
the Original Leasehold Improvements. Landlord warrants that the Original
Base Building and Original Leasehold Improvements will be free of all
defects in design, materials or construction for a period of one year from
the Original Commencement Date.
3.11 REASONABLENESS AND GOOD FAITH STANDARD. Landlord and Tenant
acknowledge that they must work together cooperatively in order to design the
Original Building and therefore
16
agree to act reasonably and in good faith in such design process.
40 RENT
4.1 BASIC RENT AND ORIGINAL BASIC RENT. Commencing on the
Original Commencement Date and then throughout the Term, Tenant agrees to pay
Landlord Basic Rent according to the following provisions. Basic Rent
throughout the Term will be payable in monthly installments, in advance, on
or before the first day of each and every month during the Term. The
Original Basic Rent is in the amount of (a) during the portion of the Term
beginning on the Original Commencement Date and ending on the first
anniversary of the last day of the month preceding the month in which the
Original Commencement Date occurs, $56,732.75 per month; (b) during the
portion of the Term beginning on the second anniversary of the first day of
the month in which the Original Commencement Date occurs and ending on the
last day of the month preceding the sixth anniversary of the Original
Commencement Date, $114,228.30 per month; (c) during the portion of the Term
beginning on the sixth anniversary of the first day of the month in which the
Original Commencement Date occurs to the Expiration Date of the initial
Term, $128,244.62 per month; and (d) during each Renewal Term with respect to
which Tenant exercises its option, the amount per month determined pursuant
to SECTION 2.5. However, if the Term commences on other than the first day
of a month or ends on other than the last day of a month, Basic Rent for such
month will be appropriately prorated.
4.2 NET LEASE. Neither Landlord nor Tenant will be required to pay
any costs or expenses or provide any services in connection with the Premises
except as expressly provided in this Lease.
4.3 TERMS OF PAYMENT. All Rent will be paid to Landlord in lawful
money of the United States of America, at Landlord's Rent Address or to such
other person or at such other place as Landlord may from time to time
designate in writing, without notice or demand and without right of
deduction, abatement or setoff, except as otherwise expressly provided in
this Lease. Tenant's covenants to pay Basic Rent and Additional Rent are
independent of any other covenant, condition, provision or agreement
contained in this Lease; provided, however, that the foregoing statement
cannot be deemed in any way to limit Tenant's rights and remedies set forth
elsewhere in this Lease.
4.4 LATE PAYMENTS. Any payment of Rent which is not received
within five days after it is due will be subject to a late charge equal to 5%
of the unpaid payment, or $100.00, whichever is greater. This amount is in
compensation of Landlord's additional cost of processing late payments. In
addition, any Rent which is not paid within five days after it is due will
accrue interest at the Interest Rate from the date on which it was due until
the date on which it is paid in full with accrued interest.
4.5 RIGHT TO ACCEPT PAYMENTS. No receipt by Landlord of an amount
less than Tenant's full amount due will be deemed to be other than payment "on
account," nor will any endorsement or statement on any check or any accompanying
letter effect or evidence an accord and satisfaction. Landlord may accept such
check or payment without prejudice to Landlord's right to recover the
17
balance or pursue any right of Landlord. No payments by Tenant to Landlord
after the expiration or other termination of the Term, or after the giving of
any notice (other than a demand for payment of money) by Landlord to Tenant,
will reinstate, continue or extend the Term or make ineffective any notice
given to Tenant prior to such payment. After notice or commencement of a
suit, or after final judgment granting Landlord possession of the Premises,
Landlord may receive and collect any sums of Rent due under this Lease, and
such receipt will not void any notice or in any manner affect any pending
suit or any judgment obtained. Any amounts received by Landlord may be
allocated to any specific amounts due from Tenant to Landlord as Landlord
determines.
50 TAXES
5.1 PAYMENT OF TAXES. Except as provided in SECTION 5.3 and
SECTION 5.4 below, Tenant will pay before delinquency, directly to the taxing
authority, all Taxes which accrue during or are attributable to any part of
the Term. Within 10 days after Landlord's written request, Tenant will
provide Landlord with evidence of Tenant's payment of Taxes for the most
recent Tax Year for which Taxes have been paid. Landlord will use reasonable
efforts to have the real property tax notices and bills issued directly to
Tenant, but if Landlord is unable to do so, Landlord will promptly (and in
any event with fifteen (15) days after Landlord's receipt thereof) forward
all such notices and bills directly to the address to which Landlord is then
required to send notices to Tenant.
5.2 PRORATION AT BEGINNING AND END OF TERM. If the Term begins on
other than the first day of a Tax Year or if the Term expires or otherwise
terminates on other than the last day of a Tax Year, Taxes for the Tax Year
in which the Term begins or ends, as the case may be, will be prorated
between Landlord and Tenant, based on the most recent levy and most recent
assessment. Such proration will be subsequently adjusted when the actual
bills become available for Taxes for the Tax Year for which Taxes were
prorated. The parties' obligations under this SECTION 5 will survive the
expiration of the Term or other termination of this Lease.
18
5.3 SPECIAL ASSESSMENTS. Tenant will pay, as Taxes, all special
assessments and other like impositions; provided, however, that Tenant may
pay in installments any such special assessments or like impositions that may
be so paid according to applicable Laws and, in such event, Tenant will only
be required to pay those installments of any such assessments or impositions
that are assessed or imposed for periods of time within the Term and with
proration, as provided above, of any installment due period at the beginning
or end of the Term that covers a period of time that includes both a portion
of the Term and an additional period either before or after the Term. The
Premises are not now, and Landlord will take no action to cause or permit the
Premises on the Original Commencement Date to be, located in a special
improvement district or otherwise subject to special assessments. Landlord
will not consent to the inclusion of the Premises in a special improvement
district or other district that would subject the Premises to special
assessments without Tenant's prior written approval and without giving Tenant
the right and sufficient notice to allow Tenant to object to the inclusion in
Landlord's name and on Landlord's behalf.
5.4 TAX CONTESTS. Tenant will have the right to contest any Taxes
payable by Tenant; provided, however, that Tenant will make timely payment of
the contested Taxes notwithstanding the pendency of any such contest unless
applicable Laws permit the withholding of payment without delinquency, in
which case Tenant may withhold payment of the contested Taxes until such time
as payment thereof (or of such Taxes as the same may be reduced by such
contest) is required to be made by applicable Laws in order to avoid
delinquency. Tenant will notify Landlord within five business days of the
commencement of any such contest. So long as Tenant complies with the terms
of this SECTION 5.4, Tenant will have the right, in connection with any such
contest, at its sole expense, to institute and prosecute, in good faith and
with due diligence and in Landlord's name if necessary, any appropriate
proceedings, and Landlord will, at Tenant's expense, fully cooperate with
Tenant's efforts to contest any such Taxes or special assessments.
60 USE, OCCUPANCY AND COMPLIANCE
6.1 USE. Tenant may use the Premises for any and all uses and
purposes that are from time to time permitted by Laws. Tenant will not keep
anything on or about the Premises which would
19
invalidate any insurance policy required to be carried on the Premises by
Tenant pursuant to this Lease. Tenant will not cause or permit to exist any
public or private nuisance on or about the Premises.
6.2 COMPLIANCE. On the Original Commencement Date, the Premises
will comply with all Laws applicable to their use and occupancy for the
purposes for which they were designed. Tenant will comply with all Laws
applicable to the use and occupancy of the Premises during the Term and will
keep and maintain the Premises in compliance with all applicable Laws.
Tenant will have the right, however, to contest or challenge by appropriate
proceedings the enforceability of any Law or its applicability to the
Premises or the use or occupancy thereof by Tenant so long as Tenant
diligently prosecutes the contest or challenge to completion and, in the
event Tenant loses the contest or challenge, thereafter abides by and
conforms to such Law. In the event of Tenant's challenge or contest of such
Law, Tenant may elect not to comply with such Law during such challenge or
contest; provided, however, that such election not to comply will not result
in any material risk of forfeiture of Landlord's interest in the Premises.
Tenant will indemnify and hold Landlord harmless from and against all claims,
damages or judgments resulting from any such election not to comply.
6.3 HAZARDOUS SUBSTANCES.
(a) TENANT'S COVENANTS. Tenant will not allow any Hazardous
Substance to be located on the Premises and will not conduct or authorize
the use, generation, transportation, storage, treatment or disposal at
the Premises of any Hazardous Substance other than in quantities
incidental to the conduct of Tenant's business in the Premises and in
compliance with Environmental Laws; provided, however, nothing herein
contained will permit Tenant to allow any so-called "acutely hazardous,"
"ultra-hazardous," "imminently hazardous chemical substance or mixture"
or comparable Hazardous Substance to be located on or about the Premises.
If the presence, release, threat of release, placement on or in the
Premises or the generation, transportation, storage, treatment or
disposal at the Premises of any Hazardous Substance as a result of
Tenant's use or occupancy of the Premises (i) gives rise to liability
(including, but not limited to, a response action, remedial action or
removal action) under Environmental Laws; (ii) causes a significant
public health effect; or (iii) pollutes or threatens to pollute the
environment, Tenant will promptly take any and all remedial and removal
action necessary to clean up the Premises and mitigate exposure to
liability arising from the Hazardous Substance, whether or not required
by Laws.
(b) TENANT'S INDEMNITY. Tenant will indemnify, defend and hold
Landlord harmless from and against all damages, costs, losses, expenses
(including, without limitation, actual attorneys' fees and engineering
fees) arising from or attributable to (i) the existence of any Hazardous
Substance at the Premises as a result of the acts of Tenant or its
agents, employees or contractors or Tenant's use and occupancy of the
Premises, and (ii) any breach by Tenant of any of its covenants contained
in this SECTION 6.3.
(c) LANDLORD'S REPRESENTATION AND INDEMNITY. Landlord has
delivered to Tenant copies of all studies in Landlord's possession
concerning the presence of Hazardous Substances on the Premises and will
promptly furnish Tenant with a copy of any additional such study that
Landlord obtains on or within two months after the Original Commencement
Date. Landlord represents to Tenant that, to Landlord's current actual
knowledge (without any investigation other than as described in Phase I
Environmental Site Assessment; 10.32 Acres of Undeveloped Land, Waterview
Parkway, Dallas, Texas, Terracon Project No. 54975133, December 31, 1997,
Prepared for Xxxx Xxxxx Xxxxxxxxxxx, 00000 Greenville
00
Xxxxxx, #000, Xxxxxx, Xxxxx 00000 and prepared by Terracon
Environmental, Inc., Dallas, Texas (the "REPORT") and subject to all
matters reflected or referenced thereon), there are no Hazardous
Substances present on the Premises as of the date of this Lease in any
manner or quantity that violates any Environmental Laws. Landlord
will indemnify, defend and hold Tenant harmless from and against all
damages, costs, losses, expenses (including, without limitation,
actual attorneys' fees and engineering fees) arising from or
attributable to (i) the existence of any Hazardous Substance at the
Premises as a result of the acts of Landlord or its agents, employees
or contractors, and (ii) any breach by Landlord of its representation
contained in this SECTION 6.3.
(d) SURVIVAL. The parties' obligations under this SECTION
6.3 will survive the expiration of the Term or other termination of
this Lease.
6.4 AMERICANS WITH DISABILITIES ACT. Landlord will be obligated to
design and construct the Original Base Building and, if applicable, the
Expansion Base Building in accordance with the ADA and Texas Accessibility
Standards and if Landlord fails to do so, Landlord will have the continuing
obligation to cause the Original Base Building and, if applicable, the
Expansion Base Building to meet such requirement. Subject to the terms of
the preceding sentence, Tenant will, at its expense, cause the Premises and
the operation of any business within the Premises to comply with the ADA, and
if Tenant fails to maintain the Premises in compliance with the ADA, Landlord
will have the right, but not the obligation, at Tenant's expense, to enter
the Premises and cause the Premises to comply with the ADA; and Tenant will
indemnify, defend and hold Landlord harmless from and against any and all
costs, claims and liabilities, including, without limitation, attorneys' fees
and court costs, arising from or related to Tenant's failure to maintain the
Premises in compliance with the ADA; provided, however, Landlord will cause
the Original Base Building and, if applicable, the Expansion Base Building to
be designed and constructed in accordance with the "ADA Guidelines for
Buildings and Facilities" attached as "Appendix A" to the rules and
regulations implementing the ADA, as the same are interpreted as of the date
Landlord submits its complete application for a building permit for such
construction, and provided, further, that any such obligation of Landlord
will be subject to and based upon Tenant's representations concerning
Tenant's status as a "Public Accommodation" and concerning the location of
any "area of primary function." Without limiting the generality of the
foregoing, if work is performed by, through or under Tenant after the
Original Commencement Date, Tenant will, at Tenant's expense, cause such work
to be designed and constructed in compliance with the ADA, and Tenant will be
responsible for (i) the cost of any work required as a result of (A) Tenant
or an assignee or subtenant being deemed a "Public Accommodation" or the
Premises being deemed a "Place of Public Accommodation," or (B) such work
being deemed to affect an "Area of Primary Function" (as such terms are
defined in the ADA); and (ii) the cost of the installation or implementation
of any "Auxiliary Aid" required under the ADA as a result of the operation of
any business within the Premises.
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6.5 SIGNS. Tenant may erect, maintain or replace from time to time
upon the Premises at Tenant's cost all signs that Tenant deems appropriate to
the conduct of its business, including, without limitation, pylon signs,
monument signs, roof signs, banners, signage on the exterior of the Building or
glass surfaces of the windows and doors of the Building, provided that all of
such signs and signage are in compliance with applicable Laws. Landlord will,
at Tenant's expense, cooperate and assist Tenant in obtaining any permits for
signage, including variances from Laws.
70 UTILITIES
7.1 PAYMENT; INTERRUPTION OF SERVICES. Landlord will cause all
utilities described in the Approved Original Base Building Plans and Approved
Original Leasehold Improvements Plans and, if applicable, the Approved
Expansion Base Building Plans and the Approved Expansion Leasehold Improvements
Plans to be brought to the applicable portion of the Premises and hooked-up, and
will pay the applicable tap, hook-up or similar fees. Tenant will pay for all
electricity, gas, water, sewer or other utility service provided to the Premises
from and after the Original Commencement Date. Landlord will not be liable in
damages or otherwise, nor will there be an abatement of Rent, if the furnishing
by any supplier of any utility service or other service to the Premises is
interrupted or impaired by fire, accident, riot, strike, act of God, the making
of necessary repairs or improvements, or by any causes beyond Landlord's
reasonable control.
7.2 HVAC. From and after the Original Commencement Date, Tenant will
pay the cost for all heating, air conditioning and ventilation service provided
to the Premises, including the cost of maintenance, repair and replacement of
same. Tenant may maintain a preventative maintenance contract on the HVAC units
in the Premises, which contract will provide for periodic maintenance in
accordance with the manufacturer's specifications, or Tenant may perform such
preventative maintenance itself. In the event Tenant fails to maintain such
preventative maintenance contract or to perform such preventative maintenance
itself, Landlord, at its option and after giving Tenant notice
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and an opportunity to cure pursuant to SECTION 15.2, may arrange for such a
preventative maintenance contract for the HVAC units, in which event the cost
of such preventative HVAC maintenance will be billed directly to Tenant and
will be paid within 10 days of receipt of invoice therefor.
80 REPAIRS AND MAINTENANCE
8.1 TENANT'S OBLIGATIONS. Tenant will, at its expense (a)
maintain, replace and repair all of the Premises (including, without
limitation, all non-structural components of the walls, all flooring,
ceilings and fixtures, all windows, window fittings and sashes, all interior
and exterior doors, and all paved and landscaped areas on the Land), except
those portions the maintenance of which is expressly Landlord's responsibility
pursuant to SECTION 8.2, in a good, clean, safe, orderly and sanitary
condition, ordinary wear and tear excepted; (b) keep the Premises free of
insects, rodents, vermin and other pests; (c) repair and maintain all
heating, ventilating and air conditioning equipment that serves the Premises
and all utility systems, lines, conduits and appurtenances thereto that serve
the Premises; (d) keep any garbage, trash, rubbish or refuse removed on a
regular basis and temporarily stored on the Premises in accordance with local
Laws; and (e) provide such janitorial services to the Building and such snow
and ice removal from the paved areas on the Land as may be required by Laws
or otherwise necessary for the operation of Tenant's business.
8.2 LANDLORD'S OBLIGATIONS. Landlord will, at its expense
(a) maintain, replace and repair the roof and structural elements of the
Building (including the foundations, structural components of the walls and
structural columns and beams) and all utility lines and facilities serving the
Premises that extend beyond the exterior walls of the Building in good
condition, ordinary wear and tear excepted; and (b) make all capital repairs and
replacements (but not ordinary maintenance and repairs) required to keep the
driveways and parking areas on the Land in good condition, ordinary wear and
tear excepted (including such resurfacing thereof as may from time to time be
necessary and any restriping required in connection with such resurfacing);
provided however, that subject to the penultimate sentence of SECTION 3.8, if
the need for any such repair is caused by (i) Tenant or anyone claiming by or
through Tenant; or (ii) the installation or removal of Tenant's property,
regardless of fault or by whom such damage is caused (unless caused by Landlord,
its agents, contractors, servants, employees or licensees), then, in any such
case, subject to SECTION 9.4, Tenant agrees to reimburse Landlord for all costs
and expenses incurred by Landlord with respect to such repair. Landlord will
commence repairs it is required to do hereunder as soon as reasonably
practicable after receiving written notice from Tenant of the necessity of such
repairs.
8.3 LANDLORD'S RIGHT OF ENTRY. For purposes of performing Landlord's
obligations under SECTION 8.2, or performing any of Tenant's obligations under
SECTION 8.1 that Tenant fails to perform within the cure period provided in
SECTION 15.2, or to inspect the Premises, Landlord may enter the
23
Premises upon reasonable prior notice to Tenant (except in cases of actual or
suspected emergency, in which case no prior notice will be required) without
liability to Tenant for any loss or damage incurred as a result of such entry
(excluding, subject to SECTION 9.4, any damage to Tenant's personal property
or equipment caused by the negligence of Landlord or its agents, employees or
contractors), provided that Landlord will take reasonable steps in connection
with such entry to minimize any disruption to Tenant's business or its use of
the Premises.
90 INSURANCE, WAIVERS AND INDEMNITY
9.1 PROPERTY INSURANCE. Landlord will throughout the Term, provide
and maintain a "special form" insurance policy (including fire and standard
extended coverage perils, leakage from fire protective devices and other
water damage) covering loss or damage to the Improvements (including, without
limitation, the Original Base Building, the Original Leasehold Improvements,
the Expansion Base Building, and the Expansion Leasehold Improvements, and
any alterations made to the Premises from time to time) on a full replacement
cost basis, excluding excavations, footings and foundations and providing for
a deductible of no greater than $10,000.00 (unless Landlord can obtain a
smaller deductible and Tenant approves of such deductible and the increased
cost in such insurance arising from such smaller deductible). Tenant agrees
to pay Landlord, as Additional Rent, Landlord's cost of maintaining such
insurance, said payments to be made to Landlord within ten (10) days after
Landlord presents Tenant a statement setting forth the amount due, together
with reasonable supporting documentation. In the event of a casualty, Tenant
shall pay to Landlord the lesser of the amount of the deductible or the full
amount of the loss in the case of a loss in an amount less than the
deductible, subject in both cases, to the $10,000.00 limit set forth above,
in respect of any insured loss, which payment shall be treated in the same
manner as insurance proceeds. Tenant will provide and maintain throughout
the Term, at its expense, such property insurance covering Tenant's
machinery, equipment, furniture, fixtures, personal property (including also
property under the care, custody, or control of Tenant) and business
interests which may be located in, upon or about the Premises in such amounts
as Tenant may from time to time deem prudent. All of such property policies
will permit Tenant's waiver of claims against Landlord under SECTION 9.4 for
matters covered thereby.
9.2 LIABILITY AND OTHER INSURANCE. Tenant will throughout the Term,
at its expense as Additional Rent, provide and maintain the following insurance,
in the amounts specified below:
(a) bodily injury and property damage liability insurance, with
a combined single occurrence limit of not less than $5,000,000.00; such
insurance will be on a commercial general liability form including,
without limitation, personal injury and assumed contractual liability for
the performance by Tenant of the indemnity agreements set forth in
SECTION 9.5; Landlord and its mortgagee will be named as an additional
insureds in the policy providing such liability insurance, which will
include cross liability and severability of interests clauses
24
or endorsements; unless otherwise approved in writing by Landlord, such
policy will have a deductible of $5,000.00 or less and will not have a
retention or self-insurance provision;
(b) worker's compensation insurance insuring against and
satisfying Tenant's obligations and liabilities under the worker's
compensation laws of the State of Texas and employers' liability
insurance in the limit of $100,000/500,000/100,000 (provided that Tenant
may self-insure this obligation pursuant to a program of self-insurance);
and
(c) if Tenant operates owned, hired or nonowned vehicles on the
Premises, comprehensive automobile liability will be carried at a limit
of liability not less than $1,000,000.00 combined bodily injury and
property damage.
9.3 GENERAL INSURANCE REQUIREMENTS. All insurance required to be
maintained by Landlord and Tenant pursuant to SECTIONS 9.1 AND 9.2 will be
maintained with insurors licensed to do business in the State of Texas and
having a Best's Key Rating of at least A-:XII. Tenant and Landlord will each
file with the other, on or before the Original Commencement Date and at least 10
days before the expiration date of expiring policies, such copies of either
current policies or certificates as may be reasonably required to establish that
the insurance coverage required by SECTIONS 9.1 AND 9.2 is in effect from time
to time and that the insuror(s) have agreed to give the other party at least 30
days notice prior to any cancellation of, or material modification to, the
required coverage. Landlord and Tenant will cooperate with each other in the
collection of any insurance proceeds which may be payable in the event of any
loss, including the execution and delivery of any proof of loss or other actions
required to effect recovery. All commercial general liability and property
policies maintained by Tenant will be written as primary policies, not
contributing with and not supplemental to any coverage that Landlord may carry.
9.4 WAIVERS. Except to the extent caused by the willful or negligent
act or omission or breach of this Lease by Landlord, its agents or employees or
anyone else for whom Landlord is legally responsible, Landlord and its
Affiliates will not be liable or in any way responsible for, and Tenant waives
all claims against Landlord and its Affiliates for, any loss, injury or damage
suffered by Tenant or others relating to (a) loss or theft of, or damage to,
property of Tenant or others; (b) injury or damage to persons or property
resulting from fire, explosion, falling plaster, escaping steam or gas,
electricity, water, rain or snow, or leaks from any part of the Improvements or
from any pipes, appliances or plumbing, or from dampness; or (c) damage caused
by persons on or about the Premises, or caused by the public or by construction
of any private or public work. Provided that Landlord maintains the insurance
required to be maintained by Landlord pursuant to SECTION 9.1, Landlord and its
Affiliates will not be liable or in any way responsible to Tenant for, and
Tenant waives all claims against Landlord and its Affiliates for, any loss,
injury or damage that is insured under SECTION 9.1 or required to be insured by
Tenant under SECTION 9.1. Provided that Tenant maintains the insurance required
to be maintained by Tenant pursuant to SECTION 9.1, Tenant and its Affiliates
will not be liable or in any way responsible to Landlord for, and Landlord
waives all claims against Tenant and its Affiliates for, any loss, injury or
damage that is insured by Tenant under SECTION 9.1.
25
9.5 INDEMNITY. Except to the extent caused by the willful or
negligent act or omission or breach of this Lease by Landlord, its agents or
employees or anyone else for whom Landlord is legally responsible, Tenant
will indemnify and hold Landlord harmless from and against any and all
liability, loss, claims, demands, damages or expenses (including reasonable
attorneys' fees) due to or arising out of any accident or occurrence on or
about the Premises during the Term (including, without limitation, accidents
or occurrences resulting in injury, death, property damage or theft) or any
willful or negligent act or omission of or breach of this Lease by Tenant or
anyone for whom Tenant is legally responsible.
100 ALTERATIONS; MECHANICS' LIENS
10.1 ALTERATIONS. Tenant will not make any modifications,
improvements, alterations, additions or installations in or to the Premises
that affect the Original Building's structural systems, the Expansion
Building's structural systems, or the Core Building Systems, or that will
cost more than $50,000.00 per building, without Landlord's prior written
consent, which consent will not be unreasonably withheld. Tenant will notify
Landlord prior to making any modifications, improvements, alterations,
additions or installations in or to the Premises (referred to in this section
as the "work"), regardless of whether Landlord's consent is required in
connection with such work. Along with any request for Landlord's consent and
at least 15 days before commencement of any work or delivery of any materials
to be used in any work to the Premises, Tenant will furnish Landlord with
plans and specifications, estimated commencement and completion dates, the
name and address of Tenant's general contractor, and the necessary permits
and licenses. Landlord will have the right to post notices of
non-responsibility or similar notices on the Premises in order to protect the
Premises against any liens resulting from such work. Tenant agrees to
indemnify, defend and hold Landlord harmless from any and all claims and
liabilities of any kind and description which may arise out of or be
connected in any way with such work. Tenant will pay the cost of all such
work, and also the cost of painting, restoring or repairing the Premises
occasioned by such work. Upon completion of the work, Tenant will furnish
Landlord with contractor's affidavits that include full and final waivers of
liens and receipts for all amounts due for labor and materials. In the case
of any work that required Landlord's consent, Tenant will also provide
Landlord with as-built plans and specifications of the Premises as altered by
such work. All work will comply with all insurance requirements and all
applicable Laws (including, without limitation, the ADA) and will be
constructed in a good and workmanlike manner, using materials of first-class
quality and free and clear of all liens or claims therefor. Tenant will
permit Landlord to inspect construction operations in connection with any
such work. Landlord's approval of any plans for any modifications,
improvements, alterations, additions or installations proposed by Tenant will
not constitute a representation that the same will comply with
26
Laws or be fit for any particular purpose; such approval will merely
constitute Landlord's consent to construct or install the same in the
Premises.
10.2 MECHANICS' LIENS. Tenant will not permit any mechanic's lien or
other lien to be filed against the Premises by reason of any work performed by
or for, or material furnished to, Tenant (including, without limitation, any
work undertaken by Tenant pursuant to SECTION 10.1). If any such lien is filed
at any time against the Premises, Tenant will cause the same to be discharged of
record (including by bonding) within 10 days after the date of filing the same.
If Tenant fails to discharge any such lien within such period, then, in addition
to any other right or remedy of Landlord, after 10 days prior written notice to
Tenant, Landlord may, but will not be obligated to, discharge the same by paying
to the claimant the amount claimed to be due or by procuring the discharge of
such lien as to the Premises by deposit in the court having jurisdiction of such
lien, the foreclosure thereof or other proceedings with respect thereto, of a
cash sum sufficient to secure the discharge of the same, or by the deposit of a
bond or other security with such court sufficient in form, content and amount to
procure the discharge of such lien, or in such other manner as is now or may in
the future be provided by present or future Laws for the discharge of such lien
as a lien against the Premises. Any amount paid by Landlord, or the value of
any deposit so made by Landlord, together with all costs, fees and expenses in
connection therewith (including reasonable attorney's fees of Landlord),
together with interest thereon at the Interest Rate, will be repaid by Tenant to
Landlord on demand
27
by Landlord and if unpaid may be treated as Additional Rent. Notwithstanding
the foregoing, if Tenant desires to contest any such lien, Tenant may do so
provided that, within 10 days after Tenant learns of the filing thereof,
Tenant notifies Landlord of Tenant's intention to do so and, until such time
as Tenant causes such lien to be removed by the payment thereof or by bonding
over such lien in the manner provided by law or posting with Landlord such
security as Landlord may reasonably request to provide funds with which
Landlord may discharge such lien in the event Tenant is unsuccessful in its
contest and then fails to discharge such lien. Tenant will indemnify and
defend Landlord against and save Landlord and te Premises harmless from all
losses, costs, damages, expenses, liabilities, suits, penalties, claims,
demands and obligations, including, without limitation, reasonable attorney's
fees resulting from the assertion, filing, foreclosure or other legal
proceedings with respect to any such mechanic's lien or other lien.
110 ASSIGNMENT AND SUBLETTING
11.1 NOTICE AND CONSENT. Tenant may, upon notice to Landlord but
without obtaining Landlord's consent, assign this Lease or sublet all or any
portion of the Premises to any of Tenant's Affiliates. Tenant will not,
however, assign this Lease or sublet all or any portion of the Premises to any
assignee or subtenant that is not one of Tenant's Affiliates without first
obtaining Landlord's written consent, which consent will not be unreasonably
withheld, conditioned or delayed. It is not reasonable for Landlord to withhold
its consent to an otherwise acceptable assignee or sublessee on the grounds that
Tenant and its guarantor would or could be released from liability as a result
of such assignment or sublease or on the grounds that such assignee or sublessee
would be entitled to exercise the expansion right set forth in SECTION 18 below,
it being understood and agreed that Landlord's recapture remedy described below
is sufficient. If Tenant desires to effect an assignment or subletting that
will require Landlord's consent, Tenant will seek such written consent of
Landlord by a written request therefor, setting forth the date (which will not
be less than 30 days after date of Tenant's notice) on which Tenant desires to
assign this Lease or to sublet all or any portion of the Premises, the name and
address of the proposed assignee or sublessee and its proposed use of the
Premises, copies of the proposed assignee's or subtenant's financial statements
(or, if not available, any other information in Tenant's possession concerning
the proposed assignee's or
28
subtenant's financial condition and business), and the proposed form of
assignment or sublease. If Landlord does not withhold its consent in
writing, stating the reason for withholding such consent, within twenty (20)
days after Tenant submits the documentation required by the terms of the
preceding sentence, then Landlord will be deemed to have approved of such
assignment or subletting. If it would be unreasonable for Landlord to
withhold, condition or delay its consent, but Landlord for whatever reason
does not wish an assignment or subletting of the entire Premises to be
consummated, Landlord's sole and exclusive right in such situation shall be
to terminate this Lease by written notice to Tenant, which notice must
specify a termination date no earlier than sixty (60) days after the date of
such notice and no later than one hundred twenty (120) days after the date of
such notice. Such termination notice must be given within twenty (20) days
after the date upon which Tenant requests Landlord's consent to such
assignment or subletting. If such termination notice is not given within
such twenty (20)-day period of time, then Landlord shall be deemed to have
consented to such assignment or subletting.
11.2 DEEMED ASSIGNMENTS. Any change in the partners or members of
Tenant (except to any of Tenant's Affiliates), if Tenant is a partnership or
limited liability company, or, if Tenant is a corporation, any transfer of
any or all of the shares of stock of Tenant (except to any of Tenant's
Affiliates), resulting in a change in the identity of the person or persons
owning a majority of equity interests in Tenant as of the date of this Lease,
will be deemed to be an assignment within the meaning of this SECTION 11.
However, a transfer of the stock or partnership or membership interests of
Tenant if Tenant is a publicly held entity whose equity interests are traded
on a national stock exchange, or in an initial public offering, will not
constitute an assignment requiring Landlord's consent pursuant to this
SECTION 11. A transfer of interests in Tenant's parent entity does not
constitute a violation of this SECTION 11.2.
11.3 GENERAL PROVISIONS. No subletting or assignment by Tenant
hereunder, regardless of whether the same requires Landlord's consent, will
release or discharge Tenant of or from any liability, whether past, present or
future, under this Lease, and Tenant will continue fully liable hereunder.
Notwithstanding the foregoing, in the event the Release Conditions, as defined
above, are met, then Tenant and Guarantor will be automatically released from
all obligations arising under this Lease from and after the date of such
assignment or sublease and Landlord agrees to execute an agreement confirming
such release within ten (10) days after requested to do so by Tenant or
Guarantor, or both, although execution of such document will not be necessary
for such release to be effective. The sublessee or assignee will agree to
comply with and be bound by all of the terms,
29
covenants, conditions, provisions and agreements of this Lease to the extent
of the space sublet or assigned from and after the date of such assignment or
subletting, and Tenant will deliver to Landlord promptly after execution an
executed copy of each such sublease or assignment and such an agreement of
compliance by each such sublessee or assignee. Consent by Landlord to any
assignment of this Lease or to any subletting of the Premises will not be a
waiver of Landlord's rights under this section as to any subsequent
assignment or subletting. Any sale, assignment, mortgage, transfer or
subletting of this Lease which is not in compliance with the provisions of
this SECTION 11 will be of no effect and void. Landlord will not assign its
interest in this Lease before the Original Commencement Date. After the
Original Commencement Date, Landlord's right to assign its interest in this
Lease will remain unqualified. Landlord may charge Tenant up to $1,000.00
for attorneys' fees and administrative expenses incident to a review of any
documentation related to any proposed assignment or subletting by Tenant.
120 CASUALTY
12.1 LANDLORD'S OBLIGATIONS.
(a) Subject to subsections (b) and (c) below, in the event the
Improvements shall be damaged by fire or other casualty, Landlord shall,
at its own expense, cause such damage to be repaired, and the Rent shall
be abated from the date of the occurrence of such fire or other casualty
until such repair work is completed.
(b) Subject to subsection (c) below, if a fire or other
casualty occurs during the last two (2) years of the Term of this Lease
and (A) the cost of repairing or restoring the Improvements to their
condition existing prior to such casualty, as determined by an architect
or contractor selected by Landlord and reasonably approved by Tenant, is
equal to or greater than 75% of the market value of the Improvements
immediately preceding such casualty, as determined by an appraiser
selected by Landlord and reasonably approved by Tenant or (B)
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the time required to repair and restore the Improvements to their
condition existing prior to such casualty, using a reasonable
construction schedule as determined by an architect or contractor
selected by Landlord and reasonably approved by Tenant, will exceed 180
days from the commencement of repairs and restoration, then either
Landlord or Tenant may, at its option, elect to terminate this Lease by
giving the other written notice of termination within thirty (30) days
from the date of such occurrence. In such event, the proceeds of
insurance will belong to the party carrying such insurance, Tenant will
not be required to pay the deductible, and the Rent shall xxxxx
completely from and after the date of the occurrence of such fire or
other casualty.
(c) Notwithstanding the foregoing, in the event that the
Improvements shall be damaged by any casualty not covered by Landlord's
insurance as required by SECTION 9.1, Landlord shall have the option to
terminate this Lease by notice to Tenant within sixty (60) days of the
occurrence; provided, that Tenant may nullify Landlord's notice of
termination in such case by notifying Landlord within ten (10) days
thereafter that Tenant will make available to Landlord funds sufficient
to cover the uninsured damage and making arrangements reasonably
satisfactory to Landlord to make such funds available to Landlord as
needed. If Tenant makes such funds available to Landlord, Landlord shall
have no obligation to repay such funds to Tenant any time or in any
manner.
12.2 TIME FOR REPAIRS. In the event of partial damage to the
Improvements, Landlord shall advise Tenant in writing within thirty (30) days of
the occurrence the time that Landlord estimates will be required to repair or
restore the Improvements, using a reasonable construction schedule. If Landlord
is obligated to repair or to restore the Improvements damaged by fire other
casualty, Landlord shall commence to repair any such damage or to restore the
Improvements as soon as reasonably possible (and in any event, within sixty (60)
days after the date of such occurrence) and shall diligently pursue completion
of such repairs or restoration. In the event Landlord does not complete such
repairs within the time period specified in such estimate (as extended by one
(1) day of each day of each day of delay after the tenth (10th) day of delay due
to force majeure), then Landlord must pay to Tenant $2,000 per day for the
period of time after the date specified in such estimate until Landlord
completes such repairs. If Landlord does not complete such repairs within one
hundred eighty (180) days after commencement of such repairs and restoration,
then Tenant may also terminate this Lease by written notice to Landlord at any
time before Landlord completes such repairs. In such event, Landlord and Tenant
will have no further obligations to each other except that Landlord must return
all Basic Rent and other charges paid by Tenant for the period after the
occurrence of such event and must pay to Tenant the amounts accruing under this
SECTION 12.2 for Landlord's failure to complete such repairs and Tenant will not
be required to pay the deductible to Landlord.
13. EMINENT DOMAIN
13.1 TERMINATION. If the whole of the Premises is taken by any public
authority under the power of eminent domain, this Lease will terminate as of the
day possession is taken by such public authority. If more than 30% of the floor
area of the Building is taken, or if so much of the Land is taken that Tenant is
permanently deprived of the use of more than 30% of the parking spaces
previously available on the Land (and such spaces cannot be reconstructed on the
remaining Land or any adjacent land acquired by Landlord for that purpose within
90 days after Tenant is so deprived of such use), by any public authority under
the power of eminent domain, then Tenant may, by notice to Landlord, terminate
this Lease as of the day possession is taken by such public authority. In case
of any such termination, Landlord will make a pro rata refund of any prepaid
Rent.
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13.2 RESTORATION; AWARD. Anything in this SECTION 13 to the contrary
notwithstanding, in the event of a partial condemnation of the Premises where
this Lease is not terminated, (i) Landlord will, at its sole cost and expense,
restore the Premises (other than any alterations or improvements installed by
Tenant) to a complete architectural unit (but Landlord's restoration obligations
will be limited to restoration and repair of the Original Building and, if
applicable, the Expansion Building, including all sitework), and (ii) the Basic
Rent provided for herein during the period from and after the date of delivery
of possession pursuant to such proceedings to the termination of this Lease will
be reduced to a sum equal to the product of the Basic Rent provided for herein
multiplied by a fraction, the numerator of which is the area of the Premises
remaining after such taking and after the same has been restored to a complete
architectural unit, and the denominator of which is the area of the Premises
prior to such taking. In the event of any such taking or purchase in lieu
thereof and neither Landlord nor Tenant terminates this Lease, Landlord shall be
entitled to receive the entire price or award from any such taking or private
purchase in lieu thereof without any payment to Tenant, and Tenant hereby
assigns to Landlord Tenant's interest, if any, in such award. If this Lease
terminates for any reason, then Landlord and Tenant may prosecute their claims
in any condemnation proceedings for the value of their respective interest.
Landlord shall be entitled to the condemnation award attributable to the real
property and improvements and Tenant shall be entitled to the condemnation award
for the taking of its personalty (store fixtures and equipment), relocation
expenses, goodwill, loss of business and any other award not related to the
value of the real property and improvements, but shall not be entitled to make a
claim for the leasehold improvements or the leasehold estate.
14. END OF TERM
14.1 SURRENDER. On the last day of the Term, or on the sooner
termination thereof, Tenant will peaceably surrender the Premises in good
condition and repair (ordinary wear and tear and damage by casualty excepted),
consistent with Tenant's duty to make repairs as herein provided. Tenant will
give written notice to Landlord at least 30 days prior to vacating the Premises
for the express purpose of arranging a meeting with Landlord for a joint
inspection of the Premises. On or before the last day of the Term, or the date
of sooner termination thereof, Tenant may, at its sole cost and expense, remove
all of its property and trade fixtures and equipment from the Premises and
repair all damage to the Premises caused by such removal. All property not
removed will be deemed abandoned. Tenant hereby appoints Landlord its agent to
remove all property of Tenant not so removed from the Premises upon termination
of this Lease and to cause its transportation and storage for Tenant's benefit,
all at the sole cost and risk of Tenant, and Landlord will not be liable for
damage, theft, misappropriation or loss thereof, nor will Landlord be liable in
any manner in respect thereto. Tenant will reimburse Landlord upon demand for
any expenses incurred by Landlord with respect to removal, transportation or
storage of abandoned property and with respect to restoring such Premises to
good order, condition and repair. All Leasehold Improvements and any other
modifications, improvements, alterations, additions and fixtures, other than
Tenant's trade fixtures and equipment, which have been made or installed by
either Landlord or Tenant upon the Premises, will become the property of
Landlord on the last day of the Term or sooner termination thereof and will be
surrendered with the Premises as a part thereof. Tenant will promptly surrender
all keys for the Premises to Landlord at the place then fixed for the payment of
Rent and will inform Landlord of combinations on any vaults, locks and safes
left on the Premises.
14.2 HOLDING OVER. In the event Tenant remains in possession of the
Premises after expiration of this Lease without Landlord's consent, Tenant will
be deemed to be occupying the Premises without claim of right, and Tenant will
indemnify Landlord against loss or liability resulting from delay by Tenant in
surrendering the Premises, including, without limitation, claims made by any
succeeding tenants founded on such delay and any attorneys' fees resulting
therefrom. In addition,
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if Tenant remains in possession of the Premises after expiration of this
Lease without a written agreement with Landlord as to (i) the amount Rent to
be paid for such occupancy, Tenant will pay a charge for each day of
occupancy in an amount equal to 150% of the Basic Rent (on a daily basis)
payable immediately prior to such expiration, plus 100% of all Additional
Rent (also on a daily basis); or (ii) the duration of Tenant's holdover
tenancy, Tenant will be deemed a tenant at sufferance.
15. DEFAULTS AND REMEDIES
15.1 GENERAL. All rights and remedies of Landlord and Tenant
enumerated in this Lease are cumulative and are not intended to be exclusive of
any other remedies or means of redress at law or in equity to which either party
may be lawfully entitled in case of any breach or threatened breach by the other
party of any provision of this Lease. The failure of either party to insist in
any one or more cases upon the strict performance of any of the covenants of
this Lease or to exercise any option herein contained will not be construed as a
waiver or relinquishment for the future of such covenant or option. A receipt
by Landlord of Rent with knowledge of the breach of any covenant hereof (other
than breach of the obligation to pay the portion of such Rent paid) will not be
deemed a waiver of such breach, and no waiver by either party of any provisions
of this Lease will be deemed to have been made unless expressed in writing and
signed by such party. Each party agrees to pay, upon demand, all of the other
party's costs, charges and expenses, including the reasonable fees and
out-of-pocket expenses of counsel, agents, and others retained, incurred in
successfully enforcing the other party's obligations under this Lease.
15.2 EVENTS OF DEFAULT. Each of the following events will constitute
an "EVENT OF DEFAULT" under this Lease:
(a) FAILURE TO PAY RENT. Tenant fails to pay Basic Rent or any
other Rent payable by Tenant under the terms of this Lease when due, and
such failure continues for 10 days after notice from Landlord to Tenant
of such failure (provided that, with respect to monthly installments of
Basic Rent, Tenant will only be entitled to two notices of such failure
during any calendar year and if, after two such notices are given in any
calendar year, Tenant fails, during such calendar year, to pay any
further monthly installment of Basic Rent when due, such failure will
constitute an Event of Default hereunder without any further notice from
Landlord or additional cure period).
(b) FAILURE TO PERFORM OTHER OBLIGATIONS. Tenant breaches or
fails to comply with any provision of this Lease applicable to Tenant
other than a covenant to pay Rent, and such breach or noncompliance
continues for a period of 30 days after notice thereof from Landlord to
Tenant; or, if such breach or noncompliance cannot be reasonably cured
within such 30-day period, Tenant does not commence to cure such breach
or noncompliance within such 30-day period or, after commencing to cure
such breach or noncompliance, does not thereafter diligently pursue such
cure in good faith to completion.
(c) EXECUTION AND ATTACHMENT AGAINST TENANT. Tenant's interest
under this Lease or in the Premises is taken upon execution or by other
process of law directed against Tenant, or is subject to any attachment
by any creditor or claimant against Tenant and such attachment is not
discharged or disposed of within 60 days after levy.
(d) BANKRUPTCY OR RELATED PROCEEDINGS. Tenant files a petition
in bankruptcy or insolvency, or for reorganization or arrangement under
any bankruptcy or insolvency Laws, or voluntarily takes advantage of any
such Laws by answer or otherwise, or dissolves or
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makes a general assignment for the benefit of creditors, or involuntary
proceedings under any such Laws or for the dissolution of Tenant are
instituted against Tenant, or a receiver or trustee is appointed for the
Premises or for all or substantially all of Tenant's property, and such
involuntary proceedings are not dismissed or such receivership or
trusteeship vacated within 60 days after such institution or appointment.
15.3 LANDLORD'S REMEDIES. Time is of the essence. If any Event of
Default occurs, Landlord will have the right, at Landlord's election, then or at
any later time, to exercise any one or more of the following remedies:
(a) CURE BY LANDLORD. Landlord may, at Landlord's option but
without obligation to do so, and without releasing Tenant from any
obligations under this Lease, make any payment or take any action as
Landlord deems necessary or desirable to cure any Event of Default in
such manner and to such extent as Landlord in good xxxxx xxxxx necessary
or desirable. Tenant will pay Landlord, upon demand, all reasonable
advances, costs and expenses of Landlord in connection with making any
such payment or taking any such action, including reasonable attorney's
fees, together with interest at the Interest Rate, from the date of
payment of any such advances, costs and expenses by Landlord.
(b) TERMINATION OF LEASE AND DAMAGES. Landlord may terminate
this Lease, effective at such time as may be specified by notice to
Tenant, and demand (and, if such demand is refused, recover) possession
of the Premises from Tenant. In such event, Landlord will be entitled to
recover from Tenant, as damages for loss of the bargain and not as a
penalty, an aggregate sum equal to (i) all unpaid Basic Rent and other
Rent for any period prior to the termination date of this Lease
(including interest from the due date to the date of the award at the
Interest Rate); plus (ii) the present value at the time of termination
(calculated by discounting on a monthly basis at a discount rate equal to
the rate payable on U.S. Treasury securities offered at the time of award
having a maturity closest to the date on which the Term would have
expired but for such termination) of the amount, if any, by which (A) the
aggregate of the Basic Rent and all other Rent payable by Tenant under
this Lease that would have accrued for the balance of the Term after
termination, exceeds (B) the amount of such Basic Rent and other Rent
which could reasonably be recovered by reletting the Premises for the
remainder of the Term at the then-current fair rental value; plus (iii)
interest on the amount described in (ii) above from the termination date
to the date of the award at the Interest Rate.
(c) REPOSSESSION AND RELETTING. Landlord may reenter and take
possession of all or any part of the Premises, without additional demand
or notice unless required by applicable Laws, and repossess the same and
expel Tenant and any party claiming by, through or under Tenant, and
remove the effects of both using such force for such purposes as may be
necessary, without being liable for prosecution for such action or being
deemed guilty of any manner of trespass, and without prejudice to any
remedies for arrears of Rent or right to bring any proceeding for breach
of covenants or conditions. No such reentry or taking possession of the
Premises by Landlord will be construed as an election by Landlord to
terminate this Lease unless a notice of such intention is given to
Tenant. No notice from Landlord or notice given under a forcible entry
and detainer statute or similar Laws will constitute an election by
Landlord to terminate this Lease unless such notice specifically so
states. Landlord reserves the right, following any reentry or reletting,
to exercise its right to terminate this Lease by giving Tenant such
notice, in which event this Lease will terminate as specified in such
notice. After recovering possession of the Premises, Landlord will use
reasonable efforts to relet the Premises on commercially reasonable terms
and conditions.
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Landlord may collect and receive the rents for such reletting.
Landlord may apply the same first to the payment of such expenses as
Landlord may have incurred in recovering possession of the Premises,
including attorneys' fees and expenses for putting the same into good
order and condition (but specifically excluding the cost of any lease
commission or the cost of preparing or altering the same for
re-rental), and then to the fulfillment of the covenants of Tenant
hereunder. Any such reletting herein provided for may be for the
remainder of the Term or any renewal term of this Lease, as originally
granted, or for a longer or shorter period; Landlord will have the
right to change the character and use made of the Premises, and
Landlord will not be required to accept any substitute tenant offered
by Tenant or to observe any instructions given by Tenant about
reletting. Regardless of Landlord's recovery of possession of the
Premises, so long as this Lease is not terminated Tenant will continue
to pay (and Landlord may recover, if Tenant fails to do so), on the
dates specified in this Lease, the Basic Rent and other Rent which
would be payable if such repossession had not occurred, less a credit
for the net amounts, if any, actually received by Landlord through any
reletting of the Premises as long as Landlord gives Tenant at least
thirty (30) days' notice of the net amount due (which notice Landlord
may change from time to time as the facts change). Tenant will have
thirty (30) days after receipt of notice from Landlord of any other
amount due in which to pay such amount.
(d) BANKRUPTCY RELIEF. Nothing contained in this Lease will
limit or prejudice Landlord's right to prove and obtain as liquidated
damages in any bankruptcy, insolvency, receivership, reorganization or
dissolution proceeding, an amount equal to the maximum allowable by any
Laws governing such proceeding in effect at the time when such damages
are to be proved, whether or not such amount be greater, equal or less
than the amounts recoverable, either as damages or Rent, under this
Lease.
15.4 LANDLORD'S DEFAULT; TENANT'S REMEDIES. If, during the Term,
Landlord defaults in fulfilling any of its covenants, obligations or agreements
set forth in this Lease, Tenant may give Landlord notice of such default and, if
at the expiration of 30 days after delivery of such notice, such default
continues to exist, or in the event of a default which cannot with due diligence
be cured within a period of 30 days, if Landlord fails to proceed promptly after
the delivery of such notice and with all due diligence to commence to cure the
same and thereafter to prosecute the curing of such default with all due
diligence to completion as soon as reasonably possible, then Tenant will be
entitled to exercise any right or remedy available to Tenant at law or in equity
by reason of such default, except to the extent expressly waived or limited by
the terms of this Lease, and, provided that Tenant stated in such notice of
default to Landlord that Tenant intended to effect its self-help and offset
rights under this SECTION 15.4, Tenant may proceed to cure Landlord's default
and offset the amount reasonably expended by Tenant in doing so, plus interest
thereon at the Interest Rate from the date incurred to the date offset, against
the next accruing amounts of Basic Rent due hereunder; provided, however, in no
event may Tenant offset against any monthly installment of Basic Rent an amount
exceeding 25% of such installment and if such monthly offset is less than the
total amount of Tenant's expenses which are allowable for offset, the remaining
balance thereof may be carried forward and offset against future installments of
Basic Rent (but never more than 25% of any month's Basic Rent); provided further
that, if the balance of the Term will not allow full recovery of the offset
amount at the rate of 25% of each installment of Basic Rent, Tenant may amortize
the full offset over the balance of the remaining monthly installments of Basic
Rent, even if the monthly amortized offsets are in excess of 25% of those
installments. Notwithstanding the foregoing, however, if Tenant has been
notified of the name and address of any mortgagee, ground lessor, trust deed
holder, and/or sale-leaseback lessor of Landlord's interest in the Premises,
then Tenant will not exercise any remedy as a result of Landlord's default
unless and until Tenant has given any such mortgagee,
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ground lessor, trust deed holder and/or sale-leaseback lessor, by registered
or certified mail, a copy of any notice of default served upon Landlord
simultaneously with the delivery of notice to Landlord.
15.5 DISCLAIMER OF LANDLORD'S LIEN. Landlord disclaims and waives any
statutory or common law lien (excluding, however, any judgment lien) on the
Leasehold Improvements or any personal property of Tenant in or on the Premises.
16. SUBORDINATION
16.1 SUBORDINATION, NONDISTURBANCE AND ATTORNMENT. This Lease will
be subject and subordinate to any mortgage, deed of trust, ground lease or
sale-leaseback now placed upon the Premises by Landlord, and to amendments,
renewals and extensions thereof. Landlord must obtain from any holder of any
mortgage, deed of trust, ground lease, or sale-leaseback interest which has
priority over this Lease at the time of execution of this Lease and recording
of the Memorandum of Lease a Non-disturbance Agreement on the form attached
to this Lease as EXHIBIT F or such other form as is acceptable to Tenant (an
"NDA") and if Landlord does not do so before the Original Commencement Date,
all Rent will be forgiven from the Original Commencement Date through the
date that Landlord delivers such NDA, executed by such holder and Landlord,
to Tenant. Tenant agrees to subordinate this Lease to any mortgage, deed of
trust, ground lease, or sale-leaseback interest placed upon the Premises by
Landlord after the Original Commencement Date and to any amendments,
renewals, and extensions thereof upon the condition that the holder of the
instrument to which this Lease is subordinated has given Tenant an NDA upon
the form attached as EXHIBIT F or such other form as is acceptable to Tenant.
16.2 OPTION TO MAKE LEASE SUPERIOR. Notwithstanding anything contained
in SECTION 16.1, in the event the holder of any mortgage, deed of trust, ground
lease or sale-leaseback instrument at any time elects to have this Lease
constitute a prior and superior lien to its mortgage, deed of trust, ground
lease or sale-leaseback instrument, then, and in such event, upon any such
holder or Landlord notifying Tenant to that effect in writing, this Lease in its
entirety will be deemed prior and superior in lien to such mortgage, deed of
trust, ground lease or sale-leaseback instrument, whether this Lease is dated
prior to or subsequent to the date of such mortgage, deed of trust, ground lease
or sale-leaseback instrument.
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17. MISCELLANEOUS
17.1 BROKERS. Landlord and Tenant represent and warrant that no
broker or agent negotiated or was instrumental in negotiating or consummating
this Lease except Xxxxxxxx Realty Group. Neither party knows of any other
real estate broker or agent who is or might be entitled to a commission or
compensation in connection with this Lease. Landlord will pay any and all
fees, commissions or other compensation payable to Xxxxxxxx Realty Group.
Tenant and Landlord will indemnify and hold each other harmless from all
damages paid or incurred by the other resulting from any claims asserted
against either party by brokers or agents claiming through the other party
(other than Xxxxxxxx Realty Group, who will be paid by Landlord as provided
above).
17.2 ESTOPPEL CERTIFICATES. Landlord and Tenant agree, from time to
time, upon not less than 10 days' prior written request by the other party, to
deliver to the other party a statement in writing certifying (i) this Lease is
unmodified and in full force and effect (or if there have been modifications,
that this Lease as modified is in full force and effect and stating the
modifications); (ii) the dates to which Basic Rent and other Rent have been
paid; (iii) the other party is not in default in any provision of this Lease or,
if in default, the nature thereof specified in detail; (iv) the amount of
monthly Basic Rent currently payable by Tenant; (v) the amount of any prepaid
Rent; (vi) that Tenant has taken possession of the Original Premises (if Tenant
has in fact done so) and that Landlord has performed all of its obligations
under SECTION 3 with respect to the design, construction and installation of the
Original Base Building and the Original Leasehold Improvements, or if there are
any such obligations remaining to be performed, specifying the same in detail;
(vii) if applicable, that Tenant has taken possession of the Expansion Building
(if Tenant has in fact done so) and that Landlord has performed all of its
obligations under SECTION 18 with respect to the design, construction and
installation of the Expansion Base Building and the Expansion Leasehold
Improvements, or if there are any such obligations remaining to be performed,
specifying the same in detail; and (viii) such other matters as may be
reasonably requested by the requesting party or any mortgagee or prospective
purchaser of the Premises.
17.3 NOTICES. All notices required or permitted under this Lease must
be in writing and will only be deemed properly given and received (i) when
actually given and received, if delivered in person to a party who acknowledges
receipt in writing or, for purposes of notice pursuant to SECTION 3, if
transmitted by telecopier; or (ii) one business day after deposit with a private
courier or overnight delivery service, if such courier or service obtains a
written acknowledgment of receipt; or (iii) three business days after deposit in
the United States mails, certified or registered mail with return receipt
requested and postage prepaid. All such notices must be transmitted by one of
the methods described above to the party to receive the notice at, in the case
of notices to Landlord, Landlord's Notice Address, and in the case of notices to
Tenant, the applicable Tenant's Notice Address, or, in either case, at such
other address(es) as either party may notify the other of according to this
SECTION 17.3.
17.4 ACTIONS BY AGENTS. All rights and remedies of Landlord and Tenant
under this Lease or that may be provided by law may be executed by the
applicable party in its own name, individually, or in the name of its agent, and
all legal proceedings for the enforcement of any such rights or remedies,
including those set forth in SECTION 15, may be commenced and prosecuted to
final judgment and execution by the applicable party in its own name or in the
name of its agent. The applicable party will, upon the other's request, provide
written evidence of the authority of any agent of Landlord to act on Landlord's
behalf.
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17.5 SEVERABILITY; GOVERNING LAW. If any term or provision of this
Lease is to any extent held invalid or unenforceable, the remaining terms and
provisions of this Lease will not be affected thereby, but each term and
provision of this Lease will be valid and enforced to the fullest extent
permitted by law. This Lease will be construed and enforced in accordance with
the laws of the State of Texas.
17.6 TRANSFERS OF LANDLORD'S INTEREST. The term "LANDLORD" as used in
this Lease, so far as covenants or obligations on the part of Landlord are
concerned, will be limited to mean and include only the owner or owners of the
Premises at the time in question, and in the event of any transfer or conveyance
after the Original Commencement Date, the then-grantor will be automatically
freed and released from all personal liability accruing from and after the date
of such transfer or conveyance as respects the performance of any covenant or
obligation on the part of Landlord contained in this Lease to be performed, it
being intended hereby that the covenants and obligations contained in this Lease
on the part of Landlord will be binding, subject to SECTION 17.11, on the
then-Landlord only during and in respect to its period of ownership. In the
event of a sale or conveyance by Landlord of the Premises after the Original
Commencement Date, the same will operate to release Landlord from any future
liability upon any of the covenants or conditions herein contained and in such
event Tenant agrees to look solely to the responsibility of the successor in
interest of Landlord in and to this Lease. This Lease will not be affected by
any such sale or conveyance, and Tenant agrees to attorn to the purchaser or
grantee, which will be obligated on this Lease only so long as it is the owner
of Landlord's interest in and to this Lease. In the event Landlord sells or
otherwise transfers the Premises, Tenant will be entitled to pay all Rent and
other amounts due under the terms of this Lease to Landlord at Landlord's last
known address unless and until Tenant receives written notice from Landlord
authorizing Tenant to pay such amounts to the new owner of the Premises and a
written assumption by such new owner of all Landlord's duties and obligations
under this Lease which arise after the transfer.
17.7 HEADINGS. The marginal or topical headings of the several
sections are for convenience only and do not define, limit or construe the
contents of such sections.
17.8 COMPLETE AGREEMENT; MODIFICATION. All of the representations and
obligations of the parties are contained in this Lease and no modification,
waiver or amendment of this Lease or of any of its conditions or provisions will
be binding upon a party unless in writing signed by such party.
17.9 NO OFFER. The submission of this document for examination does
not constitute an offer to lease, or a reservation of, or option for, the
Premises. This document becomes effective and binding only upon the execution
and delivery hereof by the proper officer of Landlord and by Tenant.
17.10 SURVIVAL. All obligations of Tenant hereunder not fully performed
as of the expiration or earlier termination of the Term will survive the
expiration or earlier termination of the Term, including, without limitation,
all payment obligations with respect to Taxes and all obligations concerning the
condition of the Premises.
17.11 LIMITATION ON LANDLORD'S LIABILITY. Tenant agrees to look solely
to Landlord's interest in the Premises for the recovery of any judgment from
Landlord, it being agreed that Landlord, and if Landlord is a partnership, its
partners whether general or limited, and if Landlord is a corporation, its
directors, officers or shareholders, and if Landlord is a limited liability
company, its managers or members, will never be personally liable for any such
judgment.
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17.12 AUTHORITY. Tenant will furnish to Landlord and Landlord will
furnish to Tenant, promptly upon demand, a corporate resolution, proof of due
authorization of partners, or other appropriate documentation reasonably
requested by the other party evidencing the due authorization of Tenant or
Landlord, as the case may be, to enter into this Lease.
17.13 NO PARTNERSHIP. This Lease will not be deemed or construed to
create or establish any relationship or partnership or joint venture or similar
relationship or arrangement between Landlord and Tenant hereunder.
17.14 FORCE MAJEURE. Whenever a period of time is herein prescribed
for action to be taken by either party, such party will not be liable or
responsible for, and there will be excluded from the computation of any such
period of time, any delays due to force majeure.
17.15 FINANCIAL STATEMENTS. Tenant acknowledges that it has provided
Landlord with its financial statement as a material inducement to Landlord's
agreement to lease the Premises to Tenant, and that Landlord has relied on the
accuracy of such financial statement in entering into this Lease. Tenant
represents and warrants that the information contained in such financial
statement is true, complete and correct in all material aspects. Within 10 days
from request by Landlord, Tenant will make available to Landlord or to any
prospective purchaser or lender of the Premises, audited financial statements of
Tenant or any guarantor, provided, that Landlord or any such prospective
purchaser or lender agrees to maintain such statements in confidence, and
provided further that if audited financial statements of Tenant are not
available at the time of such request, Tenant may deliver unaudited statements
prepared in accordance with generally accepted accounting principles
consistently applied and certified to be true and correct by Tenant's chief
financial officer.
17.16 BINDING EFFECT. The covenants and agreements herein contained
will bind and inure to the benefit of Landlord and its successors and assigns,
and Tenant and its permitted successors and assigns. All obligations of each
party constituting Tenant hereunder will be the joint and several obligations of
each such party.
17.17 LEASE GUARANTY. Tenant covenants and agrees to cause Guarantor to
execute and deliver to Landlord a Lease Guaranty in form and substance as that
which is attached hereto as EXHIBIT G. In the event a fully executed original
of the Lease Guaranty is not provided to Landlord within three (3) days
following the date of this Lease, then Landlord may, at its option and as its
sole and exclusive remedy, terminate this Lease.
17.18 CORPORATE AUTHORITY. Contemporaneous with the execution of this
Lease, Tenant shall provide to Landlord the following:
(a) A copy of Tenant's Good Standing, or similar certificate,
issued by the Secretary of State of the State of Tenant's incorporation;
(b) Evidence that Tenant is qualified to do business in the
State wherein the Land is located; and
(c) A copy of the appropriate corporate resolutions, certified
by the secretary or the assistant secretary of the Tenant, evidencing the
authorization of the Tenant to execute this Lease.
39
In the event a guaranty agreement is executed with respect to this Lease,
Tenant shall additionally provide to Landlord, contemporaneous with the
execution of this Lease, the items listed above for the guarantor.
18. EXPANSION OPTION. Landlord hereby grants to Tenant the right to expand
the Improvements on the Land in accordance with the terms of this SECTION 18.
Such expansion right is a continuing right that expires on the Expiration Date,
and inures solely to the benefit of (A) Tenant, Tenant's corporate successors
and assigns (including, without limitation, any person or entity that acquires
Tenant), and (B) any assignee of this Lease (including, without limitation,
Tenant's Affiliates) to whom Tenant assigns such right unless Landlord is
entitled to and recaptures the Premises in accordance with the terms of SECTION
11.1 above and their corporate successors and assigns (with all such persons or
entities being deemed included in the term "TENANT"). Tenant cannot assign this
expansion option to any person or entity other than an assignee of this Lease.
Tenant cannot exercise this expansion option (Y) if an Event of Default has
occurred and is ongoing, or (Z) if neither Tenant nor its guarantor has a net
worth (excluding goodwill) greater than or equal to $75 million at the time
Tenant (or its assignee, as the case may be) exercises such expansion option.
(a) In the event Tenant wishes to exercise this right, Tenant
must notify Landlord of such fact, which notice must specify that Tenant
wishes to go forward with the expansion pursuant to the specifications of
EXHIBIT H to this Lease (the "2-STORY PLAN") or the specifications of
EXHIBIT I to this Lease (the "3-STORY PLAN"). The building shell for the
building that Tenant elects to have constructed is referred to in this
Lease as the "EXPANSION BASE BUILDING" and the Tenant improvements to the
Expansion Base Building are referred to as the "EXPANSION LEASEHOLD
IMPROVEMENTS." The Expansion Base Building and the Expansion Leasehold
Improvements are collectively referred to as the "EXPANSION BUILDING" and
the work of constructing the Expansion Building is referred to as
"LANDLORD'S EXPANSION WORK".
(b) On or before thirty (30) days after Tenant delivers such
notice to Landlord, Landlord will cause its architect to prepare and
deliver to Tenant preliminary plans and specifications for the Expansion
Base Building (the "EXPANSION BASE BUILDING PLANS"), which plans must be
based on an exterior appearance substantially similar to the Original
Base Building. While these preliminary plans and specifications are not
required to be permit-ready, they must contain a site plan, floor plan,
one-quarter inch (0.25") scale core building plans, elevations of the
Expansion Base Building and a riser diagram of the mechanical, electrical
and plumbing systems. Within five (5) business days after Tenant
receives such preliminary Expansion Base Building Plans, Tenant will
either approve the same in writing or notify Landlord in writing of
Tenant's objections to the preliminary Expansion Base Building Plans and
how the preliminary Expansion Base Building Plans must be changed in
order to make them acceptable to Tenant. Each business day following the
fifth (5th) business day after the preliminary Expansion Base Building
Plans are submitted to Tenant until Tenant either approves them or
delivers a notice of objections to Landlord will be a day of Tenant
Expansion Delay. Within five (5) business days after Landlord's receipt
of Tenant's notice of objections, Landlord will cause its architect to
prepare revised Expansion Base Building Plans according to such notice
and submit the revised Expansion Base Building Plans to Tenant. In any
review, Tenant cannot object to any aspect of the proposed Expansion Base
Building Plans (i) if such objection would require material deviations
from the terms of EXHIBIT H or EXHIBIT I attached to this Lease, as the
case may be, or (ii) such objection was not included within any of the
previous objections made by Tenant to the Expansion Base Building Plans
unless the item objected to was not included in any of the previous
versions of the Expansion Base Building Plans or such item was so
included, but has been affected by a subsequent change to the Expansion
Base Building Plans. However, it is understood
40
and agreed that Tenant has the right to select the following items,
even if such items are not consistent with the guidelines detailed in
the Base Building Specifications attached as EXHIBIT B or with the
same items in the Original Building , as long as they are available to
comply with the schedule for construction of the Expansion Building:
exterior brick, glass, and metal frames; restroom finishes (including,
without limitation, ceramic tile and toilet partitions); lobby
finishes; elevator cab finishes; landscaping; and common area interior
finishes, doors and hardware. Upon submittal to Tenant of the revised
Expansion Base Building Plans, and upon submittal of any further
revisions, the procedures described above will be repeated until
Landlord and Tenant have reached agreement. Once they have reached
agreement, Landlord must promptly prepare permit-ready Expansion Base
Building Plans and submit them to Tenant for Tenant's approval. The
only grounds upon which Tenant can object to such permit-ready
Expansion Base Building Plans is that they materially differ from the
final approved preliminary Expansion Base Building Plans. Tenant's
failure to respond to Landlord's submission within five (5) business
days after Landlord delivers such permit-ready Expansion Base Building
Plans to Tenant constitutes Tenant's approval of such permit-ready
Expansion Base Building Plans. The final permit-ready Expansion Base
Building Plans, as approved by Landlord and Tenant, constitute the
"APPROVED EXPANSION BASE BUILDING PLANS" under this Lease.
(c) On or before seventy-five (75) days after Landlord and
Tenant have approved the Approved Expansion Base Building Plans, Tenant
will cause its architect to prepare and deliver to Landlord preliminary
plans and specifications for the Expansion Leasehold Improvements (the
"EXPANSION LEASEHOLD IMPROVEMENTS PLANS"). While these preliminary plans
and specifications are not required to be permit-ready, they must show
sufficient detail concerning all aspects of the Expansion Leasehold
Improvements so that making them permit-ready is only a matter of
incorporating technical details. Each day following the expiration of
such seventy-five (75)-day period until Tenant delivers the preliminary
Expansion Leasehold Improvements Plans will be a day of Expansion Tenant
Delay. Within five (5) business days after receipt of the preliminary
Expansion Leasehold Improvements Plans, Landlord will either approve the
same in writing or notify Tenant in writing of Landlord's objections to
the preliminary Expansion Leasehold Improvements Plans and how the
preliminary Expansion Leasehold Improvements Plans must be changed in
order to make them acceptable to Landlord. Landlord can only object to
the preliminary Expansion Leasehold Improvements Plans on the grounds
that they would adversely affect the structural integrity of the
Expansion Base Building or materially modify any portion of the Core
Building Systems of the Expansion Base Building and cannot object in any
subsequent review to any matter not raised in a preceding review, unless
the item objected to was not included in any of the previous versions of
the Expansion Leasehold Improvements Plans or such item was so included,
but has been affected by a subsequent change to the Expansion Leasehold
Improvements Plans. However, under all circumstances, Tenant has the
right to select the following items as they apply to the Expansion
Leasehold Improvements, but only as long as such items are available to
comply with the schedule of construction of the Expansion Building:
exterior brick, glass, and metal frames; restroom finishes (including,
without limitation, ceramic tile and toilet partitions); lobby finishes;
elevator cab finishes; landscaping; and common area interior finishes,
doors and hardware. If Landlord fails to respond in the manner set forth
above within five (5) business days after the date Tenant delivers the
preliminary Expansion Leasehold Improvements Plans to Landlord or objects
to the preliminary Expansion Leasehold Improvements Plans on any grounds
other than those set forth in the immediately-preceding sentence, then
Landlord will be conclusively deemed to have approved the preliminary
Expansion Leasehold Improvements Plans. Within five (5) business days
after Tenant's receipt of Landlord's notice of objections (if such
objections
41
meet the requirements set forth above), Tenant will cause its
architect to prepare revised Expansion Leasehold Improvements Plans
according to such notice and submit the revised Expansion Leasehold
Improvements Plans to Landlord. Upon submittal to Landlord of the
revised Expansion Leasehold Improvements Plans, and upon submittal of
any further revisions, the procedures described above will be repeated
until Landlord and Tenant have reached agreement. Once they have
reached agreement, Tenant must promptly prepare permit-ready Expansion
Leasehold Improvements Plans and submit them to Landlord for
Landlord's approval. The only grounds upon which Landlord can object
to such permit-ready Expansion Leasehold Improvements Plans is that
they materially differ from the final approved Expansion Leasehold
Improvements Plans. Landlord's failure to respond to Tenant's
submissions within five (5) business days after Tenant delivers such
permit-ready Expansion Leasehold Improvements Plans to Landlord
constitutes Landlord's approval of such permit-ready Expansion
Leasehold Improvements Plans. The permit-ready Expansion Leasehold
Improvements Plans, as finally approved, are referred to in this Lease
as the "APPROVED EXPANSION LEASEHOLD IMPROVEMENTS PLANS."
(d) At such time as Landlord and Tenant have approved the
Approved Expansion Leasehold Improvements Plans (and in any event within
fifteen (15) days thereafter), Landlord will (i) obtain at least three
bids for each of the major trades that will be involved in the
construction of the Expansion Building, unless less than three qualified
subcontractors exist for a given trade, in which case Landlord will
obtain a bid from all qualified subcontractors of such trade (with
Landlord agreeing to solicit and consider bids from subcontractors
selected by Tenant); (ii) using the lowest qualified bid (which, in order
to be qualified, must fully comply with all bid requirements, including
but not limited to any time requirements specified) from each of the bids
so received, prepare a proposed budget for all items to be included in
Expansion Costs ("TENANT'S EXPANSION COST PROPOSAL"); and (iii) submit
copies of all bids, the Tenant's Expansion Cost Proposal, and the
Expansion Basic Rent that Tenant would be required to pay based on the
costs set forth in the Tenant's Expansion Cost Proposal to Tenant for
Tenant's review and approval. Tenant, at Tenant's option, may either
approve Tenant's Expansion Cost Proposal in writing, or elect to
eliminate or revise one or more items of Expansion Building shown on the
Approved Expansion Base Building Plans or the Approved Expansion
Leasehold Improvements Plans, or request additional bids so as to reduce
the costs shown in the Tenant's Expansion Cost Proposal. Tenant may then
approve in writing the reduced Tenant's Expansion Cost Proposal (based on
revised Approved Expansion Base Building Plans or Approved Expansion
Leasehold Improvements Plans prepared by Tenant's architect or revised
bids, as the case may be, which will then be deemed the Approved
Expansion Base Building Plans and the Approved Expansion Leasehold
Improvements Plans for all purposes under this Lease). However, each day
following the fifth (5th) business day after Tenant's receipt of Tenant's
Expansion Cost Proposal until the day on which Landlord has received
Tenant's written approval of Tenant's Expansion Cost Proposal will be a
day of Expansion Tenant Delay. The Tenant's Expansion Cost Proposal, as
finally approved, is referred to in this Lease as the "APPROVED EXPANSION
COSTS."
(e) Tenant's Representative may request and authorize changes
in Landlord's Expansion Work as long as such changes (i) are consistent
with the scope of Landlord's Expansion Work, and (ii) do not affect the
Expansion Base Building or any portion of the Core Building Systems
relating to the Expansion Base Building. All other changes will be
subject to Landlord's prior written approval, which approval Landlord
cannot unreasonably withhold, delay, or condition. Within five (5)
business days after Tenant requests a change in Landlord's Expansion
Work and prior to commencing any change, Landlord will prepare and
42
deliver to Tenant, for Tenant's approval, a change order ("EXPANSION
CHANGE ORDER") identifying the total cost or savings of such change,
which will include associated architectural, engineering and construction
contractor's fees, and the total time that will be added to or subtracted
from the construction schedule by such change. Once Landlord delivers
an Expansion Change Order to Tenant for Tenant's approval, Tenant must
either affirmatively approve or disapprove of the Expansion Change Order
within three (3) business days following Tenant's receipt of the
Expansion Change Order. In the event Tenant fails to respond within the
three (3) business day period, then each day thereafter that Tenant fails
to respond shall be a Tenant Expansion Delay. Alternatively, Landlord
may deliver to Tenant, within the same five (5) business day period, an
estimate of the time and costs to be expended in calculating the
Expansion Change Order. In the event Tenant does not respond or fails to
affirmatively authorize Landlord to proceed on the third (3rd) business
day following Tenant's receipt of such estimate, then it shall be
conclusively deemed that Tenant withdrew its request for any change in
Landlord's Expansion Work. If Tenant authorizes Landlord to proceed with
calculating the cost of the Expansion Change Order, then Tenant shall be
responsible for all reasonable costs associated therewith (and pay same
to Landlord within 30 days following Landlord's written request) and any
delay in connection with such calculation shall be an Expansion Tenant
Delay, whether or not Tenant ultimately approves the Expansion Change
Order.
(f) Landlord must deliver the Expansion Building to Tenant,
with Landlord's Expansion Work Substantially Completed, on or before two
hundred ten (210) days after Landlord and Tenant approve the Approved
Expansion Leasehold Improvements Plans (the "PROJECTED EXPANSION
COMPLETION DATE"), as such date has been delayed due to any Tenant
Expansion Delays and Permitted Expansion Force Majeure Delays only, it
being understood and agreed that such date cannot be extended for any
reason other than Tenant Expansion Delays and Permitted Expansion Force
Majeure Delays. If Landlord is unable to deliver possession of the
Expansion Building, with Landlord's Expansion Work Substantially
Completed by the Projected Expansion Completion Date, as it may be
extended, (i) the Expansion Commencement Date (as that term is defined in
SECTION 18(j)(I) below) will be extended automatically by one day for
each day of the period after the Projected Expansion Completion Date to
the day on which Landlord tenders possession of the Expansion Building to
Tenant with Landlord's Expansion Work Substantially Completed, less any
portion of that period attributable to Tenant Expansion Delays; and
(ii) Landlord will pay Tenant, as liquidated damages, an amount equal to
$2,000.00 per day for each day after such Projected Expansion Completion
Date (as it may be extended) until Landlord tenders possession of the
Expansion Building to Tenant with Landlord's Expansion Work Substantially
Completed and, if Landlord has tendered the Expansion Building to Tenant
with Landlord's Expansion Work Substantially Complete, Landlord will pay
to Tenant, as liquidated damages, $500.00 per day after the thirtieth
(30th) day after Tenant delivers the Expansion Punch List to Landlord
until Final Completion of Landlord's Expansion Work; and (iv) if Landlord
does not tender possession of the Expansion Building to Tenant with the
Landlord's Expansion Work Substantially Completed on or before two
hundred seventy (270) days after Landlord and Tenant approve the Approved
Expansion Leasehold Improvements Plans (plus any period of delay caused
by Tenant Expansion Delays or Permitted Expansion Force Majeure Delay),
Tenant will have the right to terminate this Lease by delivering written
notice of termination to Landlord not more than 30 days after such
deadline date. Upon a termination under clause (iv) above, each party
will, upon the other's request, execute and deliver an agreement in
recordable form containing a release and surrender of all right, title
and interest in and to this Lease; neither Landlord nor Tenant will have
any further obligations to each other, including, without limitation, any
obligations to pay for work previously performed in the Expansion
Building or
43
the Premises, except as set forth in this sentence; all Improvements
to the Original Building and the Expansion Building will become and
remain the property of Landlord; and Landlord will refund to Tenant
any sums paid to Landlord by Tenant in connection with this Lease,
including, without limitation, any payments to Landlord of portions of
Tenant's Expansion Cost and pay to Tenant the amounts that have
accrued under clause (ii) above. Such postponement of the Expansion
Commencement Date, payment of liquidated damages and termination and
refund right will be in full settlement of all claims that Tenant
might otherwise have against Landlord by reason of Landlord's failure
to have Substantially Completed its obligations by the Projected
Expansion Completion Date (as it may be extended). If Landlord
delivers possession of the Expansion Building with the Landlord's
Expansion Work Substantially Completed prior to the Projected
Expansion Completion Date, then Tenant may either accept such delivery
(in which case such date will be the Expansion Commencement Date
hereunder) or may refuse to accept delivery until any date selected by
Tenant that is no later than the Projected Expansion Completion Date
(as it may be extended). Within sixty (60) days after the Expansion
Commencement Date, Landlord will provide to Tenant a complete set of
as-built drawings of Landlord's Expansion Work and manuals for all
equipment incorporated into the Improvements as a part of Landlord's
Expansion Work. Landlord and Tenant have sixty (60) days after
Landlord notifies Tenant that the Expansion Building has been
Substantially Completed in which to remeasure the Expansion Building,
but after the expiration of such sixty (60) day period, neither
Landlord nor Tenant may remeasure the Expansion Building. The final
Rentable Square Feet as shown in the Approved Expansion Base Building
Plans are sometimes referred to as the "APPROVED EXPANSION RENTABLE
SQUARE FEET". In the absence of such remeasurement or the right to do
so, it shall be conclusively deemed that the Expansion Building
contains the Approved Expansion Rentable Square Feet. If Tenant
timely elects to remeasure the Expansion Building, and the variance is
greater than one percent (1%) but less than two percent (2%), the
variance shall be permitted and have no effect on the Expansion
Building being Substantially Completed, but the Expansion Basic Rent
for the Expansion Building and all other amounts calculated based on
the area of the Expansion Building will be modified accordingly. If
the Expansion Building contains more than 102% of the Approved
Expansion Rentable Square Feet, all amounts will be calculated as if
the Expansion Building contains 102% of the Approved Expansion
Rentable Square Feet. If the Expansion Building contains less than
98% of the Approved Expansion Rentable Square Feet, then Landlord must
make all alterations necessary to increase the size of the Expansion
Building to at least 98% of the Approved Expansion Rentable Square
Feet, and the Expansion Building will not be deemed to be
Substantially Completed. If, under such circumstances, Tenant fails
to terminate this Lease pursuant to the termination right set forth in
SECTION 18(f)(iv) above, then Tenant will be deemed to have accepted
the size of the Expansion Building and the Expansion Building will be
deemed to have been Substantially Completed on the day Landlord
delivered the Expansion Building to Tenant with the Landlord's
Expansion Work (other than the area of the Expansion Building)
Substantially Complete. In such event, all amounts will be calculated
on the actual size of the Expansion Building.
(g) As provided in SECTION 18(j)(I) , the Expansion
Commencement Date (and therefore Tenant's obligation for the payment of
Expansion Basic Rent) will not commence until Landlord has Substantially
Completed Landlord's Expansion Work; provided, however, that if Landlord
is delayed in causing Landlord's Expansion Work to be Substantially
Completed as a result of: (a) any Change Orders or changes in any
drawings, plans or specifications requested by Tenant (with each
individual occurrence constituting a "TENANT EXPANSION DELAY" and the
cumulative occurrences constituting TENANT EXPANSION DELAYS"), or (b)
force majeure delays (with such force majeure delays being referred to in
this Lease as "PERMITTED EXPANSION FORCE MAJEURE DELAYS"), then, if such
delays exceed ten (10) days, the
44
Expansion Commencement Date will only be extended under SECTION 18(f)
until the date on which Landlord would have Substantially Completed
the performance of such work but for such delays. As a condition to
claiming a Permitted Expansion Force Majeure Delay or a Tenant
Expansion Delay, the day of delay must have otherwise been a day upon
which Landlord intended to work on the item affected by the delay and
Landlord must advise Tenant of the circumstances giving rise to the
claim within ten (10) business days after they arise, the estimated
cost that Tenant can pay as that time to effect any available remedy
to eliminate or reduce such delay (for example, overtime work), the
cumulative total number of Permitted Expansion Force Majeure Delays
and Tenant Expansion Delays through the date of each event.
(h) Landlord must perform the Landlord's Expansion Work in
accordance with the Approved Expansion Base Building Plans and the
Approved Expansion Leasehold Improvements Plans and in a good and
workmanlike manner, using new materials, and in accordance with all
applicable laws, ordinances, rules, and regulations, including without
limitation, ADA (as it exists at the time) and all applicable
environmental laws as interpreted and enforced by the governmental bodies
having jurisdiction thereof at the time of construction. Tenant's taking
possession of any portion of the Expansion Building will be conclusive
evidence that such portion of the Expansion Building was in good order
and satisfactory condition, and that all of Landlord's Expansion Work in
or to such portion of the Expansion Building was satisfactorily
completed, when Tenant took possession, except as to any patent defects
or uncompleted items identified on a punch list (the "EXPANSION PUNCH
LIST") prepared by Tenant's Representative after an inspection of the
Expansion Building by both Tenant's Representative and Landlord's
Representative (unless Landlord's Representative fails to attend an
inspection scheduled by Tenant's Representative, with Tenant
acknowledging that Tenant's Representative must cooperate with Landlord's
Representative in attempting to establish a mutually-acceptable date and
time of inspection) made within thirty (30) days after Tenant takes
possession, and except as to any latent defects in Landlord's Expansion
Work. Landlord will not be responsible for any items of damage caused by
Tenant, its agents, independent contractors or suppliers. No promises to
construct, alter, remodel or improve the Expansion Building, and no
representations concerning the condition of the Expansion Building, have
been made by Landlord to Tenant other than as may be expressly stated in
this Lease.
(i) Landlord appoints Landlord's Representative to act for
Landlord in all matters covered by this SECTION 18. Tenant appoints
Tenant's Representative to act for Tenant in all matters covered by this
SECTION 18. All inquiries, requests, instructions, authorizations and
other communications with respect to the matters covered by this
SECTION 18 will be made to Landlord's Representative or Tenant's
Representative, as the case may be. Tenant will not make any inquiries
of or requests to, and will not give any instructions or authorizations
to, any other employee or agent of Landlord, including Landlord's
architect, engineers and contractors or any of their agents or employees,
with regard to matters covered by this SECTION 18. Either party may
change its representative at any time by three days' prior written notice
to the other party. Landlord and Tenant acknowledge that they must work
together cooperatively in order to design the Expansion Building and
therefore agree to act reasonably and in good faith in such design
process
(j) Upon Tenant's approval of the Tenant's Expansion Cost
Proposal, this Lease will automatically be amended as follows (with
Landlord and Tenant each agreeing to execute a written agreement
confirming these amendments upon delivery of such an amendment to such
party by the other party):
45
(I) The Term of this Lease will be extended so that it
ends on the day before the tenth (10th) anniversary of the
date of Substantial Completion of the Expansion Building
(the "EXPANSION COMMENCEMENT DATE"). The options to extend
the Term of this Lease granted in SECTION 2.5 above will
remain in full force and effect and may be exercised at the
end of the Term of this Lease, as so extended, subject to
the notice and other requirements of SECTION 2.5. Any
exercise of the option to extend will apply to and include
both the Original Building and the Expansion Building.
(II) The Basic Rent will be as follows:
(A) for the Original Building, the Original Basic
Rent will be the same as provided in SECTION
4.1 above for the number of years which
represents the balance of the Original Term
as defined in SECTION 1.1 above. Thereafter,
the Original Basic Rent will increase on the
first day after the original expiration date
of the Original Term to an amount equal to
one hundred twelve and one-half percent
(112.5%) of the Original Basic Rent in effect
for the immediately preceding period and will
increase every fifth (5th) anniversary of the
original expiration date of the Original Term
through the end of the then-existing initial
term (i.e., excluding the renewal terms) to
an amount equal to one hundred twelve and
one-half percent (112.5%) of the Original
Basic Rent in effect for the immediately
preceding period. For example, if the
Original Basic Rent were $128,244.62 per
month, then for the period beginning on the
day after the original expiration date of the
Original Term and extending for the lesser of
five (5) years or the date of the expiration
of the then-existing initial term, the Basic
Rent would be $144,275.19.
(B) for the Expansion Building, the monthly rent
(the "EXPANSION BASIC RENT") will be equal to
the amount determined by multiplying the
Expansion Costs (up to or equal to the
Approved Expansion Costs) by 11.4% and then
dividing the result thus obtained by twelve
(12).
IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first set forth above.
LANDLORD: TENANT:
OPUS SOUTH CORPORATION, a ADS ALLIANCE DATA SYSTEMS, INC., a
Florida corporation Delaware corporation
By: _____________________________ By: ________________________________
Xxxx X. Xxxxxxxxxx, President Its: _____________________________
46
And: ________________________________
Its: ________________________________
STATE OF __________________________)
) ss.
COUNTY OF _________________________)
The foregoing instrument was acknowledged before me this _____ day of
January, 1998 by Xxxx X. Xxxxxxxxxx as President of Opus South Corporation, a
Texas corporation.
Witness my hand and official seal.
________________________________
Notary Public
My commission expires: _________________________________
STATE OF __________________________)
) ss.
COUNTY OF _________________________)
The foregoing instrument was acknowledged before me this _____ day of
January, 1998 by _______________________________ as ____________________________
and ________________________________________ as ____________________________ of
ADS Alliance Data Systems, Inc., a Delaware corporation.
Witness my hand and official seal.
________________________________
Notary Public
My commission expires: _________________________________
47
EXHIBIT A
LEGAL DESCRIPTION OF THE LAND
BEING a parcel or tract of land situated in the City of Dallas, Collin County,
Texas, and being part of the Xxxx Xxxx Survey, Abstract 223, and being part of
Phase I, U.T.D. Synergy Park, an Industrial Addition to the City of Dallas,
filed for record in Cabinet F, Page 483 and 484 of the Deed Records of Collin
County, Texas; and being part of the tract of land conveyed to the Board of
Regents, the University of Texas System as recorded in Volume 835, Page 713 of
the Deed Records of Collin County, Texas, and being more particularly described
as follows:
BEGINNING at an Iron rod on the west right of way line of Waterview Parkway (120
feet wide) and the northeast corner of the Xxxxx/Xxxxx Xxxxxxxxx - One Tract and
the southEAST corner of the herein described tract;
THENCE South 90 degrees 00 minutes 00 seconds West a distance of 700.39 feet
following the north line of the Xxxxx/Xxxxx Xxxxxxxxx - One tract to an iron rod
found for corner, said iron rod being in the easterly line of Texas A & M
University System tract;
THENCE North 00 degrees 12 minutes 12 seconds West a distance of 642.68 feet
following the east line of the Texas A & M System tract to the intersection with
the southwest corner of the Intervoice tract and an iron rod found for corner;
THENCE North 90 degrees 00 minutes 00 seconds East a distance of 700.39 feet
following the south line of the Intervoice tract to an iron rod found for corner
in the westerly right of way line of Waterview Parkway, said point being the
southeast corner of the Intervoice tract;
THENCE South 00 degrees 12 minutes 12 seconds East, a distance of 642.68 feet
following the westerly right of way line of Waterview Parkway to the Point of
Beginning and containing 450,125 square feet or 10.3334 acres, more or less.
EXHIBIT B
BASE BUILDING SPECIFICATIONS
EXHIBIT C
BASE BUILDING/TENANT MATRIX
EXHIBIT D
MATTERS AFFECTING LANDLORD'S TITLE
1. Restrictive covenants recorded in Volume 1959, Page 755, Land Records of
Collin County, Texas.
2. Restrictive covenants recorded in Volume 2007, Page 475, Land Records of
Collin County, Texas.
3. 12.5' water main easement granted by Board of Regents of the University
of Texas Systems to City of Xxxxxxxxxx, filed 03/25/77, recorded in
Volume 1042, Page 840, Deed Records of Collin County, Texas, and as shown
on survey of BSM Engineers, Inc., certified to by Xxxxxx X. Xxxx,
R.P.L.S. #2130, dated 12/19/97, And as shown on plat recorded in Volume
F, Page 483, Map Records of Collin County, Texas.
4. Easement granted by Board of Regents of the University of Texas Systems
to Dallas Power & Light Company and Southwestern Xxxx Telephone Company,
recorded in Volume 1444, Page 555, Land Records of Collin County, Texas,
and as shown on survey of BSM Engineers, Inc., certified to by Xxxxxx X.
Xxxx, R.P.L.S. #2130, dated 12/19/97, And as shown on plat recorded in
Volume F, Page 483, Map Records of Collin County, Texas.
5. Easement granted by Board of Regents of the University of Texas Systems
to City of Dallas, filed 04/09/86, recorded in Volume 2343, page 314,
Land Records of Collin County, Texas, and as shown on survey of BSM
Engineers, Inc., certified to by Xxxxxx X. Xxxx, R.P.L.S. #2130, dated
12/19/97.
6. Easement granted by Board of Regents of the University of Texas Systems
to Texas Utilities Electric Company, filed 10/06/97, cc#97-0084664, Land
Records of Collin County, Texas, and as shown on survey of BSM Engineers,
Inc., certified to by Xxxxxx X. Xxxx, R.P.L.S. #2130, dated 12/19/97.
EXHIBIT E
MEMORANDUM OF LEASE
This Memorandum of Lease is dated as of January ___, 1998 and is by and between
Opus South Corporation, a Florida corporation ("LANDLORD") and ADS Alliance Data
Systems, Inc., a Delaware corporation ("TENANT").
R E C I T A L S
(7) Landlord is the owner of that certain property described on EXHIBIT A
attached to and made a part of this Memorandum of Lease for all purposes
(the "PROPERTY").
(8) Effective as of the same date as the date of this Memorandum of Lease,
Landlord and Tenant entered into that certain Build-to-Suit Net Lease
(the "LEASE") covering the entire Property.
(9) Tenant and Landlord wish to record this Memorandum of Lease in order to
evidence the existence of the Lease.
I N F O R M A T I O N
(1) PRIMARY TERM: Tenant has leased the entire Property from Landlord for a
period of approximately 11 years commencing on the date set forth in the
Lease and ending on the Expiration Date, as defined in the Lease.
(2) RENEWAL OPTIONS: Tenant has two (2) five (5)-year renewal options, as
more fully set forth in the Lease.
(3) INITIAL CONSTRUCTION: Landlord has covenanted and agreed to construct a
building on the Property for Tenant within the time periods and in
accordance with the terms of the Lease.
(4) EXPANSION OPTION: During the initial 11-year term, Tenant has the right
to require that Landlord construct an additional building for Tenant, as
more fully set forth in the Lease.
(5) QUIET POSSESSION: Landlord has covenanted and agreed that Tenant will
have quiet and peaceful possession of the Property during the entire term
of the Lease, and such possession will not be disturbed by Landlord or
anyone claiming by, through or under Landlord.
(6) INTERPRETATION. Landlord and Tenant have entered into this Memorandum
of Lease in order that third parties may have notice of the existence of
the Lease and some of its specific provisions. This Memorandum of Lease
is not a complete summary of the Lease, all of the terms, covenants, and
conditions of
which are made apart of this Memorandum of Lease as though fully set
forth in this Memorandum of Lease. This Memorandum of Lease is not
intended to amend, modify, or otherwise change the terms and conditions
of the Lease. In the event of a conflict between this Memorandum of
Lease and the Lease, the Lease controls.
LANDLORD: TENANT:
OPUS SOUTH CORPORATION, a ADS ALLIANCE DATA SYSTEMS, INC., a
Florida corporation Delaware corporation
By: _____________________________ By: ______________________
Xxxx X. Xxxxxxxxxx, President Its: ______________________
And: ______________________
Its: ______________________
STATE OF _________________________ )
) ss.
COUNTY OF ________________________ )
The foregoing instrument was acknowledged before me this _____ day of
__________________, 1998 by Xxxx X. Xxxxxxxxxx as President of Opus South
Corporation, a Texas corporation.
Witness my hand and official seal.
____________________________
Notary Public
My commission expires: ______________________________________________
STATE OF _________________________ )
) ss.
COUNTY OF ________________________ )
The foregoing instrument was acknowledged before me this _____ day of
__________________, 1998 by _______________________________ as ______________
and ________________________________________ as _____________________________
of ADS Alliance Data Systems, Inc., a Delaware corporation.
Witness my hand and official seal.
_____________________________
Notary Public
My commission expires: _______________________________________________
EXHIBIT F
NDA
EXHIBIT G
LEASE GUARANTY
THIS LEASE GUARANTY (this "GUARANTY") is given by ALLIANCE DATA
SYSTEMS CORPORATION, a Delaware corporation ("GUARANTOR"), to OPUS SOUTH
CORPORATION, a Florida corporation ("LANDLORD"), with respect to that certain
Build-to-Suit Net Lease dated January __, 1998 (the "LEASE") by and between
Landlord and ADS Alliance Data Systems, Inc., a Delaware corporation
("TENANT"), under which Tenant has leased from Landlord the land in
Richardson, Texas that is legally described on EXHIBIT A attached hereto and
all improvements thereon.
In order to induce Landlord to execute the Lease and for other good
and valuable consideration, the receipt and sufficiency of which Guarantor
acknowledges, Guarantor promises and agrees as follows:
1. Guarantor absolutely, unconditionally and irrevocably
guarantees the payment and performance of, and agrees to pay and perform as a
primary obligor, all of Tenant's covenants, obligations, liabilities and
duties (including, without limitation, payment of rent and all other amounts
required to be paid by Tenant) under the Lease (the "GUARANTEED
OBLIGATIONS"), as if Guarantor had executed the Lease as Tenant.
2. Guarantor's obligations under this Guaranty are primary and
independent of Tenant's obligations. Guarantor agrees that Landlord will not
be required first to enforce against Tenant or any other person any
Guaranteed Obligations before seeking enforcement against Guarantor.
Landlord may bring and maintain an action against Guarantor to enforce any
Guaranteed Obligations without joining Tenant or any other person (including,
without limitation, any other guarantor) in such action. Landlord may,
however, join Guarantor in any action commenced by Landlord against Tenant to
enforce any Guaranteed Obligations and Guarantor waives any demand by
Landlord or any prior action by Landlord against Tenant.
3. Guarantor's obligations under this Guaranty will remain in full
force and effect and will not be affected in any way by: (a) any
forbearance, indulgence, compromise, settlement or variation of terms which
may be extended to Tenant by Landlord; (b) any alteration of the Lease by the
parties, whether prior or subsequent to Lease execution; (c) any renewal,
extension, modification or amendment of the Lease; (d) any subletting of the
premises demised under the Lease or any assignment of Tenant's interest in
the Lease; (e) any termination of the Lease to the extent that Tenant remains
liable under the Lease after such termination; or (f) the release by Landlord
of any party (other than Guarantor) obligated for the Guaranteed Obligations
or Landlord's acquisition, release, return or misapplication of any other
collateral (including, without limitation, any other guaranties) given now or
later as additional security for the Guaranteed Obligations. Guarantor
waives notice of any of the above and agrees that Guarantor will remain
liable for the Guaranteed Obligations as they may be so altered, renewed,
extended, modified, amended or assigned. Guarantor also waives notice of
acceptance of this Guaranty and all other notices in connection with this
Guaranty or the Guaranteed Obligations, including notices of default by
Tenant under the Lease, and waives diligence, presentment and suit by
Landlord in the enforcement of any Guaranteed Obligations.
4. Guarantor's obligations under this Guaranty will remain in full
force and effect and will not be affected in any way by: (a) the release or
discharge of Tenant in any insolvency, receivership, bankruptcy or other
proceedings; (b) the impairment, limitation or modification of the liability
of Tenant or the estate of Tenant in bankruptcy, or of any remedy for the
enforcement of Tenant's liability under the Lease, resulting from the
operation of any present or future provision of the Federal Bankruptcy Code
or other statute or from the decision in any court; (c) the rejection or
disaffirmance of the Lease in any such proceeding; or (d) Tenant's
dissolution or other termination or any disability or other defense of Tenant.
5. Guarantor agrees to pay the reasonable attorneys' fees and
expenses incurred by Landlord in successfully enforcing Guarantor's
obligations under this Guaranty in any action or proceeding to which Landlord
is a party. In any action brought under this Guaranty, Guarantor submits to
the jurisdiction to the courts of the State of Texas, and to venue in the
District Court of Dallas County, Texas.
6. This Guaranty will be binding on Guarantor and its successors
and assigns and will inure to the benefit of Landlord and its successors and
assigns.
7. Notwithstanding anything to the contrary set forth elsewhere in
this Guaranty, in the event the Release Conditions, as defined in the Lease,
are met, then Guarantor will automatically be released from its obligations
under this Guaranty effective as of the date of such assignment or
subletting, and (b) Guarantor will at all times be entitled to assert as a
defense to any obligation under this Guaranty that Tenant has a defense to
the guaranteed obligation under the terms of the Lease.
Executed this _____ day of January, 1998.
GUARANTOR:
ATTEST: ALLIANCE DATA SYSTEMS CORPORATION,
a Delaware corporation
By: ______________________________ By:__________________________________
EXHIBIT H
2-STORY PLAN
EXHIBIT I
3-STORY PLAN
EXHIBIT J
EXPANSION COST SUMMARY
SCHEDULE OF COST FOR THE EXPANSION BUILDING
OPTION B NO LAND
LAND:
SOIL TEST ___
ENVIRONMENTAL ___
TITLE FEE ___
SUB-TOTAL FOR LAND ___
BUILDING:
BASE BUILDING ___
SITE DEVELOPMENT ___
TENANT IMPROVEMENTS ___
DESIGN FEE ___
SUB-TOTAL FOR BUILDING ___
DEVELOPMENT:
BROKER FEE (Market) ___
LEGAL ___
DEVELOPMENT
(5% of total project cost) ___
CONTINGENCY ___
CONSTRUCTION INTEREST ___
BANK FEES ___
SUB-TOTAL FOR DEVELOPMENT ___
TOTAL PROJECT COST: ___
RENT CALCULATION:
EXPANSION COSTS X 11.4%-RENT ___
TOTAL RENT ___
EXHIBIT K
CORE BUILDING SYSTEMS
-- Foundation System
-- Structural Framing System
-- Core Plumbing Systems
-- Exterior Envelope Back-up System (Framing, Sheathing, and Insulation)
-- Roofing System
-- Core Building Fire Sprinkler System
-- Core Plumbing HVAC System (Central plant, main supply loop ductwork;
perimeter zone boxes, and interior VAV boxes and controls)
-- Electrical System (Wiring of all base building HVAC equipment,
elevators, exterior lighting, main switchgear, distribution to electrical
panel boards on each floor, and lighting of interior common areas with
exit and emergency lighting as required by code)
-- Minimum Code Requirements (Stairs, Restroom Count, and Elevators)
TABLE OF CONTENTS
PAGE
----
1. DEFINITIONS AND EXHIBITS. . . . . . . . . . . . . . . . . . . . . . .1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . .8
2 GRANT OF LEASE; RENEWAL OPTIONS . . . . . . . . . . . . . . . . . . .8
2.1 Demise . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
2.2 Quiet Enjoyment. . . . . . . . . . . . . . . . . . . . . . . .8
2.3 Landlord and Tenant Covenants. . . . . . . . . . . . . . . . .8
2.4 Memorandum of Lease. . . . . . . . . . . . . . . . . . . . . .9
2.5 Tenant's Renewal Options . . . . . . . . . . . . . . . . . . .9
3. CONSTRUCTION; DELIVERY AND ACCEPTANCE OF PREMISES . . . . . . . . . 10
3.1 Landlord's Construction Obligations. . . . . . . . . . . . . 10
3.2 Original Base Building Plans . . . . . . . . . . . . . . . 10
3.3 Leasehold Improvement Plans . . . . . . . . . . . . . . . . 11
3.4 Tenant's Cost Proposal . . . . . . . . . . . . . . . . . . . 12
3.5 Original Change Orders . . . . . . . . . . . . . . . . . . . 13
3.6 Delivery of Possession . . . . . . . . . . . . . . . . . . . 13
3.7 Plan Approval Delays, Tenant Original Delays and Permitted
Original Force Majeure Delays . . . . . . . . . . . . . . . 15
3.8 Original Punch List . . . . . . . . . . . . . . . . . . . . 16
3.9 Representatives . . . . . . . . . . . . . . . . . . . . . . 16
3.10 Payment of Tenant's Cost . . . . . . . . . . . . . . . . . . 16
3.11 Reasonableness and Good Faith Standard . . . . . . . . . . . 17
4. RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.1 Basic Rent and Original Basic Rent . . . . . . . . . . . . . 17
4.2 Net Lease. . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.3 Terms of Payment . . . . . . . . . . . . . . . . . . . . . . 17
4.4 Late Payments. . . . . . . . . . . . . . . . . . . . . . . . 18
4.5 Right to Accept Payments . . . . . . . . . . . . . . . . . . 18
5. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . 18
5.2 Proration at Beginning and End of Term . . . . . . . . . . . 18
5.3 Special Assessments. . . . . . . . . . . . . . . . . . . . . 18
5.4 Tax Contests . . . . . . . . . . . . . . . . . . . . . . . . 19
6. USE, OCCUPANCY AND COMPLIANCE . . . . . . . . . . . . . . . . . . . 19
6.1 Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.2 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.3 Hazardous Substances . . . . . . . . . . . . . . . . . . . . 20
6.4 Americans With Disabilities Act. . . . . . . . . . . . . . . 21
6.5 Signs. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7. UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.1 Payment; Interruption of Services. . . . . . . . . . . . . . 21
7.2 HVAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8. REPAIRS AND MAINTENANCE . . . . . . . . . . . . . . . . . . . . . . 22
8.1 Tenant's Obligations . . . . . . . . . . . . . . . . . . . . 22
8.2 Landlord's Obligations . . . . . . . . . . . . . . . . . . . 22
8.3 Landlord's Right of Entry. . . . . . . . . . . . . . . . . . 22
9. INSURANCE, WAIVERS AND INDEMNITY. . . . . . . . . . . . . . . . . . 23
9.1 Property Insurance . . . . . . . . . . . . . . . . . . . . . 23
9.2 Liability and Other Insurance. . . . . . . . . . . . . . . . 23
9.3 General Insurance Requirements . . . . . . . . . . . . . . . 24
9.4 Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.5 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . 24
10. ALTERATIONS; MECHANICS' LIENS . . . . . . . . . . . . . . . . . . . 25
10.1 Alterations. . . . . . . . . . . . . . . . . . . . . . . . . 25
10.2 Mechanics' Liens . . . . . . . . . . . . . . . . . . . . . . 25
11. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . . 26
11.1 Notice and Consent . . . . . . . . . . . . . . . . . . . . . 26
11.2 Deemed Assignments . . . . . . . . . . . . . . . . . . . . . 26
11.3 General Provisions . . . . . . . . . . . . . . . . . . . . . 27
12. CASUALTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
12.1 Landlord's Obligation . . . . . . . . . . . . . . . . . . . 27
12.2 Time for Repairs . . . . . . . . . . . . . . . . . . . . . . 28
13. EMINENT DOMAIN. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
13.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . . 28
13.2 Restoration; Award . . . . . . . . . . . . . . . . . . . . . 28
14. END OF TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
14.1 Surrender. . . . . . . . . . . . . . . . . . . . . . . . . . 29
14.2 Holding Over . . . . . . . . . . . . . . . . . . . . . . . . 29
15. DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . 30
15.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
15.2 Events of Default. . . . . . . . . . . . . . . . . . . . . . 30
15.3 Landlord's Remedies. . . . . . . . . . . . . . . . . . . . . 31
15.4 Landlord's Default; Tenant's Remedies. . . . . . . . . . . . 32
15.5 Disclaimer of Landlord's Lien . . . . . . . . . . . . . . . 33
16. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
16.1 Subordination, Nondisturbance and Attornment . . . . . . . . 33
16.2 Option to Make Lease Superior. . . . . . . . . . . . . . . . 33
E-2
17. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
17.1 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
17.2 Estoppel Certificates. . . . . . . . . . . . . . . . . . . . 33
17.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
17.4 Actions by Agent . . . . . . . . . . . . . . . . . . . . . . 34
17.5 Severability; Governing Law. . . . . . . . . . . . . . . . . 34
17.6 Transfers of Landlord's Interest . . . . . . . . . . . . . . 34
17.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 35
17.8 Complete Agreement; Modification . . . . . . . . . . . . . . 35
17.9 No Offer . . . . . . . . . . . . . . . . . . . . . . . . . . 35
17.10 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 35
17.11 Limitation on Landlord's Liability . . . . . . . . . . . . . 35
17.12 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . 35
17.13 No Partnership . . . . . . . . . . . . . . . . . . . . . . . 35
17.14 Force Majeure. . . . . . . . . . . . . . . . . . . . . . . . 35
17.15 Financial Statements . . . . . . . . . . . . . . . . . . . . 36
17.16 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . 36
17.17 Lease Guaranty. . . . . . . . . . . . . . . . . . . . . . . 36
17.18 Corporate Authority. . . . . . . . . . . . . . . . . . . . 36
18. EXPANSION OPTION. . . . . . . . . . . . . . . . . . . . . . . . . . 37
Exhibit A - Legal Description of the Land
Exhibit B - Base Building Specifications (including
Original Building Elevation, Site Plan,
Floor Plan and Original Building
Specifications)
Exhibit C - Base Building /Tenant Matrix
Exhibit D - Matters Affecting Landlord's Title
Exhibit E - Memorandum of Lease
Exhibit F - NDA
Exhibit G - Lease Guaranty
Exhibit H - 2-Story Plan
Exhibit I - 3-Story Plan
Exhibit J - Expansion Cost Summary
Exhibit K - Core Building Systems
E-2
FINAL AGREEMENT CONCERNING RENT COMMENCEMENT AND
CONSTRUCTION COSTS AND LIQUIDATED DAMAGES
This Final Agreement Concerning Rent Commencement and Construction Costs and
Liquidated Damages (this "AGREEMENT") is executed by and between Oaklawn
Alliance, L.L.C., a Delaware limited liability company ("LANDLORD") and ADS
Alliance Data Systems, Inc., a Delaware corporation ("TENANT") and is effective
as of the last day accompanying the signature of Original Landlord, Landlord,
and Tenant below. Original Landlord, Guarantor, and Mortgagee (all as defined
below) are executing this Agreement for the purposes indicated in this
Agreement.
R E C I T A L S
A. Effective as of January 29, 1998, Opus South Corporation, a Florida
corporation ("ORIGINAL LANDLORD") and Tenant entered into that certain
Build-To-Suit Net Lease (the "LEASE") covering certain property located in
the City of Dallas, Collin County, Texas (the "LAND").
B. The Lease was guaranteed by Alliance Data Systems Corporation, a Delaware
corporation ("GUARANTOR") pursuant to the terms of that certain Lease
Guaranty dated the same date as the Lease (the "GUARANTY").
C. A Memorandum of Lease was executed the same day as the Lease and recorded
on January 30, 1998 in Volume 4091, Page 1447 of the real property records
of Collin County, Texas.
D. Original Landlord, Tenant, and NationsBank, N.A., a national banking
association ("MORTGAGEE") entered into that certain Subordination,
Non-disturbance and Attornment Agreement dated April 3, 1998 and recorded
on April 7, 1998 under Volume 4138, Page 1032 of the real property records
of Collin County, Texas.
E. Under the terms of the Lease, Original Landlord, as the Landlord under the
Lease, was required to construct for Tenant the Original Base Building (as
defined in the Lease) on the Land. Under the terms of the Lease, Tenant
had to pay for certain cost overruns and Original Landlord, as the Landlord
under the Lease, had to pay certain liquidated damages in the event that
construction of the Original Base Building was not completed on or before
certain dates. The Land together with the Original Base Building is
referred to in this Agreement as the "DEMISED PREMISES."
F. On December 3, 1998, Original Landlord transferred the Demised Premises to
Landlord.
G. Original Landlord, Landlord, and Tenant have been working together to
establish the Original Commencement Date under the Lease, the amount of any
cost overruns for which Tenant is
obligated to pay Landlord, and the amount of any liquidated damages due to
Tenant for late delivery. The purpose of this Agreement is to memorialize
their understanding.
AGREEMENTS
NOW, THEREFORE, for and in consideration of the matters set forth in the
Recitals and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Original Landlord, Landlord, and Tenant hereby
agree as follows:
1. ORIGINAL COMMENCEMENT DATE: The Original Commencement Date of the Lease is
November 4, 1998. As provided in Section 1.1 of the Lease, the Term
expires at midnight on November 30, 2009, unless sooner terminated or
unless renewed or extended as set forth in the Lease.
2. OVERRUN AMOUNT AND LIQUIDATED AMOUNT: The amount of cost overruns for
which Tenant is responsible is $263,575.00 (the "OVERRUN AMOUNT") and the
amount of liquidated damages to which Tenant is entitled is $125,500.00
(the "LIQUIDATED AMOUNT").
3. PARTIES TO WHOM PAYMENT OF THE OVERRUN AMOUNT AND THE LIQUIDATED AMOUNT ARE
DUE: Original Landlord performed the construction work and so Original
Landlord believes that Original Landlord is entitled to receive the Overrun
Amount. Landlord hereby agrees that Original Landlord is entitled to
receive the Overrun Amount. Since Original Landlord is receiving the
Overrun Amount, Landlord believes that Original Landlord should pay Tenant
the Liquidated Amount. Tenant is willing to accept the Liquidated Amount
from Original Landlord, but such agreement to allow Original Landlord to do
so does not in any way release Landlord from the obligation to do so unless
and until Tenant actually receives the full amount of the Liquidated
Amount. If for any reason Original Landlord does not pay the full amount
of the Liquidated Amount within the time period specified in PARAGRAPH 4
below, then the obligation to pay the Liquidated Amount will constitute a
joint and several obligation of Original Landlord and Landlord and Tenant
will be entitled to demand payment from both of them and to offset the
amount due to Tenant from all Rent and other amounts accruing under the
Lease.
4. TIMING OF PAYMENT OF THE OVERRUN AMOUNT AND THE LIQUIDATED AMOUNT: Original
Landlord and Tenant hereby covenant and agree that on or before Friday, May
28, 1999, they will each present the other with a check drawn on
immediately-available funds in the amount due to the other, so that Tenant
will present Original Landlord with a check for $263,575.00 and Original
Landlord will present Tenant with a check in the amount of $125,500.00.
5. LANDLORD'S REPRESENTATIONS, WARRANTIES, AND RELEASES: Landlord hereby (a)
confirms, represents, and warrants to Tenant that Tenant is to pay the
Overrun Amount to Original Landlord and not Landlord, and (b) releases
Tenant from any and all claims that Landlord
2
might have against Tenant under the Lease for payment of the Cost Overrun,
payment for any other cost overruns, and payment of Basic Rent, other
payments which are due on a regular monthly basis charges, Taxes, and
insurance premiums (with the exception of insurance premiums which were
billed in March, 1999, about which Landlord and Tenant are currently in
disagreement), IF, AND ONLY IF, SUCH CLAIMS AROSE ON OR BEFORE THE DATE OF
THIS AGREEMENT but whether or not such claims are now known or anticipated
(collectively, "CLAIMS" and individually, a "CLAIM"). Landlord
acknowledges that there is no additional promise or agreement in
consideration of this release. Landlord expressly acknowledges and agrees
that such release is a contractual undertaking and that the agreements
concerning payment settles any and all Claims by Landlord against Tenant in
connection with the Lease. This release is binding upon Landlord and the
heirs, executors, administrators, personal representatives, successors, and
assigns of Landlord and inures to the benefit of Tenant.
6. ORIGINAL LANDLORD'S REPRESENTATIONS, WARRANTIES, AND RELEASES: Original
Landlord is executing this Agreement in order to (a) confirm, represent,
and warrant to Tenant that Tenant is to pay the Overrun Amount to Original
Landlord and not Landlord, (b) confirm, represent, and warrant that
Original Landlord will pay the Liquidated Amount to Tenant as and when due
under the terms of PARAGRAPH 4 above, and (c) release Tenant from any and
all claims, OTHER THAN THE CLAIM FOR THE COST OVERRUN, that Original
Landlord might have against Tenant under the Lease for payment of Basic
Rent and other charges, including without limitation, Taxes and insurance
premiums, whether such claims now exist or hereafter arise and whether or
not such claims are now known or anticipated (collectively, "CLAIMS" and
individually, a "CLAIM"). Original Landlord acknowledges that there is no
additional promise or agreement in consideration of this release. Original
Landlord expressly acknowledges and agrees that such release is a
contractual undertaking and that the agreements concerning payment settles
any and all Claims by Original Landlord against Tenant in connection with
the Lease. This release is binding upon Original Landlord and the heirs,
executors, administrators, personal representatives, successors, and
assigns of Original Landlord and inures to the benefit of Tenant.
7. TENANT'S RELEASES: Tenant hereby releases Original Landlord and Landlord
from any and all claims that Tenant might have against Original Landlord
and Landlord for payment of any liquidated damages under Section 3.6 of the
Lease OTHER THAN the Liquidated Amount.
8. ESTABLISHMENT OF THE NUMBER OF RENTABLE SQUARE FEET IN THE ORIGINAL
BUILDING: Landlord and Tenant hereby confirm that the Original Building
contains 114,419 Rentable Square Feet.
9. RATIFICATION AND CONFIRMATION OF THE LEASE: Landlord and Tenant hereby
ratify and confirm that they are bound by all of the terms of the Lease,
including, without limitation, the terms of Section 18 of the Lease.
Landlord further acknowledges that any claims which Tenant might have under
the Lease concerning the Original Base Building and Original Leasehold
Improvements constitute claims against Landlord even though Landlord was
not the
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Landlord at the time the Original Base Building and the Original Leasehold
Improvements were constructed and even though Tenant is obligated to pay
the Cost Overrun to Original Landlord.
10. GUARANTOR'S EXECUTION: Guarantor is executing this Agreement for the
purpose of confirming that the execution and delivery of this Agreement
does not in any way terminate or limit Guarantor's obligations under the
Guaranty.
11. MORTGAGEE'S EXECUTION: Mortgagee is executing this Agreement for the
purpose of evidencing its consent to and agreement that if Mortgagee
becomes the Landlord under the Lease, Mortgagee will be bound by the terms
and provisions of this Agreement; provided, however, that under no
circumstances is Mortgagee obligated to pay the Liquidated Amount to
Tenant.
12. COUNTERPARTS: This Agreement may be executed in multiple counterparts, all
of which, when taken together, will constitute one (1) original.
LANDLORD: OAKLAWN ALLIANCE, L.L.C.,
a Delaware limited liability company
By: /s/ Xxxx Xxxxxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxxxxx
--------------------------------------
Title: President & CEO
--------------------------------------
Date of Signature: 5/28/99
--------------------------
TENANT: ADS ALLIANCE DATA SYSTEMS INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
--------------------------------------
Title: Exec. V.P. & CEO
--------------------------------------
Date of Signature: 6-14-99
--------------------------
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ORIGINAL LANDLORD: OPUS SOUTH CORPORATION,
a Florida corporation
By: /s/ Xxxx Xxxxxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxxxxx
--------------------------------------
Title: President & CEO
--------------------------------------
Date of Signature: 5/28/99
--------------------------
GUARANTOR: ALLIANCE DATA SYSTEMS CORPORATION,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
--------------------------------------
Title: Exec. V.P. & CEO
--------------------------------------
Date of Signature: 6-14-99
--------------------------
MORTGAGEE: NATIONSBANK, N.A.,
a national banking association
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxx
--------------------------------------
Title: Senior Vice President
--------------------------------------
Date of Signature: 5/28/99
--------------------------
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