LEASE AGREEMENT
This
Lease Agreement (this "Lease")
is
entered into on this the_____ day
of
July, 2008, by and between
LEGACY
TECH IV ASSOCIATES, LIMITED PARTNERSHIP, a
Delaware limited partnership ("Landlord"),
and
HALLMARK
FINANCIAL SERVICES, INC., a
Nevada
corporation ("Tenant").
1.PREMISES,
TERM, AND INITIAL IMPROVEMENTS.
(a) Subject
to and upon the terms, provisions and conditions hereinafter set forth, and
each
in consideration of the duties, covenants and obligations of the other
hereunder, Landlord hereby leases to Tenant, and Tenant hereby leases and takes
from Landlord, sixteen thousand eight hundred fourteen (16,814) square feet
of
Net Rentable Area (hereinafter defined) (the "Premises")
located
in the approximately 58,100 square foot building (the "Building")
located
at 0000 Xxxxxxxxx, Xxxxx, Xxxxx (the "Land").
The
Project is known as “Lincoln
R&D in Legacy Phase Four”
on a three (3) building project containing an aggregate of approximately 179,200
square feet of Net Rentable Area on the Land known as the “Lincoln
R&D Legacy Project Phase Four”(the
“Project”).
A
legal
description of the Land is attached hereto as Exhibit
“A-1”.
A
preliminary Site Plan depicting the Premises is attached hereto as Exhibit
"A".
The
term
"Net
Rentable Area"
refers
to
the area occupied by office and/or warehouse space, as calculated within the
boundaries defined by (i) the drip line of the exterior surface of the exterior
walls and windows of the Building, and (ii) the center line of any demising
walls separating the Premises from space to be occupied by another tenant.
The
Net Rentable Area in the Premises has been calculated on the basis of the
foregoing definition and is hereby stipulated to be 16,814 square feet; provided
Tenant shall have the right to have its architect verify such determination
and
in the event such determination reflects a rentable or usable square footage
for
the Premises greater to or less than the rentable or usable square footage
set
forth in this Section, such determination shall be controlling and an
appropriate adjustment shall be made under this Lease with respect to the amount
due hereunder as Base Rent and with respect to Tenant’s
Proportionate Share of Operating Expenses payable hereunder, and in such event,
Landlord and Tenant will execute an amendment to this Lease to reflect the
exact
square footage of the Premises, adjusted Base Rent, adjusted Tenant’s
Proportionate Share, and Adjusted Allowance.
(b) The
term
of this Lease (the “Term”)
shall
be
eighty-six (86) months, beginning on December 1, 2008 (the “Commencement
Date”)
and
ending on January 31, 2016. Although the Term may not commence until after
the
date hereof, from and after the date hereof this Lease shall be deemed to be
a
contract between Landlord and Tenant and the provisions hereof shall be
effective for all purposes. In the event that Substantial Completion, as defined
in Exhibit
"B", has
not
occurred by the date set forth hereinabove for the Commencement Date, for
reasons other than those solely specific to Tenant Delays, as defined in
Exhibit
"B", then
rent
and Tenant’s
other obligations under this Lease (other than insurance and indemnity
obligations if Tenant accesses the Premises prior to the date of Substantial
Completion) shall not commence until the date of Substantial Completion, which
date shall be the revised Commencement Date and the Term shall commence and
the
expiration date shall be extended so as to give effect to the full stated Term.
In the event that Substantial Completion has not occurred by the date set forth
hereinabove for the Commencement Date because of Tenant Delays, then Rent under
this Lease shall commence on the Commencement Date set forth hereinabove,
notwithstanding the fact that Substantial Completion has not occurred. In the
event Substantial Completion occurs prior to the Commencement Date, then
Landlord shall permit Tenant to occupy the Premises at such time, subject to
the
terms and provisions of this Lease, except that Tenant shall have no obligation
to pay Base Rent or Operating Expenses (as defined in Section 2.(c)) for the
period of any such early occupancy (but Tenant shall pay for utilities used
in
the Premises during such period). Should the Term commence on a date other
than
that specified in this Section 1.(b), Landlord will send Tenant a written
statement of such adjusted commencement and expiration dates; and, if Landlord
requests, Tenant will confirm such adjusted dates in writing. The Term of this
Lease is subject to extension as provided in Exhibit
“E”attached
hereto and made a part hereof and is subject to early termination as provided
in
Exhibit
“G”attached
hereto and made a part hereof.
(c) Landlord
shall construct the Premises in a good and workmanlike manner in substantial
accordance with the Drawings referenced on Exhibit
"B"and
in
compliance with applicable laws, and, by occupying the Premises, Tenant shall
be
deemed to have accepted the Premises in their condition, subject to completion
of any punch list items and any latent defects (provided that the foregoing
shall not release Landlord from its repair and maintenance obligations expressly
set forth in this Lease). Subject to the construction by Landlord of the
Improvements to the Premises in substantial accordance with the Drawings
referenced on Exhibit
“B”, neither
Landlord nor Landlord’s agents have made any express or implied representations
or promises with respect to the Building or the Premises or the repair or
alteration thereof, except as expressly set forth in this Lease, and no rights
or easements or licenses are acquired by Tenant by implication or otherwise,
except as expressly set forth herein.
1
2.BASE
RENT, SECURITY DEPOSIT AND ADDITIONAL RENT.
(a) Tenant
shall pay to Landlord monthly “Base
Rent”,
in
advance, without demand, deduction
or set off except as expressly otherwise provided herein, payable in the
following installments for
the
following periods of time:
|
|
|
|
Rate Per Square
|
|
||
Months in Term
|
|
Monthly Base Rent
|
|
Foot Per Year
|
|||
Months
1-2
|
$
|
0.00
|
$
|
0.00
|
* | ||
Months
3-48
|
$
|
19,896.57
|
$
|
14.20
|
|||
Months
49-86
|
$
|
20,176.80
|
$
|
14.40
|
*Base
Rent only is abated during Months 1 and 2 of the Term (the “Abatement
Period”);
Tenant
shall be obligated to pay Tenant’s Proportionate Share of Operating Expenses (as
defined and set forth in Section 2.(c) below) and all other amounts due under
the Lease during the Abatement Period.
The
first
monthly installment, plus the other monthly charges for Tenant’s Proportionate
Share of Operating Expenses, shall be due on the Commencement Date and shall
be
applied to the first month following the Abatement Period, thereafter, monthly
installments of Base Rent shall be due on the first day of each calendar month.
If the Term begins on a day other than the first day of a month or ends on
a day
other than the last day of a month, then Base Rent and additional rent for
such
partial month shall be prorated.
(b) Tenant
shall deposit with Landlord on the date hereof the sum of $19,896.57 (the
"Security
Deposit"),
which
shall be held by Landlord to secure Tenant’s obligations and liabilities under
this Lease; however, the Security Deposit is not an advance rental deposit
or a
measure of Landlord’s damages for an Event of Default (defined below). Landlord,
at its sole discretion, may use any portion of the Security Deposit to satisfy
Tenant’s unperformed obligations hereunder upon the occurrence of an Event of
Default, without prejudice to any of Landlord’s other remedies. If so used,
Tenant shall pay Landlord an amount that will restore the Security Deposit
to
its original amount immediately upon demand from Landlord. The unused portion
of
the Security Deposit will be returned to Tenant within thirty (30) days after
the end of the Term, provided that Tenant has fully performed its obligations
hereunder throughout the Term. In the event of a sale or leasing of the Building
by Landlord, Landlord shall have the right to transfer the Security Deposit
to
the vendee or tenant; and upon such transfer, Landlord shall be deemed released
by Tenant from all liability for the return of the Security Deposit. Tenant
agrees to look solely to the new landlord for the return of the Security
Deposit. It is agreed that the provisions hereof shall apply to every transfer
or assignment made of the Security Deposit to a new landlord. Landlord shall
not
be required to keep the Security Deposit separate from other funds of Landlord
and Tenant shall not be entitled to interest on the Security Deposit. In no
event shall Tenant be entitled to apply the Security Deposit to any monthly
rentals due under this Lease.
2
(c) Tenant
shall pay, as additional rent, Tenant’s Proportionate Share (hereinafter
defined) of all reasonable costs incurred by Landlord in owning, operating,
maintaining, repairing and replacing the Project and the facilities and services
provided for the common use of Tenant and any other tenants of the Project
(collectively, "Operating
Expenses"),
including
the following items: (1) Taxes (defined below) and the reasonable cost of any
tax consultant employed to assist Landlord in determining the fair tax valuation
of the Project and Land (provided that any savings shall be credited against
Operating Expenses); (2) the cost of all utilities used in the Project which
are
not billed separately to a tenant of the Building for above Project standard
utility consumption; (3) insurance premiums; (4) the cost of repairs,
replacement, management fees (not to exceed three and one-half percent (3.5%)
of
the annual gross receipts of the Project) and expenses, landscape maintenance
and replacement, security service (if provided), water and sewer service, and
trash service; (5) the cost of dues, assessments, and other charges applicable
to the Land payable to any property or community owner association under
restrictive covenants or deed restrictions to which the Premises are subject;
and (6) alterations, additions, and improvements made by Landlord to comply
with
any change in any applicable Laws (defined in Section 23(a) below) enacted
subsequent to the time of construction of the Project. Throughout the Term
on
the same day that Base Rent is due, Tenant shall pay to Landlord an amount
equal
to 1/12 of Landlord’s estimate of Tenant’s Proportionate Share of annual
Operating Expenses. The initial monthly payments are based upon Landlord’s
estimate of the Operating Expenses for the calendar year in question, and shall
be increased or decreased annually to reflect the actual Operating Expenses
determined by Landlord for that calendar year. By July 1 of each calendar year,
Landlord shall furnish to Tenant a statement of Operating Expenses for the
previous year, adjusted as provided in subsection (d) below (the “Operating
Expense Statement”).If
the
Operating Expense Statement has not been delivered to Tenant by July 1 of any
calendar year of the Term, and such failure continues for more than thirty
(30)
days following Tenant’s
written notice to Landlord of Landlord’s
failure to deliver the Operating Expense Statement by July 1, then Landlord
shall be deemed to have waived the right to recoup any underpayment of Operating
Expenses by Tenant for such calendar year (but shall not be released from the
obligation to credit or reimburse Tenant for any overpayment). If Tenant’s total
payments in respect of Operating Expenses
for any calendar year are less than Tenant’s Proportionate Share of actual
Operating Expenses for that calendar year, Tenant shall pay the difference
to
Landlord within thirty (30) days after Landlord’s request therefor; if such
payments are more than Tenant’s Proportionate Share of actual Operating Expenses
for that calendar year, Landlord shall retain such excess and credit it against
Tenant’s next monthly rent payments, or at Tenant’s
option, reimburse Tenant such excess within thirty (30) days after Tenant’s
request following Tenant’s receipt of the Operating Expense Statement. Operating
Expenses shall not include the following: (A) any costs for interest,
amortization, or other payments on loans to Landlord; (B) expenses incurred
in
leasing or procuring tenants, including, but not limited to, real estate broker
commissions, space planner fees and advertising expenses; (C) legal expenses
other than those incurred for the general benefit of the Project’s
tenants; (D) allowances, concessions, and other costs of renovating or otherwise
improving space for occupants of the Project or vacant space in the Project;
(E)
federal income taxes imposed on or measured by the income of Landlord from
the
operation of the Project; (F) rents under ground leases; (G) costs incurred
in
selling, syndicating, financing, mortgaging, or hypothecating any of Landlord’s
interests in the Project; (H) the cost of any capital improvements (except
for
the amortization of the cost of (1) capital improvements made by Landlord or
equipment purchased by Landlord as a means to accomplish savings in operating,
repairing, managing or maintaining the Project, and (2) capital improvements
made by Landlord to comply with any change in any applicable Laws enacted
subsequent to the time of construction of the Project other than costs incurred
in connection with upgrading the Project to comply with disability, life, fire
and safety codes, ordinances, statutes, or other laws in effect prior to the
Commencement Date including, without limitation, the ADA, including penalties
or
damages incurred due to such non-compliance which shall be Landlord’s
sole responsibility; all such costs shall be amortized over the useful life
of
the capital improvement); (I) any cost or expenditure for which Landlord is
reimbursed by insurance proceeds or otherwise; (J) the cost of any service
furnished to any other tenant of the Project which Landlord does not make
available to Tenant; (K) depreciation (except on capital improvements described
herein); (L) costs of correcting defects in construction of the Building; (M)
legal and auditing fees which are for the benefit of Landlord, such as
collecting delinquent rents, preparing tax returns and other financial
statements, and audits other than those incurred in connection with the
preparation of reports required pursuant to Section 2(d) below; (N) the wages
of
any employee for services not related directly to the management, maintenance,
operation and repair of the Project; (O) fines, penalties and interest (except
for a commercially reasonable interest charge connected to the amortizations
permitted herein); (P) costs of repairing, maintaining and replacing structural
elements of the Project; (Q) overhead and profit increment paid to Landlord
or
to subsidiaries or affiliates of Landlord for goods and/or services in or to
the
Building to the extent the same exceeds the costs of such goods and/or services
rendered by unaffiliated third parties on a competitive basis; (R) Landlord’s
general corporate overhead and general and administrative expenses; (S)
advertising and promotional expenditures, and costs of signs in or on the
Building identifying the owner of the Building or other tenants’ signs; (T) tax
penalties incurred as a result of Landlord’s negligence, inability or
unwillingness to make payments and/or to file any tax or informational returns
when due; (U) costs arising from Landlord’s charitable or political
contributions (V) costs arising from latent defects in the base, shell or core
of the Building or improvements installed by Landlord or repair thereof; (W)
costs (including in connection therewith all attorneys’ fees and costs of
settlement judgments and payments in lieu thereof) arising from claims, disputes
or potential disputes in connection with potential or actual claims, litigation
or arbitrations pertaining to Landlord and/or the Building and/or the Project;
(X) costs of environmental remediation. There shall be no duplication of costs
for reimbursements in calculating Operating Expenses; and (Y) any other expenses
which, in accordance with generally accepted accounting principles, consistently
applied, would not normally be treated as Operating Expenses by landlords of
comparable buildings. The amounts of the initial monthly Base Rent and Tenant’s
Proportionate Share of Operating Expenses (and the part thereof attributable
to
Taxes) are as follows:
Base
Rent (Section 2.(a))
|
$
|
19,896.57
|
||
Operating
Expenses, excluding Taxes (Section 2.(c))
|
$
|
1,877.56
|
||
Taxes
(Sections 2.(c) and 3.(a))
|
$
|
2,662.22
|
||
Total
initial monthly payment
|
$
|
24,436.35
|
Notwithstanding
the foregoing, for purposes of calculating the amount payable by Tenant under
this Section
2(c),
Operating Expenses (with the exception of Uncontrollable Expenses (defined
below)) shall not exceed for any calendar year during the Term of this Lease,
other than the first calendar year, the amount of Operating Costs for the
preceding calendar year plus six percent (6%) on a non-cumulative basis. The
term “Uncontrollable
Expenses”means
expenses relating to the cost of utilities, insurance and Taxes.
(d)
If
during any calendar year the Project is less than 100% occupied, then, for
purposes of calculating Tenant’s Proportionate Share of Operating Expenses for
that calendar year, the amount of Operating Expenses that fluctuate with Project
occupancy shall be "grossed-up" to the amount which, in Landlord’s reasonable
estimation, would have been incurred by Landlord had the Project been 100%
occupied for that entire calendar year; provided, however, in no event shall
the
tenants of the Project
be obligated to pay more than the actual Operating Expenses of the Building
for
the calendar year in question.
3
(e) If
any
payment required of Tenant under this Lease is not paid within five (5) days
of
when due, except to the extent limited by any applicable Laws, and not in
limitation or waiver of any of Landlord’s other rights and remedies under this
Lease, Landlord may charge Tenant and Tenant shall pay to Landlord a fee equal
to four percent (4%) of the delinquent payment to reimburse Landlord for its
cost and inconvenience incurred as a consequence of Tenant’s delinquency.
Notwithstanding the foregoing, the late fee referenced above shall not be
charged with respect to the first two (2) occurrences during any twelve-month
period that Tenant fails to make payment when due, until five (5) days after
Landlord delivers written notice of such delinquency to Tenant.
(f) All
payments and reimbursements required to be made by Tenant under this Lease
shall
constitute "rent"
(herein
so called).
(g) The
term
"Tenant’s
Proportionate Share"
means
the
ratio from time to time of the Net Rentable Area of the Premises to the Net
Rentable Area of the Project. Tenant’s Proportionate Share has been initially
determined to be 9.38%. If the Net Rentable Area of the Premises or Project
changes, Tenant’s Proportionate Share shall change accordingly.
(h) Landlord
and Tenant are knowledgeable and experienced in commercial transactions
and agree that the provisions of this Lease for determining charges, amounts
and
additional rent
payable by Tenant are commercially reasonable and valid even though such methods
may not state a precise
mathematical formula for determining such charges. ACCORDINGLY,
TENANT VOLUNTARILY
AND KNOWINGLY WAIVES ALL RIGHTS AND BENEFITS OF TENANT UNDER
SECTION 93.012 OF THE TEXAS PROPERTY CODE.
(i) Within
sixty (60) days (the
“Audit
Election Period”)after
Landlord furnishes to Tenant
the Operating Expense Statement for any calendar year, Tenant may, at its
expense during Landlord’s
normal business hours, elect to audit Landlord’s Operating Expenses for such
calendar year only,
subject to the following conditions: (1) there is no uncured Event of Default
under this Lease (provided
that once such Event of Default is cured, then Tenant may exercise its audit
rights); (2) the audit
shall be prepared by an independent certified public accounting firm; (3) in
no
event shall any audit be
performed by a firm retained on a “contingency
fee” basis unless such firm is mutually approved by Landlord
and Tenant and has not less than ten (10) years experience in auditing operating
expenses; (4) the
audit
shall commence within thirty (30) days after Landlord makes Landlord’s books and
records available
to Tenant’s auditor and shall conclude within sixty (60) days after
commencement; (5) the audit shall
be
conducted where Landlord maintains its books and records in Dallas County or
any
county adjoining
thereto and shall not unreasonably interfere with the conduct of Landlord’s
business; and (6) Tenant
and its accounting firm shall treat any audit in a confidential manner and
shall
each execute Landlord’s
confidentiality agreement for Landlord’s benefit prior to commencing the audit.
Tenant shall deliver
a
copy of such audit to Landlord within five (5) business days of receipt by
Tenant. This paragraph
shall not be construed to limit, suspend, or xxxxx Tenant’s obligation to pay
Operating Expenses,
which shall be paid by Tenant when due notwithstanding any dispute regarding
the
amount thereof.
After verification, Landlord shall credit any overpayment determined by the
audit report against the
next
Rent due and owing by Tenant or, if no further Rent is due, refund such
overpayment directly to Tenant
within thirty (30) days of determination. Likewise, Tenant shall pay Landlord
any underpayment determined
by the audit report within thirty (30) days of determination. The foregoing
obligations shall survive
the expiration or earlier termination of the Lease. If Tenant does not give
written notice of its election
to audit during the Audit Election Period, Landlord’s Operating Expenses for the
applicable calendar
year shall be deemed approved for all purposes, and Tenant shall have no further
right to review or
contest the same. If the audit proves that Landlord’s calculation of Operating
Expenses for the calendar year
under inspection was overstated by more than five percent (5%) in the aggregate,
then, after verification,
Landlord shall pay Tenant’s actual reasonable out-of-pocket audit and inspection
fees applicable
to the review of said calendar year statement within thirty (30) days after
receipt of Tenant’s invoice
therefor.
4
3.TAXES.
(a)
Landlord shall pay all taxes, assessments and governmental charges whether
federal, state, county, or municipal and whether they are imposed by taxing
or
management districts or authorities presently existing or hereafter created
but
excluding any interest or penalties for late or delinquent payments
(collectively, "Taxes")
that
accrue against Landlord, the Premises, the Land and the Building. If, during
the
Term, there is levied, assessed or imposed on Landlord a capital levy or other
tax directly on the rent or a margin tax, franchise tax, assessment, levy or
charge measured by or based, in whole or in part, upon rent, then all such
taxes, assessments, levies or charges, or the part thereof so measured or based,
shall be included within the term "Taxes",
provided,
however, that notwithstanding anything herein to the contrary, it is understood
and agreed that Taxes shall include those certain taxes imposed against Landlord
as a result of Texas House Xxxx 3 and sometimes hence referred to as the “margin
tax” (herein so called) only to the extent that any such margin tax would
be payable if the Project (or revenue from the Project, as applicable) was
the
only property (or revenue) of Landlord subject to such margin tax and, further,
only to the extent that the amount of any such margin tax can be reasonably
demonstrated to be in replacement of any sums previously included in ad valorem
or other real property taxes or assessments levied against the Project (it
being
thus hereby further acknowledged and agreed that such margin tax shall be
includable and included within Taxes for purposes of this Lease only to the
extent and during such periods as the ad valorem and/or other property taxes
and
assessments payable with respect to the Project shall be less than the amounts
thereof which are payable immediately prior to the imposition of such margin
tax). If during the Term of this Lease Landlord receives a credit against margin
taxes which were previously paid by Tenant, then Tenant shall receive a credit
for its pro rata share of such credit. If the Project is occupied by more than
one tenant and the cost of any improvements constructed in the Premises is
disproportionately higher than the cost of improvements constructed in the
premises of other tenants of the Project, then Landlord may require that Tenant
pay the amount of Taxes attributable to such disproportionately more costly
improvements in addition to Tenant’s Proportionate Share of other Taxes. This
provision shall apply to all tenants occupying the Project.
(b) Tenant
shall (1) pay when due all taxes levied or assessed against any personal
property, fixtures or alterations placed in the Premises and (2) upon the
request of Landlord, deliver to Landlord receipts from the applicable taxing
authority or other evidence acceptable to Landlord to verify that such taxes
have been paid. If any such taxes are levied or assessed against Landlord or
Landlord’s property and (A) Landlord pays them or (B) the assessed value of
Landlord’s property is increased thereby and Landlord pays the increased taxes,
then Tenant shall pay to Landlord such taxes within thirty (30) days of
Landlord’s request therefor.
(c) For
property tax purposes, to the extent allowed by law, Tenant waives all rights
to
protest or appeal the appraised value of the Premises, as well as the Building
and Project. Landlord agrees to provide Tenant copies of notices of
reappraisement within thirty (30) days of receipt from the appropriate taxing
authorities.
4.LANDLORD’S
MAINTENANCE.
(a) Landlord’s
maintenance obligations are limited to those expressly described elsewhere
in
the Lease and to the replacement of the Building’s roof and maintenance of the
foundation and structural members of the Building including exterior walls
and
load bearing columns within the Premises (collectively, the "Building’s
Structure")
and
the
Building’s windows and skylights; however, Landlord shall not be responsible (1)
for any such work until Tenant delivers to Landlord written notice of the need
therefor, or (2) for alterations to the Common Areas or the Building’s Structure
required by any applicable Law (including, without limitation, the Americans
with Disabilities Act of 1990 (“ADA”)because
of Tenant’s specific use of the Premises (which alterations shall be performed
by Tenant at Tenant’s sole cost and expense). The Building’s Structure does not
include glass or plate glass, doors, special store fronts or office entries,
all
of which shall be maintained by Tenant at Tenant’s sole cost and expense. In
addition, Landlord shall be responsible (at Landlord’s sole expense) for the
repair and maintenance of all Improvements constructed by Landlord pursuant
to
Exhibit
“B” attached
hereto (excluding the maintenance required of Tenant pursuant to Section
4.(c)
below)
provided that written notice of the need for such repair or maintenance is
given
within one (1) year after the Commencement Date, so long as the damage requiring
repair is not caused by Tenant, its employees, agents, contractors or invitees.
Landlord’s liability for any defects, repairs, replacement or maintenance for
which Landlord is responsible hereunder shall be limited to the cost of
performing such work.
(b) Landlord
shall maintain the parking areas, driveways, alleys and grounds surrounding
the
Premises in a clean and sanitary condition, including, without limitation,
maintenance, repairs and replacements of (i) any drill or spur track servicing
the Premises, (ii) the exterior of the Building (including painting), (iii)
sprinkler systems and sewage lines (unless they are the responsibility of the
utility provider), (iv) water lines and electrical systems to the extent they
are situated outside the Premises (unless the responsibility of the utility
provider), and (v) any other items normally associated with the foregoing.
Tenant shall repair or replace, as applicable, and pay for any damage caused
to
such parking areas, driveways, alleys and grounds by a Tenant Party (defined
below)
(c) On
or
before the Commencement Date, Landlord shall deliver the heating, air condition,
and ventilation equipment and system (the
“HVAC
System”)
and
other
Building systems serving the Premises in good repair and working order. Landlord
shall at its sole cost and expense, make all repairs to such systems for the
twelve (12) month period following the Commencement Date (but not maintenance,
which is Tenant’s obligation), so long as: (i) Tenant has maintained the Service
Contract (as defined in Section
5.(b))
and
performed the maintenance recommended by the equipment manufacturer (but not
repair, which is Landlord’s obligation); and (ii) the damage requiring repair
was not caused by Tenant, its employees, agents, contractors or
invitees.
5
(d) The
cost
of performing Landlord’s maintenance and repair obligations shall be an
Operating Expense (except to the limited extent any such cost is specifically
excluded from being an Operating Expense pursuant to Section
2.(c)
above).
(e) Landlord
shall, subject to force majeure, make available to the point of connection
to
the Building all facilities for water, electricity, sewerage, and
telephone.
5.TENANT’S
MAINTENANCE AND REPAIR OBLIGATIONS.
(a) Tenant
shall maintain all parts of the Premises (except for maintenance work for which
Landlord is expressly responsible under Section 4 above) in good condition
and
promptly make all necessary repairs and replacements to the Premises, including
without limitation any alterations required under the ADA due to Tenant’s
specific use of the Premises. Tenant shall also be responsible for the cleaning
and sweeping of the Premises and for the removal of any trash which originates
from the Premises and for all other janitorial services to the Premises
(provided that Tenant may elect to have janitorial services added to Operating
Expenses subject to reimbursement by Tenant). Tenant shall be responsible for
disposal of its trash from the Premises and will maintain adequate receptacles
for such disposal, the design, placement and capacity of such receptacles to
be
subject to the prior approval of Landlord. Outdoor storage of trash or any
other
material and receptacles or containers not approved by Landlord is strictly
prohibited. At its sole cost and expense, Tenant shall provide interior pest
and
insect extermination at the Premises as often as is reasonably necessary to
eliminate any pests or insects, specific to the Premises or Tenant’s use
thereof.
(b) Subject
to Landlord’s obligations set forth in Section 4.(c) above, Tenant shall
maintain the hot water equipment and the HVAC System in good repair and
condition and in accordance with all applicable Laws and with such equipment
manufacturers’ suggested operation/maintenance service program. Tenant shall
enter into a regularly scheduled preventive maintenance/service contract for
the
hot water equipment and the HVAC System, in form and substance and with a
contractor reasonably acceptable to Landlord, and deliver copies thereof to
Landlord (the
“Service
Contract”).
(c) If
Tenant
fails to perform any of Tenant’s maintenance or repair obligations, and if such
failure continues for thirty (30) days after written notice thereof is delivered
to Tenant (provided, however, if such failure reasonably requires longer than
thirty (30) days to cure, Tenant shall be entitled to such additional time
as is
reasonably necessary to cure same so long as same are promptly commenced and
diligently prosecuted to completion), the Landlord may perform such obligation,
in which event Tenant shall pay to Landlord the reasonable cost incurred by
Landlord in performing such obligation within thirty (30) days after Landlord’s
written request therefor.
(d) Tenant
acknowledges that Landlord is not providing security services of any kind to
the
Premises or for Tenant’s property and that the keys given to Tenant for the
Premises may not be secure. At its expense, Tenant shall provide whatever
security and/or alarm systems Tenant deems necessary or appropriate for the
protection of the Premises and of Tenant’s personal property and personnel
located therein, including, if Tenant desires to do so, installing new locks
for
the Premises with new keys. Tenant shall provide to Landlord copies of all
keys
and access codes to allow Landlord entry to the Premises under the terms and
conditions of Section 13 herein. In no event shall Landlord be responsible
for,
and Tenant waives any and all claims arising from, the loss or damage to any
of
Tenant’s personal property situated in and on the Premises, even though Landlord
may have provided general area security or guard services, provided that such
waiver shall not be effective with respect to criminal acts of Landlord or
its
agents. Landlord may elect to, but shall have no obligation to, provide general
area security or guard services. In the event Landlord elects to provide general
area security or guard services, it may discontinue such security or guard
services without notice. At its expense, Tenant is also responsible for the
maintenance, repair, or replacement of any mechanical, security, and fire
protection systems which Tenant has installed within the Premises. Tenant is
expressly advised that if Tenant should place any fixtures, inventory or
equipment within or on the Premises prior to the time the Premises are completed
and delivered to the Tenant, the risk of loss or damage to such inventory,
fixtures, or equipment will be greatly increased in view of the fact that,
out
of necessity, numerous people will be permitted access to the Premises for
the
purpose of completion of any work. All such risk of loss or damage shall be
borne exclusively by the Tenant and not by the Landlord, and the Tenant hereby
waives any claim for any such loss or damage against the Landlord.
6
6. ALTERATIONS.
Tenant
shall not make any alterations, additions or improvements to the
Premises without the prior written consent of Landlord, which shall not be
unreasonably withheld, conditioned
or delayed except as otherwise provided hereinbelow. Landlord shall not be
required to notify
Tenant of whether it consents to any alteration, addition or improvements until
it (a) has received plans
and
specifications therefor which are sufficiently detailed to allow construction
of
the work depicted thereon
to be performed in a good and workmanlike manner, and (b) has had five (5)
business days to review
them. If the alteration, addition or improvement will affect the Building’s
Structure, HVAC System,
or mechanical, electrical, or plumbing systems, then the plans and
specifications therefor must be prepared
by a licensed engineer acceptable to Landlord. Landlord’s approval of any plans
and specifications shall not be a representation or warranty that the plans
or
the work depicted thereon will comply with applicable Laws or be adequate for
any purpose, but shall merely be Landlord’s consent to performance of the work
by Tenant. Upon completion of any alteration, addition, or improvement, Tenant
shall deliver to Landlord accurate, reproducible as-built plans therefor. Tenant
may erect shelves, bins, machinery and trade fixtures without the consent of
Landlord provided that such items (1) do not alter the basic character of the
Premises or the Building; (2) do not overload or damage the same; and (3) may
be
removed without damage to the Premises. Unless Landlord specifies in writing
otherwise, all alterations, additions, and improvements shall be Landlord’s
property when installed in the Premises; provided, however, the following shall
remain Tenant’s property: (a) furniture, movable equipment and other personal
property that is not attached to the floors, walls, or ceiling of the Premises;
and (b) any other fixture, equipment, or other item, regardless of the manner
of
attachment, that is used primarily in Tenant’s trade or business and that can be
removed as a separate physical unit without damage to the Building and without
interference with other tenants’ use and enjoyment of their leased premises. All
work performed by a Tenant Party in the Premises (including that relating to
the
installation, repair, replacement, or removal of any item) shall be performed
in
accordance with all applicable Laws and with Landlord’s specifications and
requirements, in a good and workmanlike, lien-free manner, and so as not to
damage or alter the Building’s Structure or the Premises. In connection with any
such alteration, addition, or improvement which affects the roof or Building’s
Structure, Tenant shall pay to Landlord an administration fee of three percent
(3%) of all costs incurred for such work. Upon expiration of the Term or
termination of Tenant’s right to possess the Premises, Landlord may require
Tenant to remove alterations installed in the Premises by or at the request
of
Tenant (excluding the initial Improvements described on Exhibit
"B"),
to
repair
any damage to the Premises caused by such removal, and to restore the Premises
to good condition and repair, ordinary wear and tear excepted. If Landlord
elects to require Tenant to remove any alterations, it must do so by delivering
to Tenant written notice thereof at the time Landlord consented to the
alteration. Attached hereto as Exhibit
"C" is
a list
of trade fixtures, equipment, or other items that shall remain the property
of
Tenant. Subject to Landlord’s prior written approval, this list may be updated
as alterations and additions are made to the Premises.
7. SIGNS.
Tenant
shall not place, install or attach any signage, decorations, advertising media,
blinds, draperies, window treatments, bars, or security installations to the
Premises or the Building without Landlord’s prior written consent, which shall
not be unreasonably withheld, delayed or conditioned; provided, Tenant shall
have the right (but not the obligation) to place signage above Tenant’s
storefront entrance in the signage area of the Building at Tenant’s sole cost
and expense (except Tenant shall have the right to utilize a portion of the
Allowance defined in Exhibit
“B” for
signage costs), subject to Landlord’s approval of the sign plans therefor
(provided that Tenant may include its logo on such signage), which approval
shall not be unreasonably withheld, delayed or conditioned. Tenant shall repair,
paint, and/or replace any portion of the Premises or the Building damaged or
altered as a result of its signage when it is removed (including, without
limitation, any discoloration of the Building), except for the signage permitted
in the preceding sentence. Tenant shall not (a) make any changes to the exterior
of the Premises or the Building, (b) install any exterior lights, decorations,
balloons, flags, pennants, banners or paintings; or (c) erect or install any
signs, windows or door lettering, decals, window or storefront stickers,
placards, decorations or advertising media of any type that is visible from
the
exterior of the Premises without Landlord’s prior written consent which shall
not be unreasonably withheld, delayed or conditioned. Landlord shall not be
required to notify Tenant of whether it consents to any sign until it (1) has
received detailed, to-scale drawings thereof specifying design, material
composition, color scheme, and method of installation, and (2) has had five
(5)
business days to review them.
8. UTILITIES.
Landlord
shall be responsible for causing Building standard electric service to be
supplied to the house panel provided in the Building and Building common water
line service running through the Building, as set forth on Exhibit
“B”.
Tenant
shall obtain and pay for all water, electricity, heat, telephone, sewer,
sprinkler charges and other utilities and services used at the Premises,
together with any taxes, penalties, surcharges, deposits, maintenance charges,
and the like pertaining to the Tenant’s use of such utilities within the
Premises. Landlord shall, at Tenant’s expense (for which Tenant shall utilize a
portion of the Allowance), separately meter electrical service at the Premises,
and Tenant shall pay the utility provider directly for such service. Water
and
sewer service are not metered separately, but are included in Operating
Expenses. Landlord shall not be liable for any interruption or failure of
utility service to the Premises; provided, however, notwithstanding anything
to
the contrary contained in this Lease, in the event of an interruption of any
of
such services caused by the negligence or willful misconduct of Landlord which
causes the Premises to be untenantable for a period in excess of five (5)
consecutive business days (or for ten (10) business days (whether or not
consecutive) during any twelve (12) month period), then Tenant shall be entitled
to full rent abatement (including Base Rent and Tenant’s Proportionate Share of
Operating Expenses, and any obligations deemed to be rent hereunder) for each
day that the Premises are untenantable due to the interruption or failure of
utility service caused by Landlord. All amounts due from Tenant under this
Section 8 shall be payable within thirty (30) days of Landlord’s request
therefor.
7
9. INSURANCE.
Tenant
shall maintain (a) workers’ compensation insurance and commercial
general liability insurance (with contractual liability endorsement), including
personal injury and
property damage in the amount of $1,000,000 per occurrence combined single
limit
for personal injuries
and death of persons and property damage occurring in or about the Premises,
plus umbrella coverage
of at least $3,000,000 per occurrence, and (b) fire and extended coverage
insurance covering (1) the
replacement cost of all alterations, additions, partitions and improvements
installed in the Premises by or on behalf of a Tenant Party (including the
initial Improvements described on Exhibit
"B"),
and
(2) the
replacement cost of all of Tenant’s personal property in the Premises. Such
policies shall (A) name Landlord and its property manager as additional insureds
(and as loss payees on the fire and extended coverage insurance), (B) be issued
by an insurance company licensed to do business in the State of Texas with
a
Best’s Guide Insurance Rating of A-VII, or better, and otherwise acceptable to
Landlord in its reasonable discretion, (C) provide that such insurance carrier
shall endeavor to give thirty (30) days notice to Landlord prior to cancellation
of coverage, and (D) be delivered to Landlord by Tenant before the Commencement
Date and at least 30 days before each renewal thereof. Tenant’s policies of
liability insurance shall provide primary coverage with respect to occurrences
in the Premises and shall not require contribution by any insurance maintained
by Landlord, when any policy issued to Landlord provides duplicate or similar
coverage, and in such circumstance Landlord’s policy will be excess over
Tenant’s policy.
Landlord
shall procure and maintain throughout the Term, the cost of which shall be
included as an Operating Expense, (1) fire and extended coverage insurance
covering the Building in an amount not less than the full replacement cost
of
the Building, (2) commercial general liability insurance in an amount of not
less than $3,000,000, and (3) such other insurance as Landlord or Landlord’s
Mortgagee (hereinafter defined) shall require. Landlord’s policies of liability
insurance shall provide primary coverage with respect to occurrences in the
Common Areas of the Project and shall not require contribution by any insurance
maintained by Tenant, when any policy issued to Tenant provides duplicate or
similar coverage, and in such circumstance Tenant’s policy will be excess over
Landlord’s policy.
10. CASUALTY
DAMAGE.
(a) Tenant
immediately shall give written notice to Landlord of any damage to the Premises
or the Building. If the Premises or the Building are totally destroyed by an
insured peril, or so damaged by an insured peril that, in Landlord’s reasonable
estimation, rebuilding or repairs cannot be substantially completed within
one
hundred eighty (180) days after the date of Landlord’s actual knowledge of such
damage, then either Landlord or Tenant may terminate this Lease by delivering
to
the other written notice thereof within thirty (30) days after such damage,
in
which case this Lease shall terminate and the rent shall be abated during the
unexpired portion of this Lease, effective upon the date such damage occurred.
Time is of the essence with respect to the delivery of such
notices.
(b) Subject
to Section 10.(c) below, if this Lease is not terminated under Section 10.(a),
then Landlord shall restore the Premises to substantially its previous
condition, except that Landlord shall not be required to rebuild, repair or
replace any part of the partitions, fixtures, additions and other improvements
or personal property required to be covered by Tenant’s insurance under Section
9. If the Premises are untenantable, in whole or in part, during the period
beginning on the date such damage occurred and ending on the date of substantial
completion of Landlord’s repair or restoration work (the "Repair
Period"),
then
the
rent for such period shall be abated for the portion of the Premises that are
untenantable.
(c) If
the
Premises are destroyed or substantially damaged by any peril not covered by
the
insurance maintained by Landlord or any Landlord’s Mortgagee requires that
insurance proceeds be applied to the indebtedness secured by its Mortgage
(defined below) or to the Primary Lease (defined below) obligations, Landlord
may terminate this Lease by delivering written notice of termination to Tenant
within thirty (30) days after such destruction or damage or such requirement
is
made known by any such Landlord’s Mortgagee, as applicable, whereupon all rights
and obligations hereunder shall cease and terminate, except for any liabilities
of Landlord or Tenant which accrued before this Lease is
terminated.
11. LIABILITY,
INDEMNIFICATION, WAIVER OF SUBROGATION AND NEGLIGENCE.
(a) Intentionally
deleted.
(b) Landlord
and Tenant both waive any claim it might have against the other for any
damage
to
or theft, destruction, loss, or loss of use of any property, to the extent
the
same is insured against
under any insurance policy maintained by it that covers the Building, the
Premises, Landlord’s or Tenant’s
fixtures, personal property, leasehold improvements, or business, or is required
to be insured against
by the waiving party under the terms hereof, regardless of whether the
negligence or fault of the other
party caused such loss. Each party shall use its best efforts to cause its
insurance carrier to endorse all
applicable policies waiving the carrier’s rights of recovery under subrogation
or otherwise against the other party.
8
12. USE.
(a) The
Premises shall be used only for general office purposes and for such other
lawful purposes as may be incidental thereto; however, no retail sales may
be
made from the Premises. Except for standard amounts of basic cleaning solutions
and other products utilized in maintaining the cleanliness of the Premises
or in
accordance with Section
25
hereunder, Tenant shall not use or store Hazardous Substances in the Premises.
Tenant shall not use, or permit the use of, the Premises to receive, store
or
handle any product, material or merchandise that is explosive or highly
inflammable or hazardous. Outside storage is prohibited. Tenant shall be solely
responsible for complying with all Laws applicable to the use, occupancy, and
condition of the Premises. Tenant and all Tenant Parties shall comply with
all
reasonable rules and regulations governing the use and occupancy of the Premises
which are now or hereafter imposed by Landlord. A copy of the rules and
regulations now in force are attached as Exhibit
"D".
Tenant
shall not cause or permit any objectionable or unpleasant odors, smoke, dust,
gas, light, noise or vibrations to emanate from the Premises; nor take or permit
any other action that would constitute a nuisance or would disturb, unreasonably
interfere with, or endanger Landlord or any other person; nor cause or permit
the Premises to be used for any purpose or in any manner that would (1) void
the
insurance thereon, (2) materially increase the insurance risk, or (3) cause
the
disallowance of any sprinkler credits. Tenant shall pay to Landlord on demand
any increase in the cost of any insurance on the Premises or the Building
incurred by Landlord which is caused by Tenant’s use of the
Premises.
(b) Tenant
and its employees and invitees shall have the non-exclusive right to use, in
common with others, a maximum of six (6) parking spaces for each one thousand
(1,000) square feet of Net Rentable Area of the Premises and being stipulated
to
be one hundred one (101) spaces as of the Commencement Date, at no additional
charge to Tenant, subject to (1) such reasonable rules and regulations as
Landlord may promulgate from time to time and (2) rights of ingress and egress
of other tenants and their employees, agents and invitees. Tenant shall have
the
right to identify not more than six (6) parking spaces in front of Tenant’s main
storefront entrance (as identified on Exhibit
“A”) with
a
painted curb in front of each space stating “Hallmark
Visitor”, such marking to be performed by Landlord at Landlord’s sole
cost and expense. All parking shall be at no charge to Tenant during the Term
of
the Lease and any renewals hereof.
13. INSPECTION.
Upon
reasonable notice to Tenant, Landlord and Landlord’s agents and representatives
may enter the Premises during business hours accompanied by Tenant’s
representative (except
in the event of an emergency) to: inspect the Premises; to make such repairs
as
may be required or permitted
under this Lease; to perform any unperformed obligations of Tenant hereunder;
and to show the Premises
to prospective purchasers, mortgagees, ground lessors, and (during the last
six
(6) months of the Term)
tenants. During the last six (6) months of the Term, Landlord may erect a sign
on the Project indicating
that the Premises are available. At least thirty (30) days before Tenant vacates
the Premises, Landlord
and Tenant shall meet for a joint inspection of the Premises. After such
inspection, Landlord shall
prepare a list of items, if any, that Tenant must perform before the date on
which Tenant vacates the Premises
(the “Vacation
Date”)
and
for
which Tenant is responsible under this Lease. If Tenant fails to perform
such work before the Vacation Date, then Landlord may perform such work at
Tenant’s cost. Tenant
shall pay all reasonable costs incurred by Landlord in performing such work
within thirty (30) days
after Landlord’s request therefor.
14. ASSIGNMENT
AND SUBLETTING.
(a)
Tenant shall not, without the prior written consent of Landlord, which consent
shall not be unreasonably withheld, delayed or conditioned: (1) advertise that
any portion of the Premises is available for lease or cause or allow any such
advertisement, (2) assign, transfer, or encumber this Lease or any estate or
interest herein, whether directly or by operation of law, (3) if Tenant is
an
entity other than a corporation whose stock is publicly traded, permit the
transfer of an ownership interest in Tenant so as to result in a change in
the
current control of Tenant, except in the event of a public offering of the
shares of Tenant, (4) sublet any portion of the Premises, (5) grant any license,
concession, or other right of occupancy of any portion of the Premises, or
(6)
permit the use of the Premises by any parties other than Tenant (any of the
events listed in Sections 14.(a)(2) through 14.(a)(6) being a "Transfer").
If
Tenant
requests Landlord’s consent to a Transfer, then Tenant shall provide Landlord
with a written description of all terms and conditions of the proposed Transfer,
copies of the proposed documentation, and the following information about the
proposed transferee: name and address; satisfactory information about its
business and business history; its proposed use of the Premises; banking,
financial, and other credit information; and general references sufficient
to
enable Landlord to determine the proposed transferee’s creditworthiness and
character. Tenant shall reimburse Landlord for its reasonable attorneys’ fees
(not to exceed $1,000.00) and other expenses incurred in connection with
considering any request for its consent to a Transfer. If Landlord consents
to a
proposed Transfer, then the proposed transferee shall deliver to Landlord a
written agreement whereby it expressly assumes the Tenant’s obligations
hereunder (however,
any transferee of less than all of the space in the Premises shall be liable
only for obligations under this Lease that are properly allocable to the space
subject to the Transfer, and only to the extent of the rent it has agreed to
pay
Tenant therefor). Landlord’s consent to a Transfer shall not release Tenant from
performing its obligations under this Lease, but rather Tenant and its
transferee shall be jointly and severally liable therefor. Landlord’s consent to
any Transfer shall not waive Landlord’s rights as to any subsequent Transfers.
If an Event of Default occurs while the Premises or any part thereof are subject
to a Transfer, then Landlord, in addition to its other remedies, may collect
directly from such transferee all rents becoming due to Tenant and apply such
rents against Tenant’s rent obligations. Tenant authorizes its transferees to
make payments of rent directly to Landlord upon receipt of notice from Landlord
to do so. Notwithstanding the foregoing, nothing in this section or this Lease
shall prevent the transfer of Tenant’s leasehold interest hereunder to an
affiliate of Tenant or to another entity by merger or other reorganization
or by
the sale of stock of Tenant or by the sale of all or substantially all of
Tenant’s assets.
9
(b) Tenant
hereby assigns, transfers and conveys fifty percent (50%) of the consideration
received by Tenant under any Transfer (other than a Permitted Transfer, as
defined below), which are in excess of the rents payable by Tenant under this
Lease (after the payment of all reasonable expenses related to the transfer,
including, but not limited to, leasing commissions, all concessions, including
tenant improvement allowances, and reasonable attorneys’ fees), and Tenant shall
hold such amounts in trust for Landlord and pay them to Landlord within thirty
(30) days after receipt.
(c) Notwithstanding
Section
14(a),
Tenant
may Transfer all or part of its interest in this Lease or all or part of the
Premises (a “Permitted
Transfer”)to
the
following types of entities (a
“Permitted
Transferee”)without
the written consent of Landlord:
(1) any
person or entity which, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with
Tenant;
(2) any
corporation, limited partnership, limited liability partnership, limited
liability company or other business entity in which or with which Tenant, or
its
corporate successors or assigns, is merged or consolidated, in accordance with
applicable statutory provisions governing merger and consolidation of business
entities, so long as (A) Tenant’s obligations hereunder are assumed by the
entity surviving such merger or created by such consolidation; and (B) the
Tangible Net Worth of the surviving or created entity is not less than the
Tangible Net Worth of Tenant as of the date of execution of this Lease;
or
(3) any
corporation, limited partnership, limited liability partnership, limited
liability company or other business entity acquiring all or substantially all
of
Tenant’s assets if such entity’s Tangible Net Worth after such acquisition is
not less than the Tangible Net Worth of Tenant as of the date of execution
of
this Lease.
Tenant
shall promptly notify Landlord of any such Permitted Transfer. Tenant shall
remain liable for the performance of all of the obligations of Tenant hereunder,
or if Tenant no longer exists because of a merger, consolidation, or
acquisition, the surviving or acquiring entity shall expressly assume in writing
the obligations of Tenant hereunder. Additionally, the Permitted Transferee
shall comply with all of the terms and conditions of this Lease, including
the
Permitted Use, and the use of the Premises by the Permitted Transferee may
not
violate any other agreements affecting the Premises, the Building or the
Project, Landlord or other tenants of the Project. No later than fifteen (15)
days after the effective date of any Permitted Transfer, Tenant agrees to
furnish Landlord with (A) copies of the instrument effecting any of the
foregoing Transfers, (B) documentation establishing Tenant’s satisfaction of the
requirements set forth above applicable to any such Transfer, and (C) evidence
of insurance as required under this Lease with respect to the Permitted
Transferee. The occurrence of a Permitted Transfer shall not waive Landlord’s
rights as to any subsequent Transfers. “Tangible
Net Worth”means
the
excess of total assets over total liabilities, in each case as determined in
accordance with generally accepted accounting principles consistently applied
(“GAAP”),excluding,
however, from the determination of total assets all assets which would be
classified as intangible assets under GAAP including goodwill, licenses,
patents, trademarks, trade names, copyrights, and franchises. Any subsequent
Transfer by a Permitted Transferee shall be subject to the terms of this
Section
14.
15.
CONDEMNATION.
If
more
than thirty percent (30%) 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
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 Lease by delivering to the other written notice thereof within
thirty (30) days after the Taking, in which case rent shall be abated during
the
unexpired portion of the Term, effective as of the date of such Taking. If
(a)
less than thirty percent (30%) of the Premises are subject to a Taking or (b)
the Taking does not 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 Lease, but the rent payable during the
unexpired portion of the Term shall be reduced or abated 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 have 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.
10
16.
SURRENDER
OF PREMISES, HOLDING OVER.
(a)
No
act by Landlord shall be an acceptance of a surrender of the Premises, and
no
agreement to accept a surrender of the Premises shall be valid unless it is
in
writing and signed by Landlord. At the end of the Term, early termination of
the
Term as provided herein or the termination of Tenant’s right to possess the
Premises, Tenant shall (1) deliver to Landlord the Premises with all
improvements located thereon in good repair and condition, reasonable wear
and
tear (subject however to Tenant’s maintenance obligations) and damage by fire or
other casualty excepted, and with the HVAC System and hot water equipment,
light
and light fixtures (including ballasts), and overhead doors and related
equipment in good working order, reasonable wear and tear and damage by fire
or
other casualty excepted (subject, however, to Tenant’s maintenance obligations),
(2) deliver to Landlord all keys to the Premises, and (3) remove all signage
placed on the Premises, the Building, or the Land by or at Tenant’s request. All
fixtures, alterations, additions, and improvements (whether temporary or
permanent) shall be Landlord’s property and shall remain on the Premises except
as provided in the next two sentences. Tenant may remove all trade fixtures,
furniture, and personal property placed in the Premises by Tenant and described
on Exhibit
"C" (but
Tenant shall not remove any such item which was paid for, in whole or in part,
by Landlord). Additionally, Tenant shall remove such alterations, additions,
improvements (except as otherwise provided in Section 6 of this Lease),
fixtures, equipment, voice and data wiring, furniture, and other property as
Landlord may request, provided such request is made not less than thirty (30)
days prior to the end of the Term. Notwithstanding anything to the contrary
contained herein, Tenant shall not remove the initial Improvements (as defined
in Exhibit
“B”).All
items
so requested to be moved which are not so removed shall, at the option of
Landlord, be deemed abandoned by Tenant and may be appropriated, sold, stored,
destroyed, or otherwise disposed of by Landlord without notice to Tenant and
without any obligation to account for such items and Tenant shall pay for the
reasonable costs incurred by Landlord in connection therewith. Any such
disposition shall not be considered a strict foreclosure or other exercise
of
Landlord’s rights in respect of the security interest granted under Section 26
below. All work required of Tenant under this Section 16.(a) shall be
coordinated with Landlord and be done in a good and workmanlike manner, in
accordance with all applicable Laws, and so as not to damage the Building or
unreasonably interfere with other tenants’ use of their premises. Tenant shall,
at its expense, repair all damage caused by any work performed by Tenant under
this Section 16.(a). Without limiting the generality of the foregoing, delivery
of the Premises in compliance with this Section 16.(a) shall require that Tenant
cause the following (which is not an exclusive list) to be true as of the date
of surrender:
(1) All
interior lights are operational and burning.
(2) All
exhaust, ceiling and overhead fans are operational.
(3) Intentionally
Deleted.
(4) Intentionally
Deleted.
(5) Intentionally
Deleted.
(6) All
electrical conduit and wiring installed by Tenant specifically for Tenant’s
equipment are removed to originating electrical panel if Landlord so requires.
Landlord shall notify Tenant of such request during the Drawing approval process
described in Exhibit
“B”.To
the
best of Landlord’s knowledge, the Premises does not contain any wiring or
electrical conduit as of the execution date of the Lease, other than those
related to exterior lights and house panels.
(7) Interior
and exterior doors are operational and in good condition.
(8) Any
bolts
secured to floor are cut off flush and sealed with epoxy.
(9) Intentionally
Deleted.
(10) All
furniture, trash and debris are removed.
(11) All
pictures, posters, signage, stickers and all similar items are removed from
all
walls, windows, doors and all other interior and exterior surfaces of the
Premises.
(12) Carpet
areas are vacuumed.
11
(13) All
uncarpeted office floors are swept and any excess wax buildup on tile and vinyl
floors is removed.
(14) All
Tenant installed computer cable is removed to point of origin. Landlord shall
notify Tenant of such request during the Drawing approval process described
in
Exhibit
“B”.
To
the
best of Landlord’s knowledge upon reasonable inquiry, the Premises does not
contain any computer cable as of the execution date of the Lease.
(15) All
doors, windows, and miscellaneous hardware are operational if Landlord so
requires.
(16) All
heating, air conditioning and mechanical equipment is operational and in good
working condition.
(17) Ceiling
tiles, grid, light lenses, air grills and diffusers are in place with no
holes
or
stains.
(18) There
are
no broken windows or other broken glass items.
(19) Bathroom
walls, floors, and fixtures are clean.
(20) All
plumbing fixtures are intact and operational and do not leak.
(21) Inside
walls are reasonably clean and any holes in the walls or roof are properly
and
permanently patched.
(b)
If
Tenant fails to vacate the Premises at the end of the Term, then Tenant shall
be
a Tenant at will and Tenant shall pay, in addition to the other rent due
hereunder, a daily base rental equal to one hundred twenty-five percent (125%)
of the daily Base Rent payable during the last month of the Term. Additionally,
Tenant shall defend, indemnify, and hold harmless Landlord from any actual
and
direct, but not consequential damage, liability and expense (including
reasonable attorneys’ fees and expenses) incurred because of such holding over.
No payments of money by Tenant to Landlord after the Term shall reinstate,
continue or extend the Term, and no extension of this Term shall be valid unless
it is in writing and signed by Landlord and Tenant. For purposes of this Section
16.(b), the loss of a tenant or potential tenant (collectively, “Third
Party Tenant”)
and the
rents payable by such Third Party Tenant due to Tenant’s failure to vacate the
Premises at the expiration of the Term shall be deemed actual damages for which
Tenant’s indemnity shall apply. To enforce the indemnity provisions set forth
above, Landlord must provide evidence of such loss by providing Tenant with
a
copy (redacted as necessary to comply with the confidentiality provisions of
such lease, provided that information necessary to confirm monetary losses
shall
not be redacted) of the lease executed by the Third Party Tenant.
17. QUIET
ENJOYMENT.
Provided
Tenant has fully performed its obligations under this Lease, Tenant shall
peaceably and quietly hold and enjoy the Premises for the Term, without
hindrance from any party claiming by, through, or under Landlord.
18. EVENTS
OF DEFAULT.
Each
of
the following events shall constitute an "Event
of Default"
under
this Lease:
(a)
Tenant fails to pay any rent when due and such failure shall continue for five
(5) days following written notice thereof from Landlord to Tenant; provided,
however, Landlord shall be obligated to send only two (2) such written notices
of default to Tenant in any calendar year during the Term, and after two (2)
such written notices has been sent to Tenant in any calendar year, it shall
be
an Event of Default if Tenant fails to pay any rent or other amount due
hereunder when due without notice.
(b) The
filing of a petition by or against Tenant or any guarantor of Tenant’s
obligations hereunder (1) in any bankruptcy or other insolvency proceeding;
(2)
seeking any relief under any debtor relief Law; (3) for the appointment of
a
liquidator, receiver, trustee, custodian, or similar official for all or
substantially all of Tenant’s property or for Tenant’s interest in this Lease;
or (4) for reorganization or modification of Tenant’s capital structure
(however, if any such petition is filed against Tenant, then the filing of
such
petition shall not constitute an Event of Default, unless it is not dismissed
within 60 days after the filing thereof).
(c) Tenant
fails to discharge any lien placed upon the Premises in violation of Section
22
below within thirty (30) days after any such lien or encumbrance is filed
against the Premises.
12
(d)
Tenant fails to comply with any term, provision or covenant of this Lease (other
than those listed above in this Section 18), and such failure continues for
thirty (30) days after written notice thereof to Tenant, except that if Tenant
begins to cure its failure within the thirty (30) day period but cannot
reasonably complete its cure within such period, then so long as Tenant
continues to diligently attempt to cure its failure to completion, the thirty
(30) day period shall be extended to such period as reasonably necessary to
complete the cure.
19.
REMEDIES.
(a) Upon
any
Event of Default, Landlord may, in addition to all other rights and remedies
afforded Landlord hereunder or by Law, take any of the following
actions:
(1) Terminate
this Lease by giving, Tenant written notice thereof, in which event, Tenant
shall pay to Landlord the sum of (A) all rent accrued hereunder through the
date
of termination, (B) all amounts due under Section 19.(b) below, and (C) an
amount equal to (i) the total rent that Tenant would have been required to
pay
for the remainder of the Term discounted to a present value at a per annum
rate
equal to the "Prime
Rate"
as
published on the date this Lease is terminated by The Wall Street Journal,
Southwest Edition, in its listing of "Money
Rates",minus
(ii) the then present fair rental value of the Premises for such period,
similarly discounted; or
(2) Terminate
Tenant’s right to possess the Premises without terminating this Lease by giving
written notice thereof to Tenant, in which event Tenant shall pay to Landlord
(A) all rent and other amounts accrued hereunder to the date of termination
of
possession, (B) all amounts due from time to time under Section 19.(b) below,
and (C) all rent and other sums required hereunder to be paid by Tenant during
the remainder of the Term, diminished by any net sums thereafter received by
Landlord through reletting the Premises during such period; however, Landlord
shall not be obligated to relet the Premises and shall not be liable for, nor
shall Tenant’s obligations hereunder be diminished because of, Landlord’s
failure to relet the Premises or to collect rent due for a reletting. Tenant
shall not be entitled to the excess of any consideration obtained by reletting
over the rent due hereunder. Reentry by Landlord in the Premises shall not
affect Tenant’s obligations hereunder for the unexpired Term; rather, Landlord
may, from time to time, bring action against Tenant to collect amounts due
by
Tenant, without the necessity of Landlord’s waiting until the expiration of the
Term. Unless Landlord delivers written notice to Tenant expressly stating that
it has elected to terminate this Lease, all actions taken by Landlord to exclude
or dispossess Tenant of the Premises shall be deemed to be taken under this
Section 19.(a)(2). If Landlord elects to proceed under this Section 19.(a)(2),
it may at any time elect to terminate this Lease under Section 19.(a)(1)
above.
Additionally,
without notice, Landlord may alter locks or other security devices at the
Premises to deprive Tenant of access thereto, and except as required by
applicable law, Landlord shall not be required to provide a new key or right
of
access to Tenant; provided, however, that Landlord shall provide Tenant
reasonable access to remove its personal property as provided in Section 16
hereof.
(b) Tenant
shall pay to Landlord all costs and expenses incurred by Landlord (including
court costs and reasonable attorneys’ fees and expenses) in (1) obtaining
possession of the Premises,
(2) removing and storing Tenant’s or any other occupant’s property, (3)
repairing, restoring, and reasonable
costs for altering, remodeling, or otherwise putting the Premises into condition
acceptable to a new
tenant, (4) if Tenant is dispossessed of the Premises and this Lease is not
terminated, reletting all or any
part
of the Premises (including brokerage commissions, cost of tenant finish work,
and other reasonable
costs incidental to such reletting), (5) performing Tenant’s obligations which
Tenant failed to perform,
and (6) enforcing, or advising Landlord of, its rights, remedies, and recourses.
Landlord’s acceptance
of rent following an Event of Default shall not waive Landlord’s rights
regarding such Event of
Default. Landlord’s receipt of rent with knowledge of any default by Tenant
hereunder shall not be a waiver
of
such default, and no waiver by Landlord of any provision of this Lease shall
be
deemed to have been
made
unless set forth in writing and signed by Landlord. No waiver by Landlord of
any
violation or breach
of
any of the terms contained herein shall waive Landlord’s rights regarding any
future violation of such
term
or violation of any other term. If Landlord repossesses the Premises pursuant
to
the authority herein
granted, then Landlord shall have the right after notice to Tenant and a
reasonable opportunity for Tenant
to
remove the property described on Exhibit
"C" to
(A)
keep in place and use or (B) remove and store,
at
Tenant’s expense, all of the furniture, fixtures, equipment and other property
deemed abandoned by
Tenant
in the Premises, including that which is owned by or leased to Tenant at all
times before any repossession
thereof by any lessor thereof or third party having a lien thereon. Landlord
may
relinquish possession
of all or any portion of such furniture, fixtures, equipment and other property
to any person (a "Claimant")
who
presents to Landlord a copy of any instrument represented by Claimant to have
been executed
by Tenant (or any predecessor of Tenant) granting Claimant the right under
various circumstances
to take possession of such furniture, fixtures, equipment or other property,
without the necessity
on the part of Landlord to inquire into the authenticity or legality of the
instrument. The rights of
Landlord herein stated are in addition to any and all other rights that Landlord
has or may hereafter have at law or in equity, and Tenant agrees that the rights
herein granted Landlord are commercially reasonable. In the event of Tenant’s
default which is not cured within applicable cure periods, Landlord agrees
to
use its commercially reasonable efforts to mitigate the damages on account
of
such default (provided that Landlord shall not be obligated to relet the
Premises prior to other available space in the Project).
13
20. LANDLORD’S
DEFAULT.
If
Landlord fails to perform any of
its
obligations hereunder
within thirty (30) days after written notice from Tenant specifying such
failure, Tenant’s exclusive
remedy shall be an action for damages. Unless Landlord fails to so cure such
default after such notice,
Tenant shall not have any remedy or cause of action by reason thereof. In the
event Landlord or Tenant
shall be delayed, hindered or prevented from the performance of any act required
hereunder of Landlord
or Tenant by reason of acts of God, strikes, labor disputes of non-affiliated
suppliers, weather, labor
troubles of non-affiliated suppliers, inability to procure materials, the acts
of Tenant or other causes beyond
the reasonable control of Landlord or Tenant (other than with respect to the
payment of rent), then the
performance of such act shall be excused for the period of the delay and the
period for the performance
of any such act shall be extended for a period equivalent to the period of
such
delay. The liability
of Landlord (and its partners, shareholders or members) to Tenant (or any person
or entity claiming
by, through or under Tenant) for any default by Landlord under the terms of
this
Lease or any matter
relating to or arising out of the occupancy or use of the Premises and/or other
areas of the Building or
Project shall be limited to Tenant’s actual direct, but not consequential,
damages therefor and shall be recoverable
only from the interest of Landlord in the Building, and Landlord (and its
partners, shareholders
or members) shall not be personally liable for any deficiency. For purposes
of
this Section
20,
the
phrase “the
interest of Landlord in the Building” shall include Landlord’s interest
in insurance proceeds
and condemnation proceeds, subject to the rights of any Landlord’s Mortgagee.
Additionally, to the
extent allowed by law, Tenant hereby waives any statutory lien it may have
against Landlord or its assets,
including without limitation, the Building.
Notwithstanding
the foregoing, if Landlord fails to make any repairs or to perform any
maintenance required of Landlord hereunder and within Landlord’s reasonable
control, and such failure shall persist for thirty (30) days after written
notice of the need for such repairs or maintenance is given to Landlord and
unless Landlord has commenced such repairs or maintenance during such period
and
is diligently pursuing the same, Tenant may (but shall not be required to)
following a second notice (which notice shall have a heading in at least
12-point type, bold and all caps “FAILURE
TO RESPOND SHALL RESULT IN TENANT EXERCISING SELF-HELP
RIGHTS”)
and
Landlord’s failure to commence repairs within five (5) days after receipt of
such second notice, perform such repairs or maintenance in accordance with
the
provisions of this Lease governing Tenant’s repairs and Alterations and Landlord
shall reimburse Tenant for all reasonable costs and expenses therefor within
thirty (30) days after presentation of appropriate invoices and back-up
documentation.
21. MORTGAGES.
(a) This
Lease shall be subordinate to any deed of trust, mortgage or other security
instrument (a "Mortgage"),
and
any
ground lease, master lease, or primary lease (a "Primary
Lease")
that
now
or hereafter covers any portion of the Premises (the mortgagee under any
Mortgage or the lessor under any Primary Lease is referred to herein as
"Landlord’s
Mortgagee"),
and
to
increases, renewals, modifications, consolidations, replacements, and extensions
thereof. However, any Landlord’s Mortgagee may elect to subordinate its Mortgage
or Primary Lease (as the case may be) to this Lease by delivering written notice
thereof to Tenant. The provisions of this Section 21 shall be self-operative,
and no further instrument shall be required to effect such subordination;
however, Tenant shall from time to time within ten days after request therefor,
execute any instruments that may be required by any Landlord’s Mortgagee to
evidence the subordination of this Lease to any such Mortgage or Primary Lease.
If Tenant fails to execute the same within such ten-day period, Landlord may
execute the same as attorney-in-fact for Tenant. Notwithstanding the foregoing,
the subordination of this Lease to future Mortgages shall be subject to Tenant’s
receipt of a non-disturbance agreement reasonably acceptable to Tenant which
provides in substance that so long as Tenant is not in default under the Lease
past applicable cure periods, its use and occupancy of the Premises shall not
be
disturbed notwithstanding any default of Landlord under such
Mortgage.
(b) Tenant
shall attorn to any party succeeding to Landlord’s interest in the Premises,
whether by purchase, foreclosure, deed in lieu of foreclosure, power of sale,
termination of lease, or otherwise, upon such party’s request, and shall execute
such agreements confirming such attornment as such party may reasonably request.
Tenant shall not seek to enforce any remedy it may have for any default on
the
part of Landlord without first giving written notice by certified mail, return
receipt requested, specifying the default in reasonable detail to any Landlord’s
Mortgagee whose address has been given to Tenant, and affording such Landlord’s
Mortgagee an opportunity to perform Landlord’s obligations hereunder during any
period expressly allowed Landlord hereunder.
14
(c) Notwithstanding
any such attornment or subordination of a Mortgage or Primary Lease to this
Lease, the Landlord’s Mortgagee shall not be liable for any acts of any previous
landlord, shall not be obligated to install the Initial Improvements, and shall
not be bound by any amendment to which it did not consent in writing nor any
payment of rent made more than one month in advance.
(d) Tenant
agrees to execute a Subordination, Non-Disturbance and Attornment Agreement
in
the form of Exhibit
"F" attached
hereto at the time of execution of this Lease. Landlord agrees that it will
use
good faith efforts to cause Landlord’s Mortgagee to execute such
SNDA.
22. ENCUMBRANCES.
Tenant
has no authority, express or implied, to create or place any lien
or
encumbrance of any kind or nature whatsoever upon, or in any manner to bind
Landlord’s property or
the
interest of Landlord or Tenant in the Premises or the Building or to charge
the
rent for any claim in favor
of
any person dealing with Tenant, including those who may furnish materials or
perform labor for any
construction or repairs. Tenant shall pay or cause to be paid all sums due
for
any labor performed or materials
furnished in connection with any work performed on the Premises by or at the
request of Tenant.
Tenant shall give Landlord immediate written notice of the placing of any lien
or encumbrance against
the Premises.
23. MISCELLANEOUS.
(a) Words
of
any gender used in this Lease shall include any other gender, and words in
the
singular shall include the plural, unless the context otherwise requires. The
captions inserted in this Lease are for convenience only and in no way affect
the interpretation of this Lease. The following terms shall have the following
meanings: "Laws"
shall
mean all federal, state, and local laws, rules, and regulations; all court
orders, governmental directives, and governmental orders; and all restrictive
covenants affecting Tenant or the Premises, and "Law"
shall
mean any of the foregoing; "affiliate"
shall
mean any person or entity which, directly or indirectly, controls, is controlled
by, or is under common control with the party in question; and "Tenant
Party"
shall
include Tenant, any assignees claiming by, through, or under Tenant, any
subtenants claiming by, through, or under Tenant, and any of their respective
agents, contractors, employees, and invitees.
(b) Landlord
may transfer and assign, in whole or in part, its rights and obligations in
the
Building and property that are the subject of this Lease, in which case Landlord
shall have no further liability hereunder provided that Landlord’s assignee
assumes all of Landlord’s obligations under this Lease. Each party shall furnish
to the other, promptly upon demand, a corporate resolution, proof of due
authorization by partners, or other appropriate documentation evidencing the
due
authorization of such party to enter into this Lease.
(c) Tenant
shall, from time to time, within twenty (20) days after request of Landlord,
deliver to Landlord, or Landlord’s designee, financial statements (provided that
so long as Tenant is a public company for which such financial statements are
available on the internet for no fee, then Tenant shall not be obligated to
deliver same), evidence reasonably satisfactory to Landlord that Tenant has
performed its obligations under this Lease including evidence of the payment
of
the Security Deposit), and an estoppel certificate stating that this Lease
is in
full effect, the date to which rent has been paid, the unexpired Term and such
other factual matters pertaining to this Lease as may be reasonably requested
by
Landlord. If Tenant becomes a private entity during the Term of the Lease,
then
Tenant shall not be required to deliver annual financial statements to Landlord
more than two (2) times per calendar year. Tenant shall be entitled to make
such
qualifications in such estoppel certificate as are necessary to make it
factually accurate. Tenant’s obligation to furnish the above-described items in
a timely fashion is a material inducement for Landlord’s execution of this
Lease. If Tenant fails to execute any such estoppel certificate within such
twenty (20) day period, Landlord may do so as attorney-in-fact for
Tenant.
(d) This
Lease constitutes the entire agreement of the Landlord and Tenant with respect
to the subject matter of this Lease, and contains all of the covenants and
agreements of Landlord and Tenant with respect thereto. Landlord and Tenant
each
acknowledge that no representations, inducements, promises or agreements, oral
or written, have been made by Landlord or Tenant, or anyone acting on behalf
of
Landlord or Tenant, which are not contained herein, and any prior agreements,
promises, negotiations, or representations not expressly set forth in this
Lease
are of no effect. This Lease may not be altered, changed or amended except
by an
instrument in writing signed by both parties hereto.
(e) All
obligations of Tenant hereunder not fully performed by the end of the Term
shall
survive, including, without limitation, all payment obligations with respect
to
Taxes and insurance and all obligations concerning the condition and repair
of
the Premises. Landlord’s obligations, including Landlord’s obligation to return
the Security Deposit shall survive the expiration of the Term. Tenant shall,
prior to vacating the Premises, pay to Landlord the prorated amount, as
estimated by Landlord, of Tenant’s obligation hereunder for Operating Expenses
for the year in which the Term ends. All such amounts shall be used and held
by
Landlord for payment of such obligations of Tenant hereunder, with Tenant being
liable for any additional costs therefor upon demand by Landlord or with any
excess to be returned to Tenant after all such obligations have been determined
and satisfied as the case may be (and such obligation shall survive the
expiration or termination of this Lease). Any Security Deposit held by Landlord
may be credited against the amount due by Tenant under this Section
23(e).
15
(f) If
any
provision of this Lease is illegal, invalid or unenforceable, then the remainder
of this Lease shall not be affected thereby, and in lieu of each such provision,
there shall be added, as a part of this Lease, a provision as similar in terms
to such illegal, invalid or unenforceable clause or provision as may be possible
and be legal, valid and enforceable.
(g) All
references in this Lease to "the
date hereof"
or
similar references shall be deemed to refer to the last date, in point of time,
on which all parties hereto have executed this Lease.
(h) Landlord
and Tenant each warrant to the other that it has not dealt with any broker
or
agent in connection with this Lease except for Xxxxxxx & Xxxxxxxxx of Texas,
Inc. ("Broker").The
Commission Agreement between Landlord and the Broker is attached hereto as
Exhibit
"L" and
made
a part hereof for all purposes. Tenant and Landlord shall each indemnify the
other
against all costs, attorneys’ fees, and other liabilities for commissions or
other compensation claimed
by any broker or agent claiming the same by, through, or under the indemnifying
party. Landlord shall
pay
Broker a real estate commission pursuant to the terms and conditions of the
Commission Agreement.
(i) If
and
when included within the term "Tenant",as
used
in this instrument, there is
more
than one person, firm or corporation, all shall jointly arrange among themselves
for their joint execution
of a notice specifying an individual at a specific address within the
continental United States for the
receipt of notices and payments to Tenant. All parties included within the
terms
"Landlord"
and
"Tenant",respectively,
shall be bound by notices given in accordance with the provisions of Section
24
to
the
same effect as if each had received such notice.
(j)
The
terms and conditions of this Lease are confidential and neither Landlord nor
Tenant shall disclose the terms of this Lease to any third party except as
may
be required by law or to enforce its rights hereunder.
(k)
Tenant shall pay interest on all past-due rent from the date due until paid
at
the lesser of: (i) the maximum lawful rate; or (ii) twelve percent (12%) per
annum. Notwithstanding the foregoing, the interest referenced above shall not
be
charged with respect to the first two (2) occurrences (but may be charged for
any subsequent occurrence) during any twelve-month period that Tenant fails
to
make payment when due, until five (5) days after Landlord delivers written
notice of such delinquency to Tenant.
(l)
This
Lease may be executed in any number of counterparts, each of which shall be
an
original, but such counterparts together shall constitute one and the same
instrument.
(m)
TO
THE
MAXIMUM EXTENT PERMITTED BY LAW, LANDLORD AND TENANT EACH WAIVE ANY RIGHT TO
TRIAL BY JURY IN ANY LITIGATION OR TO HAVE A JURY PARTICIPATE IN RESOLVING
ANY
DISPUTE ARISING OUT OF OR WITH RESPECT TO THIS LEASE OR ANY
OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH.
(n)
Tenant represents and warrants as follows:
(i) Tenant
represents and warrants to, and covenants with, Landlord that Tenant
currently is not, and shall not be at any time during the Term hereof, in
violation of any laws relating
to terrorism or money laundering (collectively, the “Anti-Terrorism
Laws”),
including
without limitation
Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001
and relating to
Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten
to Commit, or Support
Terrorism (the “Executive
Order”)
and/or
the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law
107-56) (the “USA
Patriot Act”).
(ii) Tenant
covenants with Landlord that neither Tenant nor any of its respective
constituent owners or affiliates is or shall be during the Term hereof a “Prohibited
Person,” which
is
defined as follows: (A) a person or entity that is listed in the Annex to,
or is
otherwise subject to,
the
provisions of the Executive Order; (B) a person or entity owned or controlled
by, or acting for or on
behalf
of, any person or entity that is listed in the Annex to, or is otherwise subject
to the provisions of,
the
Executive Order; (C) a person or entity with whom Landlord is prohibited from
dealing with or otherwise
engaging in any transaction by any Anti-Terrorism Law, including without
limitation the Executive
Order and the USA Patriot Act; (D) a person or entity who commits, threatens
or
conspires to commit or support “terrorism”
as defined in Section 3(d) of the Executive Order; (E) a person or entity that
is named as a “specially
designated national and blocked person” on the then-most current list
published by the U.S. Treasury Department Office of Foreign Assets Control
at
its official website, xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxx/xxxx/xxx/x00xxx.xxx,
or
at any
replacement website or other replacement official publication of such list;
and
(F) a person or entity who is affiliated with a person or entity listed in
items
(A) through (E), above.
16
(iii)
At
any time and from time-to-time during the Term, Tenant shall deliver to
Landlord, within ten (10) days after receipt of a written request therefor,
a
written certification or such other evidence reasonably acceptable to Landlord
evidencing and confirming Tenant’s compliance with this Section
23(n).
(o)
Landlord shall pay interest on all funds payable to Tenant which are past-due,
from the date due until paid at the lesser of: (i) the maximum lawful rate;
or
(ii) twelve percent (12%) per annum. Notwithstanding the foregoing, the interest
referenced above shall not be charged with respect to the first two (2)
occurrences (but may be charged for any subsequent occurrence) during any twelve
month period that Landlord fails to make payment when due, until five (5) days
after Tenant delivers written notice of such delinquency to
Landlord.
24. NOTICES.
Each
provision of this instrument or of any applicable Laws and other requirements
with reference to the sending, mailing or delivering of notice or the making
of
any payment hereunder
shall be deemed to be complied with when and if the following steps are taken:
(a) All
rent
shall be payable to Landlord at the address for Landlord set forth below or
at
such other address as Landlord may specify from time to time by written notice
delivered in accordance herewith. Tenant’s obligation to pay rent shall not be
deemed satisfied until such rent has been actually received by
Landlord.
(b) All
payments required to be made by Landlord to Tenant hereunder shall be payable
to
Tenant at the address set forth below, or at such other address within the
continental United States as Tenant may specify from time to time by written
notice delivered in accordance herewith. Landlord’s obligation to make a payment
shall not be deemed satisfied until such payment has actually been received
by
Tenant.
(c) Any
written notice or document required or permitted to be delivered hereunder
shall
be deemed to be delivered upon the earlier to occur of (1) tender of delivery
(in the case of a hand delivered notice), (2) deposit in the United States
Mail,
postage prepaid, certified mail, return receipt requested, or (3) receipt by
facsimile transmission, in each case, addressed to the parties hereto at the
respective addresses set out below, or at such other address as they have
theretofore specified by written notice delivered in accordance herewith. If
Landlord has attempted to deliver notice to Tenant at Tenant’s address reflected
on Landlord’s books but such notice was returned or acceptance thereof was
refused, then Landlord may post such notice in or on the Premises, which notice
shall be deemed delivered to Tenant upon the posting thereof.
25. HAZARDOUS
WASTE.
The
term
"Hazardous
Substances",
as
used
in this Lease, shall
mean pollutants, contaminants, toxic or hazardous wastes, or any other
substances, the removal of which
is
required or the use of which is restricted, prohibited or penalized by any
"Environmental
Law",
which
term shall mean any Law relating to health, pollution, or protection of the
environment. Tenant
hereby agrees that (a) no activity will be conducted on the Premises that will
produce any Hazardous
Substances, except for such activities that are part of the ordinary course
of
Tenant’s business activities
(the "Permitted
Activities")provided
such Permitted Activities are conducted in accordance with
all
Environmental Laws and have been approved in advance in writing by Landlord;
(b)
the Premises will
not
be used in any manner for the storage of any Hazardous Substances except for
any
temporary storage
of such materials that are used in the ordinary course of Tenant’s business (the
"Permitted
Materials")provided
such Permitted Materials are properly stored in a manner and location satisfying
all Environmental
Laws and approved in advance in writing by Landlord; (c) no portion of the
Premises will be
used
as a landfill or a dump; (d) Tenant will not install any underground tanks
of
any type; (e) Tenant will
not
cause any surface or subsurface conditions to exist or come into existence
that
constitute, or with the
passage of time may constitute a public or private nuisance; and (f) Tenant
will
not permit any Hazardous
Substances to be brought onto the Premises, except for the Permitted Materials,
and if so brought
or found located thereon, the same shall be immediately removed by Tenant,
with
proper disposal,
and all required cleanup procedures shall be diligently undertaken pursuant
to
all Environmental Laws.
If
at any time during or after the Term, the Premises are found to be so
contaminated or subject to such
conditions as a result of Tenant’s use of the Premises or breach of this Lease,
Tenant shall defend, indemnify
and hold Landlord harmless from all claims, demands, actions, liabilities,
costs, expenses, damages
and obligations of any nature arising from or as a result of the use of the
Premises by Tenant. Unless
expressly identified on an addendum to this Lease, as of the date hereof there
are no "Permitted
Activities"or
"Permitted
Materials"for
purposes of the foregoing provision and none shall exist unless and until
approved in writing by the Landlord. Landlord may enter the Premises, upon
reasonable notice to Tenant, and conduct environmental inspections and tests
therein as it may require from time to time, provided that Landlord shall use
reasonable efforts to minimize the interference with Tenant’s business. Such
inspections and tests shall be conducted at Landlord’s expense, unless they
reveal the presence of Hazardous Substances (other than Permitted Materials)
not
present in the Premises at the Commencement Date and caused by Tenant or a
Tenant Party, or that Tenant has not complied with the requirements set forth
in
this Section 25, in which case Tenant shall reimburse Landlord for the
reasonable cost thereof within thirty (30) days after Landlord’s request
therefor. Nothing in this Section shall require Tenant to indemnify Landlord
for
any matters arising out of or caused by the actions or omissions of Landlord,
its employees, agents, contractors, licensees, or invitees. If applicable
governmental agencies require the removal of Hazardous Substances that were
not
caused by Tenant or a Tenant Party, then Landlord shall cause such removal
in
accordance with applicable Environmental Laws at no cost to Tenant. If the
Premises are untenantable during such remediation, then rent shall xxxxx during
such period of untenantability.
17
26.
WAIVER
OF LANDLORD’S LIEN.
Landlord
hereby waives any and all landlord’s liens (whether arising under statute, or
constitution or otherwise) upon the property of Tenant situated in the Premises
from time to time, and agrees that upon Tenant’s request Landlord shall execute
Landlord’s standard form of landlord waiver. If Tenant or its lender requests
changes to Landlord’s form or for Landlord to use a different form, then Tenant
shall reimburse Landlord its reasonable attorneys’ fee in connection
therewith.
TENANT
ACKNOWLEDGES THAT (1) NO REPRESENTATIONS AS TO THE REPAIR OF THE
PREMISES, NOR PROMISES TO ALTER, REMODEL OR IMPROVE THE PREMISES HAVE
BEEN
MADE
BY LANDLORD (EXCEPT AS MAY BE SET FORTH IN EXHIBIT
"B" ATTACHED
TO THIS LEASE), AND (2) THERE ARE NO REPRESENTATIONS OR WARRANTIES, EXPRESSED,
IMPLIED OR STATUTORY, THAT EXTEND BEYOND THOSE EXPRESSLY STATED
IN
THIS LEASE, IF ANY.
[Signature
page follows]
18
EXECUTED
by
Tenant on July ____, 2008
|
|||
TENANT:
|
|||
Hallmark
Financial Services, Inc.,
|
|||
a
Nevada corporation
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
Address:
|
______________________________ | ||
Telephone:
|
______________________________ | ||
Fax:
|
______________________________ | ||
EXECUTED
by
Landlord on July ____, 2008
|
|||
LANDLORD:
|
|||
Legacy
Tech IV Associates Limited Partnership,
|
|||
a
Delaware limited partnership
|
|||
By:
|
Lincoln
Legacy Tech IV, Ltd.,
|
||
a
Texas limited partnership,
|
|||
its
General Partner
|
|||
|
By:
Lincoln
GP Legacy Tech IV, Inc.,
|
||
a
Texas corporation,
|
|||
its
General Partner
|
|||
By:
|
|||
Name:
Xxxxxx X. Xxxxxxxx
|
|||
Title:
Vice President
|
|||
Address:
|
0000 Xxxxxxx Xxxxx
|
||
000 Xxxxx Xxxxx
|
|||
Xxxxxx, Xxxxx 00000
|
|||
Telephone:
|
(000)
000-0000
|
||
Fax:
|
(000)
000-0000
|
Page
19
EXHIBIT
"A"
LINCOLN
R&D LEGACY PHASE FOUR
Plano,
Texas
Approximately
16,814 square feet
SITE
PLAN OF PREMISES
(Building
I - 58,100 square feet)
Page
20

Page
21
EXHIBIT
“A-1”
THE
LAND
Being
a
tract of land containing 16.1979 acres situated in the XXXXX X. XXXX SURVEY,
ABSTRACT XX. 000, Xxxx xx Xxxxx, Xxxxxx Xxxxxx, Xxxxx, being Xxx 0, Xxxxx A
of
LINCOLN R&D IN LEGACY, PHASE IV, an addition to the City of Plano, Texas,
according to the plat recorded in Volume 2007, Page 470, Map Records, Collin
County, Texas, and being more particularly described as
follows:
BEING
of
a
tract of land out of the XXXXX X. XXXX SURVEY, Abstract No. 935, in the City
of
Plano, Collin County, Texas, being part of the 27.69 acre tract of land
described as Tract 9 in deed to West Plano Land Company, LP, recorded in Collin
County Clerk's File No. 20060920001358250 of the Land Records of Collin County,
Texas, being all of Xxx 0, Xxxxx A of Lincoln R&D In Legacy, Phase IV, Lots
1 and 2, Block A, an addition to the City of Plano according to the plat thereof
recorded in Cabinet 2007, Page 470 of the Map Records of Collin County, Texas
and being more particularly described as follows:
BEGINNING
at
an
aluminum monument in concrete found in the east right-of-way line of Pinecrest
Drive (60' ROW at this point) for the southwest corner of Lincoln R&D in
Legacy, Phase III, an addition to the City of Plano according to the plat
thereof recorded in Cabinet 2006, Page 783 of the Map Records of Collin County,
Texas;
THENCE
with
the
south line of said Lincoln R&D in Legacy, Phase III, North 89 degrees 51
minutes 50 seconds East, a distance of 520.57 feet to an aluminum monument
in
concrete found in the west line of Lincoln R&D in Legacy, Phase II, an
addition to the City of Plano according to the plat thereof recorded in Cabinet
N, Page 113 of the Map Records of Collin County, Texas;
THENCE
with
said
west line, South 00 degrees 07 minutes 20 seconds East, a distance of 359.07
feet to a 5/8" iron rod found for corner;
THENCE
with
the
south line of said Lincoln R&D in Legacy, Phase II, North 89 degrees 49
minutes 36 seconds East, a distance of 144.89 feet to a 1/2" iron rod found
for
the northwest corner of said Lincoln R&D in Legacy, Phase
I;
THENCE
with
the
west line of said Lincoln R&D in Legacy, Phase I, South 00 degrees 07
minutes 04 seconds East, a distance of 758.65 feet to a 5/8" iron rod set with
a
plastic cap stamped "KHA" (hereinafter called 5/8" iron rod
set);
THENCE
leaving
the west line of said Lincoln R&D in Legacy, Phase I, the following courses
and distances to wit:
South
89
degrees 52 minutes 56 seconds West, a distance of 716.44 feet to a 5/8" iron
rod
set for corner;
North
56
degrees 10 minutes 33 seconds West, a distance of 46.83 feet to a 5/8" iron
rod
set in the east right-of-way line of said Pinecrest Drive for the beginning
of a
non-tangent curve to the left with a radius of 1006.00 feet, a central angle
of
24 degrees 26 minutes 52 seconds, and a chord bearing and distance of North
12
degrees 05 minutes 14 seconds East, 426.01 feet;
THENCE
with
said
east right-of-way line, the following courses and distances to wit:
Northeasterly,
with said curve, an arc distance of 429.26 feet to a 5/8" iron rod found for
corner;
North
00
degrees 08 minutes 22 seconds West, a distance of 674.89 feet to the
POINT
OF BEGINNING and
containing 705,581 square feet or 16.1979 acres of land.
Page
22
EXHIBIT
"B"
CONSTRUCTION
AGREEMENT
1. Plans.
(a) Drawings.
Tenant
shall cause its space planner to prepare all plans and specifications (the
"Drawings")
necessary
to construct the interior improvements of the Premises (the "Improvements").
The
initial Drawings shall be delivered to Landlord as soon as reasonably
practicable after the execution of this Lease, provided that if the Drawings
are
not delivered to Landlord by August 8, 2008, each day thereafter that the
Drawings are not delivered to Landlord shall be considered a day of Tenant
Delay. Landlord shall notify Tenant in writing whether it approves of the
submitted Drawings within seven (7) days after Tenant's submission thereof,
which approval shall not be unreasonably withheld, delayed or conditioned.
If
Landlord disapproves of such Drawings, then Landlord shall notify Tenant in
writing thereof specifying in detail the reasons for such disapproval, in which
case, Tenant shall correct the submitted Drawings and deliver them to Landlord
for its approval within ten (10) days after Tenant receives Landlord's notice
disapproving the submitted drawings. Landlord shall have five (5) days to
approve or disapprove any resubmitted Drawings in writing, and Tenant shall
have
five (5) days to correct any such resubmitted Drawings disapproved by Landlord.
This process shall be repeated until the Drawings have been finally approved.
If
Landlord fails to notify Tenant as set forth above that it disapproves of the
initial Drawings within seven (7) days or any resubmitted Drawings within five
(5) days after the submission thereof, then Landlord shall be deemed to have
approved the Drawings.
(b) Changes.
After
approval of the Drawings, Landlord and Tenant shall initial the Drawings in
question. Tenant may from time to time request changes to the Drawings by
delivering written notice to Landlord, specifying in detail the requested
change, which change shall be subject to the prior written approval of Landlord,
which approval shall not be unreasonably withheld, delayed or conditioned.
If
Tenant requests any changes to any submitted Drawings, then (1) before any
such
change will be made, Tenant shall pay, or receive a credit against the Allowance
(as defined below) for, the difference between (A) all additional costs in
designing and constructing the Improvements as a result of any such changes
and
(B) any reductions in costs in designing and constructing the Improvements
realized in connection with other change orders and (2) all delays in designing
and constructing the Improvements caused by such changes shall not delay the
Commencement Date.
2. Construction
of Improvements. Landlord agrees that it will
obtain bids from four (4) contractors (two (2) of which are selected by Landlord
and reasonably acceptable to Tenant, and two (2) of which are selected by Tenant
and reasonably acceptable to Landlord) for the construction of the Improvements
and the contractor to be used shall be selected from these four (4) contractors
and mutually acceptable to Landlord and Tenant. Landlord shall diligently
construct the Improvements in accordance with the Drawings in a good and
workmanlike manner using building standard materials unless otherwise specified
in the Drawings and in compliance with Law (defined below) and shall obtain
all
permits, licenses, and all other governmental improvements requisite for the
construction thereof. Any delay caused by Tenant in connection with the
completion of the Improvements pursuant to this
Exhibit “B” (collectively, the
"Tenant Delays")
shall
extend the time allowed for Landlord to complete the work in question. By way
of
illustration, and not in limitation, of the foregoing:
(a)
Any
delay caused by Tenant in the preparation of the Drawings shall be charged
to
Tenant.
Page
23
(b) Any
delay
resulting from a failure by Tenant to approve or reasonably reject any shop
drawings, samples or models within five (5) business days of submission thereof
shall be charged to Tenant.
(c) In
the
event Tenant requires specific products to be used in completion of Tenant's
Work, any delay in Tenant's review of shop drawings, samples or models, or
which
results from Tenant's unreasonable later rejection of the specified products,
shall be charged to Tenant, and if Tenant specifies particular suppliers of
any
material, any delay which results from a failure by such supplier to comply
with
delivery schedules necessary to maintain the normal progression of the work
shall be charged to Tenant.
(d) Any
delay
which results from unavailability or delay in the delivery of any special
equipment, including, but not limited to, computer systems, special
communications equipment, or other equipment not associated with normal office
uses, shall be charged to Tenant.
(e) Any
delay
which results from Tenant's requests for changes in the components of the
Improvements.
(f) Any
delay
which results from Tenant's use of the Third Party Construction Administrator
(as defined in Section
5
below).
(g) Notwithstanding
anything herein, Tenant shall have the right to install its equipment
(including, but not limited to, cabling, phone system and security) during
the
tenant space improvement process, and such activity shall not be deemed a Tenant
Delay, unless Substantial Completion of the Improvements is delayed as a result
of requirements or approvals required from the applicable governmental
authorities for such activity or interference with the contractor's completion
of the Improvements.
Notwithstanding
anything contained herein to the contrary, in the event that Landlord deems
any
component or item of the Improvements requested by Tenant as “specific
products”, “special equipment”, or similar equipment, Landlord shall notify
Tenant in writing (prior to the date of Landlord's and Tenant's final approval
of the Drawings) as to the estimated number of calendar days such item(s) shall
delay Landlord's completion of the Improvements.
Landlord
assumes no liability for special, consequential, or incidental damages of any
kind whatsoever in connection with the design or construction of the
Improvements, and makes no representations, warranties, or guaranties regarding
the same, expressed or implied, including, without limitation, warranties of
merchantability, fitness for a particular purpose, or of habitability.
Notwithstanding the foregoing, Landlord shall be responsible (at Landlord’s sole
expense) for the repair and maintenance of all Improvements constructed by
Landlord pursuant to this Exhibit
“B” (other
than the maintenance required to be performed by Tenant pursuant to Section
4.(c) of the Lease) provided that written notice of the need for such repair
or
maintenance is given within one (1) year after the Commencement Date, so long
as
the damage requiring repair is not caused by Tenant, its employees, agents,
contractors or invitees. Thereafter, Landlord will assign to Tenant all
assignable contractor and manufacturer warranties it receives in connection
with
the construction of the Improvements.
Page
24
3.
Substantial
Completion.
"Substantial
Completion"
shall
occur when each of the following conditions is satisfied: (a) the Improvements
are substantially completed in accordance with the Drawings as certified by
the
Space Planner and in accordance with all applicable Laws and codes and
regulations; (b) Landlord has tendered to Tenant physical possession of the
Premises; (c) Building standard utility and electrical services are available
to
the Premises; (d) a certificate of occupancy (or a temporary permit, as
applicable) has been issued by the applicable governmental authority which
allows Tenant the legal right to occupy and conduct its day-to-day business
in
the Premises; and (e) the Premises have been thoroughly cleaned and all debris
and construction materials have been removed. Substantial Completion shall
have
occurred even though minor details of construction, decoration, landscaping,
and
mechanical adjustments remain to be completed by Landlord. Tenant shall prepare
and deliver to Landlord a punch list of incomplete, minor, detail items within
thirty (30) days after Substantial Completion and Landlord shall use all
reasonable efforts to complete such items within thirty (30) days thereafter,
except as to such items that, by their nature, will take a longer period to
complete as set forth in the punch list with respect to which Landlord shall
complete such items within a reasonable time. In the event that the Improvements
are not Substantially Complete by November 15, 2008 (which date shall be
extended to a later date by one day for each day of force majeure or Tenant
Delay, and one day for each day after August 1, 2008, this Lease is fully
executed (such extension being referred to as the “SC
Extension”))
for
any
reason, then as Tenant’s sole remedies: (i) Landlord shall reimburse Tenant for
the holdover portion of rent Tenant pays in connection with its existing leased
premises to Tenant’s existing landlord, not to exceed $834.57 per day (the
“Holdover
Reimbursement”)
for
each
day that the Improvements were not Substantially Complete after November 15,
2008 (subject to the SC Extension, if any); and (ii) at such time as Base Rent
is payable under this Lease, Tenant’s Base Rent shall be abated one day for each
day that the Improvements were not Substantially Complete after November 15,
2008 (subject to the SC Extension, if any); and (iii) if the Improvements are
not Substantially Complete by February 15, 2009 (subject to the SC Extension,
if
any), then Tenant shall have the right to terminate this Lease upon written
notice to Landlord given at any time thereafter and prior to Substantial
Completion of the Improvements. If Tenant elects the termination remedy in
subsection (iii) above, then Landlord’s obligation to pay the Holdover
Reimbursement shall cease effective as of the date of termination (provided
that
Landlord’s obligation to pay any accrued Holdover Reimbursement shall survive
such termination) and Tenant shall have no right to recover the value of the
abated rent under subsection (ii) above.
4. Allocation
of Construction Costs.
Landlord
shall pay up to $47.00 per rentable square foot in the Premises (the
“Allowance”)
toward
the construction of the Improvements depicted on the Drawings (including above
ceiling improvements, power requirements and demising of the Premises). All
other work required to construct the Improvements over and above the Allowance
(the "Additional
Work")
shall
be
performed at Tenant's expense. Tenant shall pay one-half of the costs required
to be paid by Tenant hereunder upon Landlord's commencement of construction
of
the Premises and shall pay all remaining costs upon Substantial Completion.
Tenant may elect to use all or any portion of its abated rent as payment for
such excess costs. So long as not less than $32.00 per rentable square foot
in
the Premises is used for leasehold improvements depicted on the Drawings, Tenant
may use any remaining allowance for cabling, furniture, fixtures and equipment,
a Third Party Construction Administrator (as defined hereunder) and relocation
costs.
5. Construction
Management Fee. Although
Landlord will oversee the construction of the Improvements, Landlord will not
charge Tenant with a construction management fee. Tenant shall have the right,
but not the obligation, to engage a third party construction manager (the
“Third
Party Construction Administrator”)
to
work
in conjunction with the Landlord’s construction manager to oversee the
completion of the Improvements. The Third Party Construction Administrator
shall
have access to all documents related to the completion of the Improvements,
including, but not limited to, pricing bids from contractors and subcontractors,
meeting minutes between parties relating to the completion of the Improvements
and the Drawings. In addition, the Third Party Construction Administrator shall
be invited to all meetings between the landlord’s construction manager and other
parties involved in the completion of the Improvements. Any delay in the
completion of the Improvements caused by the involvement of the Third Party
Construction Administrator shall constitute a Tenant Delay as defined herein.
Any fees charged by the Third Party Administrator shall be the sole
responsibility of the Tenant’s for which Tenant may use a portion of the
Allowance.
Page
25
6.
Shell
Condition.
The
Building will be completed in its shell condition defined as follows: Upon
Substantial Completion, the Building will be completed with the following
improvements in accordance with the Building plans: (a) outside walls, windows
and unfinished concrete floors, (b) Building standard electric service supplied
to house panel provided in the Building and (c) Building common water line
service running through the Building, and (e) sprinkler risers and main loop
without the dropping of sprinkler heads.
Page
26
EXHIBIT
"C"
TENANT'S
PERSONAL PROPERTY
All
furniture, movable equipment and other personal property that is not attached
to
the floors, walls or ceiling of the Premises; and any other fixture, equipment,
or other item, regardless of the manner of attachment, that is used primarily
in
Tenant's trade or business and that can be removed without material damage
to
the Building and without unreasonable interference with other tenants' use
and
enjoyment of their leased premises, including, without limitation, the
following:
1.
the
personal property and fixtures of Tenant's Customers, Contractors or
Employees.
[To
be completed by Tenant after execution of Lease, with final Exhibit C to be
slip
sheeted into original executed Lease]
Page
27
EXHIBIT
"D"
RULES
AND REGULATIONS
Landlord
shall have the right to prescribe the weight, position and manner of
installation of heavy equipment which, if considered reasonably necessary by
Landlord, shall be installed in a manner which shall insure satisfactory weight
distribution. The time, routing and manner of moving such heavy equipment shall
be subject to prior approval by Landlord.
1. Tenant,
or the employees, agents, visitors or licensees of Tenant, shall not at any
time
place, leave or discard any rubbish, paper, articles or objects of any kind
whatsoever outside the doors of the Premises or the Property. No animals or
birds shall be brought or kept in or about the Premises or the Property with
the
exception of animals used to assist handicapped individuals.
2. Canvassing,
soliciting or peddling in or about the Premises or the Property is prohibited
and Tenant shall cooperate to prevent same.
3. Landlord
shall have the right to exclude any person from the Property other than during
customary business hours, and any person in the Property will be subject to
identification by employees and agents of Landlord. All persons in or entering
the Property shall be required to comply with the security policies of the
Property. If Tenant desires any additional security service for the Premises
or
the Property, Tenant shall have the right (with the prior written consent of
Landlord) to obtain such additional service at Tenant's sole cost and expense.
Tenant shall keep doors to unattended areas locked and shall otherwise exercise
reasonable precautions to protect its property from theft, loss or damage.
Except as expressly set forth in the Lease, Landlord shall not be responsible
for the theft, loss or damage of any property or for any error with regard
to
the exclusion from or admission to the Premises or the Property of any person.
In case of invasion, mob, riot or public excitement, Landlord reserves the
right
to prevent access to the Premises or the Property during the continuance of
same
by closing the doors or taking other measures for the safety of the tenants
and
protection of the Premises or the Property and property or persons
therewith.
4. Tenant
shall not cause or permit any odors to permeate in or emanate from the Premises
or the Property, or permit or suffer the Premises or the Property to be occupied
or used in a manner offensive or objectionable to Landlord or other occupants
of
the Premises or the Property by reason of light, radiation, magnetism, noise,
odors, and/or vibrations, or interfere in any way with other tenants or those
having business in the Premises or the Property.
5. All
keys
in Tenant’s possession shall be returned to Landlord upon the termination of
this Lease and Tenant shall give to Landlord the explanations of the
combinations of all safes, vaults and combination locks remaining with the
Premises. Landlord may at all times keep a pass key to the Premises. All
entrance doors to the Premises shall be left closed at all times and left locked
when the Premises are not in use.
6. Tenant
shall give immediate notice to Landlord in case of any emergency at the Premises
or the Property known by Tenant.
7. Tenant
shall not advertise for temporary laborers giving the Premises or the Property
as an address, nor pay such laborers at a location in the Premises or the
Property.
Page
28
8. No
portion of the Premises or any part of the Property shall at any time be used
or
occupied as sleeping or lodging quarters.
9. The
toilet rooms, urinals, wash bowls and other apparatus in the Premises shall
not
be used for any purpose other than that for which they were constructed and
no
foreign substance of any kind whatsoever shall be thrown therein and the expense
of any breakage, stoppage or damage resulting from the violation of this rule
shall be borne by the Tenant who or whose employees or invitees shall have
caused it.
10. Landlord
reserves the right to exclude or expel from the Property any person who, in
the
judgment of Landlord, is intoxicated or under the influence of liquor or drugs,
or who shall in any manner do any act in violation of any of the Rules and
Regulations of the Premises or the Property.
11. Landlord
reserves the right to rescind any of these rules and regulations and to make
such other and further rules and regulations as in its reasonable judgment
shall, from time to time, be required for the safety, protection, care and
cleanliness of the Property, the operation thereof, the preservation of good
order therein and the protection and comfort of the tenants and their agents,
employees, and invitees, in which case Landlord will notify Tenant of such
changes, which rules and regulations shall be binding upon it following notice
thereof in like manner as if originally herein prescribed.
12. Tenant
shall park trailers and other oversized vehicles only in areas designated by
Landlord for the parking of trailers or oversized vehicles.
13. Tenant
shall not utilize the Premises for outside storage except with the written
consent of Landlord.
Page
29
EXHIBIT
"E"
RENEWAL OPTION
RENEWAL OPTION
If,
at
the end of the then-current term of this Lease, Tenant is not in default of
any
of the terms, conditions, or covenants of the Lease (beyond the expiration
of
any applicable notice and cure period provided in this Lease), Tenant, but
not
any assignee or subtenant of Tenant (other than a Permitted Transferee), is
hereby granted two (2) options to renew this Lease for an additional term of
five (5) years each upon the same terms and conditions contained in this Lease
with the following exceptions:
1. Following
the second renewal option term Tenant will have no further renewal options
unless granted by Landlord in writing; and
2. Base
rent
for the renewed term shall be based on the then prevailing rental rates for
properties of comparable quality, function and location, and taking into account
all tenant concessions and inducements with the length of the Lease term, credit
standing of Tenant, and all other relevant factors to be taken into account
("Fair
Market Value Rate").
If
Tenant
desires to renew this Lease, Tenant will notify Landlord in writing of its
intention to renew no later than one hundred eighty (180) days prior to the
expiration date of the then-current Term of the Lease. Landlord shall, within
the next fifteen (15) days, after receipt of such notice, deliver to Tenant
the
Fair Market Value Rate and terms with respect to the renewal term. Tenant shall
have fifteen (15) days to accept or reject such proposed Fair Market Value
Rate
and terms. In the event Tenant rejects such proposed Fair Market Value Rate
and
terms and Landlord and Tenant are thereafter unable to agree upon the Fair
Market Value Rate and terms to be applicable during the renewal term, the Fair
Market Value Rate as of commencement of the renewal term shall be determined
as
follows: within thirty (30) days after receipt of Landlord’s notice specifying
the Fair Market Value Rate, Tenant, at its sole cost, shall obtain and deliver
in writing to Landlord a determination of the Fair Market Value Rate for the
Premises for a term equal to the renewal term from a broker ("Tenant’s
Broker")
licensed
in the State of Texas and engaged in the office brokerage business in the
vicinity of the Building for at least the immediately preceding five (5) years.
If Landlord accepts such determination, the base rent for the renewal term
shall
be adjusted to an amount based upon the Fair Market Value Rate determined by
Tenant’s Broker. If Landlord does not accept such determination within fifteen
(15) days after receipt of the determination by Tenant’s Broker, Landlord shall
designate a broker ("Landlord’s
Broker")
licensed
in the State of Texas and engaged in the office brokerage business in the
Plano/Frisco Business Districts for at least the immediately preceding five
(5)
years. If Landlord’s Broker and Tenant’s Broker cannot together agree on the
Fair Market Value Rate, Landlord’s Broker and Tenant’s Broker shall name a third
broker, similarly qualified, within five (5) days after the appointment of
Landlord’s Broker. Each of said three (3) brokers shall determined the Fair
Market Value Rate for the Premises as of the commencement of the renewal term
for a term equal to the renewal term within fifteen (15) days after the
appointment of the third broker. The rent payable by Tenant effective as of
the
commencement of the renewal term shall be adjusted to an amount equal to the
arithmetic average of such three determinations; provided, however, that if
any
such broker’s determination deviates more than ten percent (10%) from the median
of such determinations, the rent payable shall be an amount equal to the average
of the two closest determinations. Landlord shall pay the costs and fees of
Landlord’s Broker in connection with any determination hereunder, and Tenant
shall pay the costs and fees of Tenant’s Broker in connection with such
determination. The costs and fees of any third broker shall be paid one-half
(½)
by Landlord and one-half by Tenant. At either party’s election, it may designate
an MAI Appraiser instead of a broker, in which event all references in this
Exhibit
“E” to
“broker” shall be deemed to refer to “appraiser”.
Page
31
EXHIBIT
"F"
SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
SUBORDINATION,
NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
AND ATTORNMENT AGREEMENT
THIS
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this "Agreement")
dated
July ______,
2008, is made among HALLMARK FINANCIAL SERVICES, INC., a Nevada
corporation ("Tenant"),
LINCOLN LEGACY TECH IV, LTD., a Texas limited partnership ("Landlord"),
and
BANK OF AMERICA, N.A., a national banking association, as Administrative Agent
and any successor appointed by the Lenders as Administrative Agent
("Administrative
Agent").
WHEREAS,
Administrative Agent and certain other lenders (herein, the "Lenders")
made a
loan (the "Loan")
to
Landlord secured by, among other things, a Deed of Trust, Assignment of Rents
and Leases, Security Agreement, Fixture Filing and Financing Statement, executed
by Landlord to Administrative Agent (herein, as it may have been or may be
from
time to time renewed, extended, amended or supplemented, called the
"Mortgage"),
recorded as Document Number 20071023001452610 in the Real Property Records
of
Collin County, Texas, covering, among other property, the land (the
"Land")
described in Exhibit "A" which is attached hereto and incorporated herein by
reference, and the improvements ("Improvements")
thereon (such Land and Improvements being herein together called the
"Property");
WHEREAS,
Tenant is the tenant under a lease from Landlord dated July ______,
2008 (herein, as it may
from
time to time be renewed, extended, amended or supplemented, called the
"Lease"),
covering a portion of the Property (said portion being herein referred to as
the
"Premises");
and
WHEREAS,
the term "Landlord" as used herein means the present landlord under the Lease
or, if the landlord's interest is transferred in any manner, the successor(s)
or
assign(s) occupying the position of landlord under the Lease at the time in
question.
NOW,
THEREFORE, in consideration of the mutual agreements herein, and for other
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Subordination.
Tenant
agrees and covenants that the Lease and the rights of Tenant thereunder, all
of
Tenant's right, title and interest in and to the property covered by the Lease,
and any lease thereafter executed by Tenant covering any part of the Property,
are and shall be subject, subordinate and inferior to (a) the Mortgage and
the
rights of Administrative Agent and the other Lenders thereunder, and all right,
title and interest of Administrative Agent and the Lenders in the Property,
and
(b) all other security documents now or hereafter securing payment of any
indebtedness of the Landlord (or any prior landlord) to Administrative Agent
and
the other Lenders which cover or affect the Property (the "Security
Documents").
This
Agreement is not intended and shall not be construed to subordinate the Lease
to
any mortgage, deed of trust or other security document other than those referred
to in the preceding sentence, securing the indebtedness to Administrative Agent
and other Lenders.
Page
32
2. Non-Disturbance.
Administrative Agent, on behalf of itself and the other Lenders, agrees that
so
long as the Lease is in full force and effect and Tenant is not in default
in
the payment of rent, additional rent or other payments or in the performance
of
any of the other terms, covenants or conditions of the Lease on Tenant’s part to
be performed (beyond the period, if any, specified in the Lease within which
Tenant may cure such default), (a) Tenant's possession of the Premises under
the
Lease shall not be disturbed or interfered with by Administrative Agent or
the
other Lenders in the exercise of any of its foreclosure rights under the
Mortgage or conveyance in lieu of foreclosure, and (b) Administrative Agent
and
the other Lenders will not join Tenant as a party defendant for the purpose
of
terminating Tenant's interest and estate under the Lease in any proceeding
for
foreclosure of the Mortgage.
3. Attornment.
(a) Tenant
covenants and agrees that in the event of foreclosure of the Mortgage, whether
by power of sale or by court action, or upon a transfer of the Property by
conveyance in lieu of foreclosure (the purchaser at foreclosure or the
transferee in lieu of foreclosure, including Administrative Agent or any other
Lender if it is such purchaser or transferee, being herein called "New
Owner"),
Tenant shall attorn to the New Owner as Tenant's new landlord, and agrees that
the Lease shall continue in full force and effect as a direct lease between
Tenant and New Owner upon all of the terms, covenants, conditions and agreements
set forth in the Lease and this Agreement, except for provisions which are
impossible for New Owner to perform; provided,
however,
that in
no event shall the New Owner be:
(i) liable
for any act, omission, default, misrepresentation, or breach of warranty, of
any
previous landlord (including Landlord) or obligations accruing prior to New
Owner's actual ownership of the Property;
(ii) subject
to any offset, defense, claim or counterclaim which Tenant might be entitled
to
assert against any previous landlord (including Landlord);
(iii) bound
by
any payment of rent, additional rent or other payments, made by Tenant to any
previous landlord (including Landlord) for more than one (1) month in
advance;
(iv) bound
by
any amendment, or modification of the Lease hereafter made, or consent, or
acquiescence by any previous landlord (including Landlord) under the Lease
to
any assignment or sublease hereafter granted, without the written consent of
Administrative Agent; or
(v) liable
for any deposit that Tenant may have given to any previous landlord (including
Landlord) which has not, as such, been transferred to New Owner.
(b) The
provisions of this Agreement regarding attornment by Tenant shall be self-
operative and effective without the necessity of execution of any new lease
or
other document on the part of any party hereto or the respective heirs, legal
representatives, successors or assigns of any such party. Tenant agrees,
however, to execute and deliver upon the request of New Owner, any instrument
or
certificate which in the reasonable judgment of New Owner may be necessary
or
appropriate to evidence such attornment, including a new lease of the Premises
on the same terms and conditions as the Lease for the unexpired term of the
Lease.
4. Estoppel
Certificate.
Tenant
agrees to execute and deliver from time to time, upon the request of Landlord
or
of any holder(s) of any of the indebtedness or obligations secured by the
Mortgage, a certificate regarding the status of the Lease, consisting of
statements, if true (or if not, specifying why not), (a) that the Lease is
in
full force and effect, (b) the date through which rentals have been paid, (c)
the date of the commencement of the term of the Lease, (d) the nature of any
amendments or modifications of the Lease, (e) to the best of Tenant's knowledge
no default, or state of facts which with the passage of time or notice (or
both)
would constitute a default, exists under the Lease, (f) to the best of Tenant's
knowledge, no setoffs, recoupments, estoppels, claims or counterclaims exist
against Landlord, and (g) such other matters as may be reasonably
requested.
Page
33
5.
Acknowledgment
and Agreement by Tenant.
Tenant
acknowledges and agrees as follows:
(a) Tenant
acknowledges that Landlord will execute and deliver to Administrative Agent
in
connection with the financing of the Property an Assignment of Leases and Rents
(which may be a separate agreement or included within the Mortgage). Tenant
hereby expressly consents to such assignment and agrees that such assignment
shall, in all respects, be superior to any interest Tenant has in the Lease
of
the Property, subject to the provisions of this Agreement. Tenant will not
amend, alter or waive any provision of, or consent to the amendment, alteration
or waiver of any provision of the Lease without the prior written consent of
Administrative Agent. Tenant shall not prepay any rents or other sums due under
the lease for more than one (1) month in advance of the due date therefor.
Tenant acknowledges that Administrative Agent and the other Lenders will rely
upon this instrument in connection with such financing.
(b) Administrative
Agent and the other Lenders, in making any disbursements to Landlord, is under
no obligation or duty to oversee or direct the application of the proceeds
of
such disbursements, and such proceeds may be used by Landlord for purposes
other
than improvement of the Property.
(c) From
and
after the date hereof, in the event of any act or omission by Landlord which
would give Tenant the right, either immediately or after the lapse of time,
to
terminate the Lease or to claim a partial or total eviction, Tenant will not
exercise any such right (i) until it has given written notice of such act or
omission to the Administrative Agent; and (ii) until the same period of time
as
is given to Landlord under the Lease to cure such act or omission shall have
elapsed following such giving of notice to Administrative Agent and following
the time when Administrative Agent shall have become entitled under the Mortgage
to remedy the same, but in any event 30 days after receipt of such notice or
such longer period of time as may be necessary to cure or remedy such default,
act, or omission including such period of time necessary to obtain possession
of
the Property and thereafter cure such default, act, or omission, during which
period of time Administrative Agent shall be permitted to cure or remedy such
default, act or omission; provided,
however,
that
Administrative Agent shall have no duty or obligation to cure or remedy any
breach or default. It is specifically agreed that Tenant shall not, as to
Administrative Agent, require cure of any such default which is personal to
Landlord, and therefore not susceptible to cure by Administrative
Agent.
(d) In
the
event that Administrative Agent notifies Tenant of a default under the Mortgage
or Security Documents and demands that Tenant pay its rent and all other sums
due under the Lease directly to Administrative Agent, Tenant shall honor such
demand and pay the full amount of its rent and all other sums due under the
Lease directly to Administrative Agent, without offset, or as otherwise required
pursuant to such notice beginning with the payment next due after such notice
of
default, without inquiry as to whether a default actually exists under the
Mortgage or Security Documents and notwithstanding any contrary instructions
of
or demands from Landlord.
(e) Tenant
shall send a copy of any notice or statement under the Lease to Administrative
Agent at the same time such notice or statement is sent to Landlord if such
notice or statement has a material impact on the economic terms, operating
covenants or duration of the Lease.
Page
34
(f) Tenant
has no right or option of any nature whatsoever, whether pursuant to the Lease
or otherwise, to purchase the Premises or the Property, or any portion thereof
or any interest therein, and to the extent that Tenant has had, or hereafter
acquires, any such right or option, same is hereby acknowledged to be subject
and subordinate to the Mortgage and is hereby waived and released as against
Administrative Agent and New Owner.
(g) This
Agreement satisfies any condition or requirement in the Lease relating to the
granting of a non-disturbance agreement and Tenant waives any requirement to
the
contrary in the Lease.
(h) Intentionally
Deleted.
(i) Notwithstanding
anything to the contrary in the Lease or the Security Documents, neither
Administrative Agent, the Lenders nor any New Owner shall be liable for or
bound
by any Construction-Related Obligation under the Lease. As used herein, a
"Construction-Related
Obligation"
means
any obligation of Landlord under the Lease to make, pay for, or reimburse Tenant
for any alterations, demolition, or other improvements or work at the Property,
including the Premises. Notwithstanding the foregoing, if as of or after the
date of attornment, Tenant is owed all or part of the Allowance (as described
and defined in the Lease), then New Owner shall pay to Tenant within thirty
(30)
days after demand therefor by Tenant or on the date payment is due under the
Lease, whichever is later, the lesser of (A) the unpaid portion of the Allowance
due and payable to Tenant under the Lease, and (B) an amount equal to the
product of $30.00 multiplied by the rentable square footage of the initial
Premises less any amounts previously funded in connection with Tenant’s
improvements (herein, the "Budgeted
TI Allowance").
New
Owner shall have no obligation to Tenant to pay any amount in excess of the
Budgeted TI Allowance and Tenant acknowledges and agrees that the failure by
New
Owner to pay amounts in excess of the Budgeted TI Allowance shall not constitute
a default by New Owner under the Lease or entitle Tenant to terminate the Lease
or offset or xxxxx rent.
(j)
Administrative Agent, the Lenders and any New Owner shall have no obligation
nor
incur any liability with respect to any warranties of any nature whatsoever,
whether pursuant to the Lease or otherwise, including, without limitation,
any
warranties respecting use, compliance with zoning, Landlord's title, and
Landlord’s authority, except for any express warranties contained in the Lease
regarding habitability or possession.
(k)
In
the event that Administrative Agent or any New Owner shall acquire title to
the
Premises or the Property, Administrative Agent or such New Owner shall have
no
obligation, nor incur any liability, beyond Administrative Agent's or New
Owner's then equity interest, if any, in the Property or the Premises, and
Tenant shall look exclusively to such equity interest of Administrative Agent
or
New Owner, if any, for the payment and discharge of any obligations imposed
upon
Administrative Agent or New Owner hereunder or under the Lease or for recovery
of any judgment from Administrative Agent, or New Owner, and in no event shall
Administrative Agent, New Owner, nor any of their respective officers,
directors, shareholders, agents, representatives, servants, employees or
partners ever be personally liable for such judgment.
(l)
Tenant has never permitted, and will not permit, the generation, treatment,
storage or disposal of any hazardous substance as defined under federal, state,
or local law, on the Premises or Property except for such substances of a type
and only in a quantity normally used in connection with the occupancy or
operation of buildings (such as non-flammable cleaning fluids and supplies
normally used in the day to day operation of first class establishments similar
to the Improvements), which substances are being held, stored, and used in
strict compliance with federal, state, and local laws. Tenant shall be solely
responsible for and shall reimburse and indemnify Landlord, New Owner or
Administrative Agent, as applicable, for any loss, liability, claim or expense,
including without limitation, cleanup and all other expenses, including, without
limitation, legal fees that Landlord, New Owner or Administrative Agent, as
applicable, may incur by reason of Tenant's violation of the requirements of
this Paragraph 5(l).
Page
35
6. Acknowledgment
and Agreement by Landlord.
Landlord, as landlord under the Lease and grantor under the Mortgage,
acknowledges and agrees for itself and its heirs, representatives, successors
and assigns, that: (a) this Agreement does not constitute a waiver by
Administrative Agent or the other Lenders of any of their rights under the
Mortgage or Security Documents, or in any way release Landlord from its
obligations to comply with the terms, provisions, conditions, covenants,
agreements and clauses of the Mortgage or Security Documents; (b) the provisions
of the Mortgage or Security Documents remain in full force and effect and must
be complied with by Landlord; and (c) Tenant is hereby authorized to pay its
rent and all other sums due under the Lease directly to Administrative Agent
upon receipt of a notice as set forth in paragraph 5(d) above from
Administrative Agent and that Tenant is not obligated to inquire as to whether
a
default actually exists under the Mortgage, Security Documents or otherwise
in
connection with the Loan. Landlord hereby releases and discharges Tenant of
and
from any liability to Landlord resulting from Tenant's payment to Administrative
Agent in accordance with this Agreement. Landlord represents and warrants to
Administrative Agent that a true and complete copy of the Lease has been
delivered by Landlord to Administrative Agent.
7. Lease
Status.
Landlord and Tenant certify to Administrative Agent that neither Landlord nor
Tenant has knowledge of any default on the part of the other under the Lease,
that the Lease is bona fide and contains all of the agreements of the parties
thereto with respect to the letting of the Premises and that all of the
agreements and provisions therein contained are in full force and
effect.
8. Notices.
All
notices, requests, consents, demands and other communications required or which
any party desires to give hereunder shall be in writing and shall be deemed
sufficiently given or furnished if delivered by personal delivery, by telegram,
telex, or facsimile, by expedited delivery service with proof of delivery,
or by
registered or certified United States mail, postage prepaid, at the addresses
specified at the end of this Agreement (unless changed by similar notice in
writing given by the particular party whose address is to be changed). Any
such
notice or communication shall be deemed to have been given either at the time
of
personal delivery or, in the case of delivery service or mail, as of the date
of
first attempted delivery at the address and in the manner provided herein,
or,
in the case of telegram, telex or facsimile, upon receipt. Notwithstanding
the
foregoing, no notice of change of address shall be effective except upon
receipt. This Paragraph 8 shall not be construed in any way to affect or impair
any waiver of notice or demand provided in this Agreement or in the Lease or
in
any document evidencing, securing or pertaining to the Loan or to require giving
of notice or demand to or upon any person in any situation or for any
reason.
9. Miscellaneous.
(a) This
Agreement supersedes any inconsistent provision of the Lease.
(b) Nothing
contained in this Agreement shall be construed to derogate from or in any way
impair, or affect the Loan or the lien, security interest or provisions of
the
Mortgage or Security Documents.
Page
36
(c) This
Agreement shall inure to the benefit of the parties hereto, their respective
successors and permitted assigns, and any New Owner, and its heirs, personal
representatives, successors and assigns; provided,
however,
that in
the event of the assignment or transfer of the interest of Administrative Agent,
all obligations and liabilities of the assigning Administrative Agent under
this
Agreement shall terminate, and thereupon all such obligations and liabilities
shall be the responsibility of the party to whom Administrative Agent's interest
is assigned or transferred; and provided further that the interest of Tenant
under this Agreement may not be assigned or transferred without the prior
written consent of Administrative Agent.
(d) THIS
AGREEMENT AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND
APPLICABLE UNITED STATES FEDERAL LAW.
(e) The
words
"herein", "hereof", "hereunder" and other similar compounds of the word "here"
as used in this Agreement refer to this entire Agreement and not to any
particular section or provision.
(f) This
Agreement may not be modified orally or in any manner other than by an agreement
in writing signed by the parties hereto or their respective successors in
interest.
(g) If
any
provision of the Agreement shall be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not apply to or affect any other provision hereof, but this Agreement
shall be construed as if such invalidity, illegality, or unenforceability did
not exist.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and sealed as of the date first above written.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
Page
37
ADDRESS
OF ADMINISTRATIVE AGENT:
|
ADMINISTRATIVE
AGENT:
|
Bank
of America, N.A.
000
Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx,
XX 00000
Attention:
Real Estate Loan Administration
|
BANK
OF AMERICA, N.A., a national banking association, as Administrative
Agent
|
By:
|
|
Name:
|
|
Title:
|
STATE
OF TEXAS
|
§
|
§
|
|
COUNTY
OF DALLAS
|
§
|
This
instrument was acknowledged before me on this ____ day
of ___________,
2008, by ____________________,
___________________of
Bank
of America, N.A., a national banking association,
on behalf of said association.
Printed
Name:
|
|
Notary
Public, State of Texas
|
SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
-
ADMINISTRATIVE
AGENT SIGNATURE PAGE
Page
38
ADDRESS
OF TENANT:
|
TENANT:
|
____________________________________ |
HALLMARK
FINANCIAL SERVICES, INC.
|
____________________________________ |
a
Nevada corporation
|
____________________________________ | |
____________________________________ | |
Attention:_______________________
|
By: _____________________________________
|
Name:
___________________________________
|
|
Title:
____________________________________
|
STATE
OF TEXAS
|
§
|
§
|
|
COUNTY
OF DALLAS
|
§
|
This
instrument was acknowledged before me on this ______ day
of
______________, 2008, by ________________________, ________________________of
Hallmark Financial Services, Inc., a Nevada corporation, on behalf of said
corporation.
Printed
Name:
|
|
Notary
Public, State of Texas
|
SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
-
TENANT
SIGNATURE PAGE
Page
39
ADDRESS OF LANDLORD: | LANDLORD: | |
LINCOLN
LEGACY TECH IV, LTD.
|
LINCOLN
LEGACY TECH IV, LTD.
|
|
c/o
Lincoln Property Company
|
a
Texas limited partnership
|
|
000
X. Xxxxx Xxxxxx, Xxxxx 0000
|
||
Xxxxxx,
Xxxxx 00000
|
By:
|
Lincoln GP Legacy Tech IV, Inc., |
Attention:_________________________
|
a Texas corporation | |
By:
______________________________
|
||
Name:
______________________________
|
||
Title:
______________________________
|
STATE
OF TEXAS
|
§
|
§
|
|
COUNTY
OF DALLAS
|
§
|
This
instrument was acknowledged before me on
this day
of ,
2008,
by
,
of
Lincoln GP Legacy Tech IV, Inc., a Texas corporation, the general
partner of Lincoln Legacy Tech IV, Ltd., a Texas limited partnership, on behalf
of said corporation and partnership.
________________________________________________ | |
Printed
Name: ____________________________________
|
|
Notary
Public, State of Texas
|
Page
40
EXHIBIT
"A"
LEGAL
DESCRIPTION OF THE LAND
Being
a
tract of land containing 16.1979 acres situated in the XXXXX X. XXXX SURVEY,
ABSTRACT XX. 000, Xxxx xx Xxxxx, Xxxxxx Xxxxxx, Xxxxx, being Xxx 0, Xxxxx
A of
LINCOLN R&D IN LEGACY, PHASE IV, an addition to the City of Plano, Texas,
according to the plat recorded in Volume 2007, Page 470, Map Records, Collin
County, Texas, and being more particularly described as follows:
BEING
of
a
tract of land out of the XXXXX X. XXXX SURVEY, Abstract No. 935, in the City
of
Plano, Collin County, Texas, being part of the 27.69 acre tract of land
described as Tract 9 in deed to West Plano Land Company, LP, recorded in
Collin
County Clerk's File No. 20060920001358250 of the Land Records of Collin County,
Texas, being all of Xxx 0, Xxxxx A of Lincoln R&D In Legacy, Phase IV, Lots
1 and 2, Block A, an addition to the City of Plano according to the plat
thereof
recorded in Cabinet 2007, Page 470 of the Map Records of Collin County, Texas
and being more particularly described as follows:
BEGINNING
at
an
aluminum monument in concrete found in the east right-of-way line of Pinecrest
Drive (60' ROW at this point) for the southwest corner of Lincoln R&D in
Legacy, Phase III, an addition to the City of Plano according to the plat
thereof recorded in Cabinet 2006, Page 783 of the Map Records of Collin County,
Texas;
THENCE
with
the
south line of said Lincoln R&D in Legacy, Phase III, North 89 degrees 51
minutes 50 seconds East, a distance of 520.57 feet to an aluminum monument
in
concrete found in the west line of Lincoln R&D in Legacy, Phase II, an
addition to the City of Plano according to the plat thereof recorded in Cabinet
N, Page 113 of the Map Records of Collin County, Texas;
THENCE
with
said
west line, South 00 degrees 07 minutes 20 seconds East, a distance of 359.07
feet to a 5/8" iron rod found for corner;
THENCE
with
the
south line of said Lincoln R&D in Legacy, Phase II, North 89 degrees 49
minutes 36 seconds East, a distance of 144.89 feet to a 1/2" iron rod found
for
the northwest corner of said Lincoln R&D in Legacy, Phase I;
THENCE
with
the
west line of said Lincoln R&D in Legacy, Phase I, South 00 degrees 07
minutes 04 seconds East, a distance of 758.65 feet to a 5/8" iron rod set
with a
plastic cap stamped “KHA”
(hereinafter called 5/8” iron rod set);
THENCE
leaving
the west line of said Lincoln R&D in Legacy, Phase I, the following courses
and distances to wit:
South
89
degrees 52 minutes 56 seconds West, a distance of 716.44 feet to a 5/8” iron rod
set for corner;
North
56
degrees 10 minutes 33 seconds West, a distance of 46.83 feet to a 5/8” iron rod
set in the east right-of-way line of said Pinecrest Drive for the beginning
of a
non-tangent curve to the left with a radius of 1006.00 feet, a central angle
of
24 degrees 26 minutes 52 seconds, and a chord bearing and distance of North
12
degrees 05 minutes 14 seconds East, 426.01 feet;
THENCE
with
said
east right-of-way line, the following courses and distances to wit:
Northeasterly,
with said curve, an arc distance of 429.26 feet to a 5/8” iron rod found for
corner;
North
00
degrees 08 minutes 22 seconds West, a distance of 674.89 feet to the
POINT
OF BEGINNING and
containing 705,581 square feet or 16.1979 acres of land.
41
EXHIBIT
"G"
EARLY
TERMINATION OPTION
Tenant
shall have a one-time option to terminate this Lease as of the last day of
the
sixty-second (62nd)
month
of the Lease Term (the “Early
Termination Date”),provided
Tenant gives notice thereof to Landlord not less than one hundred eighty
(180)
days prior to the Early Termination Date and provided Tenant is not in default
beyond the expiration of any applicable notice and cure period provided in
the
Lease at the time of the giving of such notice nor on the Early Termination
Date
(provided that Tenant shall remain obligated to cure each such default
notwithstanding any early termination of the Lease). Additionally, Tenant’s
right to terminate hereunder is conditioned upon: (a) the payment in full
by
Tenant of all Rent through and including the Early Termination Date; and
(b) not
later than three (3) months prior to the Early Termination Date, Tenant shall
pay Landlord the cash sum of: (i) one (1) month of Base Rent due at the rate
in
effect on the Early Termination Date, together with one (1) month of Tenant’s
Proportionate Share of Operating Expenses and Taxes at the rate in effect
on the
Early Termination Date; plus (ii) the unamortized cost of all tenant improvement
allowances and leasing commissions paid by Landlord in connection with the
Lease
(using an interest rate of eight percent (8%) per annum) (collectively, the
“Termination
Payment”).
If
Tenant
has timely exercised its early termination right, then after Landlord’s receipt
of the Termination Payment, and so long as Tenant has surrendered the Premises
in the condition required under this Lease, neither party shall have any
rights,
liabilities or obligations under this Lease for the period accruing after
the
Early Termination Date, except those which, by the provisions of this Lease,
expressly survive the termination of this Lease. If Tenant fails to timely
notify Landlord of Tenant’s exercise of its early termination right or fails to
timely pay the Termination Payment, time being of the essence, then Tenant’s
rights under this Exhibit shall be null and void.
Notwithstanding
the foregoing, Tenant’s right to terminate the Must-Take Space or any Expansion
Space will be subject to an adjusted termination payment (for the Must-Take
Space and/or the Expansion Space) which quantifies a minimum sixty-two (62)
month occupancy along with prorated payments for tenant improvements and
commissions (such payments prorated specifically to the adjusted term). Tenant
shall not be responsible for any unamortized tenant improvements and commissions
of any period during which Tenant has prepaid or continues to pay its Base
Rent
obligations.
42
EXHIBIT
"H"
MUST-TAKE
SPACE
Tenant
shall, effective as of October 1, 2010 (the “Must-Take
Commencement Date”),lease
an
additional 7,127 rentable square feet of space in the Building contiguous
to the
Premises as shown on Exhibit
“H-1” attached
hereto (the “Must-Take
Space”).
Effective
as of the Must-Take Commencement Date, the term “Premises,” as used in the
Lease, shall be and include the original Premises (as same may be expanded)
and
the Must-Take Space. The terms and conditions of the Must-Take Space shall
be
the same as the initial Premises (as same exist on the Must-Take Commencement
Date) except the Allowance shall equal $38.71 per rentable square foot contained
in the Must-Take Space (less any portion of the Early Allowance [as defined
in
the paragraph below] used by Tenant) (the “Must-Take
Allowance”).Subject
to the provisions of this Exhibit
“H”,all
improvements to the Must Take Space shall be completed in accordance with
the
Work Letter attached to the Lease as Exhibit
“B”.
Tenant
may elect upon written notice received by Landlord prior to Substantial
Completion of the Improvements (performed pursuant to Exhibit
“B”),to
use up
to $5.00 per square foot of the Must-Take Allowance in connection with such
Improvements (the “Early
Allowance”).
43
EXHIBIT
"H-1"
MUST-TAKE
SPACE

44
EXHIBIT
"I"
EXPANSION
OPTION
During
the first twelve (12) months of the Term, Tenant shall have the right to
lease
additional space in the Building contiguous to the Must-Take Space in one
of the
following increments: (i) 2,433 rentable square feet; (ii) 3,650 rentable
square
feet; (iii) 4,866 rentable square feet; (iv) 6,083 rentable square feet;
or (v)
7,300 rentable square feet, each as shown on Exhibit
“I-1” attached
hereto (the “Expansion
Space”)
by
delivering written notice to Landlord of such election prior to the expiration
of such twelve-month period. Tenant shall not have the right to modify the
square footage amounts set forth in the previous sentence. Tenant’s notice shall
contain which space Tenant has elected, and the date upon which the Expansion
Space will be included within the Premises, provided that such date shall
not be
later than the expiration of such twelve-month period (the “Expansion
Commencement Date”).
The
terms
and conditions of the Expansion Space shall be the same as the initial Premises
(as they exist on the Expansion Commencement Date) except the Allowance shall
equal $18.00 per rentable square foot contained in the Expansion Space, plus
an
amount equal to $29.00 per rentable square foot prorated on a monthly basis
for
the initial Term. For example, if Tenant elected to exercise the Expansion
Option and commence the Expansion Space twelve (12) months after the
Commencement Date, the Allowance would equal $42.86 ($18.00/psf + ($29.00/psf
-
$4.14/psf)). Subject to the provisions of this Exhibit
“I”, all
improvements to the Expansion Space shall be completed in accordance with
the
Work Letter attached to the Lease as Exhibit
“B”.
Tenant
and Landlord shall execute an amendment to this Lease including the Expansion
Space in the Premises on the same terms as this Lease, except as set forth
herein.
If
Tenant
fails or is unable to timely exercise its right hereunder, such right shall
lapse, time being of the essence with respect to the exercise thereof, provided
that Tenant shall have an on-going right of first refusal for the Expansion
Space in accordance with Exhibit
“J” of
the
Lease. Tenant’s rights under this Exhibit shall terminate if (a) this Lease or
Tenant’s right to possession of the Premises is terminated, or (b) Tenant
assigns any of its interest in this Lease or sublets more than fifty percent
(50%) of the initial Premises except to a Permitted Transferee.
45
EXHIBIT
"I-1"
EXPANSION
SPACE

46

47

48

49

50

51
EXHIBIT
"J"
RIGHT
OF FIRST REFUSAL
Subject
to renewals of other tenants in the Building (“Prior
Rights”),
and
provided no Event of Default then exists (beyond the expiration of any
applicable notice and cure period provided in the Lease), Landlord shall
during
the initial Term of this Lease, at such time as Landlord receives a written
offer from a third party which Landlord is prepared to accept for the lease
of
any available space in the Building (the “Offer
Space”),
offer
to
lease the Offer Space to Tenant; such offer shall be in writing and specify
the
lease terms for the Offer Space, including the rent to be paid for the Offer
Space and the date on which the Offer Space shall be included in the Premises
(the “Offer
Notice”).
Tenant
shall notify Landlord in writing whether Tenant elects to lease the entire
Offer
Space on the terms set forth in the Offer Notice, within ten (10) days after
Landlord delivers to Tenant the Offer Notice. If Tenant timely elects to
lease
the Offer Space, then Landlord and Tenant shall execute an amendment to this
Lease, effective as of the date the Offer Space is to be included in the
Premises, on the terms set forth in the Offer Notice and, to the extent not
inconsistent with the Offer Notice terms, the terms of this Lease; however,
Tenant shall accept the Offer Space in an “AS-IS”
condition and Landlord shall not provide to Tenant any allowances (e.g.,
moving
allowance, construction allowance, and the like) or other tenant inducements
except as specifically provided in the Offer Notice. Notwithstanding the
foregoing, if such third party offer includes space in excess of the Offer
Space, Tenant must exercise its rights hereunder, if at all, as to all of
the
space contained in the third party offer.
If
Tenant
fails or is unable to timely exercise its right hereunder, time being of
the
essence with respect to the exercise thereof, Landlord may lease all or a
portion of the Offer Space to such third party. If such third party does
not
lease the Offer Space, the Tenant’s Right of First Refusal shall continue and be
available to Tenant throughout the Term of this Lease (subject to the three
year
limitation set forth in the following paragraph) and Landlord shall first
offer
such space to Tenant upon the terms of this Exhibit before leasing it to
a third
party. If such third party leases less than all of the Offer Space in the
Building, then Tenant’s Right of First Refusal for the remainder of the Offer
Space shall be superior to any subsequent rights given to another tenant
to such
remainder space. Tenant may not exercise its rights under this Exhibit if
an
Event of Default exists (beyond the expiration of any applicable notice and
cure
period provided in the Lease).
Tenant’s
rights under this Exhibit shall terminate if (a) this Lease or Tenant’s right to
possession of the Premises is terminated, (b) Tenant assigns any of its interest
in this Lease or sublets more than fifty percent (50%) of the initial Premises
except to a Permitted Transferee, or (c) less than three (3) full calendar
years
remain in the initial Term of this Lease.
52
EXHIBIT
"K"
TENANT’S
BACK-UP GENERATOR
A. Generator
Site.
Landlord consents to Tenant installing, maintaining, and operating, in a
generator location mutually agreed upon by Landlord and Tenant in an area
adjacent to the Premises, a generator (the “Generator”)
to
be
used only as a secondary, emergency source of electricity for the Premises
and
for no other purpose (except as may be required for Tenant to conduct its
business within the Premises). At all times during the Term, Tenant shall
be the
sole owner of the Generator. Neither Landlord nor any third party shall have
any
ownership interests in and to the Generator. All areas of the Project occupied
by the Generator are referred to herein as the “Generator
Site”
and
will
at all times during the Term be a part of the Premises but will not be included
in any calculation of square footage in the Premises. Tenant acknowledges
that
Landlord has made no representations or warranties whatsoever respecting
the
condition of the Generator Site, its suitability for the Generator or otherwise,
and that Tenant accepts the Generator Site in its “AS-IS” condition. Landlord
has no obligation or duty to make any alterations, improvements, or repairs
whatsoever in and to the Generator Site in connection with Tenant’s use of the
Generator.
B. Access.
The
activities of Tenant and its agents, representatives, contractors, or other
vendors in connection with the Generator and Generator Site are subject at
all
times to Landlord’s Building rules and regulations. Landlord may access the
Generator Site twenty-four (24) hours per day, seven days per week upon at
least
twenty-four (24) hours prior notice to Tenant, except in the event of an
emergency, in which case Landlord may enter the Generator Site immediately
and
perform any activity or make any repair or alteration necessary to remedy
the
emergency. If Landlord, its employees, or agents enter the Generator Site
due to
an emergency, Landlord shall notify Tenant of such entry at the first reasonable
opportunity, taking into account the circumstances surrounding the entry
and any
action that Landlord takes to remedy the emergency. Tenant shall reimburse
Landlord for all costs incurred by Landlord in connection with remedying
any
such emergency condition. Landlord may at any time upon at least twenty-four
(24) hours prior notice to Tenant have the Generator inspected, at Landlord’s
sole cost and expense, by qualified employees of Landlord or by a qualified
third party. Tenant may observe any such inspection. If any deficiencies
in the
operation, upkeep, and maintenance of the Generator are discovered as a result
of any inspection, Landlord shall notify Tenant in writing of such deficiencies,
and Tenant must remedy such deficiencies within thirty (30) days of receipt
of
notice from Landlord; however, if Tenant has commenced, but is unable to
complete, curing such deficiencies within the thirty (30) day period and
is
diligently pursuing a cure, Tenant shall have a reasonable period of time
thereafter in which to cure such deficiency. If Landlord discovers repeated
deficiencies in the performance of upkeep and maintenance by the manufacturer
or
Tenant’s contractor, Landlord may require Tenant to contract with a different
contractor to provide such maintenance, notwithstanding any outstanding
warranties or other maintenance obligations of the manufacturer or other
contractor in favor of Tenant.
C. Installation
of Generator.
The
design, installation, and construction of the Generator and the Generator
Site
are subject to all of the terms and conditions of the Lease with regard to
alterations, and the manufacturer, qualified vendor, and/or any subcontractors
employed in connection with the installation and/or maintenance of the Generator
must be approved in advance by Landlord, not to be unreasonably withheld.
Any
repairs, maintenance, and cleaning of the Building, parking areas, and/or
the
Premises made necessary as a result of the installation, maintenance, or
operation of the Generator are the sole responsibility of Tenant.
D. Maintenance.
Tenant
shall, at its sole cost and expense, keep the Generator in good working order
and repair in accordance with recognized industry standards for comparable
equipment and keep the Generator Site neat and clean. Tenant shall contract
with
the manufacturer or other qualified vendor approved by Landlord, which approval
shall not be unreasonably withheld, to perform the required maintenance for
the
Generator. Tenant must provide Landlord with records of all maintenance
performed on the Generator, including, without limitation, all test results
and
run conditions, copies of the results of all inspections and tests, routine
or
otherwise, and reports of any preventative maintenance, repairs, or upgrades
to
the Generator. Tenant must cause the manufacturer or other qualified vendor
approved by Landlord to inspect the Generator no less than once per calendar
year and must provide Landlord with a copy of the results of such inspection.
Landlord may observe all maintenance, repairs, or upgrades to the Generator.
Tenant shall conduct its business and use commercially reasonable efforts
to
control its agents, representatives, and contractors in such manner as not
to
create any nuisance, or interfere with, annoy or disturb users of the parking
areas or any other tenant of the Project or Landlord in its operation of
the
Project. Landlord shall have no obligation to license, maintain, operate
or
safeguard the Generator. If Landlord notifies Tenant of any necessary repairs
and Tenant does not make such repairs within thirty (30) days after Tenant’s
receipt of such notice, Landlord may make such repairs, and Tenant shall
pay
Landlord for the cost of such repairs (including labor costs) within thirty
(30)
days of receipt of an invoice from Landlord; however, if Tenant has commenced,
but is unable to complete, curing such deficiencies within the thirty (30)
day
period and is diligently pursuing a cure, Tenant shall have a reasonable
period
of time thereafter in which to cure such deficiency.
53
E. Testing.
Any
testing of the Generator shall be in accordance with all applicable federal,
state and local laws, ordinances, and regulations (including without limitation
the City Zoning, Building, and Fire Codes, and all environmental laws),
generally recognized safety practices, and the rules and regulations of the
Building. All testing must be performed and completed after 12:00 a.m. and
before 7:00 a.m., subject, however, to Landlord’s reasonable approval of any
additional testing that may be necessary during the initial period after
installation of the Generator. Except in the event of an emergency, power
outage, xxxxx out, or as required by governmental authorities, Tenant shall
not
run the Generator between the hours of 7:00 a.m. and 12:00 a.m. Landlord
shall
be entitled to observe all tests, and Tenant shall notify Landlord in writing
at
least forty-eight (48) hours prior to each test.
F. Insurance.
In
addition to Tenant’s insurance requirements set forth in the Lease, Tenant shall
also maintain throughout the Term boiler/machinery insurance in a limit
reasonably acceptable to Landlord with a Waiver of Subrogation in favor of
Landlord. In addition, Tenant must either self-insure or maintain property
insurance on the Generator for its full replacement value. Tenant is solely
responsible for all deductibles in connection with any property insurance
it
maintains on the Generator. In the event Tenant’s use, operation, and
maintenance of the Generator and/or the activities of Tenant, its contractors,
agents, representatives, and vendors in, on, and around the Generator Site
result in an increase of Landlord’s insurance premium for the Project, Tenant
shall pay such increased costs to Landlord within thirty (30) days of receipt
of
an invoice.
G. Waiver
of Liability. ALL
PERSONAL PROPERTY LOCATED IN,
ON,
OR
AROUND THE GENERATOR
SITE
IS AT THE SOLE RISK OF TENANT
ONLY,
AND
TENANT
WAIVES (AND
SHALL CAUSE ITS INSURERS TO WAIVE)
ALL
CLAIMS
AGAINST LANDLORD,
ITS
EMPLOYEES,
AGENTS,
ADVISORS,
PROPERTY
MANAGERS OR CONTRACTORS FOR ANY DAMAGE TO OR THEFT OF SUCH PERSONAL
PROPERTY,
REGARDLESS
OF CAUSE AND WHETHER OR NOT DUE IN WHOLE OR IN PART TO THE NEGLIGENCE OF
ANY
SUCH PARTY BUT EXCLUDING AND DAMAGE CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF ANY SUCH PARTY.
H. Compliance
with Laws.
Tenant,
at its sole cost and expense, shall perform all acts reasonably necessary
to
ensure that the access to, and installation, maintenance, and operation of,
the
Generator is at all times in strict compliance with recognized industry
standards for comparable equipment in a comparable location, all applicable
federal, state, and local laws, ordinances, and regulations (including without
limitation the City Zoning, Building, and Fire Codes, the Americans With
Disabilities Act, and all environmental laws), and the rules and regulations
of
the Building. All such compliance shall be at Tenant’s sole cost and expense.
Tenant is solely responsible for obtaining all required licenses, permits,
or
other items necessary for operation of the Generator; however, Landlord will
reasonably cooperate with Tenant as necessary to obtain such approvals. Tenant
shall give Landlord written notice of any notices received by Tenant from
third
parties stating that the Generator is or may be in violation of any law,
ordinance, or regulation.
I. Fuel
Storage and Refueling Practices.
Tenant
shall comply with all applicable federal, state, and local laws, ordinances,
and
regulations, and generally accepted safety practices in the refueling of
the
Generator and in the storage of fuel for the Generator. Tenant may purchase
fuel
only from a licensed, reputable distributor. In the event of a fuel spill,
Tenant shall immediately take steps to terminate and contain the spill and
begin
appropriate clean-up procedures in accordance with any applicable laws. Tenant
must also notify Landlord and its security personnel of the spill immediately
(no later than twenty-four (24) hours after the discovery of a spill). After
any
initial containment activity performed by Tenant and/or its contractor, Landlord
will contract, at Tenant’s sole cost and expense, with a third party acceptable
to Landlord in its sole discretion to perform all necessary clean-up of the
spill. Tenant shall be responsible for all costs associated with a spill
and
subsequent clean-up activities, including, without limitation, any fines,
penalties, or fees incurred by Landlord and damages, including, without
limitation, consequential damages, for which Landlord may be held liable
in
connection with the spill. “Fuel” refers not only to the diesel fuel used to
power the Generator, but also any oil, hydraulic fuels, or other fuels used
in
connection with the operation and/or maintenance of the Generator.
54
J.
Removal
of Generator.
Once
the Generator is installed, Tenant may not abandon the Generator and must
maintain it and all related equipment in the manner set forth in this Exhibit
and in accordance with all applicable laws and prudent safety practices.
If
Tenant desires to terminate its use of the Generator, Tenant must either:
(i)
dismantle and remove the Generator from the Generator Site within ninety
(90)
days of terminating its use, or (ii) shut down the Generator and store it
according to the manufacturer’s specifications and as approved by Landlord so as
to mitigate any risk related to the storage and/or non-use. In addition,
upon
the termination of the Lease for any reason whatsoever, Tenant must remove
the
Generator (including all appurtenant equipment used solely in connection
with
the Generator, such as the electrical transfer switch) from the Generator
Site
on or before the effective date of the termination; provided, however, that
if
the Lease is terminated by Landlord in connection with an Event of Default
under
the Lease, Tenant shall remove the Generator from the Generator Site as quickly
as possible, but in no event later than thirty (30) days after the date of
the
termination. Any removal of the Generator will be subject to the same terms
and
conditions set forth herein that are applicable to installation of the
Generator. In addition, upon such removal, Tenant shall repair any damage
to the
Project caused by the removal and/or use of the Generator.
55
EXHIBIT
"L"
COMMISSION
AGREEMENT
[See
Attached]
56


