LEASE AGREEMENT
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THIS LEASE AGREEMENT is made this 21 day of July, 1997, (the
"Effective Date") between TIG DEVELOPMENT PROPERTY ACCOUNT I, INC. and/or
its Assigns ("Landlord"), and XXXXXXXX COMMUNICATIONS, INC., a Delaware
corporation ("Tenant")
RECITALS
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Landlord desires to design, construct and lease to Tenant a facility
(the "Building") and other improvements (the Building and other
improvements [including, without limitation, Tenant's improvements] are
sometimes referred to collectively as the "improvaments" as more
particularly described in Exhibit J) on a site consisting of approximately
1479 acres in the Piano International Business Park, as more particularly
described in Exhibit A (the "Land"), in accordance with the terms and
subject to the conditions of this Agreement, Tenant desires to have
constructed on the Land and to lease from Landlord the Improvements in
accordance with the terms and subject to the conditions contained in this
Agreement.
AGREEMENTS
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FOR AND IN CONSOERATION of the mutual covenants contained in this
Agreement, Landlord and Tenant (sometimes referred to jointly as the
"parties") agree as follows:
Section 1. Property Ownership. Except as otherwise provided
herein, Landlord shall at its sole cost and expense, design, construct and
lease to Tenant, and Tenant shall lease from Landlord, the Improvements to
be constructed by Landlord on the Land and all walkways, landscaping,
4siveways parking lots and open space on the Land. Landlord shall be the
true and lawful owner of the Land and Improvements (collectively referred
to as the "Premises'), subject only to those matters identified on Exhibit
E attached hereto (the "Permitted Exceptions").
Section 2. Construction of Improvements. (a) The Building shall
consist of approximately 182,305 square feet. In addition, Landlord shall
construct on the Land a parking lot containing at least the number at
parking spaces as set forth on Exhibit B ("Initial Parking"). Tenant shall
have the right to expand or contract the area of the Building by ten
percent (10 %) prior to Landlord's commencement of construction or as a
Change Orcl4r (as defined below) if Landlord has had the plan for the Land
and Building approved. The actual square footage of the Building shall be
deemed, for all purposes, to be that amount of square footage as is
determined by the architects for Tenant and Landlord, in the event the
architects for Tenant and Landlord are unable to agree on the technology be
utilized in calculating square footage, the parties hereto agree to utilize
BOMA's most current method for measuring industrial properties. In the
event the architects cannot agree on the actual measurement of the square
footage, they shall select, in good faith, a third architect whose decision
shall be binding on both parties as to the amount of square footage
contained in the Building,
(b) Landlord shall provide; at Landlord's sole cost and expense, all the
material, labor and equipment necessary for the construction of the
Improvements in accordance with the terms of this Agreement. Landlord shall
cause the Improvements to be constructed in a. good and workmanlike manner
in accordance with the preliminary plans and specifications attached as or
described in the attached Exhibit B (the "Preliminary Plans and
Specifications") or as revised for timely acceptance of value engineering
alterations as reflected on Exhibit B. Except as otherwise provided herein,
Landlord shall, at its sole expense, complete the construction of the
Improvements in accordance with all applicable statutes (including, without
limitation, the Americans with Disabilities Act) and building codes,
governmental rules, regulations and orders, zoning and land use laws, rules
and regulations, and recorded covenants, conditions and restrictions
affecting right to the Premises ("Legal Requirements"). Landlord shall
provide Tenant with "as-built" drawings of the Improvements within sixty
(60) days after substantial completion.
(c) Landlord shall cause its architect, Gromatsky & Xxxxxx, to prepare
float plans and specifications, including all necessary working drawings
("Final Plans'1) (i) for civil, utility and grading plan within twenty-
one(21) days after Lease execution; (ii) for the Building core and shell,
on or before July 2X, 1997; and (iii) for interior improvements on or
before October 6, 1997. The Final Plans shall include the drawings referred
to in Exhibit I! and shall be consistent with the Preliminary Plans and
Specifications, Tenant shall have ten (10) business days after receipt of
the Floor Plans to approve or disapprove same, in writing. Tenant shall
state any objections it may have with specificity. Landlord shall then
resubmit the Final Plans to Tenant within five (5) business days after
receipt of Tenant's objections. Tenant must approve the revised Final Plans
within seven (7) days after receipt thereof. Landlord and Tenant shall
repeat this process until the Final Plans are approved.
(d) Landlord shall commence construction of the Improvements on or before
fifteen days after the later of: (i) the Effective Date or (ii) the date
upon which Landlord acquires fee simple title to the land, Landlord shall
diligently proceed with the construction of the improvements and shall
substantially complete that construction, secure a certificate of occupancy
(the "Certificate of Occupancy") permitting Tenant's Lawful occupancy of
the Improvements and deliver possession of the Improvements to Tenant on or
before March I, 1 99L Landlord may satisfy the requirement for securing the
Certificate of Occupancy by securing a temporarily or conditional
certificate of occupancy from the City of Carrollton. If Landlord satisfies
the requirement for securing the Certificate of Occupancy by securing a
temporary or conditional certificate of occupancy, Landlord must diligently
pursue and secure the issuance of a final, unrestricted certificate of
occupancy (the "Final C.O.") within one hundred twenty (120) days after the
date of the issuance of the temporary or conditional certificate of
occupancy. If delays in the commencement of the constructions of the
Improvements or the issuance of the Final C. 0. occur by reason of forte
majeure, as defined in Section 41 of this Agreement or those that occur by
reason of acts or omissions on the part of Tenant or those acting for or
under the direction of Tenant, including but rot limited to change orders,
are collectively referred to in this Agreement as "Tenant Delays" (all of
which delays are collectively referred to in this Agreement as "Excused
Delays") (all other delays are defined as "Landlord Delays"), the date
established above For the commencement of the construction of the
Improvements or obtaining the Final CO. will be postponed by the aggregate
duration of the Excused Delays. In order for a delay to constitute an
Excused Delay, Landlord must give Tenant written notice of the occurrence
of the delay and its probable duration within ten (10) business days
following its 000tix-rence or the "Weekly Progress Meeting" (as hereinafter
defined), next following the event, whichever is sooner. Upon obtaining
substantial completion, Landlord's architect shall issue its written notice
of substantial completion ("Notice of Substantial. Completion") certifying
that Landlord has substantially completed construction of the Improvements
in compliance with the Fir's] Plans and Specifications. I~ the event Tenant
disputes Landlord's determination of substantial completion, the decision
of an architect selected jointly by Landlord and Tenant, shall be final and
binding. Such architect shall be selected within sixty (60) days of the
Effective Date of this Agreement. The only issue to be decided by such
architect is whether Landlord's architect was correct in determining the
date of substantial completion. For purposes of such determination~
substantial completion shall mean that the Improvements have been made
suitable for use or occupancy by Tenant and is in a condition to serve its
intended purpose, but may require minor miscellaneous work and adjustment,
If, as a result of Tenant Delays, Landlord fails to complete the
construction of the Improvements and to secure the Certificate of Occupancy
by March 1, 1998, or the date of the expiration of the period that begins
on March 1, 1995, and that ends for the aggregate number of days of Excused
Delays (other than Tenant Delays) that occur, if any, Tenant shall continue
paying Base Rent and additional rent on the earlier of the Rent
Commencement Date (as hereinafter defined), or the date of the expiration
of the period that begins on March 1, 1993, and that extends for the
aggregate number of days of Excused Delays (other than Tenant belays) that
occur, if any. Representatives of Landlord and Tenant shall together
inspect the Improvements upon the issuance of Notice of' Substantial
Completion and shall generate a punch list within thirty (30) business days
after the inspection or within such shorter time that Tenant may reasonably
request not sooner than seven (7) days from the issuance of the Notice of
Substantial Completion. Landlord shall diligently pursue and complete any
punch list hems and remedy any non-conforming or detective work within
sixty (60) days thereafter.
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(e) Tenant's obligation to pay Base Rent and additional rent will commence
on a date that is seven (7) days following the later of (i) Landlord's
architects giving Notice of Substantial Completion or as determined by
third party architect as the case may be; (ii) Landlord's tender of
possession of the Improvements to Tenant; and (ill) Landlord's obtaining a
Certificate of Occupancy (or other temporary or conditional certificate as
allowed ,under Section 2(d)) ("Rent Commencement Date"). if prior to
Landlord's substantial completion of the Improvements, the Improvements are
partially ready for Occupancy, Tenant may, with Landlord's consent, occupy
the portion of the Improvements that is ready for occupancy and, in the
event of such early occupancy, Tenant shall commence payment of Base Rent
to Landlord on the date on which Tenant first commences business
operations, which date shall be the "Commencement Date" for purposes of
this Agreement. If, prior to substantial completion of the constructions of
the Improvements, Tenant occupies a portion of the improvements without
conducting business operations, the terms of this Agreement, excepting only
the obligation to pay Base Rent, will apply to that occupancy. Landlord
agrees to keep Tenant reasonably informed of the progress of Landlord's
construction of the; Improvements and agrees to give Tenant written notice
of the date upon which Landlord anticipates substantial completion of that
construction will occur at least sixty (60) days in advance of that
projected date. Commencing on Tenant's receipt of that notice, Tenant's
employees and contractor$ may enter the Improvements for the purpose of
Staffing in accordance with Legal Requirements Tenant's machinery,
equipment, fixtures and other personal property ("Tenant Activities").
Subject to the terms of this Agreement, Tenant may have access to the
Premises at all times. Tenant may exercise that privilege only if Landlord
reasonably determines that Tenant's employees and contractors will not
interfere with Landlord's timely completion of the construction of the
Improvements and all the insurance coverages required under Section 15 of
this Agreement are in place, In the event any of Tenant's Activities
interfere with Landlord's timely completion of construction, Landlord shall
initially provide written notice to Tenant which shall set forth the nature
of the interference. Tenant shall immediately cease such interference. in
the event Tenant fails to cease such interference, Landlord shall have the
right to suspend Tenant's Activities within the improvements until such
time that resumption of Tenant's Activities will not interfere with
Landlord's work. In the event Tenant thus to promptly suspend such
activities and such interference causes damage or loss to arise, including
but not limited to, loss or damage sustained by Landlord's contractors or
subcontractors, Tenant shall indemnify and hold Landlord harmless from any
such loss ~r damage. Landlord's consent to Tenant's Activities shall not be
construed to be a waiver of Landlord's rights to assess Tenant Delays,
Entry by Tenant's employees and contractors for this limited purpose will
not constitute Tenant's acceptance of the improvements or give rise to any
obligation to pay Base Rent of additional rent with respect to the
improvements,
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(t) Landlord shall incorporate only new materials and equipment into the
construcitos of the improvements. Landlord shall guarantee the Improvements
against defects in materials and workmanship for one (1) year after Notice
of Substantial Completion. Provided, however, that all items that are
identified on the punch list that are remedied or corrected shall be
covered for a period of one (1) year from the date~ of completion of the
punch list as certified by Landlord's architect. Landlord shall deliver to
Tenant originals of all continuing assignable guarantees and warranties
issued and made in connection with the construction of the Improvements.
Except for those warranties which remain Landlord's responsibility pursuant
to Section 8(a) below, Tenant may elect to enforce such warranties or
guaranties or may elect to have Landlord enforce same. Landlord agrees to
cooperate with Tenant, at Tenant's expense after the one year warranty
period, to enforce such warranties or guaranties.
(g) Tenant may request changes in the Final Plans consisting of additions,
deletions, value engineering items or other revisions to the Improvements
anti extensions of the progress schedule, The parties will evidence
agreement to such changes by signing change orders ("Change Orders") in the
form of the attached Exhibit C and, upon the signing of a Change Order,
Landlord shall prosecute the changes in accordance with the requirements of
that Change Order. Landlord and Tenant shall not unreasonably delay or
refuse to sign Change Orders reflecting changes requested by Tenant For the
purposes of this Agreement, the terra "Change Order Cost" for editions,
deletions or other revisions means the amount by which the aggregate cost
Landlord will necessarily incur in connection with the construction of the
Improvements, including without limitation the costs of labor and material,
design fees, development fees (not to exceed 5% of the total cost))
commissions, interest and other carrying coats, and sales or other excise
taxes Landlord must pay in connection with the purchase of materials and
services, will increase or decrease with respect to the construction budget
included in Exhibit B by reason of the implementation. of a change Tenant
requests with respect to the Final Plans and for the value engineering
items in the amounts set forth in Exhibit B. Landlord and Tenant will
cooperate in good faith to arrive at a mutually agreeable Change Order Cost
using the construction budget in Exhibit B. If the sum of all Change Order
Costs set forth in fully executed Change Orders (the "Aggregate change
Order Change") is a negative number thereby reflecting that Landlord will
realize savings in the estimated aggregate cost Landlord will necessarily
incur in connection with the construction of the Improvements by reason of
the implementation of Tenant's requested changes, the parties will lower
the annual Base Rent by art amount equal to the cost savings multiplied by
the Yield Rate as defined below divided by the total square footage of the
Building. The term "Yield Rate" shall mean an annual rate of interest equal
to 10.5%. An example of the reduction, assuming a $100,000.00 negative
Aggregate Change Order cost is, as follows:
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$100,000.OO x 0.105 $.0576 per square foot if there is a One Hundred
182,305 Thousand Dollar ($100,000.00) decrease.
(I-I) Before implementing any change to the design of the improvements that
Tenant requests after approval of the Final Plans, Landlord roust submit to
Tenant in the form of a proposed Change Order a statement of the Change
Order Cost that will occur by virtue of that change and a statement of the
terms and conditions under which Landlord will undertake to implement
Tenant's requested change, including, without limitation, the effect that
implementation of the requested change will have on the anticipated date
for Landlord's substantial completion of the improvements. Until Landlord's
representative and Tenant's representative, as defined in Section 2(k),
sign the proposed Change Order, Landlord has neither obligation nor
authority to proceed to implement the requested change. Each fully executed
Change Order will become part of the Final Plant Any delay occurring with
respect to Landlord's substantial completion of the Improvements by virtue
of the review o~ a change that Tenant requests, the negotiation of a
mutually acceptable Change Order in connection with that request, and the
implementation of the requested change will constitute a Tenant Delay. if
the Aggregate Change Order Cost is a positive number, arid is equal to or
less than Three Hundred Fifty Thousand Dollars ($3 SQ000), the parties will
increase the annual Base Rent by an amount equal to the amount of the
positive change times the Yield Rate divided by the total square footage
of the Building. An example of this increase, assuming a One Hundred
Thousand Dollar ($100,000) positive Aggregate Change Order Cost is as
follows:
$ 100,000.00 x $0.0576 per square foot if there is a One Hundred
Thousand 182,305 Dollar ($100,000) increase.
In the Aggregate Change Order Cost will exceed Three Hundred Fifty Thousand
Dollars ($350,000) ("Excess Aggregate Change Order Cost"), Tenant shall pay
to Landlord, as provided below, all sums in excess of Three Hundred Fifty
Thousand Dollars ($350,000) and pay the increased annual Base Rent
attributable to the Three Hundred Fifty Thousand Dollar ($350,000) increase
in Aggregate Change Order Cost as set forth above, After the time, if any,
at which Tenant first becomes obligated to make payments to Landlord for
Excess Aggregate Change Order Coat in accordance with the terms of the
preceding sentence, the parties will make all subsequent calculations of
the Aggregate Change Order Cost by deducting from the sum of all Change
Order Costs set forth in fully signed Change Orders the aggregate amount of
payments that Tenant has made, or is obligated to make, to Landlord for
Excess Aggregate Change Order Cost. The parties hereto agree to determine
the Aggregate Change Order Cost on or before thirty (30) days front the
date of the issuance of Notice of Substantial Completion ant! to
memorialize amendment to Lease fixing Ease Rent.
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(i) Tenant shall pay the Excess Aggregate Change Order Cost to Landlord, as
follows:
(1) If the Excess Aggregate Change Order Cost is less than Ten Thousand
Dollars (S 10,000), Tenant shall pay Landlord the Excess Aggregate Change
Order Cost on the Commencement Date.
(2) If the Excess Aggregate Change Order Cost is equal to or greater than
Ten Thousand Dollars ($100,000), Tenant shall pay Landlord fifty percent
(50%) of the Excess Aggregate Change Order Cost upon the approval of the
Change Order(s) and the remaining fifty percent (50%) of the Excess
Aggregate Change Order Cost on the Commencement Date.
(j) Landlord shall afford Tenant and its contractors reasonable
access to the Improvements during construction for the purposes of
inspecting the Improvements and making preparations for work that Tenant
must undertake to ready the Improvements for Tenant's use,
(k) Tenant and Landlord must each designate in writing at least one
(1) but not more than three (3) representative(s) to act in its behalf in
dealings with the other party in matters relating to the construction of
the Improvements. At least one of Tenant's and Landlord's representatives
must (I) attend each regular project meeting (which shall take place
weekly) relating to the construction of the Improvements ("Weekly Project
Meeting"), (ii) be qualified to give authorizations, render decisions and
take such other action as may be required at those meetings, but only to
the extent those authorizations, decisions or other actions do not result
of an increase in the monetary obligations of either party by ;n amount in
excess often Thousand Dollars ($10,000), and (Iii) be authorized to approve
Change Orders contemplating a Change Order Cost not in excess of Ten
Thousand Dollars ($10,000) in any one instance. Any consents or approvals
given by a designated representative will bind the party on whose behalf
the representative acts, Either party may change its designated
representatives at any time by giving written notice of a change of
designation to the other party. The designated representatives will exert
their reasonable efforts to render decisions and take actions in a timely
manner so as to avoid unreasonable delay in the other party's work and
actions relating to the Improvements. For purposes of this Section 2(k),
Landlord designates Xxxx Xxxxx and Xxxx XxXxxx as Landlord's initial
representatives and Tenant designates Xxxx Xxxxxx of Xxxxxxxx
Communications, Inc. as Tenant's initial representative.
(l) Throughout the period between the date on which Landlord
commences construction of the Improvements arc! the data on which Landlord
substantially completes the construction of the Improvements and tenders
possession of the Improvements to Tenant, Landlord shall maintain (or have
its general contractor maintain) in force with respect to the Improvements
a policy of multiple peril (all-risk) builders risk insurance on a
completed value basis in an amount equal to the 11*11 replacement cost of
the Improvements. Such insurance shall be written by insurance companies
licensed to do business in the State of Texas with a financial rating of
XIII or better, and a policy rating of A- or better in the latest edition
of Best's Guide on Property and Casualty Insurance Companies. That policy
must name Tenant and Guarantor as an additional insured and must assure
Tenant that its coverage will continue for Tenant's benefit notwithstanding
any act or omission on Landlord's part. That policy must provide that no
cancellation, surrender or material change Will become effective unless
Tenant receives written notice at lean thirty (30) days in advance of the
time at which that cancellation, surrender or material change becomes
effective.
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(m) If Landlord fails to substantially complete the construction of
the Improvement, secure and tender possession of the improvement; to Tenant
by March 1, 1998. or such later date to which Landlord's obligation to
tender possession of the completed Improvements to Tenant is deferred by
Excused Delays, Tenant shall receive one day of rent abatement for each one
day that Landlord fails to substantially complete the Improvements and
tender possession to Tenant beyond March 1, 1998 (as such date may be
extended due to Excused Delays, unless such failure results from Tenant
Delays). If such lid lure continues for more than thirty (30) clays after
the date specified, Tenant shall receive two full days of rent abatement
for every day of delay up to the ninetieth (90th) day after the date
specified, If such failure continues beyond ninety (90) days, Tenant shall
receive three full days of rent abatement for one day of delay after the
ninetieth (90th) day. If such delay continues for more than one hundred
eighty (180) days after the date specified, then in lieu of the rent
abatement and as Tenant's sole and exclusive remedy, Tenant shall have the
right to terminate this Agreement upon fifteen (15) days written notice to
Landlord; provided, however, that Landlord shall be entitled to cure during
such period arid Tenant's termination of this Agreement shall not become
effective unless Landlord fails to cure within such period. In the event of
such cure, Tenant shall continue to receive the abatement during the cure
period at the then current rate. Landlord agrees that in the event it has
not tendered possession of the Improvements to Tenant on or before June 1,
1998, and such failure is not attributable to Tenant Delays, Landlord
agrees to hold Tenant harmless from any and all direct holdover costs
assessed by Tenant's current Landlord and incurred by Tenant in connection
with its current lease agreement with Aetna Insurance Company at 0000 Xxxxx
Xxxx, Xxxxxxxxxx, Xxxxx 00000, which are incurred pursuant to such lease
as a result of Tenant's holding over under such lease. Landlord further
agrees that in the event it has not tendered possession of the Improvements
to Tenant on or before August 4, 1998, and such failure is not attributable
to Tenant delays, Landlord agrees to additionally hold, Tenant harmless
from any and all direct holdover costs assessed by Tenant's current
Landlord and incurred by Tenant in connection with its current lease
agreement with Xxxxx Interest at Two Galleria, Dallas, Texas, which are
incurred pursuant to such lease as result of Tenant's holding over under
such lease.
Section 3. Initial Term. (a) The Initial Term of this Agreement
(the "Initial Term") will be the period that commences on the Commencement
Date and that ends at 11:59 p.m. (Dallas, Texas time) on either the day
prior to the fifteenth (15th) anniversary of the Commencement Date, lithe
Commencement Date occurs on the first day of a calendar month, or on the
fifteenth (15th) anniversary of the last day of the calendar mouth in which
the Commencement Date occurs, if the Commencement Date does not occur on
the first day of a calendar month, whichever is applicable. The definition
accorded the term "Commencement Date" in this Section 3 will not reduce
Tenant's obligation to pay Base Rent with respect to periods of time
preceding the Term, as defined above, under the circumstances set forth in
Section 2(b) or 2(c). Tenant has the right to renew the term of this
Agreement, as set forth in Section S below, and the Initial Term and any
Renewal Term with respect to which Tenant exercises that option in
accordance with Section 5 are collectively called the 'Term" in this
Agreement.
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(b) Within thirty (30) days after the Commencement Date, the parties will
execute an acknowledgment letter for the purpose of confirming the
Commencement Date, the Expiration Date, and the annual Base Rent for each
Lease Year (as defined below). For purposes of this Agreement, the term
"Lease Year" shall mean each twelve month period commencing with the month
in which the Commencement Date occurs. That acknowledgment will be
substantially in the form of the attached Exhibit D.
Section 4. Base Rent, and Additional Rent. (a) Subject only to the
adjustments and credits expressly set forth in Section 2 of this Agreement,
Tenant shall pay to Landlord for the Premises the annual amount as base
rent ("Base Rent") for each Lease Year indicated On Exhibit F attached
hereto and made a part hereof. Tenant shall pay each monthly installment of
Base Rent in advance on the first day of each month during the Term, with
the first installment of Base Rent being due on the Commencement Date. If
the Commencement Date occurs on a day other than the first day of a
calendar month and if the obligation to commence paying Base Rent does not
arise earlier in accordance with the terms of Section 2(b) or 2(c), the
Base Rent for the month in which the Commencement Date occurs will be equal
to the monthly installment amount specified above multiplied by a fraction,
the numerator of which is the number of days in the period between the
Commencement Date and the last day of that month, and the denominator of
which is the total number of days in that month. Under no circumstances
shall the Base Rent payable hereunder be abated for any period unless
otherwise specifically provided in this Agreement. If any payment required
of Tenant under this Agreement is not paid when due, Landlord may charge
Tenant a fee equal to five percent (5%) of the delinquent payment to
reimburse. Landlord for its cost and inconvenience incurred as a
consequence of Tenant's delinquency; provided, however, that Tenant may
have one late payment per Lease Year without incurring such charge in the
event the actual payment is received by Landlord on or before the 111Th
(5th) day of the month in which it is due following written notice from
Landlord that such amount is past due.
(b) If a termination of this Agreement occurs prior to the last day
of the Term (the "Expiration Date") for reasons other than Tenant's default
and if the effective date of termination is other than the last day of a
calendar month, the parties will pro rate the Base Rent payable with
respect to the calendar month in which the effective date of termination
occurs based on the number of days in that month, and Landlord shall
promptly refund to Tenant, to the extent Tenant is not then in default
under this Agreement, any previously paid Base Rent attributable to any
period of time following the termination date.
(c) Tenant will pay, prior to the date such taxes are delinquent, all
real estate taxes and installments of special assessments levied against
the Premises and attributable to any period of time included within the
Term (the "Impositions"). Except for any installment of assessments owed by
Tenant at the termination of this Agreement which shall be paid in
proportion to the then remaining term at the time of termination, Tenant
shall have the right to make assessment payments in amounts and in
proportions as permitted by applicable law. Landlord agrees to designate
Tenant as the party to receive all real estate tax bills for the Premises.
Upon Tenant's receipt of a paid receipt that the taxing authority issues
and that demonstrates the payment of that Imposition, Tenant shall deliver
to Landlord a copy of the receipt. In the event Tenant fails to timely pay
such Imposition, Tenant must pay all interest and penalties that accrue in
respect of that Imposition. The foregoing will not require Tenant to pay
any municipal, state or federal income or excess profits taxes assessed
against Landlord, any municipal, state or federal capital levy, estate,
succession, inheritance or transfer taxes of Landlord, or any franchise tax
unless such franchise tax has been enacted or modified to replace, in whole
or in part, ad valorem taxes. With respect to the Impositions levied in
respect of any period of time within which either the Commencement Date or
the Expiration Date occurs, Tenant must only pay a proportionate part of
those Impositions, which part will bear the same ratio to the total amount
of those Impositions as the number of days in the period between the
Commencement Date and the end of that period of time or in the period
between the beginning of that period of time and the Expiration Date,
whichever is applicable, bears to the total number of days in that period
of time, Any Impositions owed by Tenant at the termination of this
Agreement shall be payable in full to Landlord at the time of termination,
and if current taxes are not known at the time of termination, such amount
shall be determined based on the taxes assess for the preceding year.
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Tenant shall have the right to contest and is entitled to recover from
Landlord any refund paid to Landlord as a result of a successful contest of
such Imposition by Tenant, provided, however, Landlord shall be entitled to
retain from such refund, rebate or credit any reasonable unreimbursed
expenses it has incurred by virtue of Tenant's contest. If Tenant contests
any Imposition in a manner which results in a lien or other encumbrance
being assessed or affixed upon the Premises at any time, Tenant shall take
reasonable steps to protect Landlord against any liens arising therefrom.
Tenant may request Landlord to join in any contest Tenant undertakes in
accordance with the foregoing if the provisions of any law, rule or
regulation at the time in effect require that the proceedings be brought by
or in the name of Landlord, and the expense of same to Landlord, including
but not limited to the reasonable fees and costs of Landlord's attorneys
and experts, shall be borne by Tenant, Landlord agrees to take reasonable
steps to cooperate with Tenant, at Tenant's expense, in connection with any
contest of Impositions undertaken by Tenant. Landlord agrees to pass on to
Tenant all tax incentives (i.e., tax rebates, credits, refunds) obtained by
Landlord or Tenant in connection with the Land and Building and to the
extent permitted by law shall assign such incentives to Tenant upon the
condition that. such incentives shall revert to Landlord in the event this
Agreement is terminated for any reason expressly permitted herein. The
parties agree that in such event such reversion to Landlord shall occur
without the necessity of any further action by Landlord. Landlord agrees
not to take affirmative actions that cause the loss of any tax incentives
from any taxing authority.
(d) Tenant shall also pay, as additional rent, all costs and
expenses, including but not limited to penalties and interest, paid by
Landlord to any third party on Tenant's behalf which are attributable to
obligations owing by Tenant under this Agreement, for which such additional
charge was imposed by virtue of late receipt of Tenant's payment, including
but not limited to real estate taxes. Such costs and expenses, which will
include an administration fee of two percent (2%) of Landlord's out-of-
pocket expenditures shall be due and payable by Tenant upon its receipt of
written demand from Landlord. These costs and expenses shall also
constitute "Impositions," and the proration and payment date described in
Section 4(c) above shall also apply to the Impositions referenced in this
Section 4(d).
9
(e) Tenant xxxx pay Base Rent and additional rent to Landlord at the
address set forth in Section 33Q) or at such other address as Landlord may
from time to time designate. Tenant's obligation to pay rent and any other
amounts to Landlord under this terms of this Lease shall not be deemed
satisfied until such rent and other amounts have been actually received by
Landlord, In addition to Base Rent due hereunder, all sums of money and all
payments due Landlord under this Agreement, including, without limitation,
monies owed to Landlord by Tenant for reimbursement of Landlord's costs in
performing any obligations of Tenant hereunder, shall be deemed to be
additional rent owed to Landlord by Tenant.
Section 5. Renewal of the Term. (a) Tenant may renew the Term for
two (2) renewal terms ("Renewal Terms") of sixty (60) months each (the
first such renewal defined as the "First Renewal Term" and the second such
renewal defined as the "Second Renewal 1mm") so long as (i) this Agreement
is in full force and effect and Tenant is not in default (beyond any
applicable grace period) in respect of the performance of any obligation it
undertakes under the terms of this Agreement during the time that Tenant
exercises that option and the time the Renewal Term commences and (ii)
Tenant or any Permitted Transferee (as defined in Section 31 below) of
Tenant continues to hold the tenant's interest created by virtue of the
execution of this Agreement. The provisions of this Agreement will govern
the relationship between the parties during each Renewal Term, except that
the Base Rent for each Renewal Term will be determined as provided below.
Tenant will exercise that renewal option, if at all, by delivering written
notice (the "Tenant Option Notice") to Landlord not more than thirty (30)
days from the date of its receipt of' Landlord's renewal notice, Landlord
shall give Tenant notice, within three hundred sixty (360) days but not
more than four hundred fifty (450) days prior to the end of such Lease
term, of Landlord's opinion of the Fair Market Rent (as defined below) (the
"Landlord Renewal Notice"). Tenant's Renewal Notice shall state whether it
accepts the Landlord's determination of Fair Market Rent or in the event it
does not accept Landlord's determination of Fair Market Rent, it shall
state its opinion of Fair Market Rent. If Tenant does not accept Landlord's
determination of Pair Market Rent and proposes its own opinion of Fair
Market Rent, then Fair Market Rent shall be determined by binding
arbitration as provided below However, both parties agree that for a period
of thirty (30) days from the date of Tenant's Renewal Notice that they will
attempt, in good faith, to reach an agreement as to Fair Market Rent. In
the event the parties are unable to agree on Fair Market Rent, Tenant may
withdraw its exercise of the renewal option or may proceed to arbitration
as provided below, In the event Landlord shall fail to issue its Landlord
renewal notice, Tenant may provide its Tenant Option Notice to Landlord
within two hundred seventy (270) days but not more than three hundred fifty
nine (359) days prior to the end of such Lease Term. Such Tenant Option
Notice shall state that Tenant exercises such option and state Tenant's
determination of Fair Market Rent. In such event, the parties shall
attempt, in good faith, for a period of thirty (30) days from Landlord's
receipt of Tenant's renewal notice to reach an agreement as to Fair Market
Rent. In the event the parties fail to reach an agreement, Tenant may
withdraw its Tenant renewal notice or proceed to arbitration as provided
below.
(b) The annual Base Rent payable during each Renewal Term will be
equal to ninety-five percent (95%) of the Fair Market Rent, as defined
below and as determined in accordance with the procedures described in this
Section 5(b)). If determination of Fair Market Rent in accordance with the
following procedures becomes necessary, the parties will take the following
actions,
10
(i) The parties will each select a real estate broker who (A) is
licensed in the State of Texas, and has a SIOR or CCIM designation (B)
has been actively arid continuously engaged in the leasing of
industrial/office space in the Dallas, Texas metropolitan area during
the preceding five-year period, (C) has been the primary broker
representing either a landlord or a tenant to a lease covering at
least 25,000 square feet of industrial/office space during the most
recent three-year period, and (D) has not represented Landlord or
Tenant during the preceding five-year period. Such selections of the
real estate brokers by each of Landlord and Tenant shall be made
within ten (10) days of the parties' failure to agree on the Fair
Market Rent. in the event either party fails to so nominate a
selecting broker, the broker nominated by the other party may choose
the other broker to act on behalf of the non-selecting party. The two
selected real estate brokers shall have ten (10) days from the date of
their selection to establish a mutually agreeable Fair Market Rent
rate. Should such brokers fail to establish a Fair Market Rent within
the time allowed, such brokers shall within five (5) days following
expiration of their ten (10) day determination period, select a third
real estate broker, who also meets the criteria of this Section
5(b)(i)(A)-(D), to serve as the final arbitrator to determine the Fair
Market Rent, and should they fail to so agree, such broker shall be
chosen by the American Arbitration Association in Dallas, Texas.
(ii) Within twenty (20) days after the date of his or her
appointment, the third real estate broker will give the parties
written notice of its determination of the Fair Market Rent, which
will be used to calculate the Base Rent that will apply during the
ensuing Renewal Term.
(iii) The decision of the real estate broker serving as the final
arbitrator will bind the parties.
(iv) The parties will share the cost of the arbitration equally.
(c) If Tenant fails to exercise the option to renew the Term by
failing to deliver the Tenant Option Notice by the outside date established
in Section 5(a), the renewal option granted to Tenant in this Section 5
will terminate and will be null and void and of no further force and
effect. Tenant's exercise of that renewal option will neither operate to
cure any default by Tenant in the performance of any obligations it
undertakes under the terms of this Agreement nor extinguish or impair any
rights or remedies of Landlord arising by virtue of such a default. If this
Agreement or Tenant's right to possession of the Premises terminates in any
manner whatsoever before Tenant exercises the renewal option, the renewal
option will simultaneously terminate and become null and void.
(d) "Fair Market Rent" means the annual rental rate per square
foot that a comparable landlord of a building that is located in the
vicinity of the Building and that is comparable in size, design and quality
to the Building would accept in comparable transactions involving a tenant
whose creditworthiness is comparable to that of Tenant and whose other
obligations under the lease would be comparable to those undertaken by
Tenant in this Agreement. The parties agree that in determining Fair Market
Rent there will be no reduction in rent attributable to the imputed cost of
demolition of Tenant's existing Improvements nor will there be an increase
in rent attributable to Tenant's Improvements which alter the character of
the Property, i.e., Tenant converting warehouse space to office space, at
its cost, and thereby increasing the rate per square foot based solely on
the character of the space as office rather than warehouse.
11
Section 6. Use. Tenant shall use the Premises only for lawful
purposes reasonably related to Tenant's business operations. Tenant may not
knowingly use the Premises for the receipt, storage or handling of any
product, material or merchandise that is explosive or highly inflammable or
hazardous, except for any minimal quantities of such substances which are
used by Tenant in the ordinary course of business and in compliance with
applicable laws. Tenant shall comply with all federal, state, and local
governmental laws, ordinances and regulations applicable to the use of the
Premises and with all governmental orders and directives for the
correction, prevention and abatement of nuisances in or upon, or connected
with, the Premises.
Section 7. Alterations. (a) During the Term, Tenant may not
make structural alterations, exterior alterations or alterations which
change the original character of the Building without Landlord's prior
written consent (which shall not be unreasonably withheld or delayed), but
Tenant will have the right, without Landlord's consent, to make non-
structural alterations to the interior of the Premises which do not change
the character of the Building, further providing, that both types of
alterations have a project cost to Tenant of less than One Hundred Fifty
Thousand Dollars ($150,000.00) ("Alterations") and are required or
commercially desirable for the conduct of Tenant's business. In making any
Alterations, Tenant shall do the following:
(i) notify Landlord in writing at least fourteen (14) days
prior to commencement of the Alterations, and describe in such
notice the name, address and other pertinent business information
of the general contractor selected to construct such Alterations.
(ii) comply with all applicable local, state or federal
laws, regulations, codes or ordinances affecting the Alterations
and the Premises.
(iii) provide Landlord with copies of all proposed plans and
specifications at least seven (7) working days prior to
commencement of the work-effort and upon request by Landlord,
provide Landlord, not more than one time per year, with revised
plans and specifications, relating to the Alterations, reflecting
changes from the prior plans and specifications.
(iv) provide Landlord with certificates of insurance
evidencing insurance coverage of the general contractor and major
subcontractors and naming Landlord as an additional insured and
loss payee under such policies and, as to the certificates of
insurance of the major subcontractors, naming the general
contractor as an additional insured under such policies.
(v) upon completion of construction of the Alterations,
provide Landlord with copies of final lien releases and waivers
of the general contractor and all major subcontractors, suppliers
and any other party possessing the right At that time or at any
time thereafter to file a lien or encumbrance against the
Premises.
12
(b) Upon the expiration of the Term or any earlier termination of
this Agreement, Tenant shall return the Premises to Landlord clean and in
the condition that existed on the Commencement Date except for ordinary
wear and tear, damage that Landlord has the obligation to repair under the
terms of this Agreement, Alterations and other leasehold improvements that
Tenant does not have the obligation to remove under the terms of this
Section 7(b) and damage by casualty. Tenant's trade fixtures, furnishings
and equipment, including, but not limited to all broadcasting, studio,
satellite and production equipment in the Premises will remain Tenant's
property for all purposes and Tenant may remove them at its option and
expense at any time on or before the Expiration Date or earlier termination
of this Agreement. Except as provided below, all Alterations and other
leasehold improvements and property at the Premises (including wall to wall
carpeting, paneling or other wall covering and any other surface material
attached to or affixed to the floor, wall or ceiling of the Premises) will
remain in and be surrendered with the Premises upon the expiration of the
Term or the earlier termination of this Agreement and Tenant waives all
rights to any payment, reimbursement or compensation for the property that
must remain at the Premises in accordance with the foregoing. Tenant must,
however~ remove from the Premises prior to the Expiration Date or the date
of the earlier termination of this Agreement any Alteration or other
leasehold improvement that Landlord has designated for removal at the time
of Landlord's written approval of such leasehold improvements. Tenant shall
not be required to remove from the Premises any of the Alterations which
are constructed in the Premises in accordance with the Final Plans ~r those
that do not require Landlord's approval. Tenant must promptly repair any
damage to the Premises that it~ removal of personal property, Alterations
or leasehold improvements causes and agrees to indemnify and hold Landlord
harmless from any and all lest damage, claim or cause of action, including
attorneys' fees and expenses resulting from any such activities by Tenant,
its agents, employees or contractors.
Section 8. Maintenance of Premises. (a) Landlord shall, at
its expense and for the benefit of Tenant, maintain, repair and, if
necessary, replace the roof, and maintain and repair the foundation, load-
bearing exterior walls and its walls and structural components of the
Building during the Term.
(b) Except as otherwise provided in this Agreement, Tenant shall
be responsible for maintaining in good condition at its expense the
Premises and the systems serving the Premises. Moreover, during the entire
Term, Tenant shall keep the parking areas clean, shall maintain the
landscape plantings situated on the Land at suitable intervals and shall
maintain in force service contracts providing for the mowing, fertilizing
and other routine care of the lawn and other landscape plantings on the
Land (at a minimum in compliance with the covenants, conditions and
restrictions affecting the Land) and for the routine preventive maintenance
of the HVAC and other building systems serving the Premises, Tenant may
retain third party providers to perform Tenant's repair and maintenance
obligations under this Agreement, and upon Landlord's request, Tenant shall
promptly furnish to Landlord a copy of the contracts for those services
that are then in force. If, following notice from Landlord, Tenant fails to
make any necessary repairs or perform any necessary maintenance for which
Tenant is responsible, Landlord may cause the repairs or maintenance to be
performed and Landlord's costs of doing so will be payable as additional
rent with the next installment of Base Rent that becomes due. Tenant shall
nor have any obligation to replace the HVAC system or any component thereof
unless it is determined by a reputable HVAC engineer mutually selected by
the parties, that the FIVAC system or the component thereof is incapable of
being repaired to the extent necessary to function properly and in
accordance with manufacturer's specifications,
13
Section 9. Utilities. Tenant shall be responsible for
obtaining service from and shall pay for all utilities and other services
furnished to the Premises Landlord shall, as part of the construction of
the Building, install and connect to the Building all utility connections
in such a manner as to enable Tenant to obtain all necessary utility
services excluding telecommunications.
Section 10. ~ Tenant has the right to place exterior signs on the
Premises subject only to any restrictions applicable by virtue of Legal
Requirements and all covenants, conditions and restrictions affecting the
Land. Tenant shall maintain its signs in good condition and shall remove
them and repair any damage and discoloration to the building the removal
causes on or before the Expiration Date, If Tenant falls to remove the
exterior signs within thirty (30) days of termination of this Agreement,
Landlord may remove them at Tenant's expense, and Landlord will have no
duty or obligation to account to Tenant for any proceeds Landlord receives
from the disposal of those exterior signs. Landlord shall use reasonable
efforts to cooperate with Tenant, at Tenant's sole cost and expense, to
assist Tenant to obtain all required approvals for Tenant's exterior
signage. Landlord to construct and install movement sign and all site
directionals and ADA signage as required by Exhibit B.
Section 11. Expansion Options. (a) Building Expansion. (i) If
tenant is not in default, beyond any applicable grace period, in respect of
the performance of its obligations arising under the terms of this
Agreement and has not exercised the Office Expansion Option in 11(b) hereof
and (ii) this Agreement is in full force and effect in accordance with its
terms, Tenant has the option (the "Building Expansion Option") to lease an
addition to the Building that Landlord will erect in order to enlarge the
floor area of the warehouse portion of the Building up to 22,500 square
feet (the 'tBuil4ing Expansion"). If Landlord undertakes the construction
of the Building Expansion in accordance with the terms of this Section 11,
Landlord will construct it in the area depicted on the attached Exhibit B
in accordance with plans and specifications mutually acceptable to the
parties. In the event Tenant desires to exercise the Building Expansion
Option at a time when there are less than ten years remaining on the
Initial Term, then Tenant shall simultaneously with the exercise of the
Building Expansion Option exercise its option to renew the Term for the
First Renewal Term, and if necessary, the Second Renewal Term, in
accordance with the terms of Section 5 of this Agreement. Tenant shall have
the option to reduce the term of the First Renewal Term or the Second
Renewal Term, as necessary, to a period that when added to the remainder of
the Term, remaining at the time of Substantial Completion of the Building
Expansion, will equal ten (10) years or may renew for the full five year
period contained in the renewal option. Tenant may exercise the Building
Expansion Option, if at all, by delivering written notice to Landlord. In
that notice, Tenant shall state, if it is required to exercise the first
renewal option the length of time which the first option will include as
described above and also specify the floor area of the Building Expansion
that Tenant requests Landlord to construct. In the event Tenant is required
to exercise the first renewal option or the second renewal option, as the
case may be, Base Rent for the renewal period shall be determined in
accordance with the procedures contained in Section 5 of this Agreement;
however, in the event arbitration is required, the determination of Base
Rent shall be based on the decision as to Fair Market Rent as of the end of
the Term. Once Landlord has substantially completed construction of the
Building Expansion, the parties will consider the Building Expansion part
of the Premises for purposes of this Agreement. Tenant shall have the right
to pay for and construct the Building Expansion and in such event there
shall be no requirement for the exercise of the first renewal option or the
second renewal option. Tenant however must comply with Section 7 regarding
the Alterations in the event it constructs the improvements.
14
(2) If Tenant timely exercises the Building Expansion Option:
(i) The parties agree to increase by an amount, as
determined below, the Base Rent payable during the period from
the date of the completion of the construction of the Building
Expansion to the last day of the Initial Term. 11 for any reason,
the parties fail to achieve the agreement contemplated in this
Section 1 l(a)(2)(~f within ninety (90) days after the date on
which Tenant exercises the Building Expansion Option, Tenant
shall reimburse Landlord for all the architectural and
engineering fees Landlord reasonably incurs by virtue of Tenant's
exercise of the Building Expansion Option, the parties will have
no further rights or obligations with respect to the Building
Expansion and this Section 11(a) will have no further force or
effect. Moreover, if Tenant exercises the Building Expansion
Option and is required to exercise its option to renew for the
First Renewal Term or Second Renewal Term, as the case may be,
and the circumstances described in the preceding sentence occur,
Tenant may rescind its exercise of the option to renew the Term
by delivering written notice to Landlord within one hundred five
(105) days after the date on which Tenant exercises the Building
Expansion Option. If that rescission occurs before the date that
is nine (9) months in advance of the Expiration Date, Tenant may
re-exercise its option to renew the Term for the first Renewal
Term at a later time in accordance with the terms of Section 5.
The additional Base Rent to be paid by Tenant to Landlord, during
the Initial Term, on account of the Building Expansion, shall
equal the product of (A) the total Building Expansion Cost
(defined below) and (B) the sum of(i) a constant rate equal to
the Equivalent United States Treasury Note Rate (as defined
below) at the time of the Expansion notice plus (ii) 300 basis
points. The term "Equivalent United States Treasury Note Rate"
shall mean the yield rate existing at the close of trading on the
day of Landlord's receipt of Tenant's written notice of exercise
of the Building Expansion Option, on United States Treasury Notes
maturing on the last day (or date closest thereto) of the Lease
Term. The term "Building Expansion Cost" shall mean Landlord's
direct costs incurred in connection with the design, development
and construction of the Building Expansion and shall include, but
not be limited to, fees for construction, consultation by
professionals, reasonable attorneys' fees, reasonable design
fees, reasonable development fees paid to Landlord (not to exceed
five percent (5%) of the total cost), commissions paid to real
estate brokers in connection with the Building Expansion. The
Building Expansion Space shall include construction of the shell
and building equivalent improvements such as II VAC, lighting,
sealed floor and other features commonly found in equivalent
space in the Dallas/Fort Worth area.
(ii) In the event Tenant elects to exercise the Building
Expansion Option the parties agree that the following procedures
shall apply to the process:
15
a. Tenant's notice shall include a preliminary site
plan and specification similar to the site plan and
specification that was provided in the initial RFP in
Exhibit B submitted by Tenant to Landlord;
b. Landlord shall prepare preliminary plans
sufficient to price the Building Expansion within 45 days of
its receipt of the Building Expansion Notice;
c. Within forty-five (45) days of receipt of the
Building Expansion Notice, Landlord shall provide to Tenant
a construction estimate and schedule;
d. Tenant shall approve or disapprove within fifteen
(15) business days of its receipt of such estimate and
schedule. Landlord shall resubmit with revisions within ten
(10) days of Tenant's approval or disapproval. Tenant shall
have ten (10) business days to approve or disapprove of
Landlord's revisions;
e. Tenant shall cooperate with Landlord in the
preparation of plans and provide all necessary information;
f. The parties agree that the schedule of drawings as
determined for the construction of the improvements shall
apply to the Building Expansion and that all plans shall be
prepared to the same level of detail as the original plans
and specifications for construction of the improvements.
Such plans shall be in sufficient detail to calculate the
expansion rent.
g. Landlord agrees that the exterior of the Building
expansion shall be consistent with the quality and
appearance of the existing Building;
h. Landlord shall obtain not less than three (3)
competitive bids with respect and provide to Tenant cost
estimates from general contractors approved by Tenant;
i. The parties shall agree on the additional Base
Rent within thirty-five (35) days of the date Landlord
submits final plans for the Building expansion;
j. Landlord shall use reasonable efforts to timely
obtain all required government approvals and shall hold
Tenant harmless from any liability resulting from changes in
legal requirements occurring subsequent to the commencement
of construction, but prior to substantial completion of the
improvements.
k. Landlord will use reasonable efforts to conduct
the construction to reasonably minimize interference with
Tenant's use and enjoyment of the Premises.
16
l. The parties hereto agree that the procedures and
obligations with regard to the actual construction of the
Improvements shall apply to the construction of the
improvements herein.
(iii) The parties will agree to promptly execute and deliver
on or about the date that Landlord substantially completes the construction
of the Building Expansion an acceptance certificate that confirms the
addition of the Building Expansion to the Premises, the Expiration Date and
the Base Rent that will be payable through the Expiration Date.
(b) Office Expansion.
(1) If (i) Tenant is not in default, beyond any applicable grace
period, in respect of the performance of its obligations arising under the
terms of this Agreement and has not exercised the Building Expansion Option
in 11(a) hereof, and (ii) this Agreement is in full force and effect in
accordance with its terms, and Tenant has the option (the "Office Expansion
Option") to lease an addition to the Building that Landlord will erect in
order to enlarge the floor area of the office portion of the Building up to
15,000 square feet (the "Office Expansion"). If Landlord undertakes the
construction of the Office Expansion in accordance with the terms of this
Section 11, Landlord will construct it in the area depicted on the attached
Exhibit B in accordance with plans and specifications mutually acceptable
to the parties. In the event Tenant desires to exercise the Office
Expansion Option at a time when there are less than ten years remaining on
the Initial Term, then Tenant shall simultaneously with the exercise of the
Office Expansion Option exercise its option to renew the Term for the First
Renewal Term and, if necessary, the Second Renewal Term, in accordance with
the terms of Section 5 of this Agreement. Tenant shall have the option to
reduce the term of the First Renewal Term, or the Second Renewal Term, as
necessary, to a period that when added to the remainder of the Term,
remaining at the time of Substantial Completion of the Office Expansion,
will equal ten (10) years or may renew for the full five year period
contained in the renewal option. Tenant may exercise the Office Expansion
Option, if at all, by delivering written notice to Landlord. In that
notice, Tenant shall also specify the floor area of the Office Expansion
that Tenant requests Landlord to construct. In the event Tenant is required
to exercise the first renewal option, or the second renewal option, as the
case may be, Base Rent for the renewal period shall be determined in
accordance with the procedures contained in Section 5 of this Agreement;
however, in the event arbitration is required, the determination of Base
Rent shall be based on the decision as to Fair Market Rent as of the end of
the Initial Term. Once Landlord has substantially completed construction of
the Office Expansion, the parties will consider the Office Expansion part
of the Premises for purposes of this Agreement. Tenant shall have the right
to pay for and construct the Office Expansion and in such event there shall
be no requirement for the exercise of the first renewal option or the
second renewal option. Tenant, however, must comply with Section 7
regarding the Alterations in the event it constructs the improvements.
17
(2) If Tenant timely exercises the Office Expansion Option:
(i) The parties agree to increase by an amount, as determined
below, the Base Rent payable during the period from the date of the
completion of the construction of the Office Expansion to the last day of
the Initial Term, It; for any reason, the parties fail to achieve the
agreement contemplated in this Section 1 l(h)(2)(i) within ninety (90) days
after the date on which Tenant exercises the Office Expansion Optic; Tenant
shall reimburse Landlord for all the architectural and engineering fees
Landlord reasonably incurs by virtue of Tenant's exercise of the Office
Expansion Option, the parties will have no further rights or obligations
with respect to the Office Expansion and this Section 11(b) will have no
further force or effect. Moreover, if Tenant exercises the Office Expansion
Option and is required to exercise its option to renew for the first
Renewal Term and the circumstances described in the preceding sentence
occur, Tenant may rescind its exercise of the option to renew the Lease by
delivering written notice to Landlord within one hundred five (103) days
after the date on which Tenant exercises the Office Expansion Option, If
that rescission occurs before the date that is nine (9) months in advance
of the Expiration Date, Tenant may re-exercise its option to renew the Term
for the first Renewal Term at a later time in accordance with the terms of
Section 5. the additional Base Rent to be paid by Tenant to Landlord for
the expanded office space shall be determined by taking the total Office
Expansion Cost (as defined below) and amortizing such costs over the
remaining term of this Agreement utilizing the Yield Rate as a discount
rate. The term "Office Expansion Cost" shall mean Landlord's costs incurred
in connection with the design, development and construction of the Office
Expansion and parking lot (as may be required to conform the Premises to
code regulations and Tenant's use) and shall include, but not be limited
to, fees for construed on, consultation by professionals, reasonable
attorneys' fees, reasonable attorneys' fees, reasonable development fees
paid to Landlord (not to exceed five percent (5%) of the total cost),
commissions paid to real estate brokers in connection with the Office
Expansion and all other costs incurred, whether direct or indirect. The
Office Expansion Space shall include construction of the shell and building
equivalent improvements such as HVAC, lighting, sealed floor and other
features commonly found in equivalent office space in the Dallas/Fort Worth
area.
(ii) The requirements set forth in Section 11(a)(2)(ii) in
connection with the Building Expansion Option shall apply to Tenant's
exercise of the Office Expansion Option.
(iii) The parties will agree to promptly execute and deliver on
or about the date that Landlord substantially completes the construction of
the Office Expansion, an acceptance certificate that confirms the addition
of the Office Expansion to the Premises, the Expiration Date and the Base
Rent that will be payable through the Expiration Date.
(c) Parking Expansion Option.
(i) At any time within the first ten (10) years of the
Initial Term of this Agreement, or at anytime in connection with
either of the expansion options, Tenant may elect to require
Landlord to construct an additional one hundred and fifty (150)
parking spaces in the areas set forth on Exhibit. B and marked
"Additional Parking" ("Parking Expansion Option"). In the event
Tenant elects to exercise its Parking Expansion Option, Tenant
agrees to increase its Base Rent by an amount equal to that
amount per month that would amortize Landlord's costs incurred in
connection with the design and expansion of the additional
parking, at the Yield Rate over the then remaining term of this
Agreement. Notwithstanding the above, if Tenant exercises the
Parking Expansion Option in connection with the exercise with the
Building Expansion Option, the Parking Expansion Option shall be
deemed to be a part of the building expansion for purposes of
computing additional Base Kent. Tenant may exercise the Parking
Expansion Option in Section 11(c) above without regard to whether
or not it exercises either the Building Expansion Option or
Office Expansion Option.
18
(d) The Building Expansion Option in Section 11(a) above and the
Office Expansion Option in Section 11(b) above may, upon Tenant's
compliance with the conditions of each such option, be exercised by Tenant
independently of, and without regard to the exercise or recision of such
option or the other option. Tenant's failure or refusal to exercise either
the Building Expansion Option or the Office Expansion Option shall not be
deemed a waiver of its right to exercise the other option. if available.
(e) Notwithstanding anything contained herein to the contrary,
Tenant may exercise the Building Expansion, Office Expansion or Parking
Expansion options without regard to the tinting of such exercise provided
Tenant pays, as its sole cost and expense, all costs associated with such
expansion, and performs such construction in accordance with Section 7 of
this Agreement. Notwithstanding the above, Tenant shall not be required to
obtain Landlord's consent provided Tenant constructs all of the foregoing
in accordance with Exhibit B. Tenant shall, however, comply with all other
requirements of Section 7 of this Agreement,
(f) Landlord shall utilize reasonable efforts to obtain
governmental approvals for the Building Expansion and construction of the
Mezzanine during the approval process undertaken in connection with the
construction of the Improvements set forth on Exhibit B.
(g) The failure of the parties hereto to Teach an agreement on
the terms of any of the Building Expansion Option, Office Expansion or
Parking Expansion Option shall not affect the validity of the remaining
term of this Agreement or this Agreement.
Section 12. Landlord's Right of Access. (a) Landlord and its
authorized representatives have the right to enter the Premises upon
reasonable advance notice, and, if required, accompanied by Tenant
representative during Tenant's regular business hours far the purpose of
(i) determining whether the Premises are in good condition and whether
Tenant is complying with its obligations arising under the terms of this
Agreement, and (ii) performing any maintenance or repairs for which
Landlord is responsible under the terms of this Agreement. Landlord has the
right to enter the Premises at all times without notice in the event of an
emergency or for the purpose of making emergency repairs; under other
circumstances, Landlord must give Tenant notice of Landlord's intended
entry at least twenty four (24) hours in advance of that entry, and, if
required, accompanied by Tenant representative.
(b) Landlord shall conduct its activities in the Premises in a manner
so as not to interfere with Tenant's business operations.
Section 13. Tenant's Indemnity. Except as provided in Section
16, Tenant shall indemnify and hold Landlord harmless from and against all
claims, actions, demands, judgments, damages, liabilities and expenses,
including reasonable attorneys' fees, that may be asserted against Landlord
or that Landlord may sustain by virtue of the occurrence of the death of or
bodily injury to any person or the loss of; damage to, or destruction of,
any property arising from Tenant's use, occupancy or maintenance of the
Premises, except to the extent the claims, actions, demands, judgments,
damages, liabilities or expenses arise from the intentional or grossly
negligent acts or omissions of Landlord or any of its representatives,
agents, employees.
19
Section 14. Landlord's Indemnity. Except as provided in
Section 16, Landlord shall indemnify and hold Tenant harmless from and
against all claims, actions, demands, judgments, damages, liabilities and
expenses, including reasonable attorneys' fees, that may be asserted
against Tenant or that Tenant may sustain by virtue of the occurrence of
the death of or bodily injury to any person or the loss of, damage to, or
destruction of any property arising from the grossly negligent or
intentional acts or omissions of Landlord, or any of its agents or
employees, except to the extent any such claims, actions, demands,
judgments, damages, liabilities or expenses arise from the intentional or
negligent acts or omissions of Tenant or any Of its representatives,
agents, employees, contractors or invitees.
Section 15. Insurance. (a) Tenant shall provide insurance at
Tenant's expense (which shall constitute additional rent to be paid to
Landlord within thirty (30) days following demand therefor, but in all
events prior to the due date for the annual premium payment) throughout the
Term as follows:
(1) Commercial general liability insurance insuring Tenant,
and also naming as additional insureds and loss payees, Landlord
and Landlord's mortgagees, against liability arising from
Tenant's use, occupancy or maintenance of the Premises and
appurtenant areas and providing contractual liability coverage
for the indemnities Tenant makes in Section 13. The limit of that
insurance must be at least Five Million Dollars ($5,000,000.00)
per occurrence for bodily injury to or death of any persons or
property damage. The commercial general liability insurance
policy shall be endorsed in order to confirm that (i) that
insurance is primary insurance arid (ii) insurance maintained by
or for Landlord's benefit will not reduce the proceeds payable in
respect of any claim made on the insurance furnished in
accordance with the terms of this Section 15(a)(1). This
obligation to provide comprehensive general liability insurance
shall be deemed to be a free-standing obligation of Tenant and be
independent of Tenant's obligation to indemnify Landlord.
(2) Workers' compensation insurance in the amount required
by applicable law and employer's liability insurance in an amount
not less than Five Hundred Thousand Dollars ($300,000.00). The
workers' compensation insurance must include an all-states
endorsement.
(b) Tenant shall elect, on or before sixty (60) days prior to the
date any premiums are due, to provide at its sole cost and expense or
request Landlord to provide, at Tenant's sole cost and expense (which shall
constitute additional rent to be paid to Landlord within thirty (30) days
following demand thereof; but in all events prior to the due date for the
annual premium payment), insurance throughout the term as follows:
(1) With respect to the Building and the leasehold
improvements Tenant makes to the Building, all risk property
insurance in an amount equal to the replacement cost of the
Building above its foundations and Tenant's leasehold
improvements, The policy must name Tenant and Guarantor as
insured and must also name Landlord and Landlord's mortgagees as
additional insureds and loss payees, and must contain a mortgagee
clause in favor of' Landlord's mortgagees.
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(2) All risk property insurance covering personal property
Tenant places upon or installs within the Premises in an amount
equal to the replacement cost of that personal property.
(3) Time element insurance covering the loss of rental
income for a period of up to twelve (12) months that may occur as
a result of loss or damage to the Building caused by any peril
covered by the property insurance described in Section 2 5(b)(1)
above, The policy must name Tenant and Guarantor as insured and
must also name Landlord and Landlord's mortgagees as additional
insureds and loss payees, and must contain a mortgagee clause in
favor of Landlord's designated mortgagees.
(4) Condemnation or eminent domain insurance insuring
Landlord and Landlord's mortgagees, against the permanent loss or
temporary interruption of the Base Rent, additional rent and
other payment obligations of Tenant under this Agreement arising
from the taking of all or any portion of the Premises in eminent
domain proceedings. Such insurance shall cover the fair market
value of the loss of the rental income for the duration of the
taking of all or any portion of the Premises.
(c) Each policy of insurance shall be written by insurance
companies licensed to do business in the State of Texas with a financial
rating of VIII or better and policy holder rating of A-or better in the
latest edition of Best's Guide on ?ropeny & Coma fry Insurance Companies,
and must provide that the insurer will cancel, terminate or materially
change the policy only after it has given Landlord and Tenant written
notice of the anticipated cancellation, termination or material change at
least thirty (30) days in advance of the time at which the cancellation,
termination or material change becomes effective.
(d) Landlord or Tenant, as the case may be, may provide the
specified insurance by means of a combination of primary and excess or
umbrella coverage and by means of a policy or policies of blanket insurance
so long as (i) the amount of the total insurance allocated to the Premises
under the terms of the blanket policy or policies furnishes protection
equivalent to that of separate policies in the amounts required by the
terms of this Agreement, and (ii) the blanket policy or policies comply in
all other respects with the other requirements of this Agreement.
(e) As soon as practicable but in no event more than thirty (30)
days after the date of the execution of this Agreement by both parties,
Landlord shall furnish to Tenant certificates of insurance reflecting that
the specified policies are in force, Landlord shall also provide
certificates evidencing all renewals of those policies at least thirty (30)
day~ prior to the date of expiration of such policies.
21
Section 16. Waiver of Subrogation. To the extent permitted by
respective insurance carriers, Landlord and Tenant, on their own behalf and
oh behalf of anyone claiming through them by way of subrogation, waive and
release any and all rights of recovery, claim, action or cause of action
that either may now or later have against the other or the other's agents,
officers and employees, but only to the extent of insurance proceeds
actually received, by virtue of (i) any loss or damage that may occur to
the Building, improvements to the Building or personal property within the
Building by reason of fire, the elements or other risks covered under
policies of all risk property insurance available in the area where the
Building is located or (ii) any diminution in the rent derived from the
operation of the Building or in the revenue derived from the conduct of
business within the Building that may occur by reason of fire, the elements
or other risks covered under policies of time element insurance available
in the area where the Building is located, regardless of cause or origin,
including, without limitation, the negligence of Landlord or Tenant or any
of their respective representatives, agents, employees, contractors and
invitees.
Section 17. Casualty. (a) If the damage caused by a fire or
other casualty renders the Building untenantable in the commercially
reasonable opinion of Tenant, the Base Rent and any additional rent
required by virtue of Section 4 above will xxxxx for the period during
which the Building is untenantable, provided that Tenant has fully complied
with the provisions of Section 15(b)(3) of this Agreement. If the damage
caused by a fire or other casualty renders the Building partially
untenantable in the reasonable opinion of Landlord, the Base Rent and any
additional rent required by virtue of Section 4 above will partially xxxxx
for the period during which the affected portion of the Building is
untenantable in proportion to the diminished utility of the Building in the
conduct of Tenant's business, provided Tenant has fully complied with the
provisions of Section 15(b)(3) of this Agreement. For purposes of this
Section 17, a portion of the Building is untenantable when it is not
reasonably usable for the conduct of Tenant s business. If Landlord
restores a portion of the Building affected by the casualty damage to a
tenantable condition and permits Tenant to resume possession of that
restored portion while Landlord continues the restoration of other damaged
portions of the Building, the parties will make a pro rata adjustment of
the partial abatement of rent that occurs by virtue of the foregoing terms
of this Section 17(a) to reflect Tenant's resumption of use of the restored
portion. Landlord is entitled to receive all proceeds payable in respect of
the time element insurance maintained in accordance with the terms of
Section 15(a)(3) above.
(b) if a fire or other casualty renders the Premises
untenantable, in whole or in part, and Landlord's estimated time for
restoration of the Premises (exclusive of leasehold improvements Tenant
makes) exceeds the period that will expire on the date that is one hundred
fifty (150) days after the date Landlord receives actual knowledge of the
occurrence of the fire or casualty, Tenant may terminate this Agreement by
the delivery of written notice to Landlord within fifteen (15) days
following the date on which Landlord notifies Tenant of the estimated time
for the restoration. Landlord must provide that estimate within thirty (30)
days following the date of the casualty. If a termination of this Agreement
does not occur in accordance with the foregoing provisions of this Section
17(b), but Landlord fails to complete the restoration of the Premises, and
such failure is not occasioned by any delay or hindrance by Tenant or its
contractors, by the date that is thirty (30) days after the date of the
expiration of the period within which Landlord estimated the restoration
would be completed, Tenant may terminate this Agreement by the delivery of
written notice to Landlord at any time following the expiration of that 30-
day period, but prior to the date on which Landlord substantially completes
the restoration of the Premises. If a fire or other casualty occurring
during the final two (2) years of either the Initial Term or any Renewal
Term renders the Premises untenantable, in whole or in part, and for
Landlord's estimated time for the restoration of the Premises (exclusive of
leasehold improvements Tenant makes) exceeds the period that will expire on
the date that is forty-five (45) days after the date Landlord receives
22
actual knowledge of the occurrence of the fire or casualty and Tenant has
not previously exercised its option to renew the Term for the ensuing
Renewal Term in accordance with the terms of Section 5, Landlord may
terminate this Agreement by delivering written notice to Tenant at the time
at which Landlord notifies Tenant of the estimated time for the
restoration. If the casualty occurs on or before the last day on which
Tenant may exercise its option to renew the Term, as provided in Section 5,
Tenant may nullify Landlord's termination of this Agreement by exercising
its option to renew the Term in accordance with the terms of Section 5
within thirty (30) days after the date of its receipt of Landlords
termination notice. For purposes of nullifying Landlord's termination of
this Agreement, Tenant may exercise its option to renew the Term within the
time specified above even if the expiration of that 30-day period occurs
after the date that is six (6) months in advance of the Expiration Date.
(c) If a termination of this Agreement occurs in accordance with
the terms of this Section 17, Landlord is entitled to receive all proceeds
payable in respect of the insurance maintained in accordance with the terms
of Section 15(a)(1) above to the extent not previously disbursed to
Landlord in connection with the restoration of the Premises,
(d) If fire or other casualty damages the Premises and a
termination of this Agreement does not occur, Landlord shall restore the
Premises (inclusive of leasehold improvements Tenant makes) to
substantially the condition that existed prior to the occurrence of the
fire or other casualty and shall pursue the restoration with diligence and
continuity. In so doing, Landlord shall comply Legal Requirements. In
performing its restoration obligation, Landlord must restore the
Improvements so that they comply with laws and regulations applicable at
the time of the restoration and not just the laws and regulations that were
applicable at the time of original construction of the Improvements.
Tenants contractors may have access to the Premises during the restoration
for the purpose of concurrently repairing or replacing Tenant's leasehold
improvements and trade fixtures that the fire or other casualty damaged and
each party shall cause its contractors to cooperate with the other party's
contractors in order to provide for the coordinated restoration of the
Premises and Tenant's leasehold improvements and to minimize the time
required for that coordinated restoration. If the aggregate amount of those
insurance proceeds exceed the aggregate amount of the costs Landlord
reasonably incurs in connection with the restoration, Landlord is entitled
to retain the excess.
Section 18. Condemnation. If more than 25% of the Premises is
taken for any public or quasi-public use by right of eminent domain or
private purchase in lieu thereof (a "Taking"), and, in the reasonable
opinion of Tenant, the Taking prevents or materially interferes with the
use of the remainder of the Premises for the purpose for which they were
leased to Tenant, either party may terminate this Agreement by delivering
to the other written notice thereof within 30 days after Tenant's written
notice to Landlord that the Taking prevents or materially interferes with
Tenant's use of the Premises, in which case rent shall be abated during the
unexpired portion of the Term, effective cm the date of such Taking. If (a)
less than 25% of the Premises are subject to a Taking or (b) more than 25%
of the Premises are subject to a Taking, but the Taking does not, in the
reasonable opinion of Tenant, prevent or materially interfere with the use
of the remainder of the Premises for the purpose for which they were leased
to Tenant, then neither party may terminate this Agreement, but the rent
payable during the unexpired portion of the Term shall be reduced to such
extent as may be fair and reasonable under the circumstances. All
compensation awarded for any Taking shall be the property of Landlord and
Tenant assigns any interest it may hive in any such award to Landlord;
however. Landlord shall have no interest in any award made to Tenant for
loss of business or goodwill or for the taking of Tenant's trade fixtures,
if a separate award for such items is made to Tenant. Landlord shall use
reasonable efforts to deliver to Tenant its notice of the extent of the
Taking within thirty (30) days following the Taking.
23
Section 19. Compliance with Environmental Laws.
(a) The term "Hazardous Substance" for purposes of this Agreement
shall he interpreted broadly to include, but not be limited to, any
material or substance that is defined or classified under federal, state,
or local laws a: (a) a "hazardous substance' pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act., 42
U.S.C. Section 9601(14); section 311 of the Federal Water Pollution Control
Act, 33 U.S.C. Section 1321, as now or hereafter amended; (b) a "hazardous
waste" pursuant to section 1004 or section 3001 of the Resource
Conservation and Recovery Act, 42 U S.C. Section 6903, 692 1., as now or
hereafter amended; (c) a toxic pollutant under section 301(a)(1) of the
Federal Water Pollution Control Act, 33 U.S.C. Section 1317(a)(1); (d) a
"hazardous air pollutant" under section 112 of the Clean Air Act, 42 U5.C,
Section 7412, as now or hereafter amended; (e) a "hazardous material" under
the Hazardous Materials Transportation Uniform Safety Act of 1990, 49
U.S.C. App, Section 1802(4), as now or hereafter amended (toxic or'
hazardous pursuant to regulations promulgated now or hereafter under the
aforementioned laws: or (f) presenting a risk human health or the
environment under other applicable federal, state or local laws,
ordinances, or regulations, as now or as may be passed or promulgated in
the future: "Hazardous Substance" shall also mean any substance that after
release into the environment and upon exposure, ingestion, inhalation, or
assimilation, either directly from the environment or directly by ingestion
through food chains, will or may reasonably be anticipated to cause death,
disease, behavior abnormalities, cancer, or genetic abnormalities.
"Hazardous Substance" specifically includes, but is not limited to,
asbestos, polychlorinated biphenyls ("PCBs"), petroleum and petroleum-based
derivatives, and urea formaldehyde.
(b) Landlord will provide Tenant with a Phase I Environmental
Study of the Property prior to and following completion of the
Improvements. At of the Commencement Date, Landlord represents that, to the
present actual knowledge of Landlord's representatives as set forth in
section 2(k) of this Agreement, it has or will, as of the Commencement
Date, have no knowledge of any Hazardous Substances located on the
Property, other than those revealed in the Phase 1 Environmental Studies
delivered or to be delivered to Tenant,
(c) Tenant Covenants and warrants that it will not permit any
Hazardous Substances to be brought onto the Premises, other than (i)
minimal quantities of such substances which are
24
Section 20. Compliance with Public Accommodation laws. (a)
Landlord warrants that when constructed, the Improvements, as set forth in
Exhibit E will comply with all applicable laws, regulations and building
codes governing nondiscrimination in public accommodations and commercial
facilities ("Public Accommodation Laws"), including without limitation, the
requirements of the Americans with Disabilities Act (42 U.S.C. Section 12101)
and all rules and regulations made on the basis of authority granted in that
Act, as then currently interpreted.
(b) Tenant warrants, covenants and agrees that it will comply
with Public Accommodation Laws insofar as they relate to (i) any
improvements or alterations Tenant or its contractors initiate and
construct within the Premises, and (ii) any change in the use to which
Tenant puts the Premises. Landlord agrees that should Alterations be
required to be made by Tenant hereunder, that it will cause such work to be
done in accordance with agreed upon plans and specifications. Tenant shall,
upon substantial completion of the Alterations, pay as additional Base Rent
hereunder the following:
(i) If such Alterations are required because of Tenant's
specific use of the Premises and the requirement creating the
need for such Alterations is not imposed generally on all
commercial tenants, then the actual cost of constructing such
Alterations shall be payable to Landlord by amortizing such cost,
at the Yield Rate, over the then remaining term of this
Agreement.
(ii) If Tenant elects to exercise the Building Expansion
Option contained in Section 11(a) of this Agreement and Landlord
is required to make Alterations to existing Improvements as a
result of such Building Expansion, then such additional costs
shall be treated as a cost of the Building Expansion and shall be
paid to Landlord in accordance with Section 11.
(iii) As to all other Alterations required to be made
under this Section, Tenant shall pay to Landlord, as additional
Base Rent, an amount determined by taking the useful life of such
Alterations as reasonably determined by Landlord and Tenant and
amortizing the total costs of constructing such Alterations over
such useful life at the Yield Rate. Tenant shall be obligated to
pay to Landlord that portion of the amortized costs that continue
for the remaining term of this Agreement and any extensions
thereof.
Section 21. Tenant's Default. The occurrence of any one or
more of the following events (the "Events of Default") will constitute a
default and breach of this Agreement by Tenant:
(i) Tenant's abandonment of the Premises, as defined in
Section 93.002(d) of the Texas Property Code; provided, however,
abandonment shall be deemed not to have occurred if and for so
long as Tenant (A) provides prior written notice to Landlord of
its intent to remove a substantial portion of its property and
equipment from the Building; (B) timely makes payment of all Base
Rent, Impositions and other monetary obligations under this
Agreement; (C) continues to maintain the Improvements on an as-
if-occupied basis, including but not limited to maintaining all
utilities to the Improvements, maintaining constant temperature
settings and maintaining landscaping, janitorial and security
services consistent with periods of occupancy; and (D) timely
performs all other obligations under this Agreement.
25
(ii) Tenant's failure to deliver any subordination,
attornment and non-disturbance agreement within the time period
established in Section 25 or Tenant's failure to deliver any
tenant estoppel within the time period established in Section 28
and the continuance of such failure for more than ten (10) after
the date on which such agreement or estoppel was requested;
(iii) Tenant's failure to pay any Base Rent, additional
rent or any Impositions when due and the continuance of that
failure for more than ten (10) days after the date on which
Landlord gives Tenant written notice of the delinquency; if,
however, Landlord has given Tenant written notice of a
delinquency on two separate occasions in any 12-month period, the
occurrence of a third or subsequent delinquency during the
remainder of that 12-month period will constitute an Event of
Default immediately upon the occurrence of the delinquency
without any need for Landlord to give Tenant notice of the
delinquency or an opportunity to rectify it;
(iv) Tenant's failure to observe or materially perform
any of the covenants, conditions or provisions of this Agreement
that Tenant must observe or perform, other than the late payment
of Base Rent, additional rent, Impositions or the matters
described in Section 21(ii) above, where the failure continues
for a period of thirty (30) days after Tenant's receipt of
written notice from Landlord; if however, the nature of the
obligation that Tenant has failed to perform is such that more
than thirty (30) days are reasonably required for its
rectification, Tenant will be entitled to an additional period of
time to cure its failure, as reasonably determined by Landlord,
and an Event of Default will not occur so long as Tenant
commences the rectification within that 30-day period and
diligently and continuously prosecutes the rectification to
completion;
(v) the making by Tenant of any general assignment or
general arrangement for the benefit of its creditors; the filing
by or against Tenant of a petition seeking relief under any law
relating to bankruptcy (unless, in the case of a petition filed
against Tenant, Tenant causes the petition to be dismissed within
sixty (60) days after the date of its filing); the appointment of
a trustee or a receiver to take possession of substantially all
of Tenant's assets located in the Premises or of Tenant's
interest in this Agreement, where possession is not restored to
Tenant within sixty (60) days after the date of the appointment;
or the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located in the Premises or
of Tenant's interest in this Agreement unless Tenant causes the
seizure to be discharged within sixty (60) days after the date of
the initiation of the seizure; or
(vi) Tenant's failure to discharge any lien placed upon
the Premises in violation of this Agreement within sixty (60)
days after the lien or encumbrance is filed against the Premises.
Section 22. Landlord's Remedies. At any time after the
occurrence of an Event of Default, with or without additional notice or
demand, Landlord may do one or more of the following:
26
(i) terminate Tenant's right to possession of the Premises
and repossess the Premises by any lawful means without
terminating this Agreement. Landlord reserves the right, however,
(i) to lease any other comparable space available in any other
building Landlord owns prior to offering the Premises for lease
and (ii) to refuse to lease the Premises to any potential tenant
that does not meet Landlord's standards and criteria for leasing
space in the Building. Landlord will not be liable for, and
Tenant's obligations under this Agreement will not be diminished
because of Landlord's failure to relet the Premises or collect
rental due in respect of a reletting. For the purposes of that
re-letting, Landlord may repair, remodel or alter the Premises.
If Landlord fails to re-let the Premises, Tenant shall pay to
Landlord the Base Rent and additional rent reserved in this
Agreement for the balance of the Term as those amounts become due
in accordance with the terms of this Agreement. If Landlord re-
lets the Premises, but fails to realize a sufficient sum from the
re-letting to pay the full amount of Base Rent and additional
rent reserved in this Agreement for the balance of the Term as
those amounts become due in accordance with the terms of this
Agreement, after paying all of the costs and expenses of all
decoration, repairs, remodeling, alterations and additions and
the expenses of the reletting and of the collection of the rent
accruing from the reletting, Tenant shall pay to Landlord the
amount of any deficiency upon Landlord's demand from time to time
made;
(ii) terminate this Agreement and repossess the Premises by
any lawful means. In that event Landlord may recover from Tenant
as damages (a) all Base Rent and additional rent that became due
prior to the termination and that remains unpaid, (b) the
discounted present value (determined based on the Yield Rate) of
the amount, if any, by which (I) the Base Rent plus all
additional rent payable under the terms of this Agreement for the
balance of the Term that remained as of the effective date of the
termination exceeds (II) the fair market rent for the Premises
(including both base and additional rent components) for the
balance of the Term after deduction of all anticipated reasonable
expenses of re-letting for that period (such as the cost of
preparation of the leased premises, leasing commissions and
reasonable attorneys' fees associated with occupancy by a new
tenant), (c) the cost of recovering the Premises (including
reasonable attorneys' fees and costs of suit), (d) all reasonable
costs and expenses Landlord reasonably incurs in connection with
the enforcement of Tenant's obligation to pay those damages,
including, without limitation, reasonable attorneys' fees, and
(e) any other sum of money and damages Tenant owes to Landlord.
If the amount described in division (II) above exceeds the amount
described in division (I) above, Landlord has no obligation to
pay Tenant any part of the excess or to credit any part of the
excess against any other sums or damages for which Tenant may be
liable to Landlord at the time of the termination; or
(iii) pursue any other remedy available to Landlord under
the laws of the State of Texas.
27
For purposes of computing the additional rent that would have accrued and
become payable under the terms of this Agreement, the parties will assume
that the additional rental for the calendar year in which the Event of
Default occurs and each fixture calendar year for the balance of the Term
that remained as of the effective date of the termination equals Tenant's
additional rent for the calendar year prior to the year in which the Event
of Default occurs compounded at a rate equal to the mean average rate of
inflation for the three (3) calendar years preceding the calendar year in
which the Event of Default occurs, as determined by using the United States
Department of Labor, Bureau of Labor Statistics Consumer Price Index (All
Urban Consumers, all items, 1982-84 equals 100) for the metropolitan area
or region of which Dallas, Texas is a part. If that Index is discontinued
or revised during the term of this Agreement, the parties will use such
other government index or computation with which it is replaced in order to
obtain substantially the same result as would be obtained if the Index had
not been discontinued or revised, If no replacement Index exists, Landlord
may select as a replacement index an index that, in Landlord's reasonable
opinion, is generally recognized as the successor index.
If Landlord repossesses the Premises in accordance with the terms of this
Agreement, Landlord has the right to keep in place and use, or to remove
and store, at Tenant's expense, all of the furniture, fixtures and
equipment at the Premises, including that which is owned by or leased to
Tenant at all times prior to any foreclosure or repossession by any lessor
or security interest holder having an interest in that furniture, fixtures
or equipment (a "Claimant"). Landlord also has the right to relinquish
possession of all or any portion of the furniture, fixtures, equipment and
other property to any Claimant who presents to Landlord a copy of any
instrument that the Claimant represents to have been executed by Tenant (or
any predecessor of Tenant) granting Claimant the right under various
circumstances to take possession of the furniture, fixtures, equipment or
other property, without the necessity on the part of Landlord to inquire
into the authenticity or legality of the instrument. At Landlords sole
option and without prejudice to, or waiver of any rights it may have,
Landlord may (i) escort Tenant to the Premises to retrieve any personal
belongings of Tenant and its employees not covered by a lien in favor of
Landlord, or (ii) obtain a list from Tenant of the personal property of
Tenant and its employees that is not covered by a lien in favor of
Landlord, and make that property available to Tenant or Tenant's employees,
provided that Tenant first pays in cash all costs and estimated expenses to
be incurred in connection with the removal of the property. Any property
that Tenant does not remove within five days after Landlord's demand will
be conclusively presumed to have been abandoned by Tenant, and Landlord may
take over possession of that property and declare it to be Landlord's
property by written notice to Tenant. Tenant stipulates that the rights
granted Landlord in this Section 22 are commercially reasonable. The
foregoing notwithstanding, Tenant shall have the right after any default to
remove its trade fixtures and any files, records or other items of personal
property directly related to the conduct of Tenant's business.
Section 23. Landlord's Default and Tenant's remedies. If
Landlord defaults in the performance of any of Landlord's obligations set
forth in this Agreement and if (i) Landlord's default either prevents the
conduct of Tenant's business at the Premises or creates a substantial risk
of imminent danger of bodily injury to or death of persons or material
damage to or destruction of property, and either Landlord does not commence
the rectification of its default within fourteen (14) business days after
the date of Tenant's delivery of written notice of the default to Landlord
or Landlord fails to pursue the rectification of its default with diligence
and continuity or (ii) Landlord's default does not prevent the conduct of
Tenant's business at the Premises or create a substantial risk of imminent
danger of bodily injury to or death of persons or material damage to or
destruction of property, and Landlord fails to rectify its default within
thirty (30) days after Tenant's delivery of written notice of the default
to Landlord or within such longer period of time following the delivery of
that notice as may be reasonably required to accomplish the rectification
of the default through the exercise of prompt, diligent and continuous
efforts, Tenant may perform the obligation on behalf of Landlord. The
notice and period of time afforded Landlord hereunder shall not be required
28
to expire before Tenant may undertake to perform any of Landlord's
obligations hereunder in emergency situations, provided, however, Tenant
shall remain obligated to give Landlord as much prior notice as is possible
under the circumstances of such emergency. In the case of defaults of the
nature described in division (i) above, Tenant's notice of default must
state that Tenant intends to undertake the rectification of the default if
Landlord fails to commence the rectification of the default within fourteen
(14) business days after the date of the delivery of Tenant's notice.
Unless the circumstances described below arise, Landlord shall pay to
Tenant within thirty (30) days after the date of Landlord's receipt of
Tenant's invoice and reasonable corroborating documentation the full amount
of the reasonable cost and expense Tenant incurs in performing the
obligation on behalf of Landlord, If Landlord fails to pay those amounts
within that 30-day period, Tenant may, after obtaining a judgment for such
sums in a court of competent jurisdiction, offset the amount owed, together
with interest accruing in respect of the amount owed at the Legal Rate
after the expiration of that 30-day period, against Base Rent, additional
rent and any other sums due Landlord.
Section 24. Quiet Enjoyment. Landlord warrants that, so long
as Tenant pays all Base Rent and additional rent that becomes due under the
terms of this Agreement, timely performs all other covenants and
obligations of Tenant hereunder, and is not otherwise in default (beyond
any applicable grace period) in respect of any obligation under the terms
of this Agreement, Tenant may peaceably and quietly enjoy the Premises at
all times during the Term without disturbance from agents or employees of
Landlord.
Section 25. Subordination, Attornment & Non Disturbance. (a)
This Agreement is and will be subordinate to the lien of any mortgage or
deed of trust executed in favor of any bank, insurance company or other
lending institution and now or in the future in force against the Premises.
Landlord shall obtain from the mortgagee or the beneficiary under that deed
of trust a subordination, attornment and non-disturbance agreement in favor
of, and in form reasonably satisfactory to both Tenant and the mortgagee or
beneficiary whereby the mortgagee or beneficiary agrees not to disturb
Tenant's quiet possession of the Premises so long as no Event of Default
has occurred and is continuing. Tenant further agrees that, if proceedings
are brought for foreclosure of the lien of the mortgage or deed of trust or
if the mortgage holder causes the exercise of the power of sale set forth
in the mortgage or deed of trust, Tenant shall attorn to the purchaser upon
the conclusion of the foreclosure or sale and recognize the purchaser as
the landlord under this Agreement. The parties hereto agree that the form
of subordination, attornment and non-disturbance agreement attached hereto
as Exhibit J shall satisfy the requirements of this Section and Tenant
agrees to execute such document upon written request by Landlord. The term
mortgagee shall include, but not be limited to, a securitized mortgagee,
including a trustee or servicer under a securitized pooling agreement.
29
(b) Contemporaneously with the execution of this Agreement,
Landlord shall cause each mortgagee now holding a lien that affects the
Premises to execute in favor of Tenant and deliver a non-disturbance
agreement satisfying the requirements set forth in Section 25(a).
Section 26. Landlord's Liability. The obligations Landlord
undertakes under the terms of this Agreement will bind Landlord only during
the period of its ownership of title to the Premises. The term "Landlord"
means only the owner of the Premises for the time being and landlord's
transfer of its interest in the Premises will release and discharge it from
liability for the performance of all obligations Landlord undertakes under
the terms of this Agreement. Moreover, except as provided below, Tenant may
not seek to satisfy any judgment that Tenant obtains against Landlord by
reason of the negligence of' Landlord or any of its shareholders,
directors, officers, agents, partners, investors, employees or contractors
or Landlord's failure to perform any of the obligations it has undertaken
under the terms of this Agreement from any source other than Landlord's
interest in the Premises (or the proceeds from the sale thereof) and no
asset of any shareholder, director, officer, employee or agent of Landlord
or any of the heirs, legal representatives, successors or assigns of any of
the foregoing will be subject to attachment or execution to satisfy the
judgment. The foregoing limitation will not preclude Tenant from satisfying
the judgment by offsetting the amount of judgment against Base Rent and
additional rent owing under this Agreement.
Section 27. Broker's Commission. Each party represents to the
other that the only brokers used in connection with this Agreement are The
Industrial Group Management Services, Inc. and Xxxxxxx and Xxxxxxxxx, whose
commissions Landlord shall pay Landlord shall defend and indemnify Tenant
from and against any claims, demands and actions brought by The Industrial
Group Management Services, Inc. or Xxxxxxx and Wakefield to recover a
brokerage commission or any other commissions or compensation related
damages. Each party shall defend and indemnify the other from and against
any claims; demands and actions brought by any broker or other finder to
recover a brokerage commission or any other damages on the basis of alleged
dealings with the indemnifying party contrary to the foregoing
representation.
Section 28. Estoppel Certificate. Within twenty (20) days
after Tenant's receipt of Landlord's written request, Tenant shall execute
and deliver to Landlord a statement in substantially the form of the
attached Exhibit G that (i) certifies that this Agreement is unmodified and
in full force and effect (or, if modified, states the nature of the
modification and certifies that this Agreement, as so modified, is in full
force and effect) and the date to which Base Rent is paid in advance, if
any, and (ii) acknowledges that, to Tenant's knowledge, there are no
uncured defaults on the part of Landlord or specifies such defaults, if
Tenant claims any. Tenant acknowledges that the Estoppel Certificate
described herein shall be relied upon by mortgagees and potential
mortgagees. In addition to the Estoppel Certificate described above,
Tenant, within twenty (20) days after Tenant's receipt of Landlord's
written request, shall also execute and deliver to Landlord, upon
Landlord's request on or after the Commencement Date, an Estoppel
Certificate that (i) certifies that all construction was completed to the
Final Plans and Specifications; (ii) that there exists, as of such date, no
default or amounts due from Landlord which were not paid in accordance with
the terms of this Agreement; and (iii) confirms the Commencement Date of
this Agreement.
30
Section 29. Rules and Regulations. Intentionally Omitted.
Section 30. Holding Over. If Tenant remains in possession of
the Premises after the Expiration Date, Tenant shall be a tenant-at-
sufferance at a Base Rent equal to (i) one hundred twenty-five percent
(125%) of the Base Rent payable during the first thirty (30) days the
Expiration Date occurs, and (ii) one hundred fifty percent (150%) of the
Base Rent payable after the 30th day following the Expiration Date, and
subject to all of the other terms and conditions of this Agreement.
Section 31. Assignment and Subletting. (a) Landlord may assign
any part of its interest in the Premises or in this Agreement without
Tenant's prior written consent.
(b) Tenant may assign this Agreement or sublet all the Premises
to an Affiliate (as defined in Section 31(d)) of Tenant without Landlord's
prior consent. Tenant must give Landlord written notice, however, of the
assignment or sublease at least ten (10) days prior to the date the
assignment or sublease becomes effective and, with respect to any
assignment of this Agreement, an original written assumption of the duties,
obligations and liabilities that the Tenant undertakes under the terms of
this Agreement that the Affiliate executes in favor of Landlord. That
notice must specify the identity of the assignee or subtenant, the
effective date of the assignment or sublease, and, in the case of a
sublease, the duration of the sublease term, Tenant will remain directly
and primarily liable for the performance of all the obligations it
undertakes under the terms of this Agreement (including, without
limitation, the obligation to pay Base Rent and additional rent). Landlord
may enforce this Agreement in accordance with its terms against Tenant, but
first must make a diligent effort to enforce the Lease and the obligations
hereunder against the sublessee or assignee.
(c) Except as provided in Section 31(b), Tenant may not assign
this Agreement or sublease any portion of the Premises without Landlord's
prior written consent granted in accordance with the terms of this Section
31(c). If Tenant desires to assign this Agreement or sublet any part of the
Premises or allow the Premises to be used or occupied by others, Tenant
must give Landlord written notice of that desire at least thirty (30) days
in advance of the date on which Tenant desires to make the assignment or
sublease or to allow a use or occupancy by others. That notice must specify
the identity of the prospective assignee, subtenant or user, the proposed
effective date of the assignment, sublease or additional use and, in the
case of either a sublease or a use or occupancy by others, the duration of
the term of the proposed agreement and the exact location of the space that
is the subject of the prospective sublease or use agreement. Such notice
shall also include sufficient financial information relating to the
proposed assignee or sublessee, so that Landlord may assure itself of such
proposed assignee or sublessee's ability to perform under the terms of this
Agreement. Within fifteen (15) days following receipt of that notice
Landlord must notify Tenant in writing that Landlord elects to:
(i) permit Tenant to consummate the action Tenant proposes
in its notice, or
(ii) refuse to allow Tenant to consummate the action Tenant
proposes in its notice, if; and only if; Landlord reasonably
determines that: (w) the proposed occupancy would impose a
material additional burden upon the Building systems and Tenant
does not agree to pay additional rent to rectify or alleviate
that additional burden; or (x) the proposed occupancy would
present a greater risk of environmental harm to the Premises or
to any neighboring areas; or (y) the proposed occupancy involves
a greater perceived risk of harm to persons and/or property
located at or near the Premises, resulting in a material increase
in the amount of premiums charged for the all risk coverage
(obtained for Landlord's benefit) or the deductible associated
with such coverage; or (z) Landlord failed to receive from Tenant
sufficient financial information relating to the proposed
assignee or sublessee to assure Landlord, in Landlord's
reasonable opinion, of adequate assurance of future performance
under this Agreement by the proposed assignee or sublessee,
Adequate assurance of fixture performance shall be found to exist
if the financial condition and operating performance of the
proposed assignee or sublessee is sufficient for such party to
timely pay and perform the obligations of Tenant hereunder.
31
(d) The term "Affiliate" means, as to any person, any other
person controlled by, under common control with, or controlling, that
person. The term "person" means an individual or a corporation,
partnership, trust, unincorporated organization, association or other
entity, The term "control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies
of the person to which reference is made, whether through ownership of
voting securities, by contract or otherwise, and the terms "controlling"
and "controls" have meanings correlative to the foregoing. "Affiliate" also
includes the surviving corporation in any merger or other reorganization
involving the Tenant or the purchaser of all or substantially all of the
Tenant's assets or outstanding shares of stock.
(e) Except for assignments or subleases in favor of Affiliates,
no assignment or subletting by Tenant will be effective unless Tenant
executes, acknowledges and delivers to Landlord an instrument in form and
substance reasonably acceptable to Landlord in which Tenant acknowledges
that, notwithstanding the subletting or assignment: (i) Tenant remains
directly and primarily liable for the performance of all the obligations
Tenant has undertaken under the terms of this Agreement (including, without
limitation, the obligation to pay rent), subject to Landlord's obligations
in Section 31(b); (ii) Tenant has no actual knowledge that such assignee's
or sublessee's intended use of the Premises will violate the restrictions
in Section 31 (c)(ii) above, and (iii) Landlord may continue to enforce
this Agreement against Tenant without prior demand upon, or without
proceeding in any way against, any other persons. For purposes of this
Agreement, Tenant's knowledge shall mean the constructive knowledge of
Tenant after its due inquiry.
(I) Landlord's consent to an assignment or sublease will not
constitute a consent to a use not permitted under the terms of'
Section 6. Any consent by Landlord to a particular assignment or
sublease will not constitute Landlord's consent to any other or
subsequent assignment or sublease, and any proposed sublease or
assignment by any assignee or sublessee will be subject to the
provisions of this Section 31 as if it were a proposed sublease
or assignment by Tenant. The restriction against assignments or
subleases set forth in this Section 31 includes a prohibition
against Tenant's mortgaging or otherwise encumbering in favor of
any person other than an Affiliate its leasehold estate (but not
Tenant's equipment or trade fixtures located in the Premises),
each of which will be ineffective and void unless Landlord
consents to it in writing in advance.
32
(g) In any situation in which Landlord consents to an assignment
or sublease in accordance with the terms of this Section 31, Tenant shall
promptly deliver to Landlord a fully executed copy of the final sublease or
assignment instrument and all ancillary agreements associated with that
instrument.
(ii) Any Affiliate, or other entity to whom Tenant assigns
this Agreement with Landlord's consent, shall sometimes be
referred to herein as 'Permitted Transfer."
Section 32. Further Assurances. Each party must take the
actions, provide the documents, do the things and provide the further
assurances that the other party reasonably requests during the Term in
order to accomplish the objectives of the parties embodied in this
Agreement.
Section 33. Miscellaneous. (a) This Agreement inures to the
benefit of and binds each of the parties and their respective heirs,
administrators, successors and assigns.
(b) All section headings and captions used in this Agreement are
purely for convenience and do not affect the interpretation of this
Agreement.
(c) All Exhibits described in this Agreement are incorporated in
end made a part of this Agreement, except that, if there is any
inconsistency between this Agreement and the provisions of any Exhibit, the
provisions of this Agreement control.
(d) This Agreement will be governed by and interpreted in
accordance with the laws of the State of Thus,
(e) Except as otherwise provided, the parties may amend this
Agreement only by means of' written agreements signed on behalf of Tenant
and Landlord by their respective authorized signatories.
(f) This Agreement supersedes all prior understandings,
representations, negotiations and correspondence between the parties and
constitutes the entire agreement between them with respect to the matters
described in this instrument, No course of dealing, course of performance
or usage of trade will modify, or affect this Agreement,
(g) The invalidity, illegality or unenforceability of' any
provision of this Agreement will not affect or impair the validity,
legality end enforceability of the remaining provisions.
(h) The failure of either party at any rime to require
performance by the other of any provision of this Agreement will not affect
that party's right to enforce that provision, nor will the waiver by either
pasty of any breach of any provision of this Agreement constitute a waiver
of any further breach of the same provision or any other provision.
(i) The parties may execute this Agreement In any number of
counterparts and all those counterparts taken together will constitute a
single agreement
33
(j) All notices, approvals, requests, consents and other
communications given, required or permitted in accordance with the terms of
this Agreement must be in writing and must be hand delivered or sent by
facsimile transmission, reputable overnight services or United States
certified or registered mail. The parties will consider notices given or
delivered when received. The parties will address notices as follows:
If to Landlord: TIC Development Property Account I, Inc.
0000 Xxxxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx
with a copy to: Xxxxxx Xxxxx Xxxxxxx Xxxxxxx & Xxxxxxx
0000 Xxxxxxx Xxxx, Xxxxx 000 Xxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxxx
If to tenant: Xxxxxxxx Communications, Inc.
0000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxx, Sr. Vice President of Technology
with a copy to: K-III Communications Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Director of Real Estate
(k) Landlord agrees to execute and deliver, upon written request
of Tenant, a Subordination of Statutory Landlord's Lien in a form set forth
as Exhibit J to this Agreement.
A party may change the address to which it wishes notices to be sent by
delivering notice of the change of address to the other party in accordance
with the terms of this Section 330.
Section 34. Holiday. If the final day of any period of time
described in this Agreement is a Saturday, Sunday or a legal holiday under
the laws of the United States or the State of Texas, that period is
extended to the next day that is not a Saturday, Sunday or legal holiday.
Section 35. Guaranty. Pursuant to the terms of a separate
lease guaranty agreement attached hereto as Exhibit I and made a part
hereof, the monetary obligations of Tenant under this Agreement shall be
guaranteed by K-III Communications Corporation C'Guar.~1~") to the extent
set forth on Exhibit].
Section 36. Conditions to Tenant's Obligations. Tenant's
obligations hereunder are expressly conditioned on Landlord satisfying or
Tenant waiving the conditions stated below:
1. Landlord, on or before July 21, 1997, furnishing Tenant
reasonably satisfactory evidence of a commitment for financing to acquire
the Land and construct the Building and Improvements; and
34
2. Landlord, on or before July 21, 1997 acquiring title to the
Land in accordance with Section 1 of this Agreement; and
3. Landlord, on or before August 1, 1997, furnishing to Tenant
an agreement, in a form satisfactory to Tenant, from TU Electric permitting
the construction and use of a storm water collection system and parking
across the TU Electric easement; and
4. Landlord, on or before August 1, 1997 commencing
construction of the Improvements; and
5. Landlord's obtaining Flat approval on or before September 1,
1997 permitting construction of the Improvements in substantial compliance
with Exhibit It to allow Tenant to use the Building and Premises for their
intended purposes. Notwithstanding the above, in the event the current Flat
is not approved, Landlord shall have sixty (60) days from the date of non-
approval within which to obtain approval of a Flat that will allow the
construction of the Improvements in substantial compliance with Exhibit B.
KS Southern Railroad approves of water discharge, such approval to be in
reasonably satisfactory form to Tenant.
The failure of Landlord to satisfy such conditions shall allow Tenant, as
its sole remedy, to terminate this Agreement. Upon such termination by
Tenant, neither party shall have any further obligation to the other, and
this Agreement shall become void.
Section 37. Satellite Dish. Tenant has the right to use a
portion of the roof area of the Building or such other location on the
Land, as Tenant may reasonably select and as Legal Requirements permit, for
the installation, operation, maintenance, security, repair and replacement
of satellite dishes serving the Premises and related cable connections (the
"Telecommunications Equipment"). The following terms and conditions will
apply to Tenant's installation, operation and maintenance of the
Telecommunications Equipment in accordance with the terms of this Section
11:
(a) Once installed, Tenant shall be responsible for the
maintenance of the Telecommunications Equipment and must promptly remove
any debris and other loose materials Tenant or its representatives place on
the roof,
(b) Upon the expiration of the Term or the earlier termination of
this Agreement as to all of the Premises and upon 15 days prior written
notice to Tenant, Tenant must remove the Telecommunications Equipment. If
Tenant fails to promptly remove the Telecommunications Equipment, Landlord
may remove it at Tenant's expense, and Landlord will have no duty or
obligation to account to Tenant for any proceeds Landlord receives from the
disposal of the Telecommunications Equipment.
35
(c) If a loss of the Telecommunications Equipment occurs as a
result of repairs or maintenance of the Building, condemnation or casualty,
or a change in applicable Legal Requirements, Tenant will have no claim for
rebate or abatement of Rent or for damages against Landlord by reason of
that loss. Landlord agrees to use reasonable efforts to avoid any loss when
undertaking repairs or maintenance to the Building.
(d) Tenant must install and maintain waterproofing materials
around any penetrations of the roof of the Building that are made during
the installation, maintenance, repair, replacement and removal of the
Telecommunications Equipment, and must provide waterproofing certification
with respect to all such penetrations from Landlord's roofing contractor so
that Landlord is assured that those penetrations do not void, limit or
reduce any roof warranty in effect from time to time. Upon final removal of
the Telecommunications Equipment, Tenant must repair and restore all roof
penetrations and again provide that waterproofing certification.
(e) If any repair or maintenance to the Building necessitates the
relocation of any of the Telecommunications Equipment or any fencing or
other improvements that Tenant installs in accordance with the terms of
this Section II, Tenant must bear the expense of the relocation.
Section 38. Additional Allowance. Tenant shall have the right
to increase (or decrease) the cost of the project, up to but not exceeding
$500,000, for additional charges to the project desired by Tenant
("Additional Allowance"). In the event Tenant elects to utilize all or any
part of the Additional Allowance, the Base Rent payable under this
Agreement shall be adjusted according for all hard and soft costs to the
formula set forth in paragraph 2(h) of this Agreement. In determining
the amount of the Additional Allowance utilized by Tenant, if any, such
amount shall be the aggregate gross costs incurred by Landlord, including
but not limited to interest and development and consulting fees incurred by
Landlord. The allowance provided for herein is in addition to and not
included in the provisions of Sections 2(g) and 2(h) of this Agreement.
Section 39. Moving Allowance. Landlord agrees to provide
Tenant with an allowance in the amount of $668,725 for Tenant's costs of
relocation ("Moving Allowance"). The Moving Allowance shall be paid by
Landlord to Tenant's relocation firm and related vendors as invoices are
received by Landlord for such services. If after the ninetieth (90th) day
after completions of the relocation and payment of all invoices for
Tenant's relocation, there is a remaining surplus between the aggregate
amount paid and the Moving Allowance, such surplus shall be returned to
Tenant within thirty (30) days after receipt of the last invoice for
relocation services used by Tenant as rent credit If Tenant's relocation
expenses exceed the Moving Allowance, Landlord's obligation to pay such
expenses shall cease upon Landlord's payment of amounts up to the Moving
Allowance, and thereafter such expenses shall be paid directly by Tenant.
Section 39A. Additional Agreements With Respect to Allowances.
Landlord shall place the Additional Allowance in escrow on or before August
30, 1997, Landlord shall place the Moving Allowance in escrow on or before
the date which is thirty (30) days prior to completion of the Improvements.
The escrow agent shall be Xxxxxx, Lynch, Jackson, Xxxxxxx & Xxxxxxx, P.C.
If Landlord fails to place the allowances in escrow as aforesaid or if
Landlord and/or escrow agent fail to disburse in accordance with Sections
38 or 39 as the case may be, Tenant shall have the right to offset such
amounts against first installment rent payments.
36
Section 40. Delivery of Financial Statements. In the event
Guarantor ceases to be a publicly traded corporation, Guarantor shall, on
an annual basis, deliver to Landlord true and correct copies of its audited
financial statements, within ten (10) days of its receipt of its audited
financial statements reflecting the operations of Guarantor.
Section 41. Force Majeure. As used in this Agreement, force
majeure shall mean any delay when such delay shall be caused (directly or
indirectly) by fire; flood; accident; explosion; sabotage; strike or any
labor disturbance (regardless of the reasonableness of the demands of
labor); civil commotions; riots; invasions; wars (present or future); acts,
restraints, requisitions, regulations, or directions of any governmental
authority; voluntary or mandatory compliance by Landlord with any request
of any governmental authority, or any officer, department, agency, or
committee thereof, voluntary or mandatory compliance by Landlord with any
request for material represented to be for purposes of (directly or
indirectly) producing articles for national defense or national defense
facilities; shortage of labor, fuel, power or raw materials; inability to
obtain supplies; failure of normal sources of supplies; inability to obtain
or delays of transportation facilities; any act of God; or any cause
(whether similar or dissimilar to the foregoing) beyond the reasonable
control of Landlord and/or Landlord's sources of supply of any products. In
no event shall force majeure excuse performance for more than one hundred
eighty (180) days beyond the applicable periods for such performance.
Landlord agrees that it will use reasonable efforts to avoid events of
force majeure related to construction of the Building's Initial
Improvements. Upon the occurrence of an event of force majeure, Landlord
agrees that it will provide written notice of such event to Tenant within
ten (10) business days following its occurrence or the Weekly Progress
Meeting next following the event whichever is sooner.
Section 42. Memorandum of Lease. This Agreement shall not be
recorded. A short form or memorandum of this Agreement shall be executed
and acknowledged by the parties in substantially the form attached hereto
as Exhibit L and incorporated herein by reference, describing the Premises
and setting forth the teens of this Agreement The Memorandum of Lease may
be recorded by either party, at its sole cost and expense, however, it may
not be recorded prior to the date Landlord acquires title to the Land. In
the event of a termination of this Agreement, for any reason, Tenant agrees
to execute and deliver to Landlord, in a form reasonably satisfactory to
Landlord, a recordable notice of termination of this Agreement and Tenant's
tights thereunder
The parties have signed this Agreement on the date first above written.
"Landlord"
TIG DEVELOPMENT ACCOUNT I, INC
By: _______________
Name:
Title:
37
"Tenant"
XXXXXXXX COMMUNICATIONS, INC.
By: _______________
Name:
Title:
38
Exhibit A
to that certain
Lease Agreement
between
Dated July 21, 1997
between
TIG Development Property Account It, Inc.,
Assignee of TIG Development Property Account I, Inc.
("Landlord")
and
Primedia Workplace Learning, Inc. f/k/a
Xxxxxxxx Communications
('Tenant")
FORM OF ACKNOWLEDGEMENT
------------------------
Reference is made to the Lease Agreement (the 'tease") between TIG
Development Property Account II, Xxx. ~s Landlord, and Primedia Workplace
Learning, Inc., as Tenant, Terms that are defined in the Lease have the
same meanings when used in this acknowledgment. The parties agree as
follows:
1. Landlord has satisfactorily completed the construction of
the Improvements, including, without limitation, the
Building and parking areas that Landlord undertook to build
under the terms of the Lease, subject to the completion of
the punch list items listed on the attachment to this
acknowledgment.
2. Landlord has tendered possession of the Premises to Tenant
and Tenant has accepted possession.
3. The Commencement Date of the Initial Term is 199______ and
the Expiration Date is
4. The floor area of the Building, as completed, is
_______________ square feet.
5. The monthly Base Rent payable during the first full ____
months of the Initial Term is $_______________ and the
monthly Base Rent payable during the remainder of the
Initial Term is $__________.
39
6. The terms and conditions of the Lease will continue in full
force and effect and the parties ratify and confirm those
terms and conditions.
TIG DEVELOPMENT PROPERTY
ACCOUNT II, INC.
By: _________________________________
Title: ______________________________
___________________
Witness Date: _______________________________
("Landlord")
PRIMEDIA WORKPLACE LEARNING, INC.
By: _________________________________
Title: ______________________________
___________________
Witness Date: _______________________________
("Tenant")
40
2xhibitB
Exhibit A
to that certain
Lease Agreement
between
Dated July 21, 1997
between
TIG Development Property Account It, Inc.,
Assignee of TIG Development Property Account I, Inc.
("Landlord")
and
Primedia Workplace Learning, Inc. f/k/a
Xxxxxxxx Communications
("Tenant")
BASE RENT
----------
Months 1- 50 $163,151.91 Per Month
Months 61 - 120 $176,672.86 Per Month
Months 121 -1S4 $194,599.52 Per Month
41
LEASE AGREEMENT No. 1
This Lease Amendment No. I (this "Amendment) is made and entered
into this 20 day of May l998, by and between:
TIG Development Property Account II, Inc.,
Assignee of TIG Development Property Account I, Inc.
("Landlord")
and
Primedia Workplace Learning, Inc. f/k/a
Xxxxxxxx Communications
("Tenant")
This Amendment shall modify the original Lease Agreement entered
into by and between TIG Development Property Account, Inc. and subsequently
assigned to TIG Development Property Account II, Inc. ("Landlord") arid
Xxxxxxxx Communications, Inc., now known as Primedia Workplace Learning,
Inc. ("Tenant") dated the 21st of July, 1977 (the "Lease Agreement"), in
which certain real estate and premises therein described and situated at
Plano International Business Park, international Parkway, Plano, Texas
located in the County of Xxxxxx, and the State of Texas, were demised and
leased by Landlord to Tenant.
It is the sole intuit of this Agreement to amend and modify the Lease
Agreement as follows:
1. Section 2 of the Lease Agreement is deleted in its entirety, and
replaced and amended as
Follows:
Section 2. Construction of Improvements. (a) The Building shall
consist of approximately 205,750 square feet and a parking lot ("Initial
Parking") all as set forth ii the Shell Plans (defined below). The actual
square footage of the Building shall be deemed, for all purposes, to be
205,750 square feet.
42
(b) Landlord shall provide, at Landlord's sole cost and
expense, all the material, labor and equipment necessary for the
construction of the Shell Work (as defined herein) is accordance
with the terms of this Agreement. Landlord shall cause the Shell
Work to be constructed in a good and workmanlike manner in
accordance with the Shell Plans (as defined herein). Except as
otherwise provided herein, Landlord shall, at its sole expense.
complete the construction of the Shell Work in accordance with
all applicable statutes (including, without limitation, the
Americans with Disabilities Act) and building codes (including
the securing of a Certificate of Substantial Completion from
Xxxxxxxxx Xxxxxx & associates ("Xxxxxxxxx"), with respect to IS
Shell Work), governmental rules, regulations and orders, zoning
and land use laws, rules and regulations, and recorded covenants,
conditions and restrictions affecting title to the Premises
("Legal Requirements"). Tenant shall perform Tenant's Work (as
defined herein) using the general contractor selected by Tenant
and approved by Landlord (such approval not to be unreasonably
withheld and is hereby given if Tenant elects Constructors &
Associates, Inc. as its general contractor) and shall cause the
Tenant's Work to be constructed in a good arid workmanlike manner
in accordance with the Tenant's Plans (as defined herein).
Landlord shall provide Tenant with "as-built" drawings of the
Shell Work within sixty (GD) days after Substantial Completion
(as defined below)
(c) Pot the purposes of this Agreement the following terms
shall have the following meanings: "Shell Work" shall mean the
work (inclusive of labor and materials) set forth on the Shell
Plans, which work includes, without limitation: (1) the
construction of the Building on the Land; and (ii) the
construction of surface parking adjacent to the Building
and on the Land (including exterior lighting with conduit to the
exterior wall of the Building grading, paving, striping, and
landscaping, pursuant to the approved landscaping plan of the
City of Carrolton, excluding all alternates).
"Shell Plans" shall mean the scaled, dimensions and coordinated
architectural and engineering working drawings which describe the Shell
Work arid which are listed on Schedule I annexed to and made a part of this
Agreement
"Tenant's Work" shall mean all work, equipment arid improvements
which, in Tenant's opinion, are necessary or desirable to prepare the
Premises for Tenant's occupancy, other than the Shell Work Tenant's Work
will be more particularly set forth on the Tenant's Plans.
"Tenant's Plans" shall mean the plans and specifications for
Tenant's Work
Tenant shall provide Landlord with a copy of Tenant's Plans promptly after
receipt of same fl-cm Tenant's architect The Tenant's Plans shall be
subject to Landlord's approval, which Landlord agrees to give (or deny)
within five (5) business days after receipt of same from Tenant, Landlord
shall state any objections it may have with specificity. Tenant shall then
resubmit the Tenant's Plans to Landlord within five (5) business days alter
receipt of Landlord's objections. Landlord must either object to or approve
the revised Tenant' s Plans within five (5) days after receipt thereof.
Landlord and Tenant shall repeat this process until Tenant's Plans are
approved, Landlord shall not unreasonably withhold its approval of Tenant's
Plans.
"Landlord's Construction Contribution" shall mean the sum of
$8,100,000.00 Landlord shall pay Landlord': Construction Contribution to
Tenant as set forth herein. Landlord's Construction Contribution shall be
paid by Landlord, through its interim lender to Tenant (or as directed by
Tenant) in installments a; construction of the Tenant's Work progresses by
Tenant's 'third party general contractor. Such installments shall be paid
monthly by Landlord's interim Lender within a period of fifteen (15) days
following delivery by Tenant to Landlord of the draw requests submitted by
Tenant and/or the bills and statements paid by Tenant to the general
43
contractor or any subcontractor. Any requests by Tenant fur an Installment
or the Landlord's Construction Contribution shall be accompanied by the
certification of the supervising architect or an employee of Tenant or one
of its corporate affiliates, as the case may be, that the construction work
represented thereby is in accordance with the Tenant's Plans, Each such
payment of the Landlord's Construction Contribution shall be in an amount
equal to the sum of all draw requests end/or bills and statements submitted
by Tenant to Landlord less applicable retainage as required by law
(currently 10%). if construction of the Improvements shall be completed and
there remains a portion of the Landlord's Construction Contribution to be
paid by Landlord to Tenant such remaining portion shall be paid by Landlord
to Tenant within thirty (30) days after the later of (an) the Commencement
Date; or (bb) the date On which Tenant provides Landlord with copies of'
lien releases from its general contractor arid subcontractors. Anything
herein, or in the Lease, to the contrary notwithstanding, Tenant shall have
the right to offset against Base Rent arid additional rent, any portion of
the Landlord's Construction Contribution (or other allowance payable by
Landlord) which Landlord fails to pay in accordance with this Amendment
noon completion of all of the following:
(i) only after the Tenant has submitted a written request for an
installment of the Landlord's Construction Contribution on the standard ALA
monthly draw request form;
(ii) the AAA. monthly draw request form has been approved by the
supervising architect;
(iii) the Landlord's interim lender's architectural/engineering
consultant has verified the completion in accordance with all of the
Tenant's Plans of all items for which payment is requested:
(iv) all partial lien waivers normally required for any such draw
request have been executed and delivered, along with the ALA a monthly draw
request form; ('i) no notices of intent to file a mechanics and material
men's lien C'M&M" Lien) have been received by Landlord or Tenant's general
contractor or the actual filing of a M&M Lien has occurred by Tenant or its
general contractor or any subcontractor or any supplier for any previously
paid draw which have not been released, and
(vi) Tenant has given Landlord and Landlord's interim lender
sixty (60) days prior written notice of Landlord's alleged default and
Tenant' intent to offset Base Rent and additional rent, and Landlord or
Landlord's interim lender, as the case may be, shall have failed within
such sixty (60) days to cure such default.
(d) In connection with Tenant's Work, Tenant, in its sole discretion,
shall negotiate the final contract price and the final contract documents
with the general contractor.
(e) Landlord and Tenant acknowledge that Landlord has commenced
construction of the Shell Work Landlord shall diligently proceed with the
construction of the Shell Work and shall substantially complete that
construction in a timely manner, but in no event later than September 1,
1998. Upon obtaining substantial completion of the Shell Work, Landlord's
architect shall issue its written notice of substantial completion of the
Shell Work ("Shell Work Notice of Substantial Completion") certifying that
Landlord has substantially completed construction of the Shell Work 'in
accordance with the Shell Work Plans, Landlord shall diligently pursue and
complete any punch list, items relatin8 to the Shell Work and remedy any
non-conforming or defective work within one hundred twenty (120) days
thereafter. Landlord and Tenant shall cooperate to avoid interference with
the other's performance of Tenant's Work or Shell Work, as the case may be.
In the event that Tenant disputes the Shell Work Notice of' Substantial
Completions then Tenant must notify Landlord in writing that Tenant
disputes Landlord's architect's certification that Landlord has
44
substantially completed construction of the Shell Work within five (5) days
of Tenant's receipt of the Shell Work Notice of Substantial Completion,
which receipt the parties agree shall Ire the earlier of': (i) Tenant's
receipt of the Shell Work Notice of Substantial Completion; or (ii)
September 5, 1998, In the event Tenant timely provides notice of it dispute
of the Shell Work Notice of Substantial Completion, the parties agree that
such issue shall be conclusively determined by a majority vote of three (3)
persons, one of whom shall be Xxxxxxxxx, one of' whom shall be Xxx Xxxx of
Tishman Construction ("Xxxx'), and the third shall be a person who is
knowledgeable of the constriction of similar buildings, selected by
Xxxxxxxxx and Xxxx. Such selection shall take place within five (5) days of
"the Tenant's notice of dispute" and such decision shall be made within ten
(10) days of the selection of such third party. In the event that Tenant
does not notify Landlord in writing that Tenant disputes that Shall Work
Notice of Substantial Completion, then Landlord and Tenant agree that the
Shell Work shall be deemed to be substantially complete, except for any
punch list items that materially affect Tenant's ability to complete
Tenant's Work in accordance with this Amendment.
(f) Tenant's obligation to pay Base Rent and additional rent will
commence on November 1. 1908 ("Rent Commencement Date") The commencement
date of this Agreement ("Commencement Date") shall be the earlier of: (1)
the Rent Commencement Date; or (ii) the date on which Tenant first occupies
the Premises to conduct a portion of its operations. If, prior to
substantial completion of construction of the Tenant Improvements, Tenant
occupies a portion of the Improvements without conducting business
operations, the terms of this Agreement, excepting only the obligation to
pay Base Rent (as defined), will apply to that occupancy.
(g) Landlord shall incorporate only new, good quality materials and
equipment into the construction of the Shell Work. Landlord shall guarantee
the Shall Work against defects in materials and workmanship for one (1)
year after Shell Work Notice of Substantial Completion (or punch list
completion with respect to punch list items). Landlord shall deliver to
Tenant originals of all continuing assignable guarantees and warranties
issued and made in connection with the construction of the Shell Work.
Except for those warranties which remain Landlord's responsibility pursuant
to Section 3(a) below, Tenant may elect to enforce such warranties or
guaranties or may, during such one year period, elect to have Landlord
enforce same. Landlord agrees to cooperate with Tenant, at Tenant's expense
after the one year warranty period, to enforce such warranties or
guaranties.
(h) Tenant and Landlord must each designate in writing at least one (1) but
not more than three (3) representative(s) to act in its behalf in dealings
with the other party in matters relating to the construction of the Shall
Work and Tenant's Work. At least one of Tenant's and Landlord's
representatives must be qualified to give authorizations, render decisions
and take such other action as may be required, but only to the extent those
authorizations, decisions or other actions do not result in an increase in
the monetary obligations of either party by an amount in excess of Ten
Thousand Dollars ($10,000.00). Any consents or approvals given by a
designated representative will bind the xxxxx on whose behalf the
representative acts. Either party may change its designated representatives
at any time by giving written notice of a change of designation to the
other party The designated representatives will exert their reasonable
efforts to render decisions and take actions in a timely manner so as to
avoid unreasonable delay in the other party's work and actions relating to
the Shell Work or Tenant's Work, as the case may be~ For purposes of this
Section 2(h), Landlord designates Xxxx Xxxxx and Xxxxxxx XxXxxxx as
Landlord's initial representatives, and Tenant designates Xxxxxxx Xxxxxx of
Tenant, and Xxxxxxx Xxxxxx of PRIMEDIA Inc. (Tenant's parent company), as
Tenant's initial representatives.
45
(i) Throughout the period between the date on which each party commences
construction of their improvements and the date on which each substantially
completes the construction of such improvements, each shall maintain (or
have its general contractor maintain) hi force with respect to such
improvements a policy of multiple peril (all-risk) builder's rink insurance
On a completed value basis in ac amount equal to the fail replacement cost
of the Improvements. Such insurance shall be written by insurance companies
licensed to do business in the Slate of Texas with a financial rating of
XIII or better, and a policy rating of A- or better in the latest edition
of Best's Guide on Property and Casualty Insurance Companies. Landlord's
policy must name Tenant and Guarantor as an additional insured and must
assure tenant that its coverage will continue for Tenant's benefit
notwithstanding any act or omission on Landlord's part. Tenant's policy
must name Landlord and Guarantor as an additional insured and must assure
Landlord that its coverage will continue for Landlord's benefit
notwithstanding any act nr omission on Tenant's part. Each policy must
provide that no cancellation, surrender or material change will become
effective unless Tenant receives written notice at least thirty (33) days
in advance of the time at which that cancellation, surrender or material
change becomes effective.
2. Section 3 of the Lease Agreement is deleted in its entirety, and
replaced and amended as
Follows:
Section 3. Initial Term. (a) The Initial Term of this Agreement
(the "Initial Term") will be the period that commences on the
Commencement Date arid that ends at 11:59 p.m. (Dallas, Texas
time) of either the day prior to the one hundred eighty-fourth
(184th) month following the Commencement Date, if the
Commencement Date occurs on the first day of a calendar month, or
on the fifteenth (15th) anniversary of the last day of the
calendar month in which the Commencement Date occur, if the
Commencement Date do~ not occur on the first day of a calendar
month, whichever is applicable. Tenant has the right to renew the
term of this Agreement, as set forth in Section 5 below, and the
(Initial Term and any Renewal Term with respect to which Tenant
exercises that option In accordance with Section 5 are
collectively called the "Term" in this Agreement.
(b) Within thirty (30) days after the Commencement Date, the
PARTIES will execute an acknowledgement letter for the purpose of
confirming the Commencement Date arid the Expiration Date & For
purposes of this Agreement, the term ("Lease year") shall mean
each twelve month period commencing with the month in which the
Commencement Date occurs. That acknowledgment will be
substantially in the form of the attached Exhibit A tothis
Addendum.
46
3. Section 4(a) of the Lease Agreement is deleted in its entirety,
and replaced and amended asfollows:
Section 41. Base Rent and Additional Rent. (a) Tenant shall pay
to Landlord for the Premises the amount as base rent ("Base
Rent") indicated on Exhibit B attached hereto and made a part
hereof Tenant shall pay each monthly installment of Base Root in
advance on the first day of each month during the Term, with the
first installment of Base
Rent being due on the Rent Commencement Date. Under no
circumstances shall the Base Rent payable hereunder be abated for
any period unless otherwise specifically provided in Sections 17
or IS of the Lease or this Agreement. if any payment required of
Tenant under this Agreement is not paid when due, Landlord may
charge Tenant a fee equal to fivepercent (5%) of the delinquent
payment to reimburse Landlord for its cost and inconvenience
incurred as a consequence of Tenant's delinquency, provided,
however, that Tenantmay have one late payment per Lease Year
without incurring such charge in the eventthe actual payment is
received by Landlord on or before the fifth (5th) day of the
month in which it is due following written notice from Landlord
that such amount is past due.
4 Section ~ 1(b) of the Lease Agreement is deleted in its entirety
Should Tenant elect to perform the Office Expansion, such work
shall be deemed an Alteration and the performance thereof shall
be governed by Section 7 of the Lease.
5. Section 33(j) is amended as follows: Xxxxxxx Xxxxxx should be
added as an additional addressee of all notes to Tenant.
6. Landlord and Tenant agree that Landlord has satisfied the
obligations in Section 35 of the Lease,
7. Section 33 of the Lease Agreement L5 deleted in its entirety.
8, Section 39 of the Lease Agreement is deleted in its entirety.
9. Section 39A. of the Lease Agreement is deleted in its entirety
10. Section 42 of the Lease Agreement is deleted, replaced, and
amended as follows. Section 42, Memorandum of Lease The Lease,
this Amendment, or any other lease amendment shall not be
recorded. A revised short form or memorandum of the Lease, as
amended, shall be executed and acknowledged by the parties in
substantially the form attached hereto as 4bibit C and
incorporated herein by reference, describing the Premises and
setting forth the terms of the Lease, as amended. The Memorandum
of Lease may be recorded by either party, al its sole cost and
expense. In the event of a termination of the Lease, as amended,
for any reason, Tenant agrees to execute and deliver to Landlord,
in a font reasonably satisfactory to Landlord, a recordable
notice of termination of the Lease and Tenant's rights
thereunder,
47
11. Exhibit B to the Lease Agreement is deleted in its entirety
12. Exhibit C to the Lease Agreement is deleted in its entirety.
13. Exhibit P to the Lease Agreement is deleted in its entirety.
14. A new Section 43 is added as follows;
Section 43. Landlord Reimbursement Tenant. Landlord shall pay to Tenant an
additional allowance ("Landlord Reimbursement Payment") in total amount of
51,518,72100 to offset Tenant's cost, both direct and indirect associated
with its moving to the Building, including but not limited to the costs of
construction of Tenant's Work, moving, cabling for data and communications,
employee relocation, equipment, tangible personal property, trade fixtures
and other items to be utilized by Tenant in connection with its operations
in the Building. Landlord shall pay such Landlord's Reimbursement Payment
to Tenant within sixty (60) days of the Commencement Date.
15(a) Landlord does hereby release and forever discharge Tenant, its
predecessors, parent, subsidiaries, affiliated corporations or
other affiliated entities, successors, partners. principals,
assigns, attorneys, servants, agents~ employees, and other
representatives, of and from any and all claims and causes of
action of any and every character, Icncwn and ankuriwo, which
Landlord may have against such Tenant (other than with respect to
the breach of nay representations or warranty in the Lease, as
set forth in this Amendment), including, but not limited to, all
claims and causes of action, except third party tort claims,
connected in any way with the Lease Agreement anti which occurred
at any time prior to the date hereof.
(1) Tenant tines hereby release and forever discharge Landlord, its
predecessors, parents. subsidiaries, affiliated corporations or
other affiliated entities, successors, partners, principals.
assigns, attorneys, servants, agents. employees, and other
representatives, including, but not limited to, The Industrial
Group. Inc. and 'The Industrial Group Management Services, Inc.,
of and from any and all claims and causes of action of any and
every character, known and unknot~ri. 'which Tenant may have
against Landlord (other than with respect to the breach of any
representation or warranty in the Lease, as set forth in this
Amendment), including, but not limited to, all claims and causes
of action connected in any way with the Lease Agreement and which
occurred at any time prior to the date hereof.
(c) It is expressly understood and agreed that this Section is
intended to be, and is, a full, complete and general release in
favor of one party from the other, their predecessors, parents,
subsidiaries, affiliated corporations or other affiliated
entities, successors, partners, principals, assi~is, attorneys,
servants, agents, employees, and other representatives of any and
all claims of any kind or character which each party may have had
or may now have against the other, whether known or unknown
except as provided for herein.
16. All other terms and conditions of the Lease Agreement shall
remain in effect and unchanged.
48
17. This Amendment constitutes the entire understanding and agreement
of' the parties with respect to the subject matter of this
Amendment, anti contains all of the covenants and agreements of
the parties with respect thereto Landlord and Tenant each
acknowledge that no representations. documents, promises or
agreements, oral or written, have been made by Landlord or
Tenant, or anyone acting on behalf of Landlord or Tenant, which
are act contained herein, and any prior agreements, promises,
negotiations, or representations not expressly set forth in this
Amendment are of no force or effect This Amendment nay not be
altered, changed or amended except by an instrument in writing
signed all the parties hereto.
IN WITNESS HEREOF, the parties hereto have signed and sealed this Amendment
No. 1 as of the date first set forth above.
LANDLORD:
TIG DEVELOPMENT PROPERTY ACCOUNT II, INC.
By: _______________________
Name: _____________________
Title: ______________________
TENANT
PRIMEDIA WORKPLACE LEARNING, INC.
By: _______________________
Name: _____________________
Title: ______________________
PRIMEDIA, Inc. ("fka K-III Communications Corporation), the guarantor of
Tenant's obligations under the Lease, hereby consents to the execution and
delivery of this Agreement by Tenant
PRIMEDIA, INC.
By: _______________________
Name: _____________________
Title: ______________________
49
LEASE AGREEMENT No. 2
This Lease Amendment No. 2 (this "Amendment) is made and entered
into as of September 20, 1999, by and between:
TIG Development Property Account II, Inc.,
Assignee of TIG Development Property Account I, Inc.
("Landlord")
and
Primedia Workplace Learning, Inc. f/k/a
Xxxxxxxx Communications
('Tenant")
This Amendment shall modify the original Lease Agreement entered into by
and between TIG Development Property Account I, Inc., and subsequently
assigned to TIG Development Property Account II, Inc., ("Landlord") and
Xxxxxxxx Communications, inc. now known as Primedia Workplace Learning,
Inc. ("Tenant") dated the 21st of July, 1991 (the "Lease Agreement") and
that certain Lease Amendment No. 1 dated May20, 1998 by and between
Landlord and Tenant ("Lease Amendment No. 1") (collectively referred to as
the 'Lease"), in which certain reel estate and properties therein described
and situated at Piano international Business Park, International Parkway,
Piano, Texas located in The County of Xxxxxx, and the State of Texas, were
demised arid leased by Landlord to Tenant
It is the sole intent of this Lease Amendment No. 2 to amend and modify the
Lease as follows:
1. Section 2Q) of Lease Amendment No. 1 is deleted in its entirety
and replaced arid amended as follows:
(f) Tenant obligation to pay Base Rent and additional rent will
commence oat November 1, 1.998 ("Rent Commencement Date"). The
commencement date of this Agreement ("Commencement Date") shall
be the earlier of: (i) the Rent Commencement Date; or (ii) the
date on which Tenant first occupies the Premises to conduct a
portion of its operations. If prior to substantial completion of
the construction of the Tenant Improvements, Tenant occupies a
portion of the Improvements without conducting business
operations, the terms of this Agreement, excepting only the
obligation to pay Base Rent (as defined) and additional rent will
apply to that occupancy ("Early Occupancy").
2. Section 3(a) of Lease Amendment No. I is deleted in its entirety
and replaced and amended as follows:
Section 3. Initial Term. (a) The Initial Tern, of this Agreement
(the "Initial Term") will be the period that commences on the
Commencement Date and that ends at 11:59 p.m. (Dallas, Texas
time) on the day prior to the one hundred eighty-fifth (185th)
month anniversary of the Xxxx Commencement Date. Tenant has the
right to renew the term of this Agreement as set forth in Section
5 below, and the Initial Term arid any Renewal Term with respect
to which Tenant exercises that option in accordance with Section
S are collectively called the "Term" in this Agreement.
50
IN WITNESS THEREOF, the parties hereto have signed and sealed
this Amendment No.2 as of the date first set forth above.
LANDLORD:
TIG DEVELOPMENT PROPERTY ACCOUNT II, INC.
By: _______________________
Name: _____________________
Title: ______________________
TENANT
PRIMEDIA WORKPLACE LEARNING, INC.
By: _______________________
Name: _____________________
Title: ______________________
PRIMEDIA, Inc. ("fka K-III Communications Corporation), the guarantor of
Tenant's obligations under the Lease, hereby consents to the execution and
delivery of this Agreement by Tenant
PRIMEDIA, INC.
By: _______________________
Name: _____________________
Title: ______________________
51
