1
EXHIBIT 10.15
OFFICE BUILDING LEASE
THE STATE OF TEXAS
COUNTY OF XXXXXX
THIS LEASE, made and entered into the 8th day of October, 1999, by and
between MAPLEWOOD ASSOCIATES, L.P., a Texas Limited Partnership (hereinafter
called "Landlord"), and CROSSROADS SYSTEMS, INC., a Texas corporation
(hereinafter called "Tenant");
W I T N E S S E T H:
1. DEFINITIONS. The following definitions shall apply whenever used in
this Lease:
(a) "Premises": Floors 2 and 3, having an Agreed Rentable Area of
63,548 square feet in the Complex, as shown and designated on the floor
plan attached hereto as Exhibit A and made a part hereof. Landlord has
provided to Tenant prior to the execution of this Lease the
measurements of the Premises as determined by Landlord's architect, and
Landlord and Tenant agree that the Premises contain 63,548 square feet.
(b) "Commencement Date": February 1, 2000, unless adjusted in
accordance with the provisions of Paragraph 3 hereof.
(c) "Lease Term": A period of seventy two (72) months, commencing on
the Commencement Date and ending on January 31, 2006 (the "Expiration
Date"), unless adjusted in accordance with the provisions of Paragraph
3 hereof and further unless sooner terminated or extended as herein
provided.
(d) "Base Rental": The applicable annual rental for the Premises shown
below; subject, however, to adjustments in accordance with the
provisions of Paragraph 6 hereof:
RENTAL PERIOD MONTHLY BASE RENTAL TOTAL BASE RENTAL PER YEAR
--------------------------- --------------------------- ----------------------------
2/1/00 - 1/31/03 $92,674.17 $1,112,090.04
--------------------------- --------------------------- ----------------------------
2/1/03 - 1/31/06 $97,969.83 $1,175,638.00
=========================== =========================== ============================
(e) "Security Deposit": See Exhibit I.
(f) "The Percentage": 68.1%, being the Agreed Rentable Area of the
Premises divided by the Agreed Rentable Area of the Building, expressed
as a percentage; provided, that in the event that the amount of space
leased by Tenant shall increase or decrease subsequent to the date of
this Lease, the Percentage shall be appropriately adjusted by Landlord.
-1-
2
(g) "Permitted Use": General office purposes, provided that Tenant may
include laboratory and research and development activities normally
conducted with respect to the development of prototypes for computer
storage routers, a compact electronic device consuming power roughly
equivalent to a 100 watt light bulb and non-destructive testing of such
routers with an array of computer equipment including servers, disk
drives and tape libraries, provided (i) that such laboratory and
research and development activities do not disturb or annoy other
tenants or occupants in the Building; (ii) that Tenant will be solely
responsible for any costs associated with electrical, HVAC and other
requirements in excess of those for normal office use, and for costs of
restoration of the Premises to return the laboratory portion of the
Premises to normal office building condition upon the expiration or
earlier termination of this Lease; and (iii) that Tenant complies in
all respects with applicable zoning and land use regulations and all
other applicable laws in the conduct of any such activities.
(h) "Building": The Building(s) constructed on the Land, located at
0000 Xxxxx XxXxx Xxxxxxxxxx, Xxxxxx, Xxxxx 00000.
(i) "Land": That certain tract of land in Xxxxxx County, Texas,
described on Exhibit B attached hereto and made a part hereof.
(j) "Complex": being the Land, the office building totaling 93,312
rentable square feet, the parking garage and all other structures,
improvements, fixtures and appurtenances now or hereafter placed,
constructed or erected on or appurtenant to the Land.
(k) "Common Areas": Those areas of the Complex which are provided and
maintained for the common use and benefit of Landlord and tenants of
the Complex generally, together with the agents, employees, patrons,
guests, licensees and invitees of Landlord and such tenants, including,
without limitation, all parking areas, enclosed or otherwise, streets,
sidewalks and landscaped areas located within the Complex.
(l) "Work Letter": That Work Letter attached to this Lease as an
exhibit (see Paragraph 55 hereof) setting forth Landlord and Tenant's
respective obligations to make certain improvements to the Premises. If
Landlord and Tenant have not agreed that certain improvements will be
made to the Premises by attaching a Work Letter as an exhibit to this
Lease, then Tenant agrees to accept the Premises in its "as-is"
condition for all purposes as set forth in Paragraph 8 hereof.
(m) "Basic Costs": Any and all costs and expenses which Landlord shall
incur, pay or become obligated to pay in connection with owning,
operating, maintaining, repairing and managing the Complex as a
first-class office complex, as determined in accordance with generally
accepted accounting principles consistently applied, including but not
limited to the following:
(i) All accrued real estate taxes and annual installments of special
assessments
-2-
3
levied against the Complex and any and all taxes, charges, levies or
assessments (including interest thereon, unless such interest is charged as
a result of Landlord's payment of such taxes after their due date) which
may be levied, charged or assessed against or on the Complex in lieu
thereof or in addition thereto, together with any and all costs of
protesting and reducing taxes and legal fees incident therewith.
(ii) All wages, salaries and related expenses of all employees engaged
in the operation, maintenance and security of the Complex, to the extent
that such wages, salaries and expenses are fairly and properly allocated to
the Complex, and the costs of an office in the Complex. The wages and
salaries of management personnel above the level of property manager shall
not be included in the Basic Costs.
(iii) All costs of supplies and materials used in the operation and
maintenance of the Complex.
(iv) Cost of all utilities, including, without limitation, water,
electricity, heating, lighting, air conditioning and ventilating, together
with all costs, charges and expenses incurred by Landlord in connection
with the change of any company providing utility services, including
without limitation, maintenance, repair and service costs associated
therewith, but excluding utility costs separately billed to specific
tenants in the Complex.
(v) The costs of maintenance and service agreements for the Complex
and the equipment therein, including, without limitation, alarm service,
window cleaning and elevator maintenance and management fees; provided,
however, that the management fee will not exceed five percent (5%) of the
Base Rent to be paid by tenants in the Complex .
(vi) Accounting costs, including the costs of an annual audit, if any,
by Certified Public Accountants.
(vii) The costs of all insurance, including but not limited to fire,
casualty, liability and rental abatement insurance applicable to the
Complex and Landlord's personal property used in connection therewith.
(viii) The cost of all repairs, replacements and general maintenance
(except as specifically excluded below).
(ix) Any and all common area maintenance costs relating to public
areas of the Complex, including sidewalks, atriums, skyways, landscaping
and service areas.
(x) The amortized cost of capital improvements or repairs made to the
Complex which are primarily for the purpose of reducing Basic Costs
(provided that such amortized costs actually reduce the Basic Costs) or
otherwise for improving the operating efficiency of the Complex (whether or
not Basic Costs are actually reduced). Landlord will be solely responsible
for the cost of any capital improvements or repairs to the common areas of
the
-3-
4
Complex, which will extend the life of the Complex or which are required to
comply with any law, rule or regulation of any governmental authority
applicable to the Complex (exclusive of the Premises), and such costs will
not be part of the Basic Costs to be paid by Tenant. Tenant will be solely
responsible for the cost of any capital improvements or repairs to the
Premises which will extend the life of the Premises or which are required
to comply with any law, rule or regulation of any governmental authority
applicable to the Premises.
Specifically excluded from the definition of "Basic Costs" are expenses
for capital improvements made to the Complex (except as provided above);
expenses for repair, replacements and general maintenance paid by proceeds of
insurance or by Tenant or other third parties and alterations attributable
solely to tenants of the Building other than Tenant; expenses for repair of
latent defects in the Complex; interest, amortization or other payments on loans
to Landlord whether secured or unsecured; depreciation of the Complex; leasing
commissions; legal expenses (except as otherwise expressly provided herein); and
income, excess profits or franchise taxes or other such taxes imposed on or
measured by the income of Landlord from the operation of the Complex.
(a) "Lease Year": Any period during the Lease Term, or any renewals or
extensions thereof, of one calendar year commencing January 1 and ending on the
next following December 31; and the term "First Lease Year" shall mean the
calendar year commencing on the January 1 immediately preceding the Commencement
Date and ending on the December 31 next following.
2. DEMISE. Landlord, in consideration of the rent to be paid and the
covenants and agreements to be performed by Tenant, as herein set forth, does
hereby LEASE, DEMISE and LET unto Tenant and Tenant accepts the Premises for the
Lease Term. Notwithstanding the preceding sentence, Tenant will be bound by all
of the provisions of this Lease, except for the payment of rent, from the date
of the first use or occupancy of the Premises by Tenant or Tenant's agents or
representatives for any purpose prior to the Commencement Date. Tenant agrees
and acknowledges that the Premises (whether consisting of less than one floor or
consisting of one or more full floors within the Complex) do not include, and
Landlord hereby expressly reserves for its use, any and all mechanical,
electrical, telephone and similar rooms, janitor closets, elevator, pipe, and
other vertical shafts and ducts, flues, stairwells, any area above the
acoustical ceiling, and any other areas not specifically shown on Exhibit A as
being part of the Premises; provided, however, that Tenant shall have reasonable
access to and use of such areas with Landlord's prior consent, which consent
shall not be unreasonably withheld, as may be necessary to provide utility and
telecommunication services to the Premises. The Premises are leased by Landlord
to Tenant and are accepted and are to be used and possessed by Tenant upon and
subject to all of the terms, provisions, covenants, agreements and conditions
contained in this Lease, including without limitation the terms, provisions,
covenants, agreements and conditions contained in each exhibit, rider and
addendum attached hereto. The agreed rentable area of the Premises is hereby
stipulated to be the "Agreed Rentable Area" of the Premises set forth in Item
1(a) of the Definitions. The agreed rentable area of the Complex is hereby
stipulated to be the "Agreed Rentable Area" of the Complex set forth in Item
1(j) of the Definitions.
-4-
5
3. COMMENCEMENT OF RENT. If for any reason the improvements to the
Premises required by the Work Letter ("Tenant's Improvements") are not
Substantially Complete (as defined in the Work Letter) within two (2) business
days prior to the Commencement Date, this Lease and the obligations of Tenant
hereunder shall nonetheless continue in full force and effect and the same shall
not be construed in anywise to extend the Lease Term; provided, however, if
Tenant's Improvements are not Substantially Complete for any reason other than
Tenant Delay (as provided in the Work Letter), the Commencement Date shall be
adjusted forward to the date that is two (2) business days after the Tenant's
Improvements are Substantially Complete and the rent herein provided shall not
commence until such adjusted Commencement Date and the Expiration Date
referenced in Paragraph 1(c) shall be adjusted forward by the same number of
days as is the Commencement Date, so that the Lease Term shall be as set forth
in Paragraph 1(c). If the Commencement Date occurs on a day other than the first
day of a calendar month, then the Term of this Lease shall be extended such that
it shall continue for the number of full calendar months set forth in Paragraph
1(c) plus the first partial calendar month following the Commencement Date.
However, in the event that Tenant's Improvements are not Substantially Complete
for any reason other than Tenant Delay or force majeure by March 15, 2000, then
as Tenant's sole and exclusive remedy, Tenant shall receive one (1) day of rent
abatement for each day of such delay after March 15, 2000. If Tenant's
Improvements are not Substantially Complete by April 1, 2000 for any reason
other than Tenant Delay or force majeure, then Tenant shall have the option to
terminate this Lease by giving Landlord written notice of such termination on or
before April 10, 2000, in which event any funds previously paid by Tenant to
Landlord will be refunded to Tenant and any letter of credit delivered to
Landlord will be returned to Tenant. In the event that Tenant's Improvements are
not substantially complete by the Commencement Date due to Tenant Delay or force
majeure, the Commencement Date shall be adjourned until substantial completion
occurs.
4. USE AND OCCUPANCY.
(a) General. Tenant agrees that the Premises shall be used and occupied
by Tenant as and for the Permitted Use and for no other purpose. Tenant agrees
to use and maintain the Premises in a clean, careful, safe and proper manner and
to comply with all laws, ordinances, orders, rules and regulations of all
governmental bodies (state, federal and municipal) applicable to the Premises or
Tenant's use or occupancy thereof. Tenant will not in any manner deface or
injure the Complex or any part thereof or overload the floors of the Premises.
Tenant agrees to pay for any damage to the Premises or to any other part of the
Complex caused by Tenant or any of its agents, employees, licensees, or invitees
within thirty (30) days of receipt of an invoice therefor; provided that
Tenant's responsibility for repair of such damage that is covered by insurance
will not exceed the amount of applicable deductibles therefor, and is otherwise
subject to the provisions of Paragraph 21 hereof. Tenant agrees not to use or
allow or permit the Premises to be used for any purpose prohibited by any law of
the United States or of the State of Texas or by any ordinance of Austin, Texas,
and Tenant agrees not to commit waste or suffer or permit waste to be committed
or to allow or permit any nuisance on or in the Premises. Tenant will not use
the Premises for lodging or sleeping purposes or for any illegal purposes.
Tenant
-5-
6
shall not at any time sell, purchase or give away, or permit, except with
Landlord's prior written approval, the sale, purchase or gift of food,
beverages, cigars, cigarettes or other smoking materials in any form by or to
any of Tenant's agents or employees or any other parties on the Premises. Tenant
shall not do any cooking or other preparation of food or operate a restaurant on
the Premises (provided that Tenant may operate ordinary and customary break
rooms and kitchenettes in the Premises, at locations approved by Landlord, and
allow Tenant's employees to warm and xxxx meals in those areas), or cause or
permit any cooking odors or any other unusual or objectionable odors to emanate
from the Premises. Tenant may also maintain vending machines in the Premises in
such kitchenettes and break rooms with Landlord's approval, which approval will
not be unreasonably withheld. Tenant will conduct its business and occupy the
Premises and will control its agents, employees, licensees and invitees in such
a manner so as not to create any nuisance or disturb any of the other tenants in
the Complex or Landlord in its management of the Complex and so as not to injure
the reputation of the Complex. Tenant shall not use the Premises or allow or
permit same to be used in any way or for any purpose that Landlord may
reasonably deem to be extra hazardous or which will increase the rate of fire or
other insurance for the Complex or its contents or in respect of the operation
of the Complex or which may render the Complex uninsurable at normal rates by
responsible insurance carriers authorized to do business in the State of Texas
or which may render void or voidable any insurance on the Complex. Tenant shall
promptly correct any violation of any governmental law, rule or regulation
relating to the Premises. Tenant shall comply with any direction of any
governmental authority having jurisdiction which imposes any duty upon Tenant or
Landlord with respect to the Premises or the occupancy or use thereof. Tenant
shall not erect, place or allow to be placed any sign, advertising matter,
stand, booth, or showcase in or upon the doorsteps, vestibules, halls,
corridors, doors, outside walls, outside windows, or pavement of the Complex or
the Land (except for lettering and signage as allowed by Paragraph 10 of this
Lease) without the prior written consent of Landlord.
(b) Hazardous Materials. Tenant shall not incorporate into, or use or
otherwise place or dispose of at, the Premises, the Building or any other
portion of the Complex any hazardous or toxic materials, except for use and
storage of cleaning and office supplies used in the ordinary course of Tenant's
business and then only if (i) such materials are in small quantities, properly
labeled and contained, (ii) such materials are handled and disposed of in
accordance with the highest accepted industry standards for safety, storage, use
and disposal, (iii) notice of and a copy of the current material safety data
sheet (to the extent required by applicable law) is provided to Landlord for
each such hazardous or toxic material and (iv) such materials are used,
transported, stored, handled and disposed of in accordance with all applicable
governmental laws, rules and regulations. Landlord shall have the right to
periodically inspect, take samples for testing and otherwise investigate the
Premises for the presence of hazardous or toxic materials. For purposes of this
Lease, hazardous or toxic materials shall mean asbestos containing materials and
all other materials, substances, wastes and chemicals classified as hazardous or
toxic substances, materials, wastes or chemicals under then-current applicable
governmental laws, rules or regulations or that are subject to any right-to-know
laws or requirements. If Tenant or its employees, agents or contractors shall
ever violate the provisions of this paragraph or otherwise contaminate the
Premises or any other portion of the Complex, then, at Landlord's option, (i)
-6-
7
Tenant shall clean-up, remove and dispose of the material causing the violation,
in compliance with all applicable governmental standards, laws, rules and
regulations and then prevalent industry practice and standards and shall repair
any damage to the Premises or Complex within such period of time as may be
reasonable under the circumstances after written notice by Landlord, or (ii)
Tenant shall reimburse Landlord for all costs and expenses in connection with
Landlord's clean-up, removal and disposal of the material causing the violation.
If Landlord elects for Tenant to perform such cleanup, Tenant shall notify
Landlord of its method, time and procedure for any clean-up or removal and
Landlord shall have the right to require reasonable changes in such method, time
or procedure or to require the same to be done after normal business hours.
Tenant's obligations under this paragraph shall survive the termination of this
Lease.
(c) Disability Acts. From and after the Commencement Date, Tenant shall
be obligated to see that the Premises comply with all existing requirements of
and regulations issued under the provisions of Tex. Rev. Civ. Stat. Xxx. art.
9102 and the provisions of the Americans With Disabilities Act of 1990, 42
U.S.C. Sections 12101-12213, as amended (hereinafter collectively called the
"Disability Acts") for each of the following: (i) alterations or improvements to
any portion of the Premises performed after the Commencement Date; (ii)
obligations or complaints arising under or out of Title I of the Americans With
Disabilities Act or Tenant's employer-employee obligations; (iii) obligations or
complaints arising under or out of the conduct or operations of Tenant's
business, including any obligations or requirements for barrier removal to
customers or invitees as a commercial facility or as a public accommodation (as
defined in the Disability Acts); and (iv) any change in the nature of Tenant's
business, or its employees, or financial net worth, or Tenant's business
operations that triggers an obligation under the Disability Acts.
5. BASE RENTAL. Tenant agrees to pay to Landlord in currency of the
United States of America, without any setoff or deduction whatsoever, the Base
Rental and the Percentage of Basic Costs, as provided in paragraph 6, and all
other sums (whether or not expressly designated as rent) required to be paid to
Landlord by Tenant hereunder, including without limitation any sums payable to
Landlord under any exhibit, rider or addendum attached hereto (all of which
shall constitute rent and are sometimes herein collectively referred to as
"rent"). The Base Rental, together with any estimate of Percentage of Basic
Costs pursuant to Paragraph 6 hereof then in effect, shall be due and payable in
advance in monthly installments, which monthly installments shall commence on
the Commencement Date and shall continue on the first day of each calendar month
thereafter during the Lease Term. Tenant hereby agrees to pay such Base Rental
and the Percentage of Basic Costs to Landlord at Landlord's address provided
herein (or such other address as may be designated by Landlord in writing from
time to time) monthly, in advance, and without demand. If the Commencement Date
occurs on a day other than the first day of a calendar month or the Lease Term
ends on a day other than the last day of a calendar month, then the installments
of Base Rental and any estimate of Percentage of Basic Costs for such month or
months shall be prorated, based on the number of days in such
-7-
8
month. The first installment of Base Rental, whether for a full calendar month
or a portion thereof, shall be paid contemporaneously with the Commencement Date
of this Lease.
6. TENANT'S PERCENTAGE OF BASIC COSTS.
(a) Tenant agrees to pay to Landlord, as additional rent, the
Percentage of Basic Costs, to be paid as provided in Paragraph 5 above and in
this Paragraph 6.
(b) The Percentage of Basic Costs for the remainder of the first
calendar year (whether full or partial) and for each subsequent calendar year of
the Lease Term will be estimated by Landlord, and notice of such estimated
amounts will be given to Tenant at least thirty (30) days prior to the
Commencement Date or the beginning of each calendar year, as the case may be.
For the partial calendar year, if any, after the Commencement Date, Tenant will
pay to Landlord each month, at the same time the monthly installment of Base
Rental is due, an amount equal to the estimated Percentage of Basic Costs for
the remainder of such calendar year divided by the number of months remaining in
such year. For each full calendar year of the Lease Term, Tenant will pay to
Landlord each month, at the same time the monthly installment of Base Rental is
due, an amount equal to one-twelfth (1/12) of the estimated Percentage of Basic
Costs due for such calendar year. If the expiration of the Lease Term does not
occur on December 31, for the partial calendar year preceding the expiration
date, Tenant will pay to Landlord, each month, at the same time the monthly
installment of Base Rental is due, an amount equal to the amount of the
estimated Percentage of Basic Costs for such partial calendar year divided by
the number of full calendar months of such partial calendar year.
(c) At any time and from time to time during the Lease Term, Landlord
will have the right, by notice to Tenant, to change the monthly amount then
payable by Tenant for the estimated Percentage of Basic Costs to reflect more
accurately, in the reasonable judgment of Landlord, the actual Percentage of
Basic Costs for the then current calendar year. Tenant will begin paying the
revised estimated amount together with the next monthly payment of Base Rental
due at least fifteen (15) days after receipt by Tenant of Landlord's notice.
(d) On or before April 1 of each calendar year, Landlord will prepare
and deliver to Tenant a statement setting forth the calculation of the actual
Percentage of Basic Costs for the previous calendar year. Within thirty (30)
days after receipt of the statement of the actual Percentage of Basic Costs,
Tenant will pay to Landlord, or Landlord will credit against the next rental or
other payment or payments due from Tenant, as the case may be, the difference
between the actual Percentage of Basic Costs for the preceding calendar year and
the estimated Percentage of Basic Costs paid by Tenant during such year. Tenant
shall have the right to audit Landlord's books and records relating to the
computation of Basic Costs on the conditions that (a) any such audit shall take
place at the offices of Landlord during normal business hours and upon two
business days' prior notice; (b) such audit shall not take place more often than
once in any twelve (12) month period; (c) such audit shall be conducted only by
a Certified Public Accountant firm; and (d) the results of such audit shall be
kept confidential by Tenant. In the event such audit reveals that actual Basic
Costs in any calendar year were overstated by more than five percent
-8-
9
(5%), Landlord shall pay the reasonable cost of the audit up to but not
exceeding $2,500. In the event that the Basic Costs are so found to be
understated or overstated, the parties will promptly make the appropriate
adjustments.
(e) If the Lease Term will expire or this Lease has been terminated
prior to a final determination of the actual Percentage of Basic Costs, the
amount of adjustment between the estimated Percentage and the actual Percentage
of Basic Costs payable for the preceding calendar year and/or the final partial
calendar year of the Lease Term will be estimated by Landlord based upon the
best data available to Landlord at the time of the estimate. Prior to the
expiration date of the Lease Term, or as soon as possible after an earlier
termination date, an adjustment will be made between Landlord and Tenant. The
obligations set forth in the preceding sentence will survive the expiration date
of the Lease Term or earlier termination of this Lease.
(f) In the event the Complex is not fully occupied during any calendar
year during the Lease Term, a reasonable adjustment shall be made by Landlord in
computing the Basic Costs for such calendar year in order that such Basic Costs
shall be computed as though the Complex had been fully occupied during such
calendar year.
(g) If Tenant believes that the tax appraisal for the Land, the
Building or the Complex is excessive, Tenant may request that Landlord protest
such appraisal; provided, however, that Landlord shall not be required to
undertake such protest if Landlord determines in its good faith judgment that
such protest would be detrimental to the Complex. Section 41.413 of the Texas
Property Tax Code may give Tenant the right to protest before the appropriate
appraisal review board a determination of the appraised value of the Building,
the Land and/or the Complex if Landlord does not so protest and requires
Landlord to deliver to Tenant a notice of any determination of the appraised
value of the Building, the Land and/or the Complex. Tenant acknowledges that the
Complex and the Land upon which it is located is a multi-tenant facility, that
any filing of a protest of appraised value by Tenant will give the appraisal
district discretion to increase or decrease the appraised value, that an
increase in the appraised value will affect Landlord and the other tenants of
the Complex, and that an increase in the appraised value may increase the taxes
not only for the year in question but for future years; potentially beyond
expiration of the Lease Term. Accordingly, to the extent permitted by applicable
law, Tenant hereby waives the provisions of '41.413 of the Texas Property Tax
Code (or any successor thereto). In the alternative, if '41.413 of the Texas
Property Tax Code cannot be waived, Tenant agrees not to protest any valuation
unless Tenant notifies Landlord in writing of Tenant's intent so to protest and
Landlord fails to protest the valuation within sixty (60) days after Landlord
receives Tenant's written notice. If Tenant files a protest without giving the
written notice required by the preceding sentence, such filing shall be an event
of default under this Lease without the necessity of any notice from Landlord,
regardless of the provisions of Paragraph 26(a) of this Lease. Furthermore, if
Tenant exercises the right of protest granted by '41.413 of the Texas Property
Tax Code, Tenant shall be solely responsible for, and shall pay, all costs of
such protest. If as a result of any protest filed by Tenant, the appraised value
of the Building, the Land and/or the Complex is increased by the appraisal
board, Tenant shall be solely responsible for, and shall pay upon demand by
Landlord, all taxes (not only the Percentage thereof) assessed
-9-
10
against the Building, the Land and/or the Complex in excess of the taxes which
would have been payable in the absence of the protest. Tenant shall continue to
pay such excess taxes until the determination of appraised value of the
Building, the Land and/or the Complex is changed by the appraisal review board,
regardless of whether the increased taxes are incurred during the Lease Term or
thereafter. Landlord agrees, upon request by Tenant, to provide to Tenant a copy
of the determination of appraised value for any year. The payment obligations of
Tenant under this Paragraph 6(g) shall survive the expiration or other
termination of this Lease.
7. SERVICES TO BE FURNISHED BY LANDLORD.
(a) So long as Tenant is not in default under this Lease, Landlord
agrees to furnish the following services to the Premises:
(i) Hot and cold water at those points of supply provided for
general use of other tenants in the Complex, central heat and air
conditioning in season, at such temperatures and in such amounts as are
considered by Landlord to be standard or as required by governmental
authority; provided, however, heating and air conditioning service at
times other than for standard building hours for HVAC service (which
are 7:00 a.m. to 7:00 p.m. on Mondays through Fridays and 8:00 a.m. to
1:00 p.m. on Saturdays, exclusive of normal business holidays) shall be
delivered at Tenant's expense through an on-demand telephone dial-in
mechanism installed by Landlord. Tenant shall pay for such additional
service at the current cost of $20.00/hour/zone, subject to adjustment
by Landlord from time to time; provided, however, that adjustments to
this price will be based on Landlord's actual costs, without markup for
profit. Landlord confirms that each wing of each floor is a separate
"zone". Further, Tenant understands that the variable air volume boxes
are distributed as follows:
Interior 1:1,200/1,700 RSF
Exterior 1:600/800 RSF
Corners 1:260 RSF
Prior to the execution of this Lease, Landlord has provided Tenant with
a copy of the Building's design criteria and specifications for the
heating and air conditioning system, a copy of which is attached hereto
as Exhibit J and made a part hereof, and Landlord agrees, subject to
governmental regulation, force majeure, and alterations to the Premises
by Tenant without Landlord's prior consent, to maintain the Building's
heating and air conditioning system equipment (not including heating or
cooling units which serve only the Premises) so that indoor air
temperatures will ordinarily be within the ranges set forth in the
design specifications for the Building's heating and air conditioning
system; provided, however, that Tenant will be responsible for the
costs of providing increased heating, cooling or ventilation made
necessary by Tenant's use or manner of use of the Premises in excess of
that indicated on the Construction Plans approved by Landlord and
Tenant in connection with the initial build-out of the Tenant's
Improvements.
-10-
11
(ii) Janitor service, five times weekly, exclusive of normal
business holidays; provided, however, if Tenant's floor covering or
other improvements require special treatment, Tenant shall pay the
additional cleaning cost attributable thereto as additional rent upon
presentation of a statement therefor by Landlord.
(iii) Subject to the provisions of Paragraph 13, facilities to
provide all electrical current required by Tenant in its use and
occupancy of the Premises. Landlord has installed three (3) four (4")
inch conduits from the street to the building, one of which is
currently used by Southwestern Xxxx. With Landlord's prior approval,
which will not be unreasonably withheld, Tenant's telecommunications
providers may access a portion of unused conduit in connection with the
installation of additional telecommunications lines to the Premises,
and Landlord agrees to make available the capacity of one (1) full
conduit for use by Tenant's telecommunications providers.
(iv) Elevator Service.
(v) Card-key controlled access (or other similar access
control device or mechanism as Landlord may from time to time elect to
provide) intended to limit the general public's access to the Building
during other than "Normal Business Hours" for the Complex (which are
7:00 a.m. to 7:00 p.m. on Mondays through Fridays and 8:00 a.m. to 1:00
p.m. on Saturdays, exclusive of normal business holidays). The Building
and Premises access system shall operate off of one access card, and
card readers shall be installed in the elevators and the stairwells of
the Building. Landlord, however, shall have no liability to Tenant, its
employees, agents, invitees or licensees for any loss, damage or injury
of any kind or nature caused by or as a result of the presence of any
unauthorized person in the Premises, the Building or the Complex,
including without limitation any loss, damage or injury due to theft,
burglary or other criminal conduct by any person (REGARDLESS OF WHETHER
ANY SUCH LOSS, DAMAGE OR INJURY IS CAUSED BY OR ARISES OUT OF
LANDLORD'S NEGLIGENCE OR THE NEGLIGENCE OF ANY OFFICER, EMPLOYEE OR
AGENT OF LANDLORD OR ANY STRICT LIABILITY), nor shall Landlord be
required to insure against any such loss, damage or injury. Tenant
shall cooperate fully in Landlord's efforts to maintain security in the
Building and Complex and shall follow all rules and regulations
promulgated by Landlord with respect thereto.
(b) The failure by Landlord to any extent to furnish or the
interruption or termination of the services described in Paragraphs 7(a)(i) or
7(a)(iii) above, in whole or in part, or the interruption or termination of such
services as a result of the failure of the equipment or machinery used in the
provision of such services to function properly resulting from causes other than
the gross negligence or intentional misconduct of Landlord, shall not render
Landlord liable to Tenant or any other person in any respect, nor be construed
as an eviction of Tenant, nor work an abatement of rent, nor relieve Tenant from
the obligation to fulfill any covenant or agreement hereof; provided, however,
that in such event, Basic Rent shall xxxxx if the interruption or termination of
services renders the Premises untenantable, and Tenant does not occupy the
-11-
12
Premises or affected portion thereof, for the conduct of its business for a
period of more than five (5) consecutive business days. If the interruption or
termination of services results from the gross negligence or intentional
misconduct of Landlord and the interruption or termination of services renders
the Premises untenantable as aforesaid, Base Rent shall xxxxx from the date that
the interruption or termination occurs. Landlord agrees to use diligent efforts
to restore any services that are interrupted.
(c) Except as otherwise expressly provided herein, Landlord shall not
be required to make any repairs to the Premises.
(d) If permitted by applicable law, Landlord shall have the right at
any time and from time to time during the Lease Term to contract (i) from any
utility provider currently providing services to the Complex or (ii) from a
different company or companies providing any utility service (each such company
shall hereinafter be referred to as an "Alternative Service Provider"). Tenant
shall cooperate with Landlord, the current utility provider and the Alternative
Service Provider at all times and, as reasonably necessary, shall allow
Landlord, the current utility provider and any Alternative Service Provider
reasonable access to the Building's and/or the Complex's electric lines,
feeders, risers, wiring and any other machinery within the Premises.
(e) Landlord shall construct at its sole expense the additional parking
deck. In addition to the Base Rent to be paid by Tenant as shown in Paragraph 1
hereof, Tenant agrees to pay as additional Base Rent $1.25 per square foot of
Agreed Rentable Area of the Premises per year during the primary Lease term.
During any renewal term of this Lease, the additional parking deck and covered
parking ratios will be factors to be considered in determining the Renewal
Rental Rate. The deck construction shall be complete prior to the Commencement
Date of this Lease; provided, however, that if the additional parking deck is
not substantially completed by the Commencement Date of the Lease, the
additional Basic Rent hereunder shall not be payable by Tenant until such time
as the additional parking deck is substantially complete, and provided further
that Tenant agrees that such failure by Landlord to substantially complete the
additional parking deck does not constitute a default xxxxx this Lease so long
as Landlord makes available for Tenant's use a total of 328 parking spaces, and
Landlord proceeds diligently to complete the additional parking deck. Based upon
the existing parking ratios and the construction of the deck, Tenant shall have
328 total parking spaces. In the event that Tenant does not have access to 328
parking spaces, Landlord and Tenant agree to implement a plan to assure Tenant
access to a total of 328 parking spaces. Landlord agrees to provide
approximately twenty (20) visitor designated spaces for the use of building
visitors. Approximately fifteen (15) of these shall be designated for Tenant's
visitors and shall be part of Tenant's allocation.
(f) Simultaneously with Lease execution, Tenant has provided to
Landlord $125,000 (the "Advance Payment") as advance payment for the costs of
Tenant Improvements that may exceed the Finish Allowance. In the event that the
costs of Tenant Improvements does not exceed the Finish Allowance or if the
excess amount is less than $125,000, the unused amount of the Advance Payment
(not to exceed $125,000) will be refunded to Tenant. If Tenant does not take
possession of the Premises for any reason, the Advance Payment, or any balance
thereof,
-12-
13
will be retained by Landlord; provided, however, that if such failure is due to
Landlord's default, or if Landlord does not substantially complete the Tenant
Improvements on or before April 1, 2000, then Landlord shall promptly return the
$125,000 Advance Payment to Tenant.
8. IMPROVEMENTS TO BE MADE BY LANDLORD AND ACCEPTANCE OF PREMISES.
Tenant acknowledges that at such time as the Premises have been constructed (see
the Work Letter attached hereto as Exhibit D and made a part hereof), Tenant
will inspect the Premises and the Complex, and that Tenant's taking possession
of the Premises shall evidence Tenant's acceptance of the Premises (including
the suitability of the Premises for the Permitted Use), the Building and the
Complex in "as is, with all faults" condition for all purposes subject to
Landlord's completion of agreed punchlist items. Landlord will construct or
cause to be constructed Tenant's Improvements (as defined in the Work Letter) to
the Premises in accordance with the terms of the Work Letter and will use
reasonable efforts to Substantially Complete (as defined in the Work Letter)
Tenant's Improvements by the Commencement Date. If Tenant's Improvements are not
Substantially Complete (and approved for occupancy pending issuance of the
Certificate of Occupancy by the City of Austin) by the Commencement Date for any
reason whatsoever, Tenant's sole remedy shall be an adjustment of the
Commencement Date as provided in Paragraph 3 hereof. However, if the Tenant
Improvements are not Substantially Complete (and approved for occupancy pending
issuance of the Certificate of Occupancy by the City of Austin) by April 1, 2000
for any reason other than Tenant Delay or force majeure, Tenant may terminate
this Lease by giving Landlord written notice thereof by April 10, 2000, and any
funds or letter of credit (including the $125,000 payment referred to in
Paragraph 7(f) hereinabove) previously paid or delivered to Landlord will be
refunded or returned to tenant as Tenant's sole remedy. The Premises shall be
delivered to Tenant upon Substantial Completion of Tenant's Improvements (and
approved for occupancy pending issuance of the Certificate of Occupancy by the
City of Austin) and Landlord and Tenant will execute the Acceptance of Premises
Memorandum (herein so called) attached hereto as Exhibit F (see Paragraph 55).
If Tenant occupies the Premises or any portion thereof without executing an
Acceptance of Premises Memorandum, Tenant shall be deemed to have accepted the
Premises for all purposes and Substantial Completion shall be deemed to have
occurred on the earlier to occur of (i) actual occupancy or (ii) the
Commencement Date set forth in Paragraph 1(b) hereof. Except as otherwise
provided in the Work Letter, all installations and improvements now or hereafter
placed on the Premises shall be for Tenant's account and at Tenant's cost. The
taking of possession of the Premises by Tenant shall be conclusive evidence
that, except as may be set forth in the Acceptance of Premises Memorandum (and
the punchlist items referred to therein), Tenant accepts the Premises the
Building and the Complex and each and every part and appurtenance thereof as
being in a good and satisfactory condition and waives any defects in the
Premises and its appurtenances and in all other parts of the Building, the
Complex and the appurtenances thereto, other than latent defects that cannot be
discovered by Tenant as of the Commencement Date. Notwithstanding the foregoing
provisions to the contrary, in the event that Landlord obtains a temporary
certificate of occupancy, Landlord will pursue diligently the issuance of a
final certificate of occupancy by the City of Austin.
-13-
14
9. ALTERATIONS AND ADDITIONS.
(a) All alterations, additions and improvements to the Premises (herein
collectively called the "Leasehold Improvements"), by Landlord or Tenant shall
become a part of the Premises and the Building and shall be owned by and be the
property of Landlord, at the time same are placed in or upon the Premises
without compensation to Tenant. Tenant shall not, without the prior written
consent of Landlord (which consent Landlord may withhold in its sole
discretion), make any changes, modifications, alterations, additions or
improvements (other than Tenant's Improvements under the Work Letter) to, or
install any equipment or machinery (other than office equipment and unattached
personal property) on, the Premises (all such changes, modifications,
alterations, additions, improvements (other than Tenant's Improvements under the
Work Letter) are herein collectively referred to as "Installations") if any such
Installations would (i) affect any structural or load bearing portions of the
Complex, (ii) result in a material increase of electrical usage above the normal
type and amount of electrical current to be provided by Landlord, (iii) result
in a significant increase in Tenant's usage of heating or air conditioning, (iv)
significantly impact mechanical, electrical or plumbing systems in the Premises
or the Complex, (v) affect areas of the Premises which can be viewed from Common
Areas, (vi) require greater or more difficult cleaning work (e.g., kitchens,
reproduction rooms and interior glass partitions), (vii) adversely affect
Landlord's ability to deliver services to other tenants of the Complex or (viii)
violate any provision of this Lease (all of the foregoing hereinafter called
"Structural Installations"). As to Installations not covered by the preceding
sentence (hereinafter called "Non-Structural Installations"), Tenant will not
perform same without the prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed. All Installations shall be at Tenant's
sole cost and expense. Without in any way limiting Landlord's consent rights,
Landlord shall not be required to give its consent until (a) Landlord approves
the contractor or person making such Installations and approves such
contractor's insurance coverage to be provided in connection with the work, (b)
Landlord approves final and complete plans and specifications for the work and
(c) the appropriate governmental agency, if any, has approved the plans and
specifications for such work. All work performed by Tenant or its contractor
relating to the Installations shall conform to applicable governmental laws,
rules and regulations, including, without limitation, the Disability Acts. Upon
completion of the Installations, Tenant shall deliver to Landlord "as built"
plans. If Landlord performs such Installations, Tenant shall pay Landlord, as
additional rent, the cost thereof plus five percent (5%) as reimbursement for
Landlord's overhead. Each payment shall be made to Landlord within ten (10) days
after receipt of an invoice from Landlord. All Non-Structural Installations
shall be removed at the termination of this Lease, as provided in Paragraph 11
unless Landlord agrees in writing at the time of their installation that they do
not have to be removed upon the termination of this Lease. Structural
Installations shall be removed at the termination of this Lease, as provided in
Paragraph 11, except where approved by Landlord without the requirement that
such Installations be removed upon termination of this Lease, which requirement
will be made by Landlord, if at all, within ten (10) business days of the time
Tenant provides Landlord with written notice and plans for the requested
Structural Installation; provided, however, that Tenant shall upon the
expiration or earlier termination of this Lease, restore to condition consistent
with
-14-
15
normal office use any portions of the Premises that had been used for laboratory
use as contemplated in Section 1(g) hereinabove. Tenant shall indemnify and hold
Landlord harmless from and reimburse Landlord for and with respect to, any and
all costs, expenses (including reasonable attorneys' fees), demands, claims,
causes of action and liens, arising from or in connection with any Installations
performed by or on behalf of Tenant, EVEN IF THE SAME IS CAUSED BY THE
NEGLIGENCE OR OTHER TORTIOUS CONDUCT OF LANDLORD OR LANDLORD IS STRICTLY LIABLE
FOR SUCH COSTS, EXPENSES OR CLAIMS. All Installations performed by or on behalf
of Tenant will be performed diligently and in a first-class workmanlike manner
and in compliance with all applicable laws, ordinances, regulations and rules of
any public authority having jurisdiction over the Complex and/or Tenant's and
Landlord's insurance carriers. Landlord will have the right, but not the
obligation, to inspect periodically the work on the Premises and may require
changes in the method or quality of the work. Any approval by Landlord (or
Landlord's architect and/or engineers) of any of Tenant's contractors or
Tenant's drawings, plans or specifications which are prepared in connection with
any construction of improvements (including without limitation, Tenant's
Improvements) in the Premises shall not in any way be construed as or constitute
a representation or warranty of Landlord as to the abilities of the contractor
or the adequacy or sufficiency of such drawings, plans or specifications or the
improvements to which they relate, for any use, purpose or condition.
Notwithstanding anything in this Lease to the contrary, Tenant may make minor,
non-structural alterations, additions and improvements (that do not
significantly affect the Building's mechanical, electrical, HVAC or plumbing
systems) to the Premises in the normal course of Tenant's business that cost
less than Five Thousand Dollars ($5,000.00) without having to obtain Landlord's
prior approval of those alterations, additions or improvements, but with prior
notice to Landlord.
Landlord hereby reserves the right and at all times shall have the right to
repair, change, redecorate, alter, improve, modify, renovate, enclose or make
additions to any part of the Complex (including, without limitation, structural
elements and load bearing elements within the Premises) and to enclose and/or
change the arrangement and/or location of driveways or parking areas or
landscaping or other Common Areas of the Complex, all without being held guilty
of an actual or constructive eviction of Tenant or breach of the implied
warranty of suitability and without an abatement of rent (the "Reserved Right").
Without in any way limiting the generality of the foregoing, Landlord's Reserved
Right shall include, but not be limited to the right to do any of the following:
(i) erect and construct scaffolding, pipe, conduit and other structures on and
within and outside of the Premises where reasonably required by the nature of
the changes, alterations, improvements, modifications, renovations and/or
additions being performed, (ii) perform within and outside of the Premises all
work and other activities associated with such changes, alterations,
improvements, modifications, renovations and/or additions being performed, (iii)
repair, change, renovate, remodel, alter, improve, modify or make additions to
the arrangement, appearance, location and/or size of entrances or passageways,
doors and doorways, corridors, elevators, elevator lobbies, stairs, toilets or
other Common Areas, (iv) temporarily close any Common Area and/or temporarily
suspend Complex services and facilities in connection with any repairs, changes,
alterations, modifications, renovations or additions to
-15-
16
any part of the Complex, (v) repair, change, alter or improve plumbing, pipes
and conduits located in the Complex, including without limitation, those located
within the Premises, and (vi) repair, change, modify, alter, improve, renovate
or make additions to the Complex central heating, ventilation, air conditioning,
electrical, mechanical or plumbing systems. When exercising the Reserved Right,
Landlord will interfere with Tenant's use and occupancy of the Premises as
little as is reasonably practicable. All changes, alterations, improvements,
modifications, renovations and additions made by Landlord pursuant to the
Reserved Right shall be of comparable or better quality than the portion of the
Complex being changed, altered, improved, modified or renovated.
10. SIGNAGE AND GRAPHICS. Tenant shall have an exterior sign at a
prominent location on the third level of the Building on both the north and the
east side. At the commencement of the Lease Term, Landlord shall provide and
install, at Tenant's cost (subject to the Finish Allowance), signage in the
Building lobby to take advantage of the stair between the lobby and the second
floor. Any change to such signage requested by Tenant and approved by Landlord
shall be installed by Landlord at Tenant's sole cost. All such letters and
numerals shall be in the standard graphics for the Building and no others shall
be used or permitted on the Premises. Tenant's interior signs will be consistent
with the signs of other tenants in the Complex and Tenant's exterior signs will
be comparable to other first class, professional signs located along North MoPac
Expressway, Austin, Texas; provided that both interior and exterior signs will
be subject to Landlord's approval, which will not be unreasonably withheld.
Tenant agrees to comply with Landlord's signage guidelines. Tenant shall be
solely responsible for obtaining all required municipal approvals for such
signage, provided, however, that Landlord will cooperate with Tenant in applying
for and obtaining such permits (at no cost or expense to Landlord). Upon the
expiration or earlier termination of this Lease, Tenant shall at its sole
expense remove all of such signage and repair any damage resulting from the
installation or removal of such signage.
11. SURRENDER OF THE PREMISES BY TENANT. At the termination of this
Lease, whether caused by lapse of time or otherwise, Tenant shall at once
surrender possession of the Premises and deliver said Premises to Landlord in as
good repair and condition as at the commencement of Tenant's occupancy,
reasonable wear and tear and damage or destruction by fire or other casualty
excepted, and shall deliver to Landlord all keys to the Premises, and, if such
possession is not immediately surrendered, Landlord may forthwith enter upon and
take possession of the Premises and expel or remove Tenant and any other person
who may be occupying said Premises, or any part thereof, in compliance with
applicable legal procedures for such recovery of possession. Tenant shall, by
the expiration date or, if this Lease is earlier terminated, within seven (7)
days after the termination, remove from the Premises, at the sole expense of
Tenant, (i) all furniture, equipment, movable trade fixtures and other
personalty installed or placed in the Premises by or on behalf of Tenant
(hereinafter called "Tenant's Property") (unless Landlord is asserting its lien
rights therein), (ii) all Non-Structural Installations (unless Landlord agreed
in writing at the time of installation of the Non-Structural Installations that
they may remain on the Premises after the termination of the Lease), and (iii)
Structural
-16-
17
Installations where removal has been required by Landlord pursuant to Paragraph
9 (provided, further, that in the case of any portions of the Premises that had
been used for laboratory purposes as contemplated in Section 1(g) hereinabove,
Tenant shall restore such portions of the Premises and mechanical, electrical,
plumbing and/or structural systems to conditions consistent with normal office
use. All such removals (and restoration, as applicable) shall be accomplished in
a good workmanlike manner so as not to damage the Premises or the primary
structure or structural qualities of the Building or the plumbing, electrical
lines or other utilities. If Tenant fails to deliver the Premises in the
condition aforesaid, then Landlord may restore the Premises to such condition at
Tenant's expense. All Tenant's Property required to be removed by this paragraph
not removed within the time period required hereunder shall be conclusively
presumed to have been abandoned by Tenant and Landlord may, at its option, take
over the possession of such property and either (i) declare same to be the
property of Landlord by written notice thereof to Tenant or (ii) at the sole
cost and expense of Tenant remove the same or any part thereof in any manner
that Landlord shall choose and store the same without incurring liability to
Tenant or any other person.
12. REPAIR AND MAINTENANCE BY TENANT.
(a) Tenant shall keep the Premises including all fixtures and carpet
therein in good and tenantable condition, normal wear and tear excepted, and
shall promptly make all necessary nonstructural repairs and replacements thereto
except those caused by fire or other casualty covered by insurance on the
Complex under policies naming Landlord as the insured, all at Tenant's sole
expense, under the supervision and with the approval of Landlord. Said repairs
and replacements shall be in quality and class equal to the original work.
Without diminishing such obligation of Tenant, if Tenant fails to make such
repairs and replacements within fifteen (15) days after the occurrence of the
damage or injury, Landlord may at its option make such repair and Tenant shall
pay Landlord for the cost thereof within thirty (30) days after receipt of an
invoice. In addition, Tenant shall pay the cost of repair and replacement due to
damage or injury (except those caused by fire or other casualty covered by
insurance on the Complex under policies naming Landlord as the insured) done to
the Complex (other than the Premises) or any part thereof by Tenant or Tenant's
agents, employees or invitees. Such amount shall be paid by Tenant to Landlord
within thirty (30) days of receipt of an invoice.
(b) Subject to Paragraphs 22, 23 and 24 of this Lease, Tenant shall
maintain and repair all supplemental HVAC units, data and phone cabling, and any
and all other installations and equipment installed in the Premises, above the
acoustical ceiling tiles of the Premises or elsewhere in the Building installed
by or on behalf of Tenant and which services only the Premises (such equipment
and installations collectively referred to as the "Tenant Service Equipment").
Tenant shall notify Landlord prior to performing any repair, maintenance or
replacement of the Tenant Service Equipment and the same shall be performed in
accordance with the standards and conditions applicable to maintenance, repairs
and replacements performed by Tenant pursuant to Paragraph 12(a). Landlord shall
have no liability for any repair, maintenance or replacement cost incurred in
connection with the Tenant Service Equipment. Unless otherwise agreed to by
Landlord in writing upon the installation of the Tenant Service
-17-
18
Equipment, all Tenant Service Equipment shall become property of Landlord at the
expiration or earlier termination of the Lease; provided that, if requested by
Landlord, Tenant shall remove the Tenant Service Equipment on or before the
Expiration Date or, if this Lease is terminated earlier, within seven (7) days
after such termination. All removals shall be accomplished in accordance with
the standards for removals under Paragraph 11 hereof. Tenant shall indemnify and
hold Landlord harmless from, and reimburse Landlord for and with respect to, any
and all costs, expenses (including reasonable attorneys' fees), claims and
causes of action arising from or incurred by and/or asserted in connection with
the (i) maintenance, repair, replacement of the Tenant Service Equipment and
(ii) any damage or injury arising out of or resulting from or in connection with
the Tenant Service Equipment.
13. USE OF ELECTRICAL SERVICES AND TELECOMMUNICATIONS EQUIPMENT BY
TENANT. Tenant's use of electrical services furnished by Landlord shall be
subject to the following:
(a) Tenant's electrical equipment and overhead lighting shall be
restricted to that equipment and lighting which both individually and
collectively do not have an electrical design load greater than equipment and
lighting normally utilized in general office use and do not use electric current
in excess of the capacity of the feeders or lines to the Building or the risers
or wiring of the Building or Premises. Landlord and Tenant will consult with one
another during the preparation of the Construction Drawings (as defined in the
Work Letter attached as Exhibit D hereto) to ensure that Tenant's planned
improvements are within the electrical design load for the Building.
(b) If, in the exercise of reasonable judgment, Landlord should
determine that Tenant's consumption of electrical services exceeds normal
consumption for general office use, then Tenant shall remove such equipment
and/or lighting to achieve compliance within ten (10) days after receiving
notice from Landlord. Or upon receiving Landlord's prior written approval, such
equipment and/or lighting may remain in the Premises, subject to the following:
(i) Tenant shall pay for all costs of installation and
maintenance of submeters, wiring, air conditioning and other items
required by Landlord, in Landlord's reasonable discretion, to
accommodate Tenant's excess design loads and capacities.
(ii) Tenant shall pay to Landlord, within thirty (30) days of
receipt of an invoice, the cost of the excess demand and consumption of
electrical service at rates based upon Landlord's actual costs and
which shall be in accordance with any applicable laws.
(iii) Landlord may, at its option, upon not less than thirty
(30) days' prior written notice to Tenant, discontinue the availability
of such extraordinary utility service. If Landlord gives any such
notice, Tenant will contract directly with the public utility for the
supplying of such utility service to the Premises; in such event,
Landlord will
-18-
19
cooperate with Tenant and the public utility to provide such access to
the Building and premises as is reasonably necessary to provide such
utility service.
(c) Landlord shall be responsible for all Building standard fluorescent
bulb and ballast replacements in the Premises, but Tenant shall pay to Landlord,
within thirty (30) days of receipt of an invoice, all costs incident thereto.
(d) In the event that Tenant wishes at anytime to utilize the services
of a telephone or telecommunications provider whose equipment is not then
servicing the Building, no such provider shall be permitted to install its lines
or other equipment within the Building without first securing the prior written
approval of Landlord, which approval shall not be unreasonably withheld and
shall include, without limitation, approval of the plans and specifications for
the installation of the lines and/or other equipment within the Building.
Landlord's approval shall not be deemed any kind of warranty or representation
by Landlord, including, without limitation, any warranty or representation as to
the suitability, competence, or financial strength of the provider. Without
limitation of the foregoing standard, unless all of the following conditions are
satisfied to Landlord's satisfaction, it shall be reasonable for Landlord to
refuse to give its approval: (i) Landlord shall incur no expense whatsoever with
respect to any aspect of the provider's provision of its services, including
without limitation, the costs of installation, materials and services; (ii)
prior to commencement of any work in or about the Building by the provider, the
provider shall supply Landlord with such written indemnities, insurance,
financial statements, and such other items as Landlord determines to be
necessary to protect its financial interests and the interests of the Building
relating to the proposed activities of the provider; (iii) the provider agrees
to abide by such rules and regulations, Building and other codes, job site rules
and such other requirements as are determined by Landlord to be necessary to
protect the interests of the Building, the tenants in the Building and Landlord;
(iv) Landlord determines that there is sufficient space in the Building for the
placement of all of the provider's equipment and materials; (v) the provider
agrees to abide by Landlord requirements, if any, that provider use existing
Building conduits and pipes or use Building contractors (or other contractors
approved by Landlord); (vi) Landlord receives from the provider such
compensation as is determined by Landlord to compensate it for space used in the
Building for the storage and maintenance of the provider's equipment, for the
fair market value of a provider's access to the Building, and the costs which
may reasonably be expected to be incurred by Landlord; (vii) the provider agrees
to deliver to Landlord detailed "as built" plans immediately after the
installation of the provider's equipment is complete; and (viii) all of the
foregoing matters are documented in a written license agreement between Landlord
and the provider, the form and content of which is reasonably satisfactory to
Landlord.
14. RULES AND REGULATIONS. Tenant and Tenant's agents, employees and
invitees will comply fully with all requirements of the Rules and Regulations
(as changed from time to time as hereinafter provided) which are attached hereto
as Exhibit C and made a part hereof as though fully set out herein. Landlord
shall at all times have the right to change such Rules and Regulations or to
promulgate other Rules and Regulations in such reasonable manner
-19-
20
as may be deemed advisable for the management, safety, care or cleanliness of
the Complex, and for preservation of good order therein; provided, however, that
such changes shall not become effective and a part of this Lease until a copy
thereof shall have been delivered to Tenant. Tenant shall further be responsible
for the compliance with such Rules and Regulations by the employees, servants,
agents, visitors and invitees of Tenant.
15. ENTRY BY LANDLORD. Tenant agrees to permit Landlord or its agents
or representatives, after twenty-four (24) hours written notice from Landlord
(except that in the event of emergency, no notice shall be required), to enter
into and upon any part of the Premises during ordinary business hours, or at
such other times as Landlord deems appropriate, to inspect the same, or to show
the Premises to prospective purchasers, tenants, mortgagees or insurers, or to
clean or make repairs, alterations or additions thereto (but without any
obligation to do so, except as expressly provided for herein) and Tenant shall
not be entitled to any abatement or reduction of rent by reason thereof.
Landlord and its employees, contractors and subcontractors will maintain the
confidentiality of all information within the Premises; provided, however, that
Tenant's exclusive remedy in the event of any breach of this confidentiality
provision shall be an action for injunction to prevent further dissemination of
any such information.
16. ASSIGNMENT AND SUBLETTING. (a) Tenant shall not, without the prior
written consent of Landlord, (i) assign or in any manner transfer this Lease or
any estate or interest therein, or (ii) permit any assignment of this Lease or
any estate or interest therein by operation of law, or (iii) sublet the Premises
or any part thereof, or (iv) grant any license, concession or other right of
occupancy of any portion of the Premises or (v) permit the use of the Premises
by any parties other than Tenant, its agents and employees; provided, however,
with respect to any proposed assignment of this Lease or subletting of the
Premises, Landlord agrees not to unreasonably withhold its consent so long as
Landlord does not elect to terminate this Lease pursuant to subparagraph (b)
below. Landlord shall be deemed to have reasonably withheld its consent to any
assignment or sublease if the refusal is based on (i) Landlord's determination
(in its sole discretion) that such assignee or subtenant does not have the
financial stability or is not of the character or quality of a tenant to whom
Landlord would generally lease space in the Complex, (ii) the fact that such
assignment or sublease is not in form and of substance reasonably satisfactory
to Landlord, (iii) such assignment or sublease conflicts in any manner with this
Lease, including, but not limited to, the Permitted Use, (iv) the proposed
assignee or subtenant is a tenant of the Complex or Landlord is negotiating with
the proposed assignee or subtenant to become a tenant of the Complex, (v) the
subtenant or assignee is a governmental entity or a medical office, (vi) the
subtenant's or assignee's primary business is prohibited by any non-compete
clause then affecting the Complex or (vii) the assignment or sublease would
cause Landlord to breach any covenants or contractual obligations to which the
Complex or Landlord is subject. Consent by Landlord to one or more assignments
or sublettings shall not operate as a waiver of Landlord's rights as to any
subsequent assignments and sublettings. Notwithstanding any assignment or
subletting, Tenant and any guarantor of Tenant's obligations under this Lease
shall at all times remain fully responsible and liable for the payment of the
rent herein specified and for compliance with all of Tenant's other obligations
under this Lease. To the extent the rentals or income derived from any sublease
or assignment exceed the
-20-
21
rentals due hereunder, such excess rentals and income shall first be applied to
the costs incurred by Landlord to approve the sublease or assignment, and the
remainder will be shared equally between Landlord and Tenant. If an event of
default, as hereinafter defined, should occur while the Premises or any part
thereof are then assigned or sublet, Landlord, in addition to any other remedies
herein provided or provided by law, may at its option collect directly from such
assignee or sublessee all rents becoming due to Tenant under such assignment or
sublease and apply such rent against any sums due to Landlord by Tenant
hereunder and Tenant hereby authorizes and directs any such assignee or
sublessee to make such payments of rent directly to Landlord upon receipt of
notice from Landlord. No direct collection by Landlord from any such assignee or
sublessee shall be construed to constitute a novation or a release of Tenant or
any guarantor of Tenant from the further performance of its obligations
hereunder. Receipt by Landlord of rent from any assignee, sublessee or occupant
of the Premises shall not be deemed a waiver of the covenant in this Lease
contained against assignment and subletting or a release of Tenant under this
Lease. The receipt by Landlord to any such assignee or sublessee obligated to
make payments of rent shall be a full and complete release, discharge, and
acquittance to such assignee or sublessee to the extent of any such amount of
rent so paid to Landlord. Tenant shall not mortgage, pledge or otherwise
encumber its interest in this Lease or in the Premises.
(b) If Tenant requests Landlord's consent to an assignment of the Lease
or subletting of all or a part of the Premises, it shall submit to Landlord, in
writing, the name of the proposed assignee or subtenant, the proposed
commencement date of such assignment or subletting, the nature and character of
the business of the proposed assignee or subtenant and the proposed rates, terms
and other pertinent conditions of such assignment or subletting. Landlord shall
have the option (to be exercised within fifteen (15) days from the submission of
Tenant's written request) to (i) consent to such proposed assignment or
subletting, (ii) refuse to consent to such proposed assignment or subletting or
(iii) cancel this Lease (or the applicable portion thereof as to a partial
subletting) as of the commencement date stated in the above-mentioned notice of
subletting or assignment. If Landlord fails to notify Tenant of its election
within such fifteen (15) day period, Landlord shall be deemed to have given its
consent to such proposed assignment or subletting. If Landlord elects to cancel
this Lease as stated, then the Lease Term, and the tenancy and occupancy of the
Premises by Tenant thereunder, shall cease, terminate, expire, and come to an
end as if such cancellation date was the original termination date of this
Lease. If Landlord cancels this Lease with respect to less than the entire
Premises and the sublease space adjoins another portion of the Premises, Tenant
shall, at Tenant's sole cost and expense, construct and finish such demising
walls as are necessary to physically separate the Premises from the sublease
space, and if the sublease space is part of a floor which is fully included in
the Premises, then Landlord shall have the right, at Tenant's sole cost and
expense, to construct and finish in accordance with Building standards or to
cause Tenant to construct and finish in accordance with Building standards such
demising walls as are necessary (i) to construct a public corridor so as to
convert the floor to a multi-tenant floor and (ii) to convert the restrooms on
such floor (including access thereto) to restrooms which will serve the entire
floor, as opposed to only the Premises, and to make such revisions, if any, are
necessary, to properly light, heat, cool and ventilate the public corridor and
public restrooms.
-21-
22
(c) Landlord shall have the right to transfer, assign and convey, in
whole or in part, the Building and/or the Complex and any and all of its rights
under this Lease, and in the event Landlord assigns its rights under this Lease,
Landlord shall thereby be released from any further obligations hereunder with
respect to obligations arising after the date of such transfer or assignment,
and Tenant agrees to look solely to such successor in interest of the Landlord
for performance of such obligations.
17. MECHANIC'S LIENS. Tenant will not permit any mechanic's lien or
liens to be placed upon the Premises or any portion of the Complex during the
term hereof caused by or resulting from any work performed, materials furnished
or obligation incurred by or at the request of Tenant and nothing in this Lease
shall be deemed or construed in any way as constituting the consent or request
of Landlord, express or implied, by inference or otherwise, to any person for
the performance of any labor or the furnishing of any materials to the Premises,
or any part thereof, nor as giving Tenant any right, power or authority to
contract for or permit the rendering of any services or the furnishing of any
materials that would give rise to any mechanic's or other liens against the
interest of Landlord in the Premises or any portion of the Complex. In the event
any such lien is attached to the Premises or any portion of the Complex, Tenant
shall cause the same to be discharged of record within twenty (20) days after
the filing of same. If Tenant shall fail to discharge such mechanic's lien
within such period, then, in addition to any other right or remedy of Landlord,
Landlord may, but shall not be obligated to, discharge the same. Any amount paid
by Landlord for any of the aforesaid purposes and all reasonable legal and other
expenses of Landlord, including reasonable counsel fees, in defending any such
action or in procuring the discharge of such lien, with all disbursements in
connection therewith, shall be paid by Tenant to Landlord within thirty (30)
days of receipt of an invoice therefor.
18. PROPERTY AND LIABILITY INSURANCE. Landlord shall maintain fire and
extended coverage insurance on the Complex and the Premises (including the
Leasehold Improvements)in an amount of at least eighty percent (80%) of the
replacement value of the Building. Such insurance shall be maintained at the
expense of Landlord (as a part of the Basic Costs), and payments for losses
thereunder shall be made solely to Landlord or the mortgagees of Landlord as
their interests shall appear. Landlord shall also procure and maintain at the
expense of Landlord (but as a part of the Basic Costs) through the Lease Term
Commercial General Liability insurance against claims for bodily injury or death
and property damage occurring in or upon or resulting from the Complex, such
insurance to insure Landlord and its officers, employees and agent, to the limit
of not less than $3,000,000 (which may be a combination of liability and
umbrella liability coverage) in respect of any one accident or occurrence.
Tenant shall maintain at its expense, in an amount equal to full replacement
cost, fire and extended coverage insurance on all of Tenant's Property.
19. LIABILITY INSURANCE. Tenant shall, at its sole cost and expense,
procure and maintain through the Lease Term Commercial General Public Liability
insurance against claims for bodily injury or death and property damage
occurring in or upon or resulting from the Premises, such insurance to insure
both Tenant and, as an additional named insured, Landlord and its officers,
employees and agents, to be in standard form, to be issued by such insurance
-22-
23
company or companies as may have a Best's Insurance rating of A-IX or better,
and to afford immediate protection, to the limit of not less than $3,000,000 in
respect of any one accident or occurrence, and to the limit of not less than
$500,000 for property damage, with not more than $5,000 deductible. Such
Commercial General Public Liability insurance shall include Blanket Contractual
Liability coverage which insures contractual liability under the indemnification
of Landlord by Tenant set forth in this Lease (but such coverage or the amount
thereof shall in no way limit such indemnification). Tenant shall maintain with
respect to each policy or agreement evidencing such Commercial General Public
Liability insurance and each policy or agreement evidencing the insurance
required pursuant to Paragraph 18 above, such endorsements as may be required by
Landlord and shall at all times deliver and maintain with Landlord a duplicate
original or certified copy of such policies or a certificate with respect to
such insurance in form satisfactory to Landlord. Tenant shall obtain a written
obligation on the part of each insurance company to notify Landlord at least
fifteen (15) days prior to cancellation of such insurance. Such policies or duly
executed certificates of insurance relating thereto shall be delivered to
Landlord prior to Tenant's occupancy of the Premises and renewals thereof as
required shall be delivered to Landlord at least thirty (30) days prior to the
expiration of the respective policy terms. If Tenant fails to comply with the
foregoing requirements relating to insurance, Landlord may, following ten (10)
days written notice to Tenant, obtain such insurance and Tenant shall pay to
Landlord within thirty (30) days of receipt of an invoice the premium cost
thereof.
20. LIABILITY OF LANDLORD. Unless caused by Landlord's gross negligence
or willful misconduct, Landlord shall not be liable to Tenant or to Tenant's
employees, agents, licensees, or visitors, or to any other person whomsoever,
for any injury, loss or damage (REGARDLESS OF WHETHER SUCH INJURY, LOSS OR
DAMAGE IS CAUSED BY OR ARISES OUT OF LANDLORD'S NEGLIGENCE OR THE NEGLIGENCE OF
ANY EMPLOYEE OR AGENT OF LANDLORD OR ANY STRICT LIABILITY) to person or property
(i) due to the Complex or the Building or the Land or any part thereof becoming
out of repair or by defect in or failure of pipes or wiring, or by the backing
up of drains or by the bursting or leaking of pipes, faucets and plumbing
fixtures or by gas, water, steam, electricity or oil leaking, escaping or
flowing into the Premises, or (ii) that may be occasioned by or through the acts
or omissions of other tenants in the Complex or of any other persons whatsoever,
or (iii) that may be occasioned by theft, fire, act of God, public enemy,
injunction, riot, insurrection, war, court order, requisition or order of
governmental authority, or any other matter beyond the control of Landlord.
Tenant agrees that all of Tenant's Property shall be at the risk of Tenant only,
and that Landlord shall not be liable for any loss or damage thereto or theft
thereof (REGARDLESS OF WHETHER SUCH LOSS, DAMAGE OR THEFT IS CAUSED BY OR ARISES
OUT OF LANDLORD'S NEGLIGENCE OR THE NEGLIGENCE OF ANY EMPLOYEE OR AGENT OF
LANDLORD OR ANY STRICT LIABILITY), except where caused by the gross negligence
or willful misconduct of Landlord.
-23-
24
21. INDEMNIFICATION.
(a) Subject to the exclusions set forth below in this Paragraph, Tenant
will indemnify and hold harmless Landlord, the property manager of the Complex
("Property Manager"), their respective officers, directors, and employees and
any other parties for whom Landlord and/or Property Manager are legally
responsible (each a "Landlord Indemnified Party") from, and shall reimburse each
Landlord Indemnified Party for and with respect to, any and all costs, expenses
(including, without limitation, reasonable attorneys fees), claims, demands,
actions, proceedings, judgments, hearings, damages, losses and liabilities
brought or asserted by or payable to any third party on account of personal
injury, death, property damage or any other form of injury or damage (each a
"Claim" and collectively the "Claims") arising out of or relating to (i) an
incident or event which occurred within or on the Premises, EVEN IF THE (X)
INCIDENT OR EVENT IS THE RESULT OF OR CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS
OF ANY LANDLORD INDEMNIFIED PARTY OR (Y) THE LANDLORD INDEMNIFIED PARTY IS
STRICTLY LIABLE FOR ANY CLAIM ARISING FROM SUCH INCIDENT OR EVENT, (ii) the use
or occupancy of the Premises, EVEN IF (X) THE CLAIM IS THE RESULT OF OR CAUSED
BY THE NEGLIGENT ACTS OR OMISSIONS OF ANY LANDLORD INDEMNIFIED PARTY OR (Y) THE
LANDLORD INDEMNIFIED PARTY IS STRICTLY LIABLE FOR SUCH CLAIM, or (iii) any
breach of this Lease by Tenant which resulted in a Claim. The indemnification
and reimbursement obligations of Tenant under this subparagraph shall not apply
to a Claim (i) waived by Landlord under Paragraph 22 below or any other
provision of this Lease, or (ii) arising out of the gross negligence or
intentional misconduct of the Landlord Indemnified Party. If a third party files
a lawsuit or brings any other legal action asserting a Claim against a Landlord
Indemnified Party and that is covered by Tenant's indemnity, then Tenant, upon
notice from a Landlord Indemnified Party, shall resist and defend such Claim at
Tenant's expense through counsel reasonably satisfactory to the Landlord
Indemnified Party. Tenant's obligations under this Paragraph shall survive the
termination of this Lease.
Subject to the exclusions set forth below in this Paragraph, Landlord will
indemnify and hold harmless Tenant and its officers, directors, and employees
and any other parties for whom Tenant is legally responsible (each a "Tenant
Indemnified Party") from, and shall reimburse each Tenant Indemnified Party for
and with respect to, any and all Claims (as defined in subparagraph (a) above)
arising out of or relating to (i) an incident or event which occurred within or
on the Common Areas, EVEN IF THE (X) INCIDENT OR EVENT IS THE RESULT OF OR
CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OF ANY TENANT INDEMNIFIED PARTY OR (Y)
THE TENANT INDEMNIFIED PARTY IS STRICTLY LIABLE FOR ANY CLAIM ARISING FROM SUCH
INCIDENT OR EVENT, (ii) the use of the Common Areas, EVEN IF (X) THE CLAIM IS
THE RESULT OF OR CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OF ANY TENANT
INDEMNIFIED PARTY OR (Y) THE TENANT INDEMNIFIED PARTY IS STRICTLY LIABLE FOR
SUCH CLAIM, or (iii) any breach of this Lease by Landlord and which resulted in
a Claim. The indemnification and reimbursement obligations of Landlord under
this subparagraph shall not apply to a Claim (i) waived by Tenant under
Paragraph 22 below or any other provision of this Lease, or (ii) arising out of
the gross negligence or intentional misconduct of the Tenant
-24-
25
Indemnified Party. If a third party files a lawsuit or brings any other legal
action asserting a Claim against a Tenant Indemnified Party and that is covered
by Landlord's indemnity, then Landlord, upon notice from the Tenant Indemnified
Party, shall resist and defend such Claim at Landlord's expense through counsel
reasonably satisfactory to the Tenant Indemnified Party. Landlord's obligations
under this subparagraph shall survive the termination of this Lease.
22. WAIVER OF SUBROGATION. Notwithstanding any provision to the
contrary contained herein, each party hereto hereby waives any and every claim
which arises or may arise in its favor and against the other party hereto during
the Lease Term or any extension or renewal thereof for any and all loss of or
damage to any of its property (REGARDLESS OF WHETHER SUCH LOSS OR DAMAGE IS
CAUSED BY THE FAULT, NEGLIGENCE OR OTHER TORTIOUS CONDUCT, ACTS OR OMISSIONS OF
LANDLORD OR TENANT OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
INVITEES), which loss or damage would be covered by the fire and extended
coverage insurance policies required to be carried by such party by the terms of
this Lease. Said waivers shall be in addition to, and not in limitation or
derogation of, any other waiver or release contained in this Lease with respect
to any loss or damage to property of the parties hereto. Inasmuch as the above
mutual waivers will preclude the assignment of any aforesaid claim by way of
subrogation (or otherwise) to an insurance company (or an other person), each
party hereto hereby agrees immediately to give to each insurance company which
has issued to it policies of fire and extended coverage insurance written notice
of the terms of said mutual waivers, and to have said insurance policies
properly endorsed, if necessary, to prevent the invalidation of said insurance
coverages by reason of said waivers.
23. CASUALTY DAMAGE. If the Premises or any part thereof shall be
damaged by fire or other casualty, Tenant shall give prompt written notice
thereof to Landlord. In case the Building shall be so damaged by fire or other
casualty that substantial alteration or reconstruction of the Building shall, in
Landlord's sole opinion, be required (whether or not the Premises shall have
been damaged by such fire or other casualty) or in the event any mortgagee of
Landlord should require that the insurance proceeds payable as a result of said
fire or other casualty be applied in reduction of the mortgage debt or in the
event of any material uninsured loss to the Building, Landlord may, at its
option, terminate this Lease by notifying Tenant in writing of such termination
within forty-five (45) days after the date of such damage in which event the
rent hereunder shall be abated as of the date of such damage. If Landlord is not
entitled to or does not thus elect to terminate this Lease, Landlord shall
commence and proceed with reasonable diligence to restore the Building and the
Leased Premises (including Leasehold Improvements) to substantially the same
condition in which they were immediately prior to the happening of the casualty
but Landlord shall not in any event be required to incur costs or expense in
excess of the insurance proceeds actually received by Landlord as a result of
the casualty. In performing such work, Landlord shall not be responsible for
delays outside its control. If the Building and premises are not rebuilt so as
to allow Tenant to occupy the Premises and and conduct its business in the
Premises within two hundred forty (240) days after the date of the casualty,
then Tenant may terminate this Lease by written notice to Landlord within ten
(10) days after the expiration of such two hundred forty (240) day period. In no
event shall Landlord be required to
-25-
26
rebuild, repair or replace any part of Tenant's Property. Landlord shall not be
liable for any inconvenience or annoyance to Tenant or injury to the business of
Tenant resulting in any way from such damage or the repair thereof. If the
Premises or any other portion of the Complex is damaged by fire or other
casualty resulting from the fault or negligence of Tenant or any of Tenant's
agents, employees or invitees, Tenant shall be liable to Landlord for the cost
of the repair and restoration of the Complex caused thereby to the extent such
cost and expense is not covered by or would not be covered by Landlord's
insurance proceeds. Any insurance which may be carried by Landlord or Tenant
against loss or damage to the Premises shall be for the sole benefit of the
party carrying such insurance and under its sole control.
24. CONDEMNATION. If the whole or substantially the whole of the
Building or the Premises should be taken for any public or quasi-public use, by
right of eminent domain or otherwise, or should be sold in lieu of condemnation,
then this Lease shall terminate as of the date when physical possession of the
Building or the Premises is taken by the condemning authority. If less than the
whole or substantially the whole of the Building or the Premises is thus taken
or sold, Landlord (whether or not the Premises are affected thereby) may
terminate this Lease by giving written notice thereof to Tenant, in which event
this Lease shall terminate as of the date when physical possession of such
portion of the Building or Premises is taken by the condemning authority. If
this Lease is not so terminated upon any such taking or sale, the Base Rental
payable hereunder shall be diminished by an equitable amount, and Landlord
shall, to the extent Landlord deems feasible, restore the Building and the
Premises (including the Leasehold improvements) to substantially their former
condition, but Landlord shall not in any event be required to spend for such
work an amount in excess of the amount received by Landlord as compensation or
damages (over and above amounts going to the mortgages of the property taken and
amounts expended in collecting said compensation or damages) for the part of the
Building or the Premises so taken. In performing such work, Landlord shall not
be responsible for delays outside its control. All amounts awarded to Landlord
upon a taking of any part or all of the Building or the Premises including any
award for the value of any unexpired Lease Term shall belong to Landlord and
Tenant shall not be entitled to and expressly waives all claim to any such
compensation. However, Tenant may make a request for a separate award to
compensate Tenant for its loss resulting from the condemnation, provided that
such award does not and would not reduce any award that may be payable to
Landlord.
25. TAXES ON TENANT'S PROPERTY. Tenant shall be liable for all taxes
levied or assessed against Tenant's Property. If any such taxes for which Tenant
is liable are levied or assessed against Landlord or Landlord's property,
Landlord shall give Tenant written notice of such levy or assessment, and if
Landlord elects to pay the same or if the assessed value of Landlord's property
is increased by inclusion of personal property, furniture or fixtures placed by
Tenant in the Premises, and Landlord elects to pay the taxes based on such
increase, Tenant shall pay to Landlord within thirty (30) days of receipt of an
invoice that part of such taxes for which Tenant is liable hereunder.
-26-
27
26. EVENTS OF DEFAULT/REMEDIES.
(a) Events of Default. The following events shall be deemed to be
events of default by Tenant under this Lease: (i) Tenant shall fail to pay any
installment of the rent hereby reserved when due, and shall not cure such
failure within ten (10) days after written notice thereof to Tenant (but
Landlord shall not be required to give such notice more than two (2) times in
any twelve (12) month period); (ii) Tenant shall fail to comply with any term,
provision or covenant of this Lease, other than the payment of rent and the
events described in subparts (iii) and (iv) following, and shall not cure such
failure within thirty (30) days after written notice thereof to Tenant, but if
the cure cannot be completed within thirty (30) days, then Tenant shall not be
in default if Tenant promptly commences the cure within the initial thirty (30)
day period and thereafter diligently and continuously pursues the cure to
completion; (iii) the failure to maintain any insurance required hereunder, (iv)
an assignment of this Lease or a sublease of all or any portion of the Premises
without Landlord's consent, (v) the leasehold hereunder demised shall be taken
on execution or other process of law in any action against Tenant; (vi) Tenant
shall fail to promptly move into and take possession of the Premises when the
Premises are ready for occupancy or shall cease to do business in or abandon any
substantial portion of the Premises while the payment of rent is or becomes
delinquent ; (vii) Tenant becomes insolvent, or makes or a transfer in fraud of
creditors, or makes an assignment for the benefit of creditors, or admits in
writing its inability to pay its debts as they become due; (viii) Tenant is not
paying its debts as such debts become due; (ix) a receiver, trustee or custodian
is appointed for, or takes possession of, all or substantially all of the assets
of Tenant or any of the Premises, either in a proceeding brought by Tenant or in
a proceeding brought against Tenant and such appointment is not discharged or
such possession is not terminated within sixty (60) days after the effective
date thereof or Tenant consents to or acquiesces in such appointment or
possession; (x) Tenant files a petition for relief under the Federal Bankruptcy
Code, or any other present or future federal or state insolvency, bankruptcy or
similar law (all of the foregoing hereinafter collectively called "Applicable
Bankruptcy Law") or an involuntary petition for relief is filed against Tenant
under any applicable Bankruptcy Law and such petition is not dismissed within
sixty (60) days after the filing thereof, or an order for relief naming Tenant
is entered under any applicable Bankruptcy Law, or any composition,
rearrangement, extension, reorganization or other relief of debtors now or
hereafter existing is requested or consented to by Tenant; or (xi) any of the
events referred to in subheadings (vii), (viii), (ix) and (x) shall occur with
respect to any guarantor (hereinafter called "Guarantor") of the payment or
performance of any Tenant's obligations hereunder and shall not be remedied
within the time set forth in such subheadings.
(b) Remedies of Landlord. Upon the occurrence of any event of default
by Tenant under this Lease, Landlord, at its option, may, in addition to all
other rights and remedies provided herein or at law or in equity, exercise one
or more of the remedies set forth below.
(i) Termination of the Lease. Upon the occurrence of an event
of default by Tenant hereunder, Landlord may, without judicial process,
terminate this Lease by giving written notice thereof to Tenant
(whereupon all obligations and liabilities of Landlord hereunder shall
terminate) and, without further notice and without liability, repossess
the Premises. Landlord shall be entitled to recover all loss and damage
Landlord may suffer
-27-
28
by reason of such termination, whether through inability to relet the
Premises on satisfactory terms or otherwise, including without
limitation, the following (without duplication of any element of
damages):
(A) accrued rent to the date of termination, plus
late charges thereon as provided in Paragraph 43 and interest
thereon at the rate established under Paragraph 43 from the
date due through the date paid or date of any judgment or
award by any court of competent jurisdiction, the unamortized
cost of Tenant's Improvements, brokers' fees and commissions,
attorneys' fees, moving allowances and any other costs
incurred by Landlord in connection with making or executing
this Lease, and the cost of recovering the Premises;
(B) the present value of the Rent (discounted at a
rate of interest equal to eight percent [8%] per annum [the
"Discount Rate"]) that would have accrued under this Lease for
the balance of the Lease Term but for such termination,
reduced by the present value of the reasonable fair market
rental value of the Premises for such balance of the Lease
Term discounted at the Discount Rate; and
(C) any other costs or amounts necessary to
compensate Landlord for its damages.
If such termination is caused by the failure to pay rent and/or the abandonment
of all or any substantial portion of the Premises, Landlord may elect, by
sending written notice thereof to Tenant, to receive liquidated damages in an
amount equal to the Base Rental payable hereunder for the month during which
this Lease is terminated times the lesser of (A) [twelve (12)] or (B) the number
of full calendar months remaining in the Lease Term at the time of such
termination. Such liquidated damages shall be in lieu of the payment of loss and
damage Landlord may suffer by reason of such termination as provided above but
which shall not be in lieu of or reduce in any way any amount (including accrued
rent) or damages due to breach of covenant (whether or not liquidated) payable
by Tenant to Landlord which accrued prior to the termination of this Lease.
Nothing contained in this Lease shall limit or prejudice the right of Landlord
to prove for and obtain in proceedings for bankruptcy or insolvency by reason of
the termination of this Lease, an amount equal to the maximum allowed by any
statute or rule of law in effect at the time when, and governing the proceedings
in which, the damages are to be proved, whether or not the amount be greater,
equal to, or less than the amount of the loss or damages referred to above.
(ii) Repossession and Re-Entry. Upon the occurrence of an
event of default by Tenant hereunder, Landlord may, in compliance with
applicable legal requirements, immediately terminate Tenant's right of
possession of the Premises (whereupon all obligations and liability of
Landlord hereunder shall terminate), but not terminate this Lease, and,
without notice, demand or liability, enter upon the Premises or any
part thereof, take absolute possession of the same, expel or remove
Tenant and any other person or entity who may be occupying the Premises
and change the locks. If Landlord
-28-
29
terminates Tenant's possession of the Premises under this subparagraph
26(b)(ii), (A) Landlord shall have no obligation whatsoever to tender
to Tenant a key for new locks installed in the Premises, (B) Tenant
shall have no further right to possession of the Premises and (C)
Landlord shall use reasonable efforts to relet the Premises or any part
thereof on such terms as Landlord deems advisable, taking into account
the factors described in subparagraph 26(b)(vi). Any rent received by
Landlord from reletting the Premises or a part thereof shall be applied
first, to the payment of any indebtedness other than rent due hereunder
from Tenant to Landlord (in such order as Landlord shall designate),
second, to the payment of any cost of such reletting, including,
without limitation, refurbishing costs, reasonable attorneys' fees,
advertising costs, brokerage fees and leasing commissions and third, to
the payment of rent due and unpaid hereunder (in such order as Landlord
shall designate), and Tenant shall satisfy and pay to Landlord any
deficiency upon demand therefor from time to time. Landlord shall not
be responsible or liable for any failure to collect any rent due upon
any such reletting. No such re-entry or taking of possession of the
Premises by Landlord shall be construed as an election on Landlord's
part to terminate this Lease unless a written notice of such
termination is given to Tenant pursuant to subparagraph 26(b)(i) above.
If Landlord relets the Premises, either before or after the termination
of this Lease, all such rentals received from such lease shall be and
remain the exclusive property of Landlord and Tenant shall not be, at
any time, entitled to recover any such rental. Landlord may at any time
after a reletting elect to terminate this Lease.
(iii) Cure of Default. Landlord may, in compliance with
applicable legal requirements, enter upon the Premises, without having
any liability therefor and do whatever Tenant is obligated to do under
the terms of this Lease and Tenant agrees to reimburse Landlord within
five (5) days of receipt of an invoice for any expenses which Landlord
may incur in effecting compliance with Tenant's obligations under this
Lease, and TENANT FURTHER AGREES THAT LANDLORD SHALL NOT BE LIABLE FOR
ANY DAMAGES RESULTING TO TENANT FROM SUCH ACTION, INCLUDING DAMAGES
CAUSED BY THE NEGLIGENCE OF LANDLORD.
(iv) Continuing Obligations. No repossession of or re-entering
upon the Premises or any part thereof pursuant to subparagraph
26(b)(ii) or 26(b)(iii) above or otherwise and no reletting of the
Premises or any part thereof pursuant to subparagraph 26(b)(ii) above
shall relieve Tenant or any Guarantor of its liabilities and
obligations hereunder, all of which shall survive such repossession or
re-entering. In the event of any such repossession of or re-entering
upon the Premises or any part thereof by reason of the occurrence of a
default, Tenant will continue to pay to Landlord all rent required to
be paid by Tenant.
(v) Cumulative Remedies. No right or remedy herein conferred
upon or reserved to Landlord is intended to be exclusive of any other
right or remedy and each and every right and remedy shall be cumulative
and in addition to any other right or remedy given hereunder or now or
hereafter existing at law or in equity or by statute. In
-29-
30
addition to the other remedies provided in this Lease, Landlord shall
be entitled, to the extent permitted by applicable law, to injunctive
relief in case of the violation, or attempted or threatened violation,
of any of the covenants, agreements, conditions or provisions of this
Lease, or to a decree compelling performance of any of the covenants,
agreements, conditions or provisions of this Lease, or to any other
remedy allowed to Landlord at law or in equity.
(vi) Mitigation of Damages. With respect to the provisions of
the laws of the State of Texas or of this Lease which require that
Landlord use reasonable efforts to relet the Premises, it is understood
and agreed that the following shall apply in determining whether such
efforts by Landlord to relet are reasonable:
(A) Landlord may elect to lease other available space
in the Complex, if any, before reletting the Premises;
(B) Landlord may elect to consent to the assignment
or sublease by an existing tenant of the Complex before
reletting the Premises;
(C) Landlord may decline to incur out-of-pocket costs
to relet the Premises, other than customary leasing
commissions and legal fees for the negotiation of a lease with
a new tenant;
(D) Landlord may decline to relet the Premises at
rental rates below then prevailing market rental rates;
(E) Landlord may decline to relet the Premises to a
prospective tenant if the nature of such prospective tenant's
business is not consistent with the tenant mix of the Building
or with any other tenant leases containing provisions against
the Landlord leasing space in the Building for certain uses;
(F) Landlord may decline to relet the Premises to a
prospective tenant, the nature of whose business may have an
adverse impact upon the manner in which the Building is
operated or with the high reputation of the Building even
though in each of said circumstances such prospective tenant
may have a good credit rating;
(G) Before reletting the Premises to a prospective
tenant, Landlord may require the prospective tenant to
demonstrate the same financial capacity that Landlord would
require as a condition to leasing other space in the Building
to the prospective tenant; and
(H) Listing the Premises with a broker or leasing
agent (including in-house leasing personnel) in a manner
consistent with subparagraphs (A) through
-30-
31
(G) above shall constitute prima facie evidence of reasonable
efforts on the part of Landlord to relet the Premises.
27. QUIET ENJOYMENT. Provided that Tenant pays the rent and other sums
herein recited to be paid by Tenant and performs all of Tenant's covenants and
agreements herein contained, Tenant shall at all times during the Lease Term
peaceably and quietly enjoy the Premises without any disturbance from Landlord
or from any other person, subject to the terms, provisions, covenants,
agreements and conditions of this Lease and to the deeds of trust, mortgages and
other matters to which this Lease is subordinate and subject as herein set
forth.
28. HOLDING OVER. Should Tenant or any of its successors in interest
continue to hold the Premises after termination of this Lease, whether such
termination occurs by lapse of time or otherwise, such holding over shall
constitute and be construed as a tenancy at will only, subject, however, to all
of the terms, provisions, covenants and agreements on the part of Tenant
hereunder. Tenant or such other parties shall be subject to immediate eviction
and removal and Tenant or any such party shall pay Landlord as rent for the
period of such holdover an amount equal to one hundred fifty percent (150%) of
the monthly rent (including Base Rental and all other rental amounts) provided
herein at the time of such termination, prorated on a daily basis. No payments
of money by Tenant to Landlord after the termination of this Lease shall
reinstate, continue or extend the Lease Term and no extension of this Lease
after the termination hereof shall be valid unless and until the same shall be
reduced to writing and signed by both Landlord and Tenant. Tenant shall be
liable to Landlord for all damage which Landlord shall suffer by reason of any
holding over by Tenant and Tenant shall indemnify Landlord against all claims
made by any other tenant or prospective tenant against Landlord resulting from
delay by Landlord in delivering possession of the Premises to such other tenant
or prospective tenant.
29. SUBORDINATION. This Lease and all rights of Tenant hereunder are
subject and subordinate (i) to any mortgage or deed of trust, blanket or
otherwise, which does now or may hereafter affect the Building or Complex (and
which may also affect other property) and (ii) to any and all increases,
renewals, modifications, consolidations, replacements and extensions of any such
mortgage or deed of trust. This provision is hereby declared by Landlord and
Tenant to be self-operative and no further instrument shall be required to
effect such subordination of this Lease; provided, however, as a condition to
any such subordination, Landlord shall obtain from the lender or mortgagee its
standard form of non-disturbance agreement providing that Tenant's interest in
the Lease and rights in the Premises will not be disturbed as long as Tenant
performs all of Tenant's obligations under this Lease. Landlord's inability to
obtain such non-disturbance agreement shall not constitute a default under this
Lease, excuse Tenant from any obligation hereunder or otherwise affect the
validity of this Lease. Tenant shall, however, upon demand at any time or times
execute, acknowledge and deliver to Landlord any and all instruments and
certificates that may be reasonably necessary or proper to more effectively
subordinate this Lease and all rights of Tenant hereunder to any such mortgage
or deed of trust or to confirm or evidence such subordination, as long as
Landlord has obtained from the holder of the mortgage or deed of trust a
corresponding non-disturbance agreement in favor of Tenant as aforesaid. In the
event Tenant shall fail or neglect to execute, acknowledge and deliver any such
subordination
-31-
32
agreement or certificate, Landlord, in addition to any other remedies it may
have, may, as the agent and attorney in fact of Tenant, execute, acknowledge and
deliver the same and Tenant hereby irrevocably nominates, constitutes and
appoints Landlord Tenant's proper and legal agent and attorney in fact for such
purposes. Such power of attorney shall not be affected by subsequent disability
or incapacity of the principal. However, Landlord agrees not to execute any
subordination agreement as attorney in fact for Tenant unless Landlord has
obtained a corresponding non-disturbance agreement as aforesaid. Tenant
covenants and agrees, in the event any proceedings are brought for the
foreclosure of any such mortgage or if the Building or Complex is sold pursuant
to any such deed of trust, to attorn to the purchaser upon any such foreclosure
sale or trustee's sale if so requested by such purchaser and to recognize such
purchaser as the Landlord under this Lease as long as the purchaser recognizes
Tenant's rights under this Lease. Tenant agrees to execute and deliver at any
time and from time to time, upon the request of Landlord or of any holder(s) of
any of the indebtedness or other obligations secured by any of the mortgages or
deeds of trust referred to in this paragraph, any instrument or certificate
which, in the reasonable judgment of Landlord or of such holder(s), may be
necessary or appropriate in any such foreclosure proceeding or otherwise to
evidence such attornment as long as Landlord has requested a corresponding
non-disturbance agreement in favor of Tenant as aforesaid. This Lease and all
rights of Tenant hereunder are further subject and subordinate, to the extent
that the same relate to the Premises, (i) to all applicable ordinances of the
City of Austin, Texas, relating to easements, franchises and other interests or
rights upon, across or appurtenant to the Building or Complex or any of the
Land, and (ii) to all utility easements and agreements.
30. WAIVER OF LANDLORD'S LIEN. Landlord hereby waives its statutory
lien for rent as against Tenant's personal property in the Premises.
31. ATTORNEYS' FEES. In the event either party defaults in the
performance of any of the terms of this Lease and the other party employs an
attorney in connection therewith, the defaulting party agrees to pay the
prevailing party's reasonable attorneys' fees.
32. NO IMPLIED WAIVER. The failure of Landlord to insist at any time
upon the strict performance of any covenant or agreement herein, or to exercise
any option, right, power or remedy contained in this Lease shall not be
construed as a waiver or a relinquishment thereof for the future. No payment by
Tenant or receipt by Landlord of a lesser amount than the monthly installment of
rent due under this Lease shall be deemed to be other than on account of the
earliest rent due hereunder, nor shall any endorsement or statement on any check
or any letter accompanying any check or payment as rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such rent or pursue any other remedy
in this Lease provided.
33. PERSONAL LIABILITY. Any and all covenants of Landlord contained in
this Lease shall be binding upon Landlord and its successors only with respect
to breaches occurring during its or their respective periods of ownership of the
Landlord's interest hereunder. The liability of Landlord to Tenant for any
default by Landlord under the terms of this Lease shall be
-32-
33
limited to Landlord's interest in the Building, and Tenant agrees to look solely
to Landlord's interest in the Building for recovery of any judgment from
Landlord, it being intended that Landlord shall not be personally liable for any
judgment or deficiency. Notwithstanding anything to the contrary contained
herein, in no event shall Landlord be liable for special, consequential,
exemplary or punitive damages.
34. SECURITY DEPOSIT. In lieu of a cash Security Deposit Tenant shall
tender to Landlord the letter of credit described in Section 2(f) of the Work
Letter. If any portion of the letter of credit is funded to Landlord, landlord
shall hold and apply the funds as a Security Deposit without liability for
interest and as security for the performance by Tenant of Tenant's covenants and
obligations under this Lease, it being expressly understood that the Security
Deposit shall not be considered an advance payment of rental or a measure of
Landlord's damages in case of default by Tenant. Landlord may commingle the
Security Deposit with Landlord's other funds. Landlord may, from time to time,
without prejudice to any other remedy, use the Security Deposit to the extent
necessary to make good any arrearages of rent or to satisfy any other covenant
or obligation of Tenant hereunder. Following any such application of the
Security Deposit, Tenant shall immediately restore the Security Deposit to the
amount required in the Work Letter. If Tenant is not in default at the
termination of this Lease, the balance of any Security Deposit remaining after
any such application shall be returned by Landlord to Tenant. If Landlord
transfers its interest in the Premises during the Lease Term, Landlord may
assign the letter of credit or Security Deposit to the transferee and thereafter
shall have no further liability for the return of such letter of credit or
Security Deposit.
35. NOTICE. Any notice, request, demand or other communication required
or permitted hereunder shall be given in writing by (a) expedited delivery
service with proof of delivery, or (b) United States mail, postage prepaid,
registered or certified mail, return receipt requested, sent to the intended
addressee at the address shown on the signature page of this Lease, or to such
other address or to the attention of such other person as the addressee shall
have designated by written notice sent in accordance herewith. Any such notice,
request, demand or other communication shall be deemed to have been given as of
the date of first attempted delivery at the address and in the manner provided
herein.
36. ESTOPPEL CERTIFICATE. Tenant will, at any time and from time to
time, within not more than ten (10) days after receipt of a written request by
Landlord, execute, acknowledge and deliver to Landlord or such other persons as
Landlord may request a statement in written and recordable form, executed by
Tenant, certifying that this Lease is unmodified and in full effect (or, if
there have been modifications, that this Lease is in full effect as modified,
and setting forth such modifications) and the dates to which the rent has been
paid, containing such additional information as Landlord may reasonably request
and either stating that to the knowledge of the signer of such certificate no
default exists hereunder or specifying each such default of which the signer may
have knowledge; it being intended that any such statement by Tenant may be
relied upon by any prospective purchaser or mortgagee of the Complex.
37. INTENTIONALLY DELETED.
-33-
34
38. SEVERABILITY. Each and every covenant and agreement contained in
this Leaseis, and shall be construed to be, a separate and independent covenant
and agreement. If any term or provision of this Lease, or the application
thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of such term or
provision to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Lease shall be valid and enforceable to the fullest extent
permitted by law.
39. RECORDATION. Tenant agrees not to record this Lease, or any
memorandum hereof. In the event Landlord's mortgagee may so require, Tenant
agrees to execute a short form of this Lease for recordation.
40. GOVERNING LAW. This Lease and the rights and obligations of the
parties hereto shall be governed by and shall be interpreted, construed and
enforced in accordance with the laws of the State of Texas.
41. FORCE MAJEURE. Whenever a period of time is herein prescribed for
the taking of any action by either party hereunder, such party shall not be
liable or responsible for, and there shall be excluded from the computation of
such period of time, any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, governmental laws, regulations or restrictions or any
other cause whatsoever beyond the control of such party; provided, however, this
paragraph shall not apply with respect to any monetary obligation of either
party.
42. TIME OF PERFORMANCE. Except as expressly otherwise herein provided,
with respect to all required acts of Tenant, time is of the essence of this
Lease.
43. LATE CHARGE AND INTEREST ON TENANT'S OBLIGATIONS. In the event
Tenant fails to make any payment due hereunder on or before ten (10) days after
the date such payment is due, to help defray the additional cost to Landlord for
processing such late payments, Tenant shall pay to Landlord on demand a late
charge in an amount equal to $25.00 and the failure to pay such amount within
ten (10) days after demand therefor shall be an additional event of default
hereunder. Any sum due from Tenant to Landlord under the terms of this Lease not
paid within ten (10) days from the date due shall bear interest from the date
due until paid by Tenant at the lesser of (i) the rate of eighteen percent (18%)
per annum, or (ii) the highest lawful rate.
44. COMMISSIONS. Landlord and Tenant acknowledge that the real estate
brokers involved in this transaction are Colliers Oxford Commercial (Xx. Xxxx
Xxxxxxx) (the "Landlord's Broker") and Commercial Industrial Properties Co./New
America International (the "Tenant's Brokers"). The Tenant's Brokers and the
Landlord's Broker are hereinafter referred to together as the "Brokers."
Landlord and Tenant hereby warrant and represent to one another that no other
broker, agent or finder other than the Brokers are involved in this transaction
or owed a commission in connection with the execution of this Lease other than
the Brokers. Landlord will
-34-
35
pay the commission owed to the Brokers by separate written agreements. Landlord
and Tenant hereby indemnify and hold each other harmless against any loss,
claim, expense or liability with respect to any commissions or brokerage fees
claimed on account of the execution and/or renewal of this Lease due to any
action of the indemnifying party.
45. EFFECT OF DELIVERY OF THIS LEASE. Landlord has delivered a copy of
this Lease to Tenant for Tenant's review only, and the delivery hereof does not
constitute an offer to Tenant or option. This lease shall not be effective until
a copy executed by both Landlord and Tenant is delivered to and accepted by
Landlord.
46. CONSUMER RIGHTS. Landlord and Tenant each acknowledge, on its own
behalf and on behalf of its successors and assigns, that the Texas Deceptive
Trade Practices Consumer Protection Act, Subchapter E of Chapter 17 of the Texas
Business and Commerce Code (ADTPA"), is not applicable to this Lease.
Accordingly, the rights and remedies of Landlord and Tenant with respect to all
acts or practices of the other, past, present or future, in connection with this
Lease shall be governed by legal principles other than the DTPA. Landlord and
Tenant each hereby waives its rights under the DTPA, a law that gives consumers
special rights and protections. After consultation with an attorney of its own
selection, Landlord and Tenant, respectively, voluntarily consent to this
waiver.
47. BINDING EFFECT. All of the covenants, agreements, terms and
conditions to be observed and performed by the parties hereto shall be
applicable to and binding upon their respective heirs, personal representatives,
successors and, to the extent assignment is permitted hereunder, their
respective assigns.
48. PARAGRAPH HEADINGS. The paragraph headings contained in this Lease
are for convenience only and shall in no way enlarge or limit the scope or
meaning of the various and several paragraphs hereof.
49. ENTIRE AGREEMENT. This Lease sets forth the entire agreement
between the parties and no amendment or modification of this Lease shall be
binding or valid unless expressed in a writing executed by both parties hereto.
50. NO REPRESENTATIONS. Neither Landlord nor Landlord's agents have
made any representations or promises with respect to the Premises or the Complex
except as herein expressly set forth and no rights, easements or licenses are
acquired by Tenant by implication or otherwise except as expressly set forth in
the provisions of this Lease.
51. JOINT AND SEVERAL LIABILITY. If there is more than one Tenant, the
obligations hereunder imposed upon Tenant shall be joint and several.
52. GENDER AND NUMBER. Words of any gender used in this Lease shall be
held and construed to include any other gender, and words in the singular number
shall be held to include the plural, unless the context otherwise requires.
-35-
36
53. CHANGE OF BUILDING OR COMPLEX NAME. Landlord shall have the right,
exercisable without notice and without liability to Tenant, to change the name
and address of the Building or the Complex from time to time.
54. TAXPAYER IDENTIFICATION NUMBER. The Taxpayer Identification number
of Tenant is 00-0000000.
55. EXHIBITS. The following exhibits, riders and addenda are attached
to this Lease and made a part hereof for all purposes:
Exhibit A - Floor Plan of Premises
Exhibit B - Description of Land
Exhibit C - Building Rules and Regulations
Exhibit D - Work Letter
Exhibit E - Parking Agreement
Exhibit F - Acceptance of Premises Memorandum
Exhibit G - Renewal Option
Exhibit H - Right to Sublease or Assign to Affiliate
Exhibit I - Letter of Credit as Security Deposit
Exhibit I-1 - Form of Letter of Credit
Exhibit J - Building HVAC Design Criteria and Specifications
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease in
multiple original counterparts as of the day and year first above written.
LANDLORD:
MAPLEWOOD ASSOCIATES, L.P.,
A Texas Limited Partnership
By: Maplewood GP, Inc., its General Partner
By: /s/
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
-36-
37
Landlord's Address:
Maplewood Associates, L.P.
c/o West World Management, Inc.
0 Xxxxxxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx, President
Fax No.: (000) 000-0000
TENANT:
CROSSROADS SYSTEMS, INC.
By: /s/
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Date:
-----------------------------------
Tenant's Address:
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
Attention:
Fax No.:
-37-
38
EXHIBIT A
FLOOR PLAN OF PREMISES
Office Park
Crossroads Systems, Inc.
Suite
63,548 RSF
-38-
39
EXHIBIT B
DESCRIPTION OF LAND
[To Follow]
-39-
40
EXHIBIT C
RULES AND REGULATIONS
1. Sidewalks, doorways, vestibules, halls, stairways and similar areas
shall not be obstructed by Tenant or its officers, agents, servants, and
employees, or used for any purpose other than ingress and egress to and from the
Premises and for going from one part of the Complex to another part of the
Complex. Tenant shall not enter nor permit its employees, agents, guests or
invitees to enter into areas of the Complex designated for the exclusive use of
Landlord or other tenants of the Complex.
2. Plumbing fixtures and appliances shall be used only for the purposes
for which designed and/or constructed, and no sweepings, rubbish, rags or other
unsuitable material shall be thrown or placed therein. Any stoppage or damage
resulting to any such fixtures or appliances from misuse on the part of Tenant
or Tenant's officers, agents, servants, and employees shall be paid by Tenant.
3. No signs, posters, advertisements, or notices shall be painted or
affixed to any interior or exterior glass of the Premises visible from Common
Areas or on any of the windows or doors or other part of the Building, except of
such color, size and style and in such places, as shall be first approved in
writing by the Building Manager. No nails, hooks or screws shall be driven into
or inserted in any part of the Building, except by Building maintenance
personnel.
4. Directories will be placed by Landlord, at Landlord's own expense,
in conspicuous places in the Building. No other directories shall be permitted.
5. Tenant shall not do anything, or permit anything to be done, in or
about the Building, or bring or keep anything therein, that will in any way
increase the possibility of fire or other casualty or obstruct or interfere with
the rights of, or otherwise injure or annoy, other tenants, or do anything in
conflict with the valid pertinent laws, rules or regulations of any governmental
authority. Except for portions of the Premises specifically designated by Tenant
and consented to in writing by Landlord in advance to be used for an employee
kitchen or lounge area, Tenant shall not xxxx, sell, purchase or permit the
preparation, sale or purchase of food on the Premises.
6. Smoking of cigarettes, pipes, cigars or other tobacco products is
prohibited in the Building, in the parking garage serving the Complex, in any
enclosed corridor in the Complex (whether inside or outside of the Building) and
in any area within fifty (50) feet of any Building entrance, parking garage
entrance or entrance to any such corridor. Smoking shall be allowed in any area
so designated by Landlord and in each tenant's leased premises to the extent
allowed by applicable law (including without limitation any ordinance of the
City of Austin).
7. Landlord reserves the right to prescribe and to approve the weight,
size and location of safes, book shelves and other heavy equipment, fixtures and
articles in and about the Premises and the Complex. Tenant shall not overload
any floors. If Landlord approves the presence of a heavy item for which
reinforcement of the floor or other precautionary measures are necessary,
-40-
41
Tenant will bear the entire cost of such reinforcement or other precautionary
measures. If the services of a structural engineer are, in the judgment of
Landlord, necessary to determine the location for and/or precautionary measures
to be taken in connection with any heavy load, Landlord will engage such
engineer, but the fees and expenses of such engineer will be paid by Tenant upon
demand. All damage done to the Building by Tenant by the improper placing of
heavy items which overstress the floor will be repaired at the sole expense of
Tenant.
8. Tenant shall notify the Building Manager when safes or other
equipment are to be taken into or out of the Building. Moving of such items
shall be done under the supervision of the Building Manager, after receiving
written permission from him.
9. Corridor doors, when not in use, shall be kept closed.
10. All deliveries must be made via the service entrance and service
elevators during normal working hours as specified in the Lease. Prior approval
must be obtained from the Building Manager for any deliveries that must be
received after normal working hours. All deliveries of furniture and equipment
shall be made only during the time previously scheduled with, and in the manner
approved by, the Building Manager, execpt for routine deliveries of equipment
that is moved on hand trucks, so long as the type and volume of such deliveries
is not disruptive to other tenants. Any hand trucks, carryalls or similar
appliances used for the delivery or receipt of merchandise, supplies or
equipment shall be equipped with rubber tires, side guards and such other
safeguards as Landlord shall require.
11. Tenant shall cooperate with Building employees in keeping the
premises neat and clean. Tenant shall assist in preventing any hindrance of the
work of the janitor or cleaning personnel after 7:00 p.m. and agrees to provide
adequate waste and rubbish receptacles to facilitate cleaning services. Landlord
may permit entrance to the Premises by use of access cards controlled by
Landlord or its employees, contractors or service personnel for the purpose of
performing Landlord janitorial services.
12. Nothing shall be swept or thrown into the corridors, halls,
elevator shafts or stairways. No birds, animals or reptiles, or any other
creatures, shall be brought into or kept in or about the Building, except for
seeing eye dogs for sight impaired persons.
13. Tenant shall not use, suffer or permit the manufacture, sale or
distribution by gift or otherwise of any spirituous, fermented or intoxicating
liquors or any drugs within the Premises or the Complex; provided, however, that
Tenant may have occasional afternoon parties in the Premises and serve alcoholic
beverages at such parties so long as no other tenants or occupants of the
Building are annoyed or disturbed thereby and Tenant complies with all federal,
state and/or local laws relating thereto. Tenant will indemnify and hold
Landlord harmless from any and all loss, liability, damage and/or expense
arising out of or resulting from the presence and/or consumption of alcoholic
beverages at the Premises. Tenant will not use or keep in the Premises or the
Complex any kerosene, gasoline or other flammable, combustible or explosive
fluid, chemical or substance (except for office supplies as allowed in Paragraph
4 of the Lease).
-41-
42
Tenant shall not bring or store firearms of any kind into the Complex. Tenant
shall not use the Premises or the Complex for the manufacture, distribution or
sale of any merchandise or other materials.
14. Should Tenant require telegraphic, telephonic, annunciator or any
other communication service, Landlord will direct the electricians and
installers where and how the wires are to be introduced into the Premises, and
none shall be introduced except as Landlord shall direct.
15. Tenant shall not make or permit any objectionable, disturbing,
unpleasant or improper noises or odors in the Building or otherwise interfere in
any way with other tenants or persons having business with them. Tenant agrees
to cooperate and assist Landlord in the prevention of canvassing, soliciting and
peddling within the Building or the Complex.
16. Tenant shall not sell lottery tickets or conduct any other form of
gambling from or within the Premises or any other part of the Complex.
17. No equipment of any kind shall be operated on the Premises that
could in any way annoy any other tenant in the Building without the prior
written consent of the Landlord.
18. Tenant shall not use or keep in the Building any illuminating
material unless it is battery powered, UL approved, or any inflammable or
explosive fluid or substance.
19. Landlord has the right to evacuate the Building in event of
emergency or catastrophe.
20. All electrical fixtures hung in the leased premises must be of
quality, type, design, bulb color, size and general appearance approved by
Landlord.
21. Tenant shall not install any solar screen material, window shades,
blinds, drapes, awnings, window ventilators, or other similar equipment and any
window treatment of any kind whatsoever, without Landlord's prior written
consent. Tenant will not place anything or allow anything to be placed near the
glass of any window, door, partition or wall which may appear unsightly from
outside the Premises. No awnings or other projections will be attached to the
outside walls and roof of the Building or the Complex without prior written
consent of Landlord. Landlord will control all internal lighting, signage,
furnishings and other materials that may be visible from the exterior of the
Building or Common Areas and shall have the right to change any unapproved item,
without notice to Tenant, at Tenant's expense.
22. Landlord will not be responsible for personal property, equipment,
money or jewelry lost or stolen from the Premises.
23. No water cooler or heating or air conditioning unit or system or
other apparatus shall be installed or used by Tenant without the prior written
consent of Landlord; provided, however,
-42-
43
that Tenant may install a water purifier with Landlord's prior approval (not to
be unreasonably withheld) as to the location, installation and type thereof.
24. No bicycles, motorcycles or similar vehicles will be allowed in the
Building; but may be kept in the garage; provided, however, that Landlord shall
have no responsibility for any loss, liability or damage resulting therefrom.
Tenant may construct at Tenant's cost, and in an area in the Building's garage
approved by Landlord, a bike storage enclosure for use by Tenant's employees.
25. Tenant shall not change any locks or place additional locks upon
any doors without the prior written consent of Landlord. All necessary keys
shall be furnished by Landlord, and the same shall be surrendered upon
termination of this Lease, and Tenant shall then give Landlord or his agent an
explanation of the combination of all locks on the doors or vaults. Tenant shall
initially be given two (2) keys to its Premises by Landlord. No duplicates of
such keys shall be made by Tenant. . Tenant shall initially be given 150 access
card keys for the Premises at no cost to Tenant. Additional access cards and
keys will be obtained only from Landlord , at the cost of $20.00 each for access
cards and $3.50 each for keys.
26. Tenant will not locate furnishings or cabinets adjacent to
mechanical or electrical access panels or over air conditioning outlets so as to
prevent operating personnel from servicing such units as routine or emergency
access may require. Tenant shall pay any cost of moving such furnishings for
Landlord's access. The lighting and air conditioning equipment of the Building
will remain the exclusive charge of the Building designated personnel.
27. No portion of the Building or any leased premises shall be used for
the purpose of sleeping or lodging.
28. No vending machines or dispensing machines of any kind will be
placed in the Premises without Landlord's prior approval, which will not be
unreasonably withheld..
29. Prior written approval, which shall be at Landlord's sole
discretion, must be obtained for installation of window shades, blinds,
curtains, drapes, or any other window treatment of any kind whatsoever other
than the Building standard blinds installed as part of Tenant's Improvements. In
the event that Landlord finds it necessary to close or open blinds or other
window treatments during certain hours of the day for temperature control
purposes, Tenant shall cooperate by closing or opening its blinds or other
window treatments during such hours.
30. Intentionally Deleted.
31. Landlord reserves the right to exclude or expel from the Complex
any person who, in the reasonable judgment of Landlord, is intoxicated or under
the influence of liquor or drugs, or who will in any manner do any act in
violation of any of the rules or regulations of the Building.
-43-
44
32. The requirements of Tenant under the Lease or otherwise with
respect to the Premises will be attended to only upon application at the
management office for the Building at the address provided by Landlord to Tenant
for such purpose. Employees of Landlord will not perform any work or do anything
outside of their regular duties unless under special instructions from Landlord,
and no employees will admit any person (Tenant or otherwise) to any office
without specific instructions from Landlord.
33. Tenant will not disturb, solicit or canvass any occupant of the
Building, nor will Tenant permit or cause others to do so, and Tenant will
cooperate to prevent same by others.
34. Landlord will have the right to prevent any persons entering or
leaving the Building unless provided with a key to the Premises to which such
person seeks entrance, and a pass in a form to be approved by Landlord and
provided at Tenant's expense. Any persons found in the Building at such times
without such keys or passes will be subject to the surveillance of the employees
and agents of Landlord. Landlord will be under no responsibility for failure to
enforce this rule.
35. Tenant will not, without the prior written consent of Landlord, use
the name or any photograph, drawing or other likeness of the Building or the
Complex for any purpose other than as the address of the business to be
conducted by Tenant in the Premises, nor will Tenant do or permit anything to be
done in connection with Tenant's business or advertising which, in the
reasonable judgment of Landlord, might mislead the public as to any apparent
connection or relationship between Landlord, the Building and/or the Complex and
Tenant.
36. Landlord reserves the right to rescind any of these rules and make
such other and further rules and regulations as in the judgment of Landlord
shall from time to time be needed for the safety, protection, care and
cleanliness of the Building and/or the Complex, the operation thereof, the
preservation of good order therein, and the protection and comfort of its
tenants, their agents, employees and invitees, which rules when made and notice
thereof given to a tenant shall be binding upon such tenant in like manner as if
originally herein prescribed. Landlord agrees not to enforce these rules and
regulations in a discriminatory manner. In the event of any conflict,
inconsistency, or other difference between the terms and provisions of these
Rules and Regulations, as now or hereafter in effect, and the terms and
provisions of any lease now or hereafter in effect between Landlord and Tenant,
the terms of the Lease shall control.
-44-
45
EXHIBIT D
WORK LETTER
This Work Letter (this "Agreement") sets forth the agreement of
MAPLEWOOD ASSOCIATES, L.P. ("Landlord"), and CROSSROADS SYSTEMS, INC.
("Tenant"), in accordance with Paragraph 8 of that Office Building Lease (the
"Lease"), by and between Landlord and Tenant, dated October 8, 1999, regarding
certain improvements that are to be made to the Premises (as defined in the
Lease). Any capitalized term used but not defined herein shall have the meaning
assigned to it in the Lease. Landlord and Tenant mutually agree as follows:
1. Plans.
(a) Preparation of Plans. Tenant understands that Landlord has engaged
STG Partners architects and HCE engineers to provide all necessary architectural
and engineering services. Costs for these services shall be deducted from the
Tenant Improvement Allowance. If Tenant engages another architecture or
engineering firm then Tenant shall pay an additional fee for STC and MCE review.
Landlord's architect and engineer, at Tenant's expense, will prepare
construction plans (such construction plans, when approved, and all changes and
amendments thereto agreed to by Landlord and Tenant in writing, are herein
called the "Construction Plans") for all of Tenant's improvements to be
constructed in the Premises (all improvements required by the Construction Plans
are herein called "Tenant's Improvements"). Tenant shall promptly furnish to
Landlord, Landlord's architect and engineer and any other party involved in
preparation of the Construction Plans all information necessary such that
(following construction of Tenant's Improvements in accordance with the
Construction Plans) Tenant, the Premises and Tenant's Improvements will be in
compliance with the provisions of the Disability Acts. TENANT SHALL BE
RESPONSIBLE FOR AND SHALL INDEMNIFY AND HOLD HARMLESS LANDLORD FROM AND AGAINST
ANY AND ALL CLAIMS, LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION
REASONABLE ATTORNEYS' FEES AND EXPENSES) INCURRED BY OR ASSERTED AGAINST
LANDLORD BY REASON OF OR IN CONNECTION WITH ANY VIOLATION OF THE DISABILITY ACTS
ARISING FROM OR OUT OF (i) information or design and space plans furnished to
Landlord by Tenant (or the lack of complete and accurate information so
furnished) concerning Tenant's Improvements, (ii) Tenant's employer-employee
obligations, or (iii) after the Commencement Date, violations by Tenant and/or
Tenant's Improvements or the Premises not being in compliance with the
Disability Acts as the result of changes in regulations or law or
interpretations thereof not in effect on the Commencement Date. The foregoing
indemnity shall not include any claims, liabilities or expenses (including
reasonable attorneys' fees and expenses) arising out of the negligence, gross
negligence or willful misconduct of Landlord or Landlord's employees, agents or
contractors. Without limiting the foregoing, if Landlord constructs Tenant's
Improvements based on any special requirements or improvements required by
Tenant, or upon information furnished by Tenant that later proves to be
inaccurate or incomplete
-45-
46
resulting in any violation of the Disability Acts, Tenant shall be solely liable
to correct such violations and to bring the improvements into compliance with
the Disability Acts as promptly as is practicable. Landlord and Tenant agree
that the cost of construction drawings for the additional parking deck are at
Landlord's sole expense and will not be charged against the Finish Allowance.
(b) Approval of Plans. Within ten (10) days after proposed construction
plans are delivered to Tenant, Tenant shall approve (which approval shall not be
unreasonably withheld) or disapprove same in writing and if disapproved, Tenant
shall provide Landlord and Landlord's architect and engineer and engineer
specific reasons for disapproval. The foregoing process shall continue until the
construction plans are approved by Tenant (which approval shall not be
unreasonably withheld); provided that, if Tenant fails to respond in any ten
(10) day period, Tenant shall be deemed to have approved the last submitted
construction plans. Landlord and tenant agree to diligently pursue completion of
the construction plans and will use commercially reasonable efforts to have
those construction plans completed by October 15, 1999, or as soon thereafter as
is practicable. All costs, including professional fees which are related to
review of Tenant's information and preparation of the Construction Plans, shall
be paid by Tenant to Landlord upon receipt by Tenant of an invoice for such
costs; provided that Tenant shall be entitled to apply the Finish Allowance to
the payment of such costs.
(c) Changes to Approved Plans. If any re-drawing or re-drafting of the
Construction Plans is necessitated after the Construction Plans have been
approved (including deemed approval), by Tenant's requested changes (all of
which shall be subject to Landlord's approval), the expense of any such
re-drawing or re-drafting required in connection therewith and the expense of
any work and improvements necessitated by such re-drawing or re-drafting will be
charged to Tenant.
(d) Coordination of Planners and Designers. If Tenant shall arrange for
interior design services, whether with Landlord's architect or engineer or any
other planner or designer, it shall be Tenant's responsibility to cause
necessary coordination of its agents' efforts with Landlord's agents to ensure
that no delays are caused to either the planning or construction of the Tenant's
Improvements.
2. Construction and Costs of Tenant's Improvements.
(a) Construction Obligation and Finish Allowance. Landlord agrees to
construct Tenant's Improvements, at Tenant's cost and expense; provided,
however, Landlord shall provide Tenant with an allowance up to $1,398,056 (the
"Finish Allowance"), which allowance shall be disbursed by Landlord, from time
to time, for payment of (in the following priority) (i) the contract sum
required to be paid to the general contractor engaged to construct Tenant's
Improvements including telcom wiring (the "Contract Sum"), (ii) the fees of the
preparer of the Construction Plans (excluding costs of plans for the additional
parking deck), and (iii) the Construction Management Fee of five percent (5%) of
construction "hard" costs which are the
-46-
47
total costs paid to the general contractor (the foregoing costs are collectively
referred to as the "Permitted Costs"). Landlord shall have no obligation
whatsoever to fund any portion of the Finish Allowance for any cost other than
the Permitted Costs. Title to any equipment, appliances, furnishings or
personalty installed in the Premises and purchased with any portion of the
Finish Allowance shall pass to Landlord upon payment of the invoice cost thereof
and Tenant shall not remove any such equipment, appliances, furnishings or
personalty from the Premises without Landlord's express, prior written consent
or unless requested by Landlord in connection with the expiration or earlier
termination of the Lease. If the Permitted Costs exceed the Finish Allowance,
then Landlord will apply the $125,000 Advance Payment previously paid by Tenant
towards such excess costs, and Tenant will be responsible for further excess, if
any, not covered by the Advance Payment. If the Finish Allowance exceeds the
Permitted Costs, Landlord will retain such excess Finish Allowance and, provided
no event of default then exists beyond applicable cure periods provided for in
this Lease, the entire Advance Payment will be returned to Tenant.
(b) Excess Costs. If the sum of the Permitted Costs exceeds the Finish
Allowance, then Tenant shall pay all such excess costs ("Excess Costs"),
provided, however, Landlord will, prior to the commencement of construction of
Tenant's Improvements, advise Tenant of the Excess Costs, if any. Tenant shall
have three (3) business days from and after the receipt of such advice within
which to approve or disapprove the Excess Costs. If Tenant fails to disapprove
same by the expiration of the third such business day, then Tenant shall be
deemed to have approved the Excess Costs. If Tenant disapproves the Excess Costs
within such three (3) business day period, then Tenant shall either reduce the
scope of Tenant's Improvements such that there shall be no Excess Costs or, at
Tenant's option, Landlord shall obtain two (2) additional bids, provided that
each day beyond such three (3) business day period and until the rebid is
accepted by Tenant shall constitute a Tenant Delay hereunder. The foregoing
process shall continue until the Excess Costs, if any, are approved or deemed
approved by Tenant. Landlord and Tenant will diligently pursue the bidding
process and attempt to obtain a final approved bid no later than October ___,
1999.
(c) Approval of Construction Plans and Excess Costs. Landlord and
Tenant must approve (or be deemed to have approved) the Construction Plans and
the Excess Costs, if any for the construction of Tenant's Improvements in
writing prior to the commencement of construction. If Tenant fails to approve
the Construction Plans and/or the Excess Costs, if any, by _____________, ___,
Landlord shall have the right to terminate this Lease or, if Landlord does not
thus terminate this Lease, each day after such date that the Construction Plans
and/or the Excess Costs are not approved by Tenant shall constitute one day of
Tenant Delay.
(d) Liens Arising from Excess Costs. Tenant agrees to keep the Premises
and the Complex free from any liens arising out of nonpayment of Excess Costs.
In the event that any such lien is filed and Tenant, within ten (10) days
following such filing fails to cause same to be released of record by payment or
posting of a proper bond, Landlord shall have, in addition to all
-47-
48
other remedies provided herein and by law, the right, but not the obligation, to
cause the same to be released by such means as it in its sole discretion deems
proper, including payment of or defense against the claim giving rise to such
lien. All sums paid by Landlord in connection therewith shall constitute rent
under the Lease and a demand obligation of Tenant to Landlord and such
obligation shall bear interest from the date of payment by Landlord until the
date paid by Tenant at the rate of interest specified in Paragraph 43 of this
Lease.
(e) Excess Costs Deposit. Landlord will use commercially reasonable
efforts to obtain three (3) bids for the construction of Tenant's Improvements.
Tenant may suggest to Landlord at least one of the general contractors to bid
the Tenant Improvements but the final decision as to the general contractor to
construct Tenant Improvements will be made by Landlord. Landlord will accept the
lowest bid subject to reviewing with Tenant the quality and experience level of
the contractors submitting the bids. Landlord shall have no obligation to
commence construction of Tenant's Improvements until Landlord shall have
received Tenant's payment in advance of any Excess Costs and any resulting delay
in substantially completing Tenant's Improvements shall constitute a Tenant
Delay. All sums due Landlord under this Paragraph 2.e. shall be considered rent
under the terms of the Lease and nonpayment shall constitute a default under the
Lease and entitle Landlord to any and all remedies specified in the Lease.
(f) Credit Enhancement. On the date of initiation of construction of
Tenant's Improvements, Tenant shall post a letter of credit with Landlord
meeting the requirements of Exhibit I. The letter of credit and the burn off
schedule shall be determined by the status of Tenant's initial public offering
("IPO"). If the IPO has occurred and Tenant has raised at least $35 million, the
schedule shall be as follows:
Initial Amount $1,000,000
End of Year 1 $ 650,000
End of Year 2 $ 500,000
End of Year 3 $ 250,000
End of Year 4 $ 100,000
End of Year 5 $ 100,000
End of Year 6 $ 100,000
If the IPO has not occurred, for whatever reason, the schedule shall be as
follows:
Initial Amount $2,000,000
End of Year 1 $1,500,000
End of Year 2 $1,000,000
End of Year 3 $ 500,000
End of Year 4 $ 250,000
End of Year 5 $ 100,000
End of Year 6 $ 100,000
-48-
49
If the IPO occurs and the funding level achieved after the letter of credit is
posted, Tenant shall be able to reduce the letter of credit to the appropriate
level as if the IPO had occurred prior to the original posting of the letter of
credit.
3. Delays. Delays in the completion of construction of Tenant's
Improvements or in obtaining a certificate of occupancy, if required by the
applicable governmental authority prior to Tenant's occupancy of the Premises,
caused by Tenant, Tenant's Contractors (hereinafter defined) or any person, firm
or corporation employed by Tenant or Tenant's Contractors shall constitute
"Tenant Delays". Tenant Delays include, but are not limited to, delays resulting
from any of the following:
(a) Failure by Tenant or its agents, employees, consultants,
architects, engineers, planners, contractors or subcontractors or others
employed by Tenant to timely comply with the schedule of dates set forth in this
Work Letter;
(b) Tenant makes changes during construction of its Tenant's
Improvements and the changes result in the Tenant's Improvements being
Substantially Completed later than they would have been Substantially Completed
absent said changes;
(c) Tenant does not timely remit the Excess Costs as provided in
Paragraph 2(e);
(d) Landlord's inability to obtain, within a commercially reasonable
time, materials required for the Tenant's Improvements that have been specified
by Tenant;
(e) Landlord's inability to obtain a Building permit, certificate of
occupancy or other required governmental approval, inspection, license or
certificate or any necessary approval of any architectural control committee or
other association required under covenants, conditions or restrictions
applicable to the Complex and such inability is due to a particular requirement
of Tenant or Tenant's failure to cooperate in the approval process (including
Tenant's failure to agree in a timely manner to make changes to the Construction
Plans if and as required by such authorities); and
(f) Any other Tenant Delay specified in this Work Letter or in the
Lease.
If Tenant's Improvements are not Substantially Complete on the Commencement
Date, then each day of Tenant Delay shall constitute one day that the
Commencement Date will not be adjusted forward (toward the date of Substantial
Completion) as provided in Paragraph 3 of this Lease.
4. Substantial Completion and Punch List. The terms "Substantial
Completion" and "Substantially Complete," as applicable, shall mean when
Tenant's Improvements are sufficiently completed in accordance with the approved
Construction Plans so that Tenant can reasonably use the Premises for the
Permitted Use. When Landlord considers Tenant's Improvements to be Substantially
Complete, Landlord will notify Tenant and within five (5) business days
thereafter,
-49-
50
Landlord's representative and Tenant's representative shall conduct a
walk-through of the Premises and identify any necessary touch-up work, repairs
and minor completion items as are necessary for final completion of Tenant's
Improvements. Neither Landlord's representative nor Tenant's representative
shall unreasonably withhold his agreement on punch list items. Landlord will use
reasonable efforts to cause the contractor to complete all punch list items
within thirty (30) days after agreement thereon.
5. Tenant's Contractors. If Tenant should desire to enter the Premises
or authorize its agent to do so prior to the Commencement Date of this Lease, to
perform approved work not requested of the Landlord, Landlord shall permit such
entry if:
(a) Tenant shall use only such contractors which Landlord shall approve
in its reasonable discretion and Landlord shall have approved the plans to be
utilized by Tenant, which approval will not be unreasonably withheld;
(b) Tenant, its contractors, workmen, mechanics, engineers, space
planners or such others as may enter the Premises (collectively, "Tenant's
Contractors"), work in harmony with and do not in any way disturb or interfere
with Landlord's space planners, architects, engineers, contractors, workmen,
mechanics or other agents or independent contractors in the performance of their
work (collectively, "Landlord's Contractors"), it being understood and agreed
that if entry of Tenant or Tenant's Contractors would cause, has caused or is
causing a material disturbance to Landlord or Landlord's Contractors, then
Landlord may, with notice, refuse admittance to Tenant or Tenant's Contractors
causing such disturbance; and
(c) Tenant, Tenant's Contractors and other agents shall provide
Landlord sufficient evidence that each is covered under such Worker's
Compensation, public liability and property damage insurance as Landlord may
reasonably request for its protection.
Landlord shall not be liable for any injury, loss or damage to any of Tenant's
installations or decorations made prior to the Commencement Date and not
installed by Landlord. Tenant shall indemnify and hold harmless Landlord and
Landlord's Contractors from and against any and all costs, expenses, claims,
liabilities and causes of action arising out of or in connection with work
performed in the Premises by or on behalf of Tenant (but excluding work
performed by Landlord or Landlord's Contractors). Landlord is not responsible
for the function and maintenance of Tenant's Improvements which are different
than Landlord's standard improvements at the Building or improvements,
equipment, cabinets or fixtures not installed by Landlord. Such entry by Tenant
and Tenant's Contractors pursuant to this Paragraph 5 shall be deemed to be
under all of the terms, covenants, provisions and conditions of the Lease except
the covenant to pay Rent.
6. Construction Representatives. Landlord's and Tenant's
representatives for coordination of construction and approval of change orders
will be as follows, provided that either party may change its representative
upon written notice to the other:
-50-
51
LANDLORD'S REPRESENTATIVE:
NAME
---------------------------------------
ADDRESS
---------------------------------------
PHONE
---------------------------------------
TENANT'S REPRESENTATIVE:
NAME Xx. Xxxx X. Xxxx
ADDRESS 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx XX-000
Xxxxxx, Xxxxx 00000
PHONE (000) 000-0000
-51-
52
EXHIBIT E
NON-RESERVED PARKING SPACES
BOTH SURFACE AND RESERVED GARAGE PARKING AGREEMENT
1. Parking Spaces. So long as the Lease of which this Parking Agreement
(this "Agreement") is a part shall remain in effect and Tenant leases 63,548
rentable square feet, Tenant or persons designated by Tenant shall have the
right, at no additional cost to Tenant, to use in the parking garage which is a
part of the Complex (the "Garage") on an unreserved and non-exclusive basis up
to three hundred twenty-eight ( 328) parking spaces during the Lease Term. To
the extent Landlord determines that additional parking spaces in the Garage are
available, Tenant shall have the right (but not the obligation) to rent
additional unreserved and non-exclusive parking spaces in the Garage at the rate
from time to time designated by Landlord as standard for the Complex. Each
capitalized term used but not defined herein shall have the meaning assigned to
it in the Lease.
2. Lost Parking Cards/Parking Sticker. There will be a replacement
charge payable by Tenant equal to the amount posted from time to time by
Landlord for loss of any magnetic parking card or parking sticker issued by
Landlord.
3. Parking Stickers and Cards. Parking stickers or any other device or
form of identification supplied by Landlord shall remain the property of
Landlord and shall not be transferable. Each parking sticker, parking card or
other device or form of identification shall entitle the xxxxxx to park only one
car at any given time in the Garage.
4. Failure or Inability to Provide Parking Space. If Landlord fails or
is unable to provide any parking space to Tenant in the Garage because of damage
or condemnation or because of needed repairs to the Garage or restriping within
the Garage, such failure or inability shall never be deemed to be a default by
Landlord as to permit Tenant to terminate the Lease, either in whole or in part,
and Landlord shall have no liability to Tenant or any other xxxxxx by reason of
such failure or inability to provide Tenant with such parking space. However,
Landlord will diligently pursue the repair of any damage to reduce the time that
required parking spaces are unavailable for Tenant's use, and will attempt to
minimize inconvenience to Tenant in completing such repair work.
5. Rules and Regulations. A condition of any parking shall be
compliance by the xxxxxx with Garage rules and regulations, including any
sticker or other identification system established by Landlord. Garage managers
or attendants are not authorized to make or allow any exceptions to these Rules
and Regulations. The following rules and regulations are in effect until notice
is given to Tenant of any change. Landlord reserves the right to modify and/or
adopt such other reasonable and generally applicable rules and regulations for
the Garage as it deems necessary for the operation of the Garage.
(a) Cars must be parked entirely within the stall lines painted on the
floor.
-52-
53
(b) All directional signs and arrows must be observed.
(c) The speed limit shall not exceed five (5) miles per hour.
(d) Parking is prohibited in areas not striped for parking, aisles,
areas where "no parking" signs are posted, in cross hatched areas
and in such other areas as may be designated by Landlord or
Landlord's agent(s) including, but not limited to, areas designated
as "Visitor Parking" or reserved spaces. Any parking areas
designated as "Visitor Parking" or short term parking are for
visitors and other invitees of tenants of the Building and shall
not be used by any tenant or its officers or employees.
(e) Every xxxxxx is required to park and lock his own car. All
responsibility for damage to cars or persons or loss of personal
possessions is assumed by the xxxxxx.
(f) Spaces which are designated for small, intermediate or full-sized
cars shall be so used. No intermediate or full-size cars shall be
parked in parking spaces limited to compact cars. Landlord
expressly reserves the right to redesignate parking areas and to
modify the parking structure for other uses or to any extent.
(g) No cars shall be allowed to remain parked in the Garage overnight,
over weekends or while xxxxxx is on vacation except in such area(s)
as Landlord and tenant mutually agree.
(h) No cars or other vehicles may be advertised for sale or for lease
in any manner in the Garage; provided, however, that cars may
display a small sign on the inside glass of the rear windows of the
vehicles for such purpose.
6. Default under Parking Agreement. Landlord may refuse to permit any
person who violates the rules to park in the Garage. Any violation of the rules
shall subject the violating car to removal at the car owner's expense. No such
refusal or removal shall create any liability on Landlord or be deemed to
interfere with Tenant's right to quiet possession of the Premises.
Landlord reserves the right to designate specific areas and spaces
within which Tenant, Tenant's employees, agents, visitors and customers, may
park, and agrees to consult with Tenant in connection therewith prior to the
Commencement Date. Tenant shall not, however, be entitled to exclusive use of
such designated parking spaces (unless granted such right by Landlord in
writing) and Landlord may, in its reasonable discretion, reassign the location
of such parking spaces at any time. Landlord further reserves the right to
promulgate rules and regulations for the use of all parking areas at any time
during the term of this Lease. Notwithstanding any foregoing provision of this
Parking Agreement, Landlord shall have the right to designate any parking area
or space for the exclusive use of a tenant or other person or persons at a
monthly fee of $ -0- . All covered parking spaces or privileged parking spaces
(i.e., reserved or
-53-
54
designated spaces) will be assigned on a prorata basis according to the rentable
area leased by the tenants in the Building. Tenant agrees that it will employ
its best efforts to prevent the use by Tenant's employees, agents, visitors and
customers of parking spaces allocated to other tenants.
Tenant shall not exceed the following parking ratio: one (1) parking
space per 194 rentable square feet. If in the reasonable opinion of Landlord
these parking ratios are being exceeded, Tenant shall immediately upon written
notice from Landlord correct the problem or be in default of the lease.
Overnight parking shall be restricted to Tenant's business vehicles parked in
Tenant's designated loading spaces in the truck court or loading area, unless
prior written approval is granted by Landlord. Vehicles parked in violation of
these provisions may be towed at vehicle owner's sole cost and expense.
-54-
55
EXHIBIT F
ACCEPTANCE OF PREMISES MEMORANDUM
This Acceptance of Premises Memorandum is being executed pursuant to
that certain Office Building Lease (the "Lease") dated the _____ day of
______________, 19 , between MAPLEWOOD ASSOCIATES, L.P. ("Landlord"), and
CROSSROADS SYSTEMS, INC. ("Tenant"), pursuant to which Landlord leased to Tenant
and Tenant leased from Landlord certain space in the office Building known as
The Park, located at 0000 Xxxxx XxXxx Xxxxxxxxxx, Xxxxxx, Xxxxx 00000 (the
"Building"). Landlord and Tenant hereby agree that:
1. Except for the Punch List Items (as shown on the attached Punch
List), Landlord has fully completed the construction work required under the
terms of the Lease and the Work Letter attached thereto.
2. The Premises are tenantable, Landlord has no further obligation for
construction (except with respect to Punch List Items) and Tenant acknowledges
that the Premises and Tenant's Improvements are satisfactory in all respects,
except for the Punch List Items, and are suitable for the Permitted Use.
3. The Commencement Date of the Lease is the _____ day of
__________________, 1999. If the date set forth in Paragraph 1(b) of the Lease
is different than the date set forth in the preceding sentence, then Paragraph
1(b) of the Lease is hereby amended to be the Commencement Date set forth in the
preceding sentence.
4. The expiration date of the Lease is the _____ day of
_________________________, 2000. If the date set forth in Paragraph 1(c) of the
Lease is different than the date set forth in the preceding sentence, then
Paragraph 1(c) of the Lease is hereby amended to be the expiration date set
forth in the preceding sentence.
5. Landlord has obtained a Certificate of Occupancy covering the
Premises.
6. All capitalized terms not defined herein shall have the meaning
assigned to them in the Lease.
-55-
56
Agreed and Executed this ___________ day of ________________________, 19___.
LANDLORD
MAPLEWOOD ASSOCIATES, L.P.
a Texas Limited Partnership
By: Maplewood GP, Inc., General Partner
By:
---------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President
TENANT
CROSSROADS SYSTEM, INC.,
a Corporation
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
-56-
57
EXHIBIT G
RENEWAL OPTION
1. If, and only if, on the Expiration Date of this Lease and the date
Tenant notifies Landlord of its intention to renew the Lease Term (as provided
in subsection (2) below), (i) Tenant is not in default under this Lease, (ii)
Tenant then occupies, and the Premises then consist of, at least all the
Premises existing on the Commencement Date and (iii) this Lease is in full force
and effect, then Tenant, but not any assignee or subtenant of Tenant, shall have
and may exercise an option to renew this Lease for one (1) additional term of
three (3) years (the "Renewal Term") upon the same terms and conditions
contained in this Lease with the exceptions that (i) this Lease shall not be
further available for renewal and (ii) the rental for the Renewal Term shall be
the current market rental rate then being achieved in comparable office
buildings in the suburban Austin, Texas market with comparable location, quality
of construction, ratio of covered parking, and other amenities (the "Renewal
Rental Rate").
2. If Tenant desires to renew this Lease pursuant to subsection (1)
above, Tenant must notify Landlord in writing of its intention to renew not less
than six (6) months nor more than nine (9) months prior to the Expiration Date.
Landlord shall, within sixty (60) days following receipt of such notice, notify
Tenant in writing of Landlord's determination of the Renewal Rental Rate and
Tenant shall, within the next thirty (30) days following receipt of Landlord's
determination of the Renewal Rental Rate, notify Landlord in writing of Tenant's
acceptance or rejection of Landlord's determination of the Renewal Rental Rate.
If Tenant timely notifies Landlord of Tenant's acceptance of Landlord's
determination of the Renewal Rental Rate, this Lease shall be extended as
provided herein and Landlord and Tenant shall enter into an amendment to this
Lease to reflect the extension of the Lease Term and changes in Base Rental in
accordance with this Exhibit. If (i) Tenant timely notifies Landlord in writing
of Tenant's rejection of Landlord's determination of the Renewal Rental Rate or
(ii) Tenant does not notify Landlord in writing of Tenant's acceptance or
rejection of Landlord's determination of the Renewal Rental Rate within such
thirty (30) day period, Landlord and Tenant will promptly attempt to agree on
the Renewal Rental Rate. The Renewal Rental Rate shall be the rate that is then
being achieved in comparable office buildings in the suburban Austin, Texas
market with comparable location, quality of construction, covered parking and
other amenities. If Landlord and Tenant cannot agree within fifteen (15) days of
Tenant's rejection in subclause (i) hereinabove or the expiration of the thirty
(30) day period referred to in subclause (ii) hereinabove, then Landlord and
tenant shall each select an independent real estate broker or appraiser (i.e., a
real estate broker or appraiser with no prior or existing contractual
relationship with either party) with experience in leasing office buildings in
the north central Austin area to determine the Renewal Rental Rate. If the
values determined by the brokers/appraisers are less than ten percent (10%)
apart, the average of the values determined by them shall be deemed the Renewal
Rental Rate for the Premises. If the brokers/appraisers do not agree, and if
their determinations are more than ten percent (10%) apart, then on or before
seventy-five (75) days prior to the commencement of the Renewal Term, the two
brokers/appraisers shall select a third
-57-
58
independent broker/appraiser who will determine the Renewal Rental Rate for the
Premises. If the value determined by the third broker/appraiser is between the
values determined by the two prior broker/appraisers, the determination of the
third broker/appraiser will control. If the third broker/appraiser's
determination is not between the values determined by the two prior
broker/appraisers, then the value of the first two broker/appraisers closest to
the value of the third broker/appraiser will be the Renewal rental Rate for the
Premises. Each party shall pay the fees and expenses of its broker/appraiser,
and the fees and expenses of the third broker/appraiser shall be shared equally
between Landlord and Tenant.
-58-
59
EXHIBIT H
RIGHT TO SUBLEASE OR ASSIGN TO AFFILIATE
Notwithstanding the prohibition against assignment and subleasing
contained in Paragraph 16 of the Lease, Tenant may, without the prior written
consent of Landlord, but only after giving Landlord at least thirty (30) days
prior written notice (which notice shall include the identity of the Affiliate
(hereinafter defined) and the relationship of the Affiliate to Tenant), sublet
the Premises or any part thereof to an Affiliate or assign this Lease to an
Affiliate or permit occupancy of any portion of the Premises by an Affiliate. If
Tenant is a partnership, the term "Affiliate" shall mean (i) any corporation
which, directly or indirectly, controls or is controlled by or is under common
control with the general partner of Tenant, (ii) any corporation not less than
fifty percent (50%) of whose outstanding stock shall, at the time be owned
directly or indirectly by Tenant's general partner or (iii) any partnership or
joint venture in which Tenant or the general partner of Tenant is a general
partner or joint venturer (with joint and several liability for all of the
partnership's or venture's obligations). If Tenant is a corporation or
individual, the term "Affiliate" shall mean (i) any corporation which, directly
or indirectly, controls or is controlled by or is under common control with
Tenant or (ii) any corporation not less than fifty percent (50%) of whose
outstanding stock shall, at the time, be owned directly or indirectly by Tenant
or Tenant's parent corporation. For purposes of this paragraph, "control" shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities or by contract or otherwise and ownership of
the liabilities, losses, profits and tax benefits for such entity.
-59-
60
EXHIBIT I
LETTER OF CREDIT AS SECURITY DEPOSIT
Tenant shall furnish Landlord the Security Deposit in the form of an
unconditional, renewable and irrevocable letter of credit (the "Letter of
Credit"), in the amount of the Security Deposit as specified in Section 1(e),
deposited with Landlord in the form attached hereto as Exhibit I-1 issued by
____________________ (the "Bank") in the favor of Landlord and having a maturity
date of the date which is one year after the date of this Lease. The Letter of
Credit shall be renewed each year until the expiration of the Lease Term. Tenant
agrees to provide Landlord, at least thirty (30) days prior to the expiration of
the then current Letter of Credit, either (i) a renewal Letter of Credit from
the Bank meeting the requirements of this Paragraph or (ii) a new Letter of
Credit from a bank approved in writing by Landlord and in a form substantially
the same as the form attached hereto as Exhibit I-1 (or such other form as is
approved in writing by Landlord). If Landlord does not so receive such renewal
Letter of Credit or new Letter of Credit, then Landlord may draw in full the
current Letter of Credit for cash which shall be the Security Deposit under this
Lease. The Letter of Credit shall provide that it may be drawn upon in full or
in part for cash by Landlord upon delivery to the issuer of the Letter of Credit
of the original of the Letter of Credit and a certification by Landlord that
Tenant has defaulted under this Lease and such default has remained uncured
beyond any and all applicable notice and cure periods specifically referenced in
this Lease. Upon each occurrence of an event of default that remains uncured
beyond all applicable notice and cure periods, Landlord may draw from the Bank
in cash the part of the Letter of Credit to pay past due rent or other payments
due Landlord under this Lease, and the cost of any other damage, injury, expense
or liability caused by such event of default without prejudice to any other
remedy provided herein or provided by law. If Landlord draws upon the Letter of
Credit, Tenant shall promptly restore the Letter of Credit to the amount
required under this Exhibit.
-60-
61
EXHIBIT I-1
FORM OF LETTER OF CREDIT
Date:
-----------------------
Beneficiary: Accountee:
(or Assigns)
-------------------- -------------------------------
c/o West World Management, Inc.
-------------------------------
0 Xxxxxxxxxxxxxx Xxxx
-------------------------------
Xxxxxxxx, Xxx Xxxx 00000
-------------------------------
Irrevocable Standby Letter of Credit #_______________
Issued by _____________________________ (Bank)
Beneficiary:
We hereby establish our Irrevocable Standby Letter of Credit in your
favor which is available by your drafts, drawn on _____________________________
(Bank) for a sum not exceeding $___________________.
We, ______________________________ (Bank), hereby agree with
Beneficiary that all drafts drawn under and in compliance with the terms of this
Letter of Credit will be duly honored, if drawn and presented for payment at
this office on or before the expiration date of this Letter of Credit. The
expiration date of this Letter of Credit is ________________, ____.
All drafts shall be accompanied by: 1) this original Letter of Credit;
2) a statement signed by an officer of Beneficiary that "Accountee has defaulted
under the Lease dated ____________________, 1999, by and between Beneficiary as
Landlord and Accountee as Tenant and such default has remained uncured beyond
any and all applicable notice and cure periods specifically referenced in said
Lease."
Multiple draws are permitted against this Letter of Credit. Multiple
draws are limited in aggregate to the maximum amount of this Letter of Credit
stated above.
Unless otherwise expressly stated, this documentary credit is subject
to the "Uniform Customs and Practice For Documentary Credits", as revised.
Sincerely,
Bank:
Name:
---------------------------
Title:
---------------------
Date:
---------------------
Accountee's Acknowledgment:
Accountee:
Name:
---------------------------
Title:
---------------------
Date:
---------------------
-61-
