EXHIBIT 10.2
LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") is dated this 6th day of August,
2002, between CROW FAMILY HOLDINGS INDUSTRIAL TEXAS LIMITED PARTNERSHIP
("Landlord") and the Tenant named below (ALL CAPITALIZED TERMS IDENTIFIED BELOW
SHALL HAVE THE MEANING GIVEN TO THEM HEREIN).
TENANT: Interphase Corporation
TENANT'S REPRESENTATIVE: Xxxxx Xxxxx
ADDRESS AND PHONE NO: 13800 Senlac
Xxxxxx, Xxxxx 00000-0000
000-000-0000
PREMISES: That portion of the Building, containing
approximately 24,270 rentable square feet, as
determined by Landlord, as shown on EXHIBIT A,
situated on a portion of that certain real
property legally described in EXHIBIT A-1
attached hereto (the "Property").
PROJECT: The Building and that portion of the Property
directly benefiting the Building known as Luna
Place.
BUILDING: 0000 Xxxx Xxxx #000, Xxxxxxxxxx, Xxxxx 00000
TENANT'S PROPORTIONATE
SHARE OF PROJECT: 26.9%
TENANT'S PROPORTIONATE
SHARE OF BUILDING: 69.6%
LEASE TERM: Beginning on the Commencement Date and ending on
the last day of the thirty-ninth (39th) full
calendar month thereafter, AS SUCH TERM MAY BE
EXTENDED AND RENEWED IN ACCORDANCE WITH EXHIBIT
D.
COMMENCEMENT DATE: October 1, 2002
BASE RENT: MONTHS ANNUAL RATE PER SQ. FT. MONTHLY BASE RENT
------ ----------------------- -----------------
1-3 $0.00 $0.00
4-39 $6.00 $12,135
INITIAL ESTIMATED MONTHLY 1. Utilities: To be paid separately in
OPERATING EXPENSE PAYMENTS: accordance with Paragraph
(estimates only and subject 7 herein.
to adjustment to actual 2. Common Area Charges $ 1,181.14
costs and expenses according 3. Taxes: $ 2,892.18
to the provisions of this 4. Insurance: $ 91.01
Lease) 5. Others $ N/A
INITIAL ESTIMATED MONTHLY
OPERATING EXPENSE PAYMENTS: $ 4,164.33
INITIAL MONTHLY BASE RENT AND
OPERATING EXPENSE PAYMENTS: $16,299.33
SECURITY DEPOSIT: $16,299.33
BROKER: Xxx Xxxxxxxx, RLS Enterprises, Inc.
ADDENDA: Rules and Regulations; Addendum; Exhibit A
(Premises); Exhibit A-1 (Legal Description of
Real Property); Exhibit B (UCC-1 Financing
Statement); Exhibit C (Tenant Finish Work);
Exhibit D (Hazardous Material); Exhibit E (Tenant
Equipment)
1. GRANTING CLAUSE. In consideration of the obligation of
Tenant to pay rent as herein provided and in consideration of the other terms,
covenants, and conditions hereof, Landlord leases to Tenant, and Tenant leases
from Landlord, the Premises, to have and to hold for the Lease Term, subject to
the terms, covenants and conditions of this Lease.
2. ACCEPTANCE OF PREMISES. Except as may otherwise be
expressly provided in EXHIBIT C attached hereto, Tenant shall accept the
Premises on the Commencement Date in its "AS-IS" condition, subject to all
applicable laws, ordinances, regulations, covenants and restrictions, and
Landlord shall have no obligation to perform or pay for any repair or other work
therein. Landlord has made no representation or warranty as to the suitability
of the Premises for the conduct of Tenant's business, and Tenant waives any
implied warranty that the Premises are suitable for Tenant's intended purposes.
TENANT ACKNOWLEDGES THAT (1) IT HAS INSPECTED AND ACCEPTS THE PREMISES IN AN "AS
IS, WHERE IS" CONDITION (UNLESS OTHERWISE EXPRESSLY PROVIDED IN EXHIBIT C
ATTACHED HERETO, (2) THE BUILDINGS AND IMPROVEMENTS COMPRISING THE SAME ARE
SUITABLE FOR THE PURPOSE FOR WHICH THE PREMISES ARE LEASED AND LANDLORD HAS MADE
NO WARRANTY, REPRESENTATION, COVENANT, OR AGREEMENT WITH RESPECT TO THE
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE PREMISES, (3) THE
PREMISES ARE IN GOOD AND SATISFACTORY CONDITION, (4) NO REPRESENTATIONS AS TO
THE REPAIR OF THE PREMISES, NOR PROMISES TO ALTER, REMODEL OR IMPROVE THE
PREMISES HAVE BEEN MADE BY LANDLORD (UNLESS OTHERWISE EXPRESSLY PROVIDED IN
EXHIBIT C ATTACHED HERETO, AND (5) THERE ARE NO REPRESENTATIONS OR WARRANTIES,
EXPRESSED, IMPLIED OR STATUTORY, THAT EXTEND BEYOND THE DESCRIPTION OF THE
PREMISES. Except as provided in Paragraph 10, in no event shall Landlord have
any obligation for any defects in the Premises or any limitation on its use. The
taking of possession of the Premises shall be conclusive evidence that Tenant
accepts the Premises and that the Premises were in good condition at the time
possession was taken except for items that are Landlord's responsibility under
Paragraph 10 and any punchlist items agreed to in writing by Landlord and Tenant
IN ACCORDANCE WITH EXHIBIT C INCLUDING ANY LATENT DEFECTS.
3. USE. (a) Subject to Tenant's compliance with all zoning
ordinances and Legal Requirements (as hereinafter defined), the Premises shall
be used only for the purpose of MANUFACTURING, receiving, storing, shipping and
selling (but limited to wholesale sales) products, materials and merchandise
made and/or distributed by Tenant and for such other lawful purposes as may be
incidental thereto; however, no retail sales may be made from the Premises.
Tenant shall not conduct or give notice of any auction, liquidation, or going
out of business sale on the Premises. Tenant will use the Premises in a careful,
safe and proper manner and will not commit waste, overload the floor or
structure of the Premises or subject the Premises to use that would damage the
Premises. Tenant shall not permit any objectionable or unpleasant odors, smoke,
dust, gas, noise, or vibrations to emanate from the Premises, or take any other
action that would constitute a nuisance or would disturb, unreasonably interfere
with, or endanger Landlord or any tenants of the Project. Outside storage,
including without limitation, storage of trucks and other vehicles, is
prohibited without Landlord's prior written consent.
(b) Tenant, at its sole expense, shall use and occupy the
Premises in compliance with all laws, including, without limitation, the
Americans With Disabilities Act, orders, judgments, ordinances, regulations,
codes, directives, permits, licenses, covenants and restrictions now or
hereafter applicable to the Premises (collectively, "Legal Requirements"). The
Premises shall not be used as a place of public accommodation under the
Americans With Disabilities Act or similar state statutes or local ordinances or
any regulations promulgated thereunder, all as may be amended from time to time.
Tenant shall, at its expense, make any alterations or modifications, within or
without the Premises, that are required by Legal
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Requirements related to Tenant's specific use or occupation of the Premises.
Tenant will not use or permit the Premises to be used for any purpose or in any
manner that would void Tenant's or Landlord's insurance, increase the insurance
risk, or cause the disallowance of any sprinkler credits. If any increase in the
cost of any insurance on the Premises or the Project is caused by Tenant's use
or occupation of the Premises, or because Tenant vacates the Premises, then
Tenant shall pay the amount of such increase to Landlord. Any entrance into or
occupation of the Premises by Tenant prior to the Commencement Date shall be
subject to all obligations of Tenant under this Lease.
(c) Tenant and its employees and invitees shall have the
non-exclusive right to use, in common with others, any areas designated by
Landlord from time to time as common areas for the use and enjoyment of all
tenants and occupants of the Project (THE "COMMON AREAS"), subject to THE Rules
and Regulations (as HEREAFTER DEFINED IN PARAGRAPH 31).
4. BASE RENT. Tenant shall pay Base Rent in the amount set
forth on the first page of this Lease. The first month's Base Rent, the Security
Deposit, and the first monthly installment of estimated Operating Expenses (as
hereafter defined) shall be due and payable on the date hereof, and Tenant
promises to pay to Landlord in advance, without demand, deduction or set-off,
monthly installments of Base Rent on or before the first day of each calendar
month succeeding the Commencement Date. Payments of Base Rent for any
fractional calendar month shall be prorated. All payments required to be made by
Tenant to Landlord hereunder shall be payable at such address as Landlord may
specify from time to time by written notice delivered in accordance herewith.
The obligation of Tenant to pay Base Rent and other sums to Landlord and the
obligations of Landlord under this Lease are independent obligations. Tenant
shall have no right at any time to xxxxx, reduce, or set-off any rent due
hereunder except where expressly provided in this Lease. Tenant acknowledges
that late payment by Tenant to Landlord of any rent due hereunder will cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
such costs being extremely difficult and impractical to determine. Therefore,
if Tenant is delinquent in any monthly installment of Base Rent, estimated
Operating Expenses or other sums due and payable hereunder for more than
TEN (10) days, Tenant shall pay to Landlord on demand a late charge equal to
five percent (5%) of such delinquent sum. The parties agree that such late
charge represents a fair and reasonable estimate of the costs that Landlord
will incur by reason of such late payment by Tenant. The provision for such late
charge shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as a penalty.
5. SECURITY DEPOSIT. The Security Deposit shall be held by
Landlord as security for the performance of Tenant's obligations under this
Lease. The Security Deposit is not an advance rental deposit or a measure of
Landlord's damages in case of Tenant's default. Upon each occurrence of an Event
of Default (hereinafter defined), Landlord may use all or part of the Security
Deposit to pay delinquent payments due under this Lease, and the cost of any
damage, injury, expense or liability caused by such Event of Default, without
prejudice to any other remedy provided herein or provided by law. Tenant shall
pay Landlord on demand the amount that Will restore the Security Deposit to its
original amount. Landlord's obligation respecting the Security Deposit is that
of a debtor, not a trustee; no interest shall accrue thereon. Subject to the
requirements of, and conditions imposed by, laws applicable to security deposits
under commercial leases, Landlord shall within the time required by applicable
law (BUT IN NO EVENT LATER THAN THIRTY (30) DAYS AFTER THE FINAL WALK-THROUGH
AND COMPLETION OF THE FINAL WALK-THROUGH PUNCH-LIST ITEMS OR AN EARLIER,
MUTUALLY AGREEABLE, TERMINATION OF THIS LEASE), return to Tenant the portion of
the Security Deposit remaining after deducting all damages, charges and other
amounts permitted by law. Landlord and Tenant agree that such deductions shall
include, without limitation, all damages and losses that Landlord has suffered
or that Landlord reasonably estimates that it will suffer as a result of any
breach of this Lease by Tenant. If Landlord transfers its interest in the
Premises Landlord may assign the Security Deposit to the transferee and, upon
such transfer and the delivery to Tenant of an acknowledgement of the
transferee's responsibility for the Security Deposit as provided by law,
Landlord thereafter shall have no further liability for the return of the
Security Deposit.
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6. OPERATING EXPENSE PAYMENTS. (a) During each month of the
Lease Term, on the same date that Base Rent is due, Tenant shall pay Landlord an
amount equal to 1/12 of the annual cost, as estimated by Landlord from time to
time, of Tenant's Proportionate Share (as defined ON THE FIRST PAGE OF THIS
LEASE) of Operating Expenses for the Project. Payments thereof for any
fractional calendar month shall be prorated.
(b) The term "Operating Expenses" means all costs and expenses
incurred by Landlord with respect to the ownership, maintenance, and operation
of the Project including, but not limited to costs of: Common Area utilities;
maintenance, repair and replacement of all portions of the Project, including
without limitation, paving and parking areas, roads, roofs (except that Landlord
is responsible for replacement of the roof as provided in Xxxxxxxxx 00, Xxxxxx
being responsible only for Tenant's Proportionate Share of the cost of roof
repairs), roof membrane, alleys, and driveways; mowing, snow removal,
landscaping, and exterior painting; the cost of maintaining utility lines, fire
sprinklers and fire protection systems, exterior lighting and mechanical and
building systems serving the Building or Project; amounts paid to contractors
and subcontractors for work or services performed in connection with any of the
foregoing; charges or assessments of any association to which the Project is
subject; fees payable to tax consultants and attorneys for consultation and
contesting taxes; environmental insurance or environmental management fees; the
cost of any insurance deductibles for insurance required to be maintained by
Landlord hereunder; property management fees payable to a property manager (NOT
TO EXCEED 6% OF GROSS REVENUES), including any affiliate of Landlord, or if
there is no property manager, an administration fee of ten percent (10%) of
Operating Expenses payable to Landlord; security services, if any; trash
collection, sweeping and removal; and additions or alterations made by Landlord
to the Project or the Building in order to comply with Legal Requirements (other
than those expressly required herein to be made by Tenant) or that are
appropriate to the continued operation of the Project or the Building as a bulk
warehouse/industrial or service center facility in the market area, provided
that the cost of such additions or alterations that are required to be
capitalized for federal income tax purposes shall be amortized on a straight
line basis over a period equal to the lesser of the useful life thereof for
federal income tax purposes or ten (10) years and included in Operating Expenses
only to the extent of the amortized amount for the respective calendar year. In
addition, Operating Expenses shall include (i) Taxes (hereinafter defined) for
each calendar year during the Lease term, and (ii) the cost of insurance
maintained by Landlord for the Project for each calendar year during the Lease
Term.
(c) Notwithstanding ANYTHING TO THE CONTRARY CONTAINED IN the
foregoing PARAGRAPH, Operating Expenses do not include (i) costs, expenses,
depreciation or amortization for capital repairs and capital replacements
required to be made by Landlord under Paragraph 10 of this Lease; (ii) debt
service under ANY LOAN OR mortgages or ground rent under ground leases; (iii)
costs of restoration to the extent of net insurance proceeds received by
Landlord with respect thereto; (iv) leasing commissions or the costs of
renovating space for tenants; (v) any costs or legal fees incurred in connection
with any particular tenant; (vi) CAPITAL EXPENDITURES OTHER THAN THOSE ADDITIONS
OR ALTERATIONS SPECIFICALLY DESCRIBED IN PARAGRAPH 6(b) ABOVE; (vii) ANY COSTS
OR FEES IN CONNECTION WITH ANY WORK IDENTIFIED IN EXHIBIT C AND/OR IN CONNECTION
WITH RESPECT TO THE HVAC WARRANTY ON EXHIBIT D; (viii) TAXES ON INCOME AND
FRANCHISE TAXES; (ix) LANDLORD'S OVERHEAD COSTS, INCLUDING SALARIES, EQUIPMENT,
SUPPLIES, ACCOUNTING AND LEGAL FEES, RENT AND OTHER OCCUPANCY COSTS, OR ANY
OTHER COSTS ASSOCIATED WITH THE OPERATION AND INTERNAL ORGANIZATION AND FUNCTION
OF LANDLORD AS A BUSINESS ENTITY; (x) WAGES AND SALARIES (INCLUDING EMPLOYEE
BENEFITS) OF THE BUILDING MANAGER, WHICH SHALL BE INCLUDED IN THE BUILDING
MANAGEMENT FEE, OF EXECUTIVE OR OTHER PERSONNEL ABOVE THE GRADE OF BUILDING
MANAGER, OR OF EMPLOYEES WHO DO NOT DEVOTE THE MAJORITY OF THEIR TIME TO THE
BUILDING; (xi) FEES OR OTHER COSTS FOR PROFESSIONAL SERVICES PROVIDED BY
LAWYERS, SPACE PLANNERS, ARCHITECTS, ENGINEERS, AND OTHER SIMILAR PROFESSIONAL
CONSULTANTS, REAL ESTATE COMMISSIONS AND MARKETING AND ADVERTISING EXPENSES;
(xii) COSTS OF DEFENDING OR PROSECUTING LITIGATION WITH ANY PARTY, INCLUDING
TENANTS, MORTGAGES, OR OTHERS, UNLESS A FAVORABLE JUDGMENT WOULD REDUCE OR AVOID
AN INCREASE IN OPERATING EXPENSES, OR UNLESS THE LITIGATION IS TO ENFORCE
COMPLIANCE WITH THE BUILDING RULES OR OTHER STANDARDS OR REQUIREMENTS FOR THE
GENERAL BENEFIT OF THE TENANTS IN THE BUILDING; (xiii) COSTS INCURRED AS THE
RESULT OF LANDLORD'S VIOLATION OF ANY LEASE, CONTRACT, LAW OR ORDINANCE,
INCLUDING FINES AND PENALTIES; (xiv) LATE CHARGES, INTEREST OR PENALTIES OF ANY
KIND FOR LATE OR OTHER IMPROPER PAYMENT OF ANY PUBLIC OR
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PRIVATE OBLIGATION, INCLUDING AD VALOREM TAXES; (xv) COSTS OF REMOVING HAZARDOUS
WASTES OR ASBESTOS OR OF CORRECTING ANY OTHER CONDITIONS IN ORDER TO COMPLY WITH
ANY ENVIRONMENTAL LAW OR ORDINANCE, UNLESS CAUSED BY TENANT'S OCCUPANCY; (xvi)
COSTS FOR WHICH LANDLORD IS ENTITLED TO REIMBURSEMENT FROM ANY SOURCE, INCLUDING
COSTS COVERED BY PROCEEDS OF INSURANCE, CONDEMNATION AWARDS, OR COURT JUDGMENTS,
AMOUNTS SPECIFICALLY BILLED TO OR PAYABLE BY INDIVIDUAL TENANTS, COSTS COVERED
BY ANY MANUFACTURER'S, CONTRACTOR'S, OR OTHER WARRANTY, OR ANY OTHER COST FOR
WHICH LANDLORD IS ENTITLED TO REIMBURSEMENT; (xvii) COSTS, INCLUDING AD VALOREM
TAXES AND INSURANCE PREMIUMS FOR IMPROVEMENTS, OTHER MATERIALS, WORK, OR
SERVICES FURNISHED FOR ANY TENANT OTHER THAN TENANT TO A MATERIALLY GREATER
EXTENT OR IN A MATERIALLY MORE FAVORABLE MANNER THAN FURNISHED TO TENANTS
GENERALLY, OR THAT ARE FURNISHED ON AN EXCLUSIVE BASIS TO ANY ONE TENANT OR
GROUP OF TENANTS; (xviii) COSTS RELATED TO ANY BUILDING OR LAND NOT INCLUDED IN
THE PROJECTS INCLUDING ANY ALLOCATION OF COSTS INCURRED ON A SHARED BASIS, SUCH
AS CENTRALIZED ACCOUNTING COSTS, UNLESS THE ALLOCATION IS MADE ON A REASONABLE
AND CONSISTENT BASIS THAT FAIRLY REFLECTS THE SHARE OF SUCH COSTS ACTUALLY
ATTRIBUTABLE TO THE BUILDING, AND UNLESS SUCH SHARING OF COSTS ACTUALLY REDUCES
OPERATING EXPENSES; AND (xix) THE PART OF ANY COST OR OTHER SUM PAID TO ANY
AFFILIATE OF LANDLORD OR TO ANY OTHER PARTY THAT MAY EXCEED THE FAIR MARKET
PRICE OR COSTS GENERALLY PAYABLE FOR COMPARABLE GOODS OR SERVICES IN THE AREA OF
THE PROJECT. The cost of any repairs or replacements which are classified as
capital improvements under generally accepted accounting principles shall be
amortized with interest over the lesser of the useful life of the improvement or
ten (10) years and included in Operating Expenses only to the extent of the
amortized amount for the respective calendar year.
(d) If Tenant's total payments of Operating Expenses for any
year are less than Tenant's Proportionate Share of actual Operating Expenses for
such year, then Tenant shall pay the difference to Landlord within thirty (30)
days after demand, and if more, then Landlord shall retain such excess and
credit it against Tenant's next payments, OR, IF NO SUCH PAYMENTS ARE DUE (AS A
RESULT OF THE EXPIRATION OR TERMINATION OF THIS LEASE), THEN LANDLORD SHALL
REIMBURSE THE FULL AMOUNT OF THE OVERPAYMENT TO TENANT WITHIN 180 DAYS AFTER THE
END OF THE CALENDAR YEAR IN WHICH PAYMENT WAS DUE OR THE LEASE EXPIRED OR WAS
TERMINATED. For purposes of calculating Tenant's Proportionate Share of
Operating Expenses, a year shall mean a calendar year except the first year,
which shall begin on the Commencement Date, and the last year, which shall end
on the expiration of this Lease.
(e) With respect to Operating Expenses which Landlord
allocates to the entire Project, Tenant's "Proportionate Share" shall be the
percentage set forth on the first page of this Lease as Tenant's Proportionate
Share of the Project as reasonably adjusted by Landlord in the future for
changes in the physical size of the Premises or the Project (PROVIDED, HOWEVER,
ANY SUCH ADJUSTMENT SHALL NOT HAVE THE EFFECT OF INCREASING THE ACTUAL AMOUNT OF
OPERATING EXPENSES PAID BY TENANT; PROVIDED, FARTHER, HOWEVER, THAT SUCH
LIMITATION SHALL HAVE NO EFFECT ON LANDLORD'S RIGHT TO INCREASE CONTROLLABLE
OPERATING EXPENSES IN ACCORDANCE WITH SECTION 6(f) BELOW); and, with respect to
Operating Expenses which Landlord allocates only to the Building, Tenant's
"Proportionate Share" shall be the percentage set forth on the first page of
this Lease as Tenant's Proportionate Share of the Building as reasonably
adjusted by Landlord in the future for changes in the physical size of the
Premises or the Building (PROVIDED, HOWEVER, ANY SUCH ADJUSTMENT SHALL NOT HAVE
THE EFFECT OF INCREASING THE ACTUAL AMOUNT OF OPERATING EXPENSES PAID BY TENANT;
PROVIDED, FURTHER, HOWEVER, THAT SUCH LIMITATION SHALL HAVE NO EFFECT ON
LANDLORD'S RIGHT TO INCREASE CONTROLLABLE OPERATING EXPENSES IN ACCORDANCE WITH
SECTION 6(f) BELOW). Landlord may equitably increase Tenant's Proportionate
Share for any item of expense or cost reimbursable by Tenant that relates to a
repair, replacement, or service that benefits only the Premises or only a
portion of the Project or Building that includes the Premises or that varies
with occupancy or use. The estimated Operating Expenses for the Premises set
forth on the first page of this Lease are only estimates, and Landlord makes no
guaranty or warranty that such estimates will be accurate.
(f) OPERATING EXPENSE CAP. For purposes of calculating
additional rent under Section 6(b), the maximum increase in the amount of
Controllable Operating Expenses (defined below) that may be included in
calculating such additional rent for each calendar year after 2003 shall be
limited to eight percent (8%) per calendar year on a cumulative, compounded
basis; for example, the maximum amount of Controllable Operating Expenses that
may be included in calculation of such additional rent for each
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calendar year after 2003 shall equal the product of the 2002 Controllable
Operating Expenses and the following percentages for the following calendar
years: 108% for 2004; 116.64% for 2005; 125.97% for 2006; etc. "CONTROLLABLE
OPERATING EXPENSES" shall mean all Operating Expenses, which are within the
reasonable control of Landlord; thus, excluding Taxes, insurance, utilities, and
other costs beyond the reasonable control of Landlord. The limit on the
increases in Controllable Operating Expense shall continue during any renewal or
extended Term, using the 2003 as the base year to calculate the applicable
limit.
(g) AUDIT. Tenant or its representative shall have the right
to examine such records upon reasonable prior notice specifying such records
Tenant desires to examine, during normal business hours at the place or places
where such records are normally kept by sending such notice no later than
forty-five (45) days following the furnishing of the Statement. Tenant may take
exception to matters included in Taxes or Operating Expenses, or Landlord's
computation of Tenant's Prorata share of either, by sending notice specifying
such exception and the reasons therefore to Landlord no later than thirty (30)
days after Landlord makes such records available for examination. Such statement
shall be considered final, except as to matters to which exception is taken
after examination of Landlord's records in the foregoing manner and within the
foregoing times. Tenant acknowledges that Landlord's ability to budget and incur
expenses depends on the finality of such Statement, and accordingly agrees that
time is of the essence of this Paragraph. If Tenant takes exception to any
matter contained in the Statement as provided herein, Tenant shall refer the
matter to an independent certified public accountant approved by Landlord, whose
certification as to the proper amount shall be final and conclusive as between
Landlord and Tenant. Tenant shall promptly pay the cost of such certification
unless such certification determines that Tenant was overbilled by more than 2%
in which case Landlord shall pay for the certification up to a limit of $3,000.
Pending resolution of any such exceptions in the foregoing manner, Tenant shall
continue paying Tenant's Prorata Share of Taxes and Operating Expenses in the
amounts determined by Landlord, subject to adjustment after any such exceptions
are so resolved. IF A DISCREPANCY IS FOUND PER PARAGRAPH 6(g), OPERATING
EXPENSES SHALL BE ADJUSTED REFLECTING EITHER THE UNDER- OR OVER-PAYMENT OF
OPERATING EXPENSES. LANDLORD'S AND TENANT'S RIGHTS AND OBLIGATIONS UNDER THIS
SECTION SHALL SURVIVE THE END OF THE LEASE TERMS OR ANY EARLIER TERMINATION OF
THE LEASE PER TERMS AND CONDITIONS STATED IN THIS PARAGRAPH 6(g).
7. UTILITIES. Tenant shall pay for all water, gas,
electricity, heat, light, power, telephone, sewer, sprinkler services, refuse
and trash collection, and other utilities and services used on the Premises, all
maintenance charges for utilities, and any storm sewer charges or other similar
charges for utilities imposed by any governmental entity or utility provider,
together with any taxes, penalties, surcharges or the like pertaining to
Tenant's use of the Premises, PROVIDED, HOWEVER TENANT SHALL NOT BE RESPONSIBLE
FOR ANY PENALTIES ON SURCHARGES UNLESS DIRECTLY ATTRIBUTABLE TO TENANT'S FAILURE
TO MAKE TIMELY PAYMENTS TO THE UTILITY PROVIDER. Landlord may cause at Tenant's
expense any utilities to be separately metered or charged directly to Tenant by
the provider. Tenant shall pay its share of all charges for jointly metered
utilities based upon consumption, as reasonably determined by Landlord. Tenant
agrees to limit use of water and sewer for normal restroom use. No interruption
or failure of utilities shall result in the termination of this Lease or the
abatement of rent, UNLESS SUCH INTERRUPTION OR FAILURE IS WITHIN LANDLORD'S
CONTROL AND CONTINUES FOR A PERIOD OF THREE (3) CONSECUTIVE BUSINESS DAYS AFTER
NOTICE TO LANDLORD FROM TENANT. IN SUCH EVENT, THE TENANT'S SOLE REMEDY SHALL BE
TO XXXXX RENT IN THE PROPORTION TO WHICH THE PREMISES ARE RENDERED UNUSABLE BY
THE INTERRUPTION OR FAILURE OF UTILITIES.
8. TAXES. Landlord shall pay all taxes, assessments and
governmental charges (collectively referred to as "Taxes") that either (a)
accrue against the Project during the Lease Term if such Taxes are payable in
advance, or (b) are assessed against the Project during the Lease Term if such
Taxes are payable in arrears. Taxes shall be included as part of the Operating
Expenses charged to Tenant pursuant to Paragraph 6 hereof during each year of
the Lease Term, based upon Landlord's reasonable estimate of the amount of
Taxes, and shall be subject to reconciliation and adjustment pursuant to
Paragraph 6 once the actual amount of Taxes is known. Landlord may contest by
appropriate legal proceedings the amount, validity, or application of any Taxes
or liens thereof and any costs incurred in such contest may be included as part
of Taxes. SUCH COSTS WILL NOT EXCEED $1,000 IN THE EVENT THE PROTEST IS NOT
SUCCESSFUL. All
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capital levies or other taxes assessed or imposed on Landlord upon the rents
payable to Landlord under this Lease and any franchise tax, any excise,
transaction, sales or privilege tax, assessment, levy or charge measured by or
based, in whole or in part, upon such rents from the Premises and/or the Project
or any portion thereof shall be paid by Tenant to Landlord monthly in estimated
installments or upon demand, at the option of Landlord, as additional rent;
provided, however, in no event shall Tenant be liable for any net income taxes
imposed on Landlord unless such net income taxes are in substitution for any
Taxes payable hereunder. If any such tax or excise is levied or assessed
directly against Tenant, then Tenant shall be responsible for and shall pay the
same at such times and in such manner as the taxing authority shall require.
Tenant shall be liable for all taxes levied or assessed against any personal
property or fixtures placed in the Premises, whether levied or assessed against
Landlord or Tenant, and if any such taxes are levied or assessed against
Landlord or Landlord's property and (a) Landlord pays them or (b) the assessed
value of Landlord's property is increased thereby and Landlord pays the
increased taxes, then Tenant shall pay to Landlord such taxes within ten (10)
days after Landlord's request therefor. For property tax purposes, Tenant waives
all rights to protest or appeal the appraised value of the Premises, as well as
the Project, and all rights to receive notices of reappraisement as set forth in
Sections 41.413 and 42.015 of the Texas Tax Code.
9. INSURANCE. (a) Landlord shall maintain all risk property
insurance covering the full replacement cost of the Building (excluding
foundations), less a commercially reasonable deductible if Landlord so chooses.
Landlord may, but is not obligated to, maintain such other insurance and
additional coverages as it may deem necessary, including, but not limited to,
commercial liability insurance, flood insurance, and rent loss insurance. All
such insurance shall be included as part of the Operating Expenses charged to
Tenant pursuant to Paragraph 6 hereof. The Project or Building may be included
in a blanket policy (in which case the cost of such insurance allocable to the
Project or Building will be determined by Landlord based upon the insurer's cost
calculations). Tenant shall also reimburse Landlord for any increased premiums
or additional insurance THAT Landlord reasonably deems necessary as a result of
Tenant's use of the Premises.
(b) Effective as of the earlier of: (1) the date Tenant enters
or occupies the Premises; or (2) the Commencement Date, and continuing during
the Lease Term, Tenant, at its expense, shall obtain and maintain in full force
the following insurance coverage: (i) all risk property insurance covering the
full replacement cost of all property and improvements installed or placed in
the Premises by Tenant or for Tenant's benefit; (ii) worker's compensation
insurance with no less than the minimum limits required by law; (iii) employer's
liability insurance with such limits as required by law; and (iv) commercial
liability insurance, with a minimum limit of $1,000,000 per occurrence and a
minimum umbrella limit of $2,000,000, for a total minimum combined general
liability and umbrella limit of $3,000,000 for property damage, personal
injuries, or deaths of persons occurring in or about the Premises. Landlord may
from time to time require reasonable increases in any such limits. The
commercial liability policies shall name Landlord and Landlord's agents as
additional insureds, insure on an occurrence and not a claims-made basis, be
issued by insurance companies which are reasonably acceptable to Landlord, not
be cancelable unless thirty (30) days prior written notice shall have been given
to Landlord, contain a hostile fire endorsement or amended pollution
endorsement, and a contractual liability endorsement and provide primary
coverage to Landlord (any policy issued to Landlord providing duplicate or
similar coverage shall be deemed excess over Tenant's policies). Such
certificates, or at Landlord's option, copies of the policies evidencing
coverage shall be delivered to Landlord by Tenant at least ten (10) days prior
to the Commencement Date and at least fifteen (15) days prior to each renewal of
said insurance. If Tenant fails to comply with the foregoing insurance
requirements or to deliver to Landlord copies of such policies and certificates
evidencing the coverage required herein, Landlord, in addition to any remedy
available pursuant to this Lease or otherwise, may UPON WRITTEN NOTICE TO
TENANT, but shall not be obligated to, obtain such insurance and Tenant shall
pay to Landlord on demand the premium costs thereof, plus an administrative fee
of TEN percent (10%) of the cost.
7
(c) The all risk property insurance obtained by Landlord and
Tenant shall include a waiver of subrogation by the insurers and all rights
based upon an assignment from its insured, against Landlord or Tenant, their
officers, directors, employees, managers, agents, invitees and contractors, in
connection with any loss or damage thereby insured against. The failure of a
party to insure its property shall not void this waiver. Notwithstanding
anything to the contrary contained herein, Tenant hereby waives any claims
against Landlord, and its officers, directors, employees, managers, agents,
invitees and contractors for any loss or damage insured against or required to
be insured against hereunder (whether by self-insurance or otherwise),
regardless of whether the negligence or fault of Landlord caused such loss.
Landlord hereby waives any claims against Tenant, and its officers, directors,
employees, managers, agents, invitees and contractors for any loss or damage
insured against or required to be insured against hereunder to the extent
insurance proceeds are received therefor, regardless of whether the negligence
or fault of Tenant caused such loss; however, Landlord's waiver shall not apply
to any deductible amounts maintained by Landlord under its insurance.
10. LANDLORD'S REPAIRS. This Lease is intended to be a net
lease; accordingly, Landlord's maintenance and repair obligations are limited to
the replacement of the Building's roof and maintenance of the foundation piers
and structural members of the exterior walls, reasonable wear and tear and
uninsured losses and damages caused by Tenant, its agents, employees and
contractors excluded. The term "walls" as used in this Paragraph 10 shall not
include windows, glass or plate glass, doors or overhead doors, special store
fronts, dock bumpers, dock plates or levelers, or office entries, all of which
shall be maintained by Tenant. Tenant shall promptly give Landlord written
notice of any repair required by Landlord pursuant to this Paragraph 10, after
which Landlord shall have a reasonable opportunity to repair such item. Landlord
shall also maintain in good repair and condition the parking areas and other
common areas of the Building, including, but not limited to driveways, alleys,
landscape and grounds surrounding the Premises, the cost of such maintenance,
repair and replacement to be paid in accordance with Paragraph 6 hereof.
TENANT SHALL HAVE ACCESS TO THE PREMISES TWENTY-FOUR (24)
HOURS PER DAY, SEVEN (7) DAYS PER WEEK.
PER SECTION 6, LANDLORD SHALL BE RESPONSIBLE FOR (i) MOWING
AND IRRIGATION OF LANDSCAPING, AND SWEEPING AND REMOVAL OF LITTER AND DEBRIS
FROM THE EXTERIOR COMMON AREAS, AND (ii) ELECTRICAL LIGHTING FOR EXTERIOR AREAS
OF THE PROPERTY FOR BUILDINGS OF SIMILAR SIZE AND IN SIMILAR LOCATIONS, AND
(iii) REPLACEMENT OF BUILDING STANDARD LIGHT BULBS AND TUBES IN EXTERIOR AREAS
OF THE PROPERTY.
11. TENANT'S REPAIRS. (a) Subject to Landlord's obligation in
Xxxxxxxxx 00, Xxxxxx, at its sole expense, shall repair, replace and maintain in
good condition all portions of the Premises and all areas, improvements and
systems exclusively serving the Premises including, without limitation, dock,
dock equipment and loading areas, dock doors, plumbing, water, and sewer lines
up to points of common connection, entries, doors, ceilings, windows, interior
walls, and the interior side of demising walls, and heating, ventilation and air
conditioning systems, and other building and mechanical systems serving the
Premises. Such repair and replacements include capital expenditures and repairs
whose benefit may extend beyond the Term. Maintenance and repair of the heating,
ventilation and air conditioning systems and other mechanical and building
systems serving the Premises, and any repairs to the roof, shall be at Tenant's
expense pursuant to maintenance service contracts entered into by Tenant or, at
Landlord's written election, by Landlord (but at Tenant's expense). The scope of
services and contractors under such maintenance contracts shall be subject to
Landlord's prior written approval.
(b) In the event that any repair or maintenance obligation
required to be performed by Tenant hereunder may affect the structural integrity
of the Building (e.g., roof, foundation, structural members of the exterior
walls), prior to commencing any such repair, Tenant shall provide Landlord with
written notice of the necessary repair or maintenance and a brief summary of the
structural component or components of the Building that may be affected by such
repair or maintenance. Within ten (10) business days after Landlord's receipt of
Tenant's written notice, Landlord shall have the right, but not the obligation,
8
to elect to cause such repair or maintenance to be performed by Landlord, or a
contractor selected and engaged by Landlord, but at Tenant's sole cost and
expense. The foregoing sentence is not intended to obligate Tenant to pay for
repairs or maintenance to those structural items which are Landlord's
responsibility pursuant to Paragraph 10 above, but shall only require Tenant to
pay for the repair and maintenance to such structural components to the extent
such repair or maintenance is necessitated due to the performance of Tenant's
repair and maintenance obligations pursuant to this Paragraph 11.
(c) Within the fifteen (15) day period prior to the expiration
or termination of this Lease, Tenant shall deliver to Landlord a certificate
from an engineer reasonably acceptable to Landlord certifying that the hot water
equipment and the HVAC system are then in good repair and working order. If
Tenant fails to perform any repair or replacement for which it is responsible,
Landlord may perform such work and be reimbursed by Tenant within ten (10) days
after demand therefor Subject to Paragraphs 9 and 15, Tenant shall bear the full
cost of any repair or replacement to any part of the Building or Project that
results from damage caused by Tenant, its agents, contractors, or invitees and
any repair that benefits only the Premises.
12. TENANT-MADE ALTERATIONS AND TRADE FIXTURES. (a) Any
alterations additions, or improvements made by or on behalf of Tenant to the
Premises ("Tenant-Made Alterations") shall be subject to Landlord's prior
written consent Tenant shall cause, at its expense, all Tenant-Made Alterations
to comply with insurance requirements and with Legal Requirements and shall
construct at its expense any alteration or modification required by Legal
Requirements as a result of any Tenant-Made Alterations.
(b) All Tenant-Made Alterations shall be constructed in a good
and workmanlike manner by contractors reasonably acceptable to Landlord and only
good grades of materials shall be used. All plans and specifications for any
Tenant-Made Alterations shall be submitted to Landlord for its approval.
Landlord may monitor construction of the Tenant-Made Alterations. Tenant shall
reimburse Landlord for its OUT-OF-POCKET costs in reviewing plans and
specifications and in monitoring construction not to exceed THREE percent (3%)
of the total cost of such Tenant-Made Alterations. Landlord's right to review
plans and specifications and to monitor construction shall be solely for its own
benefit, and Landlord shall have no duty to see that such plans and
specifications or construction comply with applicable laws, codes, rules and
regulations.
(c) Tenant shall provide Landlord with the identities and
mailing addresses of all persons performing work or supplying materials, prior
to beginning such construction, and Landlord may post on and about the Premises
notices of non-responsibility pursuant to applicable law. Tenant shall furnish
security or make other arrangements satisfactory to Landlord to assure payment
for the completion of all work free and clear of liens and shall provide
certificates of insurance for worker's compensation and other coverage in
amounts and from an insurance company satisfactory to Landlord protecting
Landlord against liability for personal injury or property damage during
construction. Upon completion of any Tenant-Made Alterations, Tenant shall
deliver to Landlord sworn statements setting forth the names of all contractors
and subcontractors who did work on the Tenant-Made Alterations and final lien
waivers from all such contractors and subcontractors.
(d) Upon surrender of the Premises, all Tenant-Made
Alterations and any leasehold improvements constructed by Landlord or Tenant
shall remain on the Premises as Landlord's property, except to the extent
Landlord's requires removal at Tenant's expense of any such items or Landlord
and Tenant have otherwise agreed in writing in connection with Landlord's
consent to any Tenant-Made Alterations. Prior to the expiration or termination
of this Lease, Tenant, at its sole expense, shall repair any and all damage
caused by such removal, ORDINARY WEAR AND TEAR EXCEPTED.
(e) Tenant, at its own cost and expense and without Landlord's
prior approval, may erect such shelves, bins, machinery and trade fixtures
(collectively "Trade Fixtures") in the ordinary course of its business provided
that such items do not alter the basic character of the Premises, do not
overload or
9
damage the Premises, and may be removed without injury to the Premises, and the
construction, erection, and installation thereof complies with all Legal
Requirements and with Landlord's requirements set forth above. Prior to the
expiration or termination of this Lease, Tenant, at its sole expense, shall
remove its Trade Fixtures and shall repair any and all damage caused by such
removal.
(f) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
LEASE, TENANT SHALL HAVE THE RIGHT TO INSTALL IN THE PREMISES, AT NO COST TO
LANDLORD, THE EQUIPMENT (THE "EQUIPMENT') IDENTIFIED ON EXHIBIT F ATTACHED
HERETO. UPON SURRENDER OR VACATION OF THE PREMISES, TENANT SHALL REMOVE ALL
EQUIPMENT FROM THE PREMISES.
13. SIGNS. All signs, decorations, advertising media, blinds,
draperies and other window treatment or bars or other security installations
visible from outside the Premises shall be subject to Landlord's prior written
approval and shall conform in all respects to Landlord's requirements, WHICH
APPROVAL SHALL NOT BE UNREASONABLE WITHHELD OR DELAYED. Tenant shall not make
any changes to the exterior of the Premises, install any exterior lights,
decorations, balloons, flags, pennants, banners, or painting, or erect or
install any signs, windows or door lettering, placards, decorations, or
advertising media of any type which can be viewed from the exterior of the
Premises, without Landlord's prior written consent. Landlord shall not be
required to notify Tenant of whether it consents to any sign until it (a) has
received detailed, to-scale drawings thereof specifying design, material
composition, color scheme, and method of installation, and (b) has had a
reasonable opportunity to review them. Upon surrender or vacation of the
Premises, Tenant shall have removed all signs and repair, paint, and/or replace
the building facia surface to which its signs are attached ORDINARY WEAR AND
TEAR EXCEPTED. Tenant shall obtain all applicable governmental permits and
approvals for sign and exterior treatments. NOTWITHSTANDING THE FOREGOING,
LANDLORD AGREES TO PERMIT TENANT, AT TENANT'S EXPENSE AND SUBJECT TO ALL
APPLICABLE LAWS, CODES, RULES AND REGULATIONS, TO ERECT EXTERIOR SIGNAGE IN FORM
AND SUBSTANCE REASONABLY ACCEPTABLE TO LANDLORD. TENANT SHALL SUBMIT ITS SIGNAGE
CRITERIA AND PLANS TO LANDLORD FOR LANDLORD'S APPROVAL, WHICH APPROVAL SHALL NOT
BE UNREASONABLY WITHHELD OR DELAYED.
14. PARKING. Tenant shall be entitled to park in common with
other tenants of the Project in those areas designated for nonreserved parking.
Landlord may allocate parking spaces among Tenant and other tenants in the
Project at Landlord's sole discretion. Landlord shall not be responsible for
enforcing Tenant's parking rights against any third parties. TENANT ACKNOWLEDGES
THAT THERE IS NO RESERVED PARKING, PROVIDED, HOWEVER, IN NO EVENT SHALL FEWER
THAN FIFTY (50) PARKING SPACES BE MADE AVAILABLE FOR TENANT'S USE.
15. RESTORATION. (a) If at any time during the Lease Term the
Premises are damaged by a fire or other casualty, Landlord shall notify Tenant
within FIFTY (50) days after such damage as to the amount of time Landlord
reasonably estimates it will take to restore the Premises. If the restoration
time is estimated to exceed OR EXCEEDS 210 days from the date OF THE CASUALTY,
either Landlord or Tenant may elect to terminate this Lease upon notice to the
other party given no later than thirty (30) days after Landlord's notice OR
AFTER EXPIRATION OF THE 210 DAY TIME PERIOD. If neither party elects to
terminate this Lease or if Landlord estimates that restoration will take 180
days or less, then, subject to receipt of sufficient insurance proceeds,
Landlord shall promptly restore the Premises excluding the improvements
installed by Tenant or by Landlord and paid by Tenant, subject to delays arising
from the collection of insurance proceeds or from Force Majeure events. Tenant
at Tenant's expense shall promptly perform, subject to delays arising from the
collection of insurance proceeds, or from Force Majeure events, all repairs or
restoration not required to be done by Landlord and shall promptly re-enter the
Premises and commence doing business in accordance with this Lease.
NOTWITHSTANDING THE FOREGOING, EITHER PARTY MAY TERMINATE THIS LEASE UPON THIRTY
(30) DAYS WRITTEN NOTICE TO THE OTHER IF THE PREMISES ARE DAMAGED DURING THE
LAST YEAR OF THE LEASE TERM AND LANDLORD REASONABLY ESTIMATES THAT IT WILL TAKE
MORE THAN THIRTY (30) DAYS TO REPAIR SUCH DAMAGE.
(b) If the Premises are destroyed or substantially damaged by
any peril not covered by the insurance maintained by Landlord or any Landlord's
mortgagee requires that insurance proceeds be
10
applied to the indebtedness secured by its mortgage (defined hereinafter),
Landlord may terminate this Lease by delivering written notice of termination to
Tenant within thirty (30) days after such destruction or damage or such
requirement is made known by any such Landlord's mortgagee, as applicable,
whereupon all rights and obligations hereunder shall cease and terminate, except
for any liabilities of LANDLORD AND Tenant which accrued prior to Lease
termination.
(c) If such damage or destruction is caused by the act(s) or
omission(s) of Tenant, its employees, agents or contractors, Tenant shall pay to
Landlord with respect to any damage to the Premises and/or Project the amount of
the commercially reasonable deductible under Landlord's insurance policy within
ten (10) days after presentment of Landlord's invoice. Base Rent and Operating
Expenses shall be abated for the period of repair and restoration in the
proportion which the area of the Premises, if any, which is not usable by Tenant
bears to the total area of the Premises. Such abatement shall be the sole remedy
of Tenant, and except as provided herein, Tenant waives any right to terminate
the Lease by reason of damage or casualty loss.
16. CONDEMNATION. If any part of the Premises or the Project
should be taken for any public or quasi-public use under governmental law,
ordinance, or regulation, or by right of eminent domain, or by private purchase
in lieu thereof (a "Taking" or "Taken"), and (a) the Taking would prevent or
materially interfere with Tenant's use of the Premises, (b) in Landlord's
judgment would materially interfere with or impair its ownership or operation of
the Project or (c) as a result of such Taking, Landlord's mortgagee accelerates
the payment of any indebtedness securing all or a portion of the Project, then
upon written notice by Landlord this Lease shall terminate and Base Rent shall
be apportioned as of said date. If part of the Premises shall be Taken, and this
Lease is not terminated as provided above, the Base Rent payable hereunder
during the unexpired Lease Term shall be reduced to such extent as may be fair
and reasonable under the circumstances, and Landlord shall restore the Premises
to its condition prior to the Taking; provided, however, Landlord's obligation
to so restore the Premises shall be limited to the award Landlord receives in
respect of such Taking that is not required to be applied to the indebtedness
secured by a mortgage. In the event of any such Taking, Landlord shall be
entitled to receive the entire price or award from any such Taking without any
payment to Tenant, and Tenant hereby assigns to Landlord Tenant's interest, if
any, in such award. Tenant shall have the right, to the extent that same shall
not diminish Landlord's award, to make a separate claim against the condemning
authority (but not Landlord) for such compensation as may be separately awarded
or recoverable by Tenant for moving expenses and damage to Tenant's Trade
Fixtures, if a separate award for such items is made to Tenant
17. ASSIGNMENT AND SUBLETTING. (a) Without Landlord's prior
written consent (NOT TO BE UNREASONABLY WITHHELD OR DELAYED), Tenant shall not
assign this Lease or sublease the Premises or any part thereof or mortgage,
pledge, or hypothecate its leasehold interest or grant any concession or license
within the Premises (each being a "Transfer") and any attempt to do any of the
foregoing shall be void and of no effect. For purposes of this Paragraph 17, a
transfer of the ownership interests controlling Tenant shall be deemed a
Transfer of this Lease unless such ownership interests are publicly traded.
Notwithstanding the above, Tenant may assign or sublet the Premises, or any part
thereof, to any entity controlling Tenant, controlled by Tenant or under common
control with Tenant (a "Tenant Affiliate"), without the prior written consent of
Landlord; provided, however, Tenant shall provide at least ten (10) days written
notice prior to assigning this Lease to, or entering into any sublease with, any
Tenant Affiliate. Tenant shall reimburse Landlord for all of Landlord's
reasonable out-of-pocket expenses in connection with any Transfer, other than to
a Tenant Affiliate. Upon Landlord's receipt of Tenant's written notice of a
desire to assign or sublet the Premises, or any part thereof (other than to a
Tenant Affiliate), Landlord may, by giving written notice to Tenant within
thirty (30) days after receipt of Tenant's notice, terminate this Lease with
respect to the space described in Tenant's notice, as of the date specified in
Tenant's notice for the commencement of the proposed assignment or sublease.
(b) Notwithstanding any Transfer, Tenant and any guarantor or
surety of Tenant's obligations under this Lease shall at all times remain fully
responsible and liable for the payment of the rent and for compliance with all
of Tenant's other obligations under this Lease (regardless of whether Landlord's
11
approval has been obtained for any such Transfer). In the event that the rent
due and payable by a sublessee or assignee (or a combination of the rental
payable under such sublease or assignment plus any bonus or other consideration
therefor or incident thereto) exceeds the rental payable under this Lease, then
Tenant shall be bound and obligated to pay Landlord as additional rent hereunder
FIFTY PERCENT (50%) OF such excess rental and other excess consideration
within ten (10) days following receipt thereof by Tenant.
(c) If this Lease is assigned or if the Premises is subleased
(whether in whole or in part) or in the event of the mortgage, pledge, or
hypothecation of Tenant's leasehold interest or grant of any concession or
license within the Premises or if the Premises be occupied in whole or in part
by anyone other than Tenant, then upon a default by Tenant hereunder Landlord
may collect rent from the assignee, sublessee, mortgagee, pledgee, party to whom
the leasehold interest was hypothecated, concessionee or licensee or other
occupant and, except to the extent set forth in the preceding subparagraph,
apply the amount collected to the next rent payable hereunder; and all such
rentals collected by Tenant shall be held in trust for Landlord and immediately
forwarded to Landlord. No such transaction or collection of rent or application
thereof by Landlord, however, shall be deemed a waiver of these provisions or a
release of Tenant from the further performance by Tenant of its covenants,
duties, or obligations hereunder. Any approved assignment or sublease shall be
expressly subject to the terms and conditions of this Lease. Landlord's consent
to any Transfer shall not waive Landlord's rights as to any subsequent
Transfers.
18. INDEMNIFICATION. (a) Tenant agrees to indemnify, defend
(with counsel reasonably acceptable to Landlord) and hold harmless Landlord, and
Landlord's agents, employees and contractors, from and against any and all
claims, demands, losses, liabilities, causes of action, suits, judgments,
damages, costs and expenses (including attorneys' fees) arising from any
occurrence on the Premises, the use and occupancy of the Premises, or from any
activity, work, or thing done, permitted or suffered by Tenant in or about the
Premises or due to any other act or omission of Tenant, its subtenants,
assignees, invitees, employees, contractors and agents, or from Tenant's failure
to perform its obligations under this Lease (other than any loss arising from
the sole or gross negligence of Landlord or its agents), EVEN THOUGH CAUSED OR
ALLEGED TO BE CAUSED BY THE JOINT, COMPARATIVE, OR CONCURRENT NEGLIGENCE OR
FAULT OF LANDLORD OR ITS AGENTS, AND EVEN THOUGH ANY SUCH CLAIM, CAUSE OF
ACTION, OR SUIT IS BASED UPON OR ALLEGED TO BE BASED UPON THE STRICT LIABILITY
OF LANDLORD OR ITS AGENTS. THIS INDEMNITY PROVISION IS INTENDED TO INDEMNIFY
LANDLORD AND ITS AGENTS AGAINST THE CONSEQUENCES OF THEIR OWN NEGLIGENCE OR
FAULT AS PROVIDED ABOVE WHEN LANDLORD OR ITS AGENTS ARE JOINTLY, COMPARATIVELY,
OR CONCURRENTLY NEGLIGENT WITH TENANT. This indemnity provision shall survive
termination or expiration of this Lease. The furnishing of insurance required
hereunder shall not be deemed to limit Tenant's obligations under this Paragraph
18.
(b) LANDLORD AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS
TENANT, AND TENANT'S AGENTS, EMPLOYEES AND CONTRACTORS, FROM AND AGAINST ANY AND
ALL CLAIMS, DEMANDS, LOSSES, LIABILITIES, CAUSES OF ACTION, SUITS, JUDGMENT,
DAMAGES, COST AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) RESULTING FROM
CLAIMS BY THIRD PARTIES FOR INJURIES TO ANY PERSON AND DAMAGE TO OR LOSS OF
PROPERTY OCCURRING IN OR ABOUT THE PROJECT AND ARISING SOLELY FROM THE
NEGLIGENCE OR INTENTIONAL MISCONDUCT OF LANDLORD, ITS EMPLOYEES, CONTRACTORS, OR
AGENTS.
19. INSPECTION AND ACCESS. Landlord and its agents,
representatives, and contractors may, UPON PRIOR NOTICE TO TENANT EXCEPT IN THE
EVENT OF EMERGENCY, enter the Premises at any reasonable time to inspect the
Premises and to make such repairs as may be required or permitted pursuant to
this Lease. Landlord and Landlord's representatives may, UPON NOTICE TO TENANT,
enter the Premises during business hours for the purpose of showing the Premises
to prospective purchasers or, during the last year of the Lease Term, to
prospective tenants. Landlord may erect a suitable sign on the Premises stating
the Premises are available to let or that the Project is available for sale.
Landlord may grant easements, make public dedications, designate Common Areas
and create restrictions on or about the Premises, provided that no such
easement, dedication, designation or restriction materially interferes with
12
Tenant's use or occupancy of the Premises. At Landlord's request, Tenant shall
execute such instruments as may be necessary for such easements, dedications or
restrictions.
20. QUIET ENJOYMENT. If Tenant shall perform all of the
covenants and agreements herein required to be performed by Tenant, Tenant
shall, subject to the terms of this Lease, at all times during the Lease Term,
have peaceful and quiet enjoyment of the Premises against any person claiming
by, Landlord REPRESENTS AND WARRANTS TO TENANT THAT IT HAS GOOD AND INDEFEASIBLE
FEE SIMPLE TITLE TO THE PROPERTY AND THE FULL RIGHT, POWER, AND AUTHORITY TO
ENTER INTO AND PERFORM THIS LEASE. LANDLORD COVENANTS THAT IF AND SO LONG AS
TENANT IS ENTITLED TO POSSESSION OF THE PREMISES, TENANT SHALL PEACEABLY AND
QUIETLY HAVE, HOLD AND ENJOY THE PREMISES FOR THE LEASE TERM WITHOUT HINDRANCE,
CLAIM OR INTERFERENCE BY LANDLORD OR ANY OTHER PERSON, SUBJECT TO THE PROVISIONS
OF THIS LEASE, AND LANDLORD SHALL TAKE ALL NECESSARY STEPS TO SECURE AND
MAINTAIN SUCH QUIET AND PEACEFUL ENJOYMENT BY TENANT
21. SURRENDER. No act by Landlord shall be an acceptance of a
surrender of the Premises, and no agreement to accept a surrender of the
Premises shall be valid unless it is in writing and signed by Landlord. Upon
termination of the Lease Term or earlier termination of Tenant's right of
possession, Tenant shall surrender the Premises to Landlord in the same
condition as received, ordinary wear and tear and casualty loss and condemnation
covered by Paragraphs 15 and 16 excepted. Any Trade Fixtures, Tenant-Made
Alterations, EQUIPMENT and property not so removed by Tenant as permitted or
required herein shall be deemed abandoned and may be stored, removed, and
disposed of by Landlord at Tenant's expense, and Tenant waives all claims
against Landlord for any damages resulting from Landlord's retention and
disposition of such property. All obligations of Tenant hereunder not fully
performed as of the termination of the Lease Term shall survive the termination
of the Lease Term, including without limitation, indemnity obligations, payment
obligations with respect to Operating Expenses and all obligations concerning
the condition and repair of the Premises.
22. HOLDING OVER. If Tenant fails to vacate the Premises after
the termination of the Lease Term, Tenant shall be a tenant at will or at
sufferance, and Tenant shall pay, in addition to any other rent or other sums
then due Landlord, a daily Base Rental equal to 150% of the Base Rent in effect
on the expiration or termination date, even if Landlord consents to such
holdover (which consent shall be effective only if in writing). Tenant shall
also be liable for all Operating Expenses incurred during such holdover period.
In addition, Tenant shall be liable for all damages (including attorneys' fees
and expenses) of whatever type (EXCLUDING consequential damages) incurred by
Landlord as a result of such holding over. No holding over by Tenant, whether
with or without consent of Landlord, shall operate to extend this Lease except
as otherwise expressly provided, and this Paragraph 22 shall not be construed as
consent for Tenant to retain possession of the Premises.
23. EVENTS OF DEFAULT. Each of the following events shall be
an event of default ("Event of Default") by Tenant under this Lease:
(i) Tenant shall fail to pay any installment of Base Rent or
any other payment required herein when due, and such failure shall continue for
a period of TEN (10) days from the date OF LANDLORD'S WRITTEN NOTICE OF SUCH
FAILURE TO PAY, PROVIDED, HOWEVER, THAT LANDLORD SHALL NOT BE OBLIGATED TO
DELIVER WRITTEN NOTICE MORE THAN ONCE IN ANY LEASE YEAR, IN WHICH CASE THE TEN
(10) DAY PERIOD SHALL RUN FROM THE DATE WHEN SUCH PAYMENT WAS DUE.
(ii) Tenant or any guarantor or surety of Tenant's obligations
hereunder shall (A) make a general assignment for the benefit of creditors; (B)
commence any case, proceeding or other action seeking to have an order for
relief entered on its behalf as a debtor or to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of it or its debts or seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or of
any substantial part of its property (collectively a "proceeding for relief");
(C) become the subject of any proceeding for relief which is not dismissed
within sixty (60) days of its filing or entry;
13
or (D) die or suffer a legal disability (if Tenant, guarantor, or surety is an
individual) or be dissolved or otherwise fail to maintain its legal existence
(if Tenant, guarantor or surety is a corporation, partnership or other entity).
(iii) Any insurance required to be maintained by Tenant
pursuant to this Lease shall be cancelled or terminated or shall expire or shall
be reduced or materially changed, except, in each case, as permitted in this
Lease.
(iv) Tenant shall fail to occupy or shall vacate the Premises
or shall fail to continuously operate its business at the Premises for the
permitted use set forth herein, whether or not Tenant is in monetary or other
default under this Lease.
(v) Tenant shall ASSIGN, SUBLEASE OR OTHERWISE transfer
Tenant's interest in or with respect to this Lease except as otherwise permitted
in this Lease.
(vi) Tenant shall fail to discharge or bond over any lien
placed upon the Premises in violation of this Lease within thirty (30) days
after WRITTEN NOTICE FROM LANDLORD.
(vii) Tenant shall fail to execute any instrument of
subordination or attornment or any estoppel certificate within the time periods
set forth in Paragraphs 27 and 29 respectively following Landlord's request for
the same.
(viii) Tenant shall breach any of the requirements of
Paragraph 30 and such failure shall continue for a period of THIRTY (30) days or
more after notice from Landlord to Tenant, PROVIDED, HOWEVER, SUCH 30 DAY TIME
PERIOD MAY BE EXTENDED FOR AN ADDITIONAL PERIOD NOT TO EXCEED SIXTY (60) DAYS IF
TENANT IS DILIGENTLY AND CONTINUOUSLY WORKING TO REMEDIATE ANY SUCH BREACH.
(ix) Tenant shall fail to comply with any provision of this
Lease other than those specifically referred to in this Paragraph 23, and except
as otherwise expressly provided herein, such default shall continue for more
than thirty (30) days after Landlord shall have given Tenant written notice of
such default.
24. LANDLORD'S REMEDIES. (a) Upon each occurrence of an Event
of Default and so long as such Event of Default shall be continuing, Landlord
may at any time thereafter at its election (UPON WRITTEN NOTICE TO TENANT):
terminate this Lease or Tenant's right of possession, (but Tenant shall remain
liable as hereinafter provided) and/or pursue any other remedies at law or in
equity. Upon the termination of this Lease or termination of Tenant's right of
possession, it shall be lawful for Landlord, without formal demand or notice of
any kind, to re-enter the Premises by summary dispossession proceedings or any
other action or proceeding authorized by law and to remove Tenant and all
persons and property therefrom. If Landlord re-enters the Premises, Landlord
shall have the right to keep in place and use, or remove and store, all of the
furniture, fixtures and equipment at the Premises.
(b) If Landlord terminates this Lease, Landlord may recover
from Tenant the sum of: all Base Rent and all other amounts accrued hereunder to
the date of such termination; the cost of reletting the whole or any part of the
Premises, including without limitation brokerage fees and/or leasing commissions
incurred by Landlord, and costs of removing and storing Tenant's or any other
occupant's property, repairing, altering DUE TO EXISTING TENANT SPECIFIC
CONFIGURATIONS, or otherwise putting the Premises into condition acceptable to a
new tenant or tenants, and all reasonable expenses incurred by Landlord in
pursuing its remedies, including reasonable attorneys' fees and court costs; and
an amount in cash equal to (A) the then present value of the Base Rent and other
amounts payable by Tenant under this Lease as would otherwise have been required
to be paid by Tenant to Landlord during the period following the termination
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of this Lease measured from the date of such termination to the expiration date
stated in this Lease minus (B) the then present fair rental value of the
Premises for such period. Such present values shall be calculated at a discount
rate equal to the 90-day U.S. Treasury xxxx rate at the date of such
termination.
(c) If Landlord terminates Tenant's right of possession (but
not this Lease), then without releasing Tenant from any liability hereunder and
without demand or notice of any kind to Tenant Landlord shall use reasonable
efforts to relet the Premises on such terms as Landlord in its sole discretion
may determine (including a term different from the Lease Term, rental
concessions, and alterations to, and improvement of, the Premises); however,
Landlord shall not be obligated to relet the Premises before leasing other
portions of the Building and Landlord shall not be obligated to accept any
prospective tenant proposed by Tenant unless such proposed tenant meets all of
Landlord's leasing criteria. Landlord shall not be liable for, nor shall
Tenant's obligations hereunder be diminished because of, Landlord's failure to
relet the Premises or to collect rent due for such reletting. Tenant shall not
be entitled to the excess of any consideration obtained by reletting over the
Base Rent due hereunder. For the purpose of such reletting Landlord is
authorized to make any repairs, changes, alterations, or additions in or to the
Premises as Landlord deems reasonably necessary or desirable. If the Premises
are not relet, then Tenant shall pay to Landlord as damages a sum equal to the
amount of the rental reserved in this Lease for such period or periods, plus the
cost of recovering possession of the Premises (including attorneys' fees and
costs of suit), the unpaid Base Rent and other amounts accrued hereunder at the
time of repossession, and the costs incurred in any attempt by Landlord to relet
the Premises. If the Premises are relet and a sufficient sum shall not be
realized from such reletting [after first deducting therefrom, for retention by
Landlord, the unpaid Base Rent and other amounts accrued hereunder at the time
of reletting, the cost of recovering possession (including attorneys' fees and
costs of suit), all of the costs and expense of repairs, changes, alterations,
and additions, the expense of such reletting (including without limitation
brokerage fees and leasing commissions) and the cost of collection of the rent
accruing therefrom] to satisfy the rent provided for in this Lease to be paid,
then Tenant shall immediately satisfy and pay any such deficiency. Any such
payments due Landlord shall be made upon demand therefor from time to time and
Tenant agrees that Landlord may file suit to recover any sums falling due from
time to time. Notwithstanding any such reletting without termination, Landlord
may at any time thereafter elect in writing to terminate this Lease for such
previous breach.
(d) Exercise by Landlord of any one or more remedies hereunder
granted or otherwise available shall not be deemed to be an acceptance of
surrender of the Premises and/or a termination of this Lease by Landlord,
whether by agreement or by operation of law. Any law, usage, or custom to the
contrary notwithstanding, Landlord shall have the right at all times to enforce
the provisions of this Lease in strict accordance with the terms hereof; and the
failure of Landlord at any time to enforce its rights under this Lease strictly
in accordance with same shall not be construed as having created a custom in any
way or manner contrary to the specific terms, provisions, and covenants of this
Lease or as having modified the same. Tenant and Landlord further agree that
forbearance or waiver by Landlord to enforce its rights pursuant to this Lease
or at law or in equity, shall not be a waiver of Landlord's right to enforce one
or more of its rights in connection with any subsequent default. A receipt by
Landlord of rent or other payment with knowledge of the breach of any covenant
hereof shall not be deemed a waiver of such breach, and no waiver by Landlord of
any provision of this Lease shall be deemed to have been made unless expressed
in writing and signed by Landlord. To the greatest extent permitted by law,
Tenant waives the service of notice of Landlord's intention to re-enter as
provided for in any statute, or to institute legal proceedings to that end, and
also waives all right of redemption in case Tenant shall be dispossessed by a
judgment or by warrant of any court or judge. The terms "enter," "re-enter,"
"entry" or "re-entry," as used in this Lease, are not restricted to their
technical legal meanings. Any reletting of the Premises shall be on such terms
and conditions as Landlord in its sole discretion may determine (including
without limitation a term different than the remaining Lease Term, rental
concessions, alterations and repair of the Premises, lease of less than the
entire Premises to any tenant and leasing any or all other portions of the
Project before reletting the Premises). Landlord shall not be liable, nor shall
Tenant's obligations hereunder be diminished because of, Landlord's failure to
relet the Premises or collect rent due in respect of such reletting.
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25. TENANT'S REMEDIES/LIMITATION OF LIABILITY. Landlord shall
not be in default hereunder unless Landlord fails to perform any of its
obligations hereunder within thirty (30) days after written notice from Tenant
specifying such failure (unless such performance will, due to the nature of the
obligation, require a period of time in excess of thirty (30) days, then after
such period of time as is reasonably necessary). All obligations of Landlord
hereunder shall be construed as covenants, not conditions; and Tenant may not
terminate this Lease for breach of Landlord's obligations hereunder. All
obligations of Landlord under this Lease will be binding upon Landlord only
during the period of its ownership of the Premises and not thereafter. The term
"Landlord" in this Lease shall mean only the owner, for the time being of the
Premises, and in the event of the transfer by such owner of its interest in the
Premises, such owner shall thereupon be released and discharged from all
obligations of Landlord thereafter accruing, but such obligations shall be
binding during the Lease Term upon each new owner for the duration of such
owner's ownership. Any liability of Landlord under this Lease or arising out of
the relationship between Landlord and Tenant shall be limited solely to
Landlord's interest in the Building, and in no event shall any personal
liability be asserted against Landlord in connection with this Lease nor shall
any recourse be had to any other property or assets of Landlord. Additionally,
Tenant hereby waives it statutory lien under Section 91.004 of the Texas
Property Code.
26. WAIVER OF JURY TRIAL. TENANT AND LANDLORD WAIVE ANY RIGHT
TO TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING
OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
27. SUBORDINATION. (a) This Lease and Tenant's interest and
rights hereunder are and shall be subject and subordinate at all times to the
lien of any first mortgage, now existing or hereafter created on or against the
Project or the Premises, and all amendments, restatements, renewals,
modifications, consolidations, refinancing, assignments and extensions thereof,
without the necessity of any further instrument or act on the part of Tenant.
Tenant agrees, at the election of the holder of any such mortgage, to attorn to
any such holder. The provisions of this Paragraph 27 shall be self-operative and
no further instrument shall be required to effect such subordination or
attornment; however, Tenant agrees to execute, acknowledge and deliver such
instruments, confirming such subordination and such instruments of attornment as
shall be requested by any such holder within ten (10) days of such request.
Tenant's obligation to furnish each such instrument requested hereunder in the
time period provided is a material inducement for Landlord's execution of this
Lease and any failure of Tenant to timely deliver each instrument shall be
deemed an Event of Default. IN CONNECTION WITH TENANT'S EXECUTION OF ANY
SUBORDINATION AGREEMENT, LANDLORD AGREES TO USE REASONABLE EFFORTS TO SECURE A
NON-DISTURBANCE AGREEMENT IN FAVOR OF TENANT AT TENANT'S SOLE COST & EXPENSE.
(b) Notwithstanding the foregoing, any such holder may at any
time subordinate its mortgage to this Lease, without Tenant's consent, by notice
in writing to Tenant, and thereupon this Lease shall be deemed prior to such
mortgage without regard to their respective dates of execution, delivery or
recording and in that event such holder shall have the same rights with respect
to this Lease as though this Lease had been executed prior to the execution,
delivery and recording of such mortgage and had been assigned to such holder.
The term "mortgage" whenever used in this Lease shall be deemed to include deeds
of trust, security assignments and any other encumbrances, and any reference to
the "holder" of a mortgage shall be deemed to include the beneficiary under a
deed of trust
(c) Tenant shall not seek to enforce any remedy it may have
for any default on the part of Landlord without first giving written notice by
certified mail, return receipt requested, specifying the default in reasonable
detail to any mortgage holder whose address has been given to Tenant, and
16
affording such mortgage holder a reasonable opportunity to perform Landlord's
obligations hereunder. Notwithstanding any such attornment or subordination of a
mortgage to this Lease, the holder of any mortgage shall not be liable for any
acts of any previous landlord, shall not be obligated to install any tenant
improvements, and shall not be bound by any amendment to which it did not
consent in writing nor any payment of rent made more than one month in advance.
28. MECHANIC'S LIENS. Tenant has no express or implied
authority to create or place any lien or encumbrance of any kind upon, or in any
manner to bind the interest of Landlord or Tenant in, the Premises or to charge
the rentals payable hereunder for any claim in favor of any person dealing with
Tenant, including those who may furnish materials or perform labor for any
construction or repairs. Tenant covenants and agrees that it will pay or cause
to be paid all sums legally due and payable by it on account of any labor
performed or materials furnished in connection with any work performed on the
Premises and that it will save and hold Landlord harmless from all loss, cost or
expense based on or arising out of asserted claims or liens against the
leasehold estate or against the interest of Landlord in the Premises or under
this Lease. Tenant shall give Landlord immediate written notice of the placing
of any lien or encumbrance against the Premises and cause such lien or
encumbrance to be discharged within thirty (30) days AFTER RECEIPT OF WRITTEN
NOTICE FROM LANDLORD; provided, however, Tenant may contest such liens or
encumbrances as long as such contest prevents foreclosure of the lien or
encumbrance and Tenant causes such lien or encumbrance to be bonded or insured
over in a manner satisfactory to Landlord within such thirty (30) day period.
29. ESTOPPEL CERTIFICATES. Tenant agrees, from time to time,
within ten (10) days after request of Landlord, to execute and deliver to
Landlord, or Landlord's designee, any estoppel certificate requested by
Landlord, stating that this Lease is in full force and effect, the date to which
rent has been paid, that Landlord is not in default hereunder (or specifying in
detail the nature of Landlord's default), the termination date of this Lease and
such other matters pertaining to this Lease as may be requested by Landlord.
Tenant's obligation to furnish each estoppel certificate in a timely fashion is
a material inducement for Landlord's execution of this Lease and any failure of
Tenant to timely deliver each estoppel certificate shall be deemed an Event of
Default. No cure or grace period provided in this Lease shall apply to Tenant's
obligation to timely deliver an estoppel certificate.
30. ENVIRONMENTAL REQUIREMENTS. (a) Except for Hazardous
Material IDENTIFIED ON EXHIBIT F AND contained in products used by Tenant in de
minimis quantities for ordinary cleaning and office purposes, Tenant shall not
permit or cause any party to bring any Hazardous Material upon the Premises or
transport, store, use, generate, manufacture, dispose, or release any Hazardous
Material on or from the Premises without Landlord's prior written consent.
Tenant, at its sole cost and expense, shall operate its business in the Premises
in strict compliance with all Environmental Requirements and all requirements of
this Lease. Tenant shall complete and certify to disclosure statements as
requested by Landlord from time to time relating to Tenant's transportation,
storage, use, generation, manufacture, or release of Hazardous Materials on the
Premises, and Tenant shall promptly deliver to Landlord a copy of any notice of
violation relating to the Premises or Project of any Environmental Requirement.
(b) The term "Environmental Requirements" means all applicable
present and future statutes, regulations, ordinances, rules, codes, judgments,
permits, authorizations, orders, policies or other similar requirements of any
governmental authority, agency or court regulating or relating to health,
safety, or environmental conditions on, under, or about the Premises or the
environment, including without limitation, the following: the Comprehensive
Environmental Response, Compensation and Liability Act; the Resource
Conservation and Recovery Act; the Clean Air Act; the Clean Water Act; the Toxic
Substances Control Act and all state and local counterparts thereto, and any
common or civil law obligations including, without limitation, nuisance or
trespass, and any other requirements of Paragraphs 3 and 31 of this Lease. The
term "Hazardous Materials" means and includes any substance, material, waste,
pollutant,
17
or contaminant that is or AT ANY TIME IN THE FUTURE BECOMES regulated under any
Environmental Requirement or that may adversely affect human health or the
environment, including, without limitation, any solid or hazardous waste,
hazardous substance, asbestos, petroleum (including crude oil or any fraction
thereof, natural gas, synthetic gas, polychlorinated biphenyls (PCBs), and
radioactive material). For purposes of Environmental Requirements, to the extent
authorized by law, Tenant is and shall be deemed to be the responsible party,
including without limitation, the "owner" and "operator" of Tenant's "facility"
and the "owner" of all Hazardous Materials brought on the Premises by Tenant,
its agents, employees, contractors or invitees, and the wastes, by-products, or
residues generated, resulting, or produced therefrom.
(c) Tenant, at its sole cost and expense, shall remove all
Hazardous Materials stored, disposed of or otherwise released by Tenant, its
assignees, subtenants, agents, employees, contractors or invitees onto or from
the Premises, in a manner and to a level satisfactory to Landlord in its
REASONABLE discretion, but in no event to a level and in a manner less than that
which complies with all Environmental Requirements and does not limit any future
uses of the Premises or require the recording of any deed restriction or notice
regarding the Premises. Tenant shall perform such work at any time during the
period of the Lease upon written request by Landlord or, in the absence of a
specific request by Landlord, before Tenant's right to possession of the
Premises terminates or expires. If Tenant fails to perform such work within the
time period specified by Landlord or before Tenant's right to possession
terminates or expires (whichever is earlier), Landlord may at its discretion,
and without waiving any other remedy available under this Lease or at law or
equity (including without limitation an action to compel Tenant to perform such
work), perform such work at Tenant's cost. Tenant shall pay all costs incurred
by Landlord in performing such work within ten (10) days after Landlord's
request therefor. Such work performed by Landlord is on behalf of Tenant and
Tenant remains the owner, generator, operator, transporter, and/or arranger of
the Hazardous Materials for purposes of Environmental Requirements. Tenant
agrees not to enter into any agreement with any person, including without
limitation any governmental authority, regarding the removal of Hazardous
Materials that have been disposed of or otherwise released onto or from the
Premises without the written approval of the Landlord.
(d) Tenant shall indemnify, defend, and hold Landlord harmless
from and against any and all losses (including, without limitation, diminution
in value of the Premises or the Project and loss of rental income from the
Project), claims, demands, actions, suits, damages (including, without
limitation, punitive damages), expenses (including, without limitation,
remediation, removal, repair, corrective action, or cleanup expenses), and costs
(including, without limitation, actual attorneys' fees, consultant fees or
expert fees and including, without limitation, removal or management of any
asbestos brought into the Premises or disturbed in breach of the requirements of
this Paragraph 30, regardless of whether such removal or management is required
by law) which are brought or recoverable against, or suffered or incurred by
Landlord as a result of any release of Hazardous Materials or any breach of the
requirements under this Paragraph 30 by Tenant, its agents, employees,
contractors, subtenants, assignees or invitees, regardless of whether Tenant had
knowledge of such noncompliance. The obligations of Tenant under this Paragraph
30 shall survive any termination of this Lease.
(e) Landlord shall have access to, and a right to perform
inspections and tests of, the Premises to determine Tenant's compliance with
Environmental Requirements, its obligations under this Paragraph 30, or the
environmental condition of the Premises. Access shall be granted to Landlord
upon Landlord's prior notice to Tenant and at such times so as to minimize, so
far as may be reasonable under the circumstances, any disturbance to Tenant's
operations. Such inspections and tests shall be conducted at Landlord's expense,
unless such inspections or tests reveal that Tenant has not complied with any
Environmental Requirement, in which case Tenant shall reimburse Landlord for the
reasonable cost of such inspection and tests. Landlord's receipt of or
satisfaction with any environmental assessment in no way waives any rights that
Landlord holds against Tenant. Tenant shall promptly notify Landlord of any
communication or report that Tenant makes to any governmental authority
regarding any possible violation of Environmental Requirements or release or
threat of release of any Hazardous Materials onto or from the Premises. Tenant
shall, within five (5) days of receipt thereof, provide Landlord with a copy of
any documents or correspondence received from any governmental agency or other
party relating to a possible
18
violation of Environmental Requirements or claim or liability associated with
the release or threat of release of any Hazardous Materials onto or from the
Premises.
(f) In addition to all other rights and remedies available to
Landlord under this Lease or otherwise, Landlord may, in the event of a breach
of the requirements of this Paragraph 30 that is not cured within thirty (30)
days following notice of such breach by Landlord (UNLESS TENANT IS DILIGENTLY
AND CONTINUOUSLY WORKING TO REMEDIATE SUCH BREACH IN WHICH EVENT, THE 30-DAY
LIME PERIOD SET FORTH HEREIN SHALL BE EXTENDED FOR AN ADDITIONAL PERIOD NOT TO
EXCEED SIXTY (60) DAYS), require Tenant to provide financial assurance (such as
insurance, escrow of funds or third party guarantee) in an amount and form
satisfactory to Landlord. The requirements of this Paragraph 30 are in addition
to and not in lieu of any other provision in the Lease.
31. RULES AND REGULATIONS. Tenant shall, at all times during
the Lease Term and any extension thereof, comply with all reasonable rules and
regulations at any time or from time to time established by Landlord covering
use of the Premises and the Project (THE "RULES AND REGULATIONS"). The current
Rules and Regulations are attached hereto. LANDLORD SHALL AT ALL TIMES HAVE THE
RIGHT TO CHANGE THE RULES AND REGULATIONS OR TO AMEND THEM IN ANY REASONABLE
MANNER AS MAY BE DEEMED ADVISABLE BY LANDLORD FOR THE SAFETY, EFFICIENCY, CARE
AND CLEANLINESS OF THE BUILDING AND FOR PRESERVATION OF GOOD ORDER THEREIN,
PROVIDED SUCH CHANGES ARE (i) SENT BY LANDLORD TO TENANT IN WRITING, (ii)
REASONABLE AND IN CONFORMITY WITH THE COMMON PRACTICE AND USAGE IN SIMILAR
BUILDINGS IN THE DFW METROPLEX (iii) NOT INCONSISTENT WITH THE PROVISIONS OF
THIS LEASE, AND (iv) APPLIED UNIFORMLY TO ALL TENANTS AND OCCUPANTS OF THE
BUILDING. In the event of any conflict between said Rules and Regulations and
other provisions of this Lease, the other terms and provisions of this Lease
shall control. Landlord shall not have any liability or obligation for the
breach of any OF THE RULES AND REGULATIONS by other tenants in the Project.
32. SECURITY SERVICE. Tenant acknowledges and agrees that,
while Landlord may (but shall not be obligated to) patrol the Project, Landlord
is not providing any security services with respect to the Premises and that
Landlord shall not be liable to Tenant for, and Tenant waives any claim against
Landlord with respect to, any loss by theft or any other damage suffered or
incurred by Tenant in connection with any unauthorized entry into the Premises
or any other breach of security with respect to the Premises, UNLESS CAUSED BY
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD, OR ANY OF ITS AGENTS,
EMPLOYEES, CONTRACTORS, ASSIGNEES OR INVITEES.
33. FORCE MAJEURE. Landlord shall not be held responsible for
delays in the performance of its obligations hereunder when caused by strikes,
lockouts, labor disputes, acts of God, inability to obtain labor or materials or
reasonable substitutes therefor, governmental restrictions, governmental
regulations, governmental controls, delay in issuance of permits, enemy or
hostile governmental action, civil commotion, fire or other casualty, and other
causes beyond the reasonable control of Landlord ("Force Majeure").
34. ENTIRE AGREEMENT. This Lease constitutes the complete and
entire agreement of Landlord and Tenant with respect to the subject matter
hereof. No representations, inducements, promises or agreements, oral or
written, have been made by Landlord or Tenant, or anyone acting on behalf of
Landlord or Tenant, which are not contained herein, and any prior agreements,
promises, negotiations, or representations are superseded by this Lease. This
Lease may not be amended except by an instrument in writing signed by both
parties hereto.
35. SEVERABILITY. If any clause or provision of this Lease is
illegal, invalid or unenforceable under present or future laws, then and in that
event, it is the intention of the parties hereto that the remainder of this
Lease shall not be affected thereby. It is also the intention of the parties to
this Lease that in lieu of each clause or provision of this Lease that is
illegal, invalid or unenforceable, there be added, as a part of this Lease, a
clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable.
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36. BROKERS. Tenant represents and warrants that it has dealt
with no broker, agent or other person in connection with this transaction and
that no broker, agent or other person brought about this transaction, other than
the broker, if any, set forth on the first page of this Lease, and Tenant agrees
to indemnify' and hold Landlord harmless from and against any claims by any
other broker, agent or other person claiming a commission or other form of
compensation by virtue of having dealt with Tenant with regard to this leasing
transaction. LANDLORD REPRESENTS AND WARRANTS THAT IT HAS DEALT WITH NO BROKER,
AGENT OR OTHER PERSON IN CONNECTION WITH THIS TRANSACTION EXCEPT XXXXXXXX XXXX
COMPANY AND RLS ENTERPRISES, INC. AND THAT NO BROKER, AGENT OR OTHER PERSON
BROUGHT ABOUT THIS TRANSACTION, OTHER THAN THE BROKER, IF ANY, SET FORTH ON THE
FIRST PAGE OF THIS LEASE, AND LANDLORD AGREES TO INDEMNIFY AND HOLD TENANT
HARMLESS FROM AND AGAINST ANY CLAIMS BY ANY OTHER BROKER, AGENT OR OTHER PERSON
CLAIMING A COMMISSION OR OTHER FORM OF COMPENSATION BY VIRTUE OF HAVING DEALT
WITH LANDLORD WITH REGARD TO THIS LEASING TRANSACTION.
37. MISCELLANEOUS. (a) Any payments or charges due from Tenant
to Landlord hereunder shall be considered rent for all purposes of this Lease.
(b) If and when included within the term "Tenant," as used in
this instrument, there is more than one person, firm or corporation, each shall
be jointly and severally liable for the obligations of Tenant.
(c) All notices required or permitted to be given under this
Lease shall be in writing and shall be sent by FACSIMILE TRANSMISSION registered
or certified mail, return receipt requested, or by a reputable national
overnight courier service, postage prepaid, or by hand delivery and, if to
Tenant, addressed to Tenant at the address for Tenant noted on the first page of
this Lease, and if to Landlord, addressed to Landlord at c/o Crow Holdings
Industrial Trust, 0000 XxXxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000,
Attention: Xxxxx X. Xxxxxxxxx, with a copy to Xxxxx and Xxxx LLP, 00 Xxxxx
Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000-0000, Attention: Xxxx
Xxxxxx/Xxxxx Xxxxxxxxx. Either party may by notice given aforesaid change its
address for all subsequent notices. Except where otherwise expressly provided to
the contrary, notice shall be deemed given upon delivery.
(d) Except as otherwise expressly provided in this Lease or as
otherwise required by law, Landlord retains the absolute right to withhold any
consent or approval.
(e) IF NO LONGER A PUBLICLY TRADED COMPANY, at Landlord's
request from time to time Tenant shall furnish Landlord with true and complete
copies of its most recent annual and quarterly financial statements prepared by
Tenant or Tenant's accountants and any other financial information or summaries
that Tenant typically provides to its lenders or shareholders. Such annual
statements shall be audited by an independent certified public accountant at
Tenant's sole cost and expense. Landlord shall hold such financial statements
and information in confidence, and shall not disclose the same except: (i) to
Landlord's lenders or potential lenders, (ii) to potential purchasers of all or
a portion of the Project, (iii) otherwise as reasonably necessary for the
operation of the Project or administration of Landlord's business or (iv) if
disclosure is required by any judicial or administrative order or ruling.
(f) UNLESS REQUIRED BY FEDERAL OR STATE LAW neither this Lease
nor a memorandum of lease shall be filed by or on behalf of Tenant in any public
record. Landlord may prepare and file, and upon request by Landlord, Tenant will
execute a memorandum of lease.
(g) Each party acknowledges that it has had the opportunity to
consult counsel with respect to this Lease, and therefore, the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Lease or any
exhibits or amendments hereto.
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(h) The submission by Landlord to Tenant of this Lease shall
have no binding force or effect, shall not constitute an option for the leasing
of the Premises, nor confer any right or impose any obligations upon either
party until execution of this Lease by both parties.
(i) 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. The captions
inserted in this Lease are for convenience only and in no way define, limit or
otherwise describe the scope or intent of this Lease, or any provision hereof,
or in any way affect the interpretation of this Lease.
(j) Any amount not paid by Tenant within TEN (10) days after
its due date in accordance with the terms of this Lease shall bear interest from
such due date until paid in full at the lesser of the highest rate permitted by
applicable law or TEN PERCENT (10%) per year. It is expressly the intent of
Landlord and Tenant at all times to comply with applicable law governing the
maximum rate or amount of any interest payable on or in connection with this
Lease. If applicable law is ever judicially interpreted so as to render usurious
any interest called for under this Lease, or contracted for, charged, taken,
reserved, or received with respect to this Lease, then it is Landlord's and
Tenant's express intent that all excess amounts theretofore collected by
Landlord be credited on the applicable obligation (or, if the obligation has
been or would thereby be paid in full, refunded to Tenant), and the provisions
of this Lease immediately shall be deemed reformed and the amounts thereafter
collectible hereunder reduced, without the necessity of the execution of any new
document, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder.
(k) Construction and interpretation of this Lease shall be
governed by the laws of the state in which the Project is located, excluding any
principles of conflicts of laws.
(1) Time is of the essence as to the performance of Tenant AND
LANDLORD'S RESPECTIVE obligations under this Lease.
(m) All exhibits and addenda attached hereto are hereby
incorporated into this Lease and made a part hereof. In the event of any
conflict between such exhibits or addenda (other than the Rules and Regulations)
and the terms of this Lease, such exhibits or addenda shall control. In the
event of a conflict between the Rules and Regulations attached hereto and the
terms of this Lease, the terms of this Lease shall control.
(n) If either party should prevail in any litigation
instituted by or against the other related to this Lease, the prevailing party,
as determined by the court, shall receive from the non-prevailing party all
costs and reasonable attorneys' fees (payable at standard hourly rates) incurred
in such litigation, including costs on appeal, as determined by the court.
38. LANDLORD'S LIEN/SECURITY INTEREST. Tenant hereby grants
Landlord a security interest, and this Lease constitutes a security agreement,
within the meaning of and pursuant to the Uniform Commercial Code of the state
in which the Premises are situated as to all of Tenant's property situate in, or
upon, or used in connection with the Premises (except merchandise sold in the
ordinary course of business) (collectively, the "Collateral") as security for
all of Tenant's obligations hereunder, including without limitation, the
obligation to pay rent. Such personalty thus encumbered includes specifically
all trade and other fixtures for the purpose of this Paragraph 38 and inventory,
equipment, contract rights, accounts receivable and the proceeds thereof. In
order to perfect such security interest simultaneously with the execution of
this Lease, Tenant shall execute two (2) original financing statements in the
form attached hereto as EXHIBIT B and Landlord may file the same at Tenant's
expense at the state and county Uniform Commercial Code filing offices. Tenant
further agrees to execute such other financing statements as reasonably
requested by Landlord to further secure Landlord's interest under this Paragraph
38 as often as Landlord in its discretion shall require; and Tenant hereby
irrevocably appoints Landlord its agent for the purpose of executing and filing
such financing statements on Tenant's behalf as Landlord shall deem
21
necessary. NOTWITHSTANDING THE FOREGOING, LANDLORD HEREBY SUBORDINATES THE
STATUTORY LIEN, AS WELL AS THE SECURITY INTEREST GRANTED TO IT UNDER THIS
PARAGRAPH 38, TO ALL LOANS MADE BY A THIRD PARTY IN THE COLLATERAL, AND LANDLORD
SHALL, AT TENANT'S EXPENSE, EXECUTE SUCH DOCUMENTATION TO EVIDENCE SUCH
SUBORDINATION AS THE OWNER OF ANY THIRD PARTY LENDER UNDER ANY SUCH LOAN MAY
REASONABLY REQUEST.
39. LANDLORD'S LIABILITY. The liability of Landlord (and its
partners, shareholders or members) to Tenant (or any person or entity claiming
by, through or under Tenant) for any default by Landlord under the terms of this
Lease or any matter relating to or arising out of the occupancy or use of the
Premises and/or other areas of the Building shall be limited to Tenant's actual
direct, but not consequential, damages therefor and shall be recoverable only
from the interest of Landlord in the Building, and Landlord (and its partners,
shareholders or members) shall not be personally liable for any deficiency.
Additionally, Tenant hereby waives it statutory lien under Section 91.004 of the
Texas Property Code.
40. RELOCATION. Landlord shall have the right at any time,
upon giving Tenant not less than thirty (30) days written notice (the
"Relocation Notice"), to provide and furnish Tenant with space elsewhere in the
Project of approximately the same size as the Premises (the "Relocation Space")
and to relocate Tenant to such space. In the event of any such relocation, (a)
Landlord shall pay for Tenant's reasonable actual relocation costs; (b) this
Lease and each and all of its terms, covenants and conditions shall remain in
full force and effect, except that Base Rent shall be adjusted to reflect the
same per square foot rate multiplied by the square footage of the Relocation
Space, but in no event shall Tenant's adjusted Base Rent be greater than the
Base Rent set forth in this Lease; and (c) such Relocation Space shall
thereafter be deemed to be the "Premises" as such term is used in this Lease.
At Landlord's request, Tenant shall execute an amendment to this Lease
acknowledging the Relocation Space as the Premises and any adjustment in Base
Rent, if applicable.
[SIGNATURES ON FOLLOWING PAGE]
22
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Lease as of the day and year first above written.
TENANT:
INTERPHASE CORPORATION
By: /s/ XXXXX XXXXX
----------------------------------------
Name: XXXXX XXXXX
--------------------------------------
Title: C.F.O.
-------------------------------------
LANDLORD:
CROW FAMILY HOLDINGS INDUSTRIAL TEXAS
LIMITED PARTNERSHIP, a Delaware limited
partnership
By: CFH-FTGP, L.L.C., a Delaware limited
liability company, its general partner
By: Crow Family Holdings Industrial
Limited Partnership, a Delaware
limited partnership, its sole member
By: CFH Industrial Trust, Inc., a
Maryland corporation, its sole
general partner
By: /s/ XXXXXX X. COMB
--------------------------------
Name: XXXXXX X. COMB
------------------------------
Title: VICE PRESIDENT
-----------------------------
23
RULES AND REGULATIONS
In the event of a conflict between the following Rules and
Regulations and the terms of the Lease to which this Addendum is attached, the
terms of the Lease shall control.
1. The sidewalk, entries, and driveways of the Project shall
not be obstructed by Tenant, or its agents, or used by them for any purpose
other than ingress and egress to and from the Premises.
2. Tenant shall not place any objects, including antennas,
outdoor furniture, etc., in the parking areas, landscaped areas or other areas
outside of its Premises, or on the roof of the Project.
3. Except for seeing-eye dogs, no animals shall be allowed in
the offices, halls, or corridors in the Project
4. Tenant shall not disturb the occupants of the Project or
adjoining buildings by the use of any radio or musical instrument or by the
making of loud or improper noises.
5. If Tenant desires telegraphic, telephonic or other electric
connections in the Premises, Landlord or its agent will direct the electrician
as to where and how the wires may be introduced; and, without such direction, no
boring or cutting of wires will be permitted. Any such installation or
connection shall be made at Tenant's expense.
6. Tenant shall not install or operate any steam or gas engine
or boiler, or other mechanical apparatus in the Premises, except as specifically
approved in the Lease. The use of oil, gas or inflammable liquids for heating,
lighting or any other purpose is expressly prohibited. Explosives or other
articles deemed extra hazardous shall not be brought into the Project.
7. Parking any type of recreational vehicles is specifically
prohibited on or about the Project. Except for the overnight parking of
operative vehicles or as expressly permitted in the Lease, no vehicle of any
type shall be stored in the parking areas at any time. In the event that a
vehicle is disabled, it shall be removed within 48 hours. There shall be no "For
Sale" or other advertising signs on or about any parked vehicle. All vehicles
shall be parked in the designated parking areas in conformity with all signs and
other markings. All parking will be open parking, and no reserved parking,
numbering or lettering of individual spaces will be permitted except as
specified by Landlord.
8. Tenant shall maintain the Premises free from rodents,
insects and other pests.
9. Landlord reserves the right to exclude or expel from the
Project any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs or who shall in any manner do any act in violation
of the Rules and Regulations of the Project.
10. Tenant shall not cause any unnecessary labor by reason of
Tenant's carelessness or indifference in the preservation of good order and
cleanliness. Landlord shall not be responsible to Tenant for any loss of
property on the Premises, however occurring, or for any damage done to the
effects of Tenant by the janitors or any other employee or person, UNLESS CAUSED
BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD, OR ANY OF ITS AGENTS,
EMPLOYEES, CONTRACTORS, ASSIGNEES OR INVITEES.
11. Tenant shall give Landlord prompt notice of any defects in
the water, lawn sprinkler, sewage, gas pipes, electrical lights and fixtures,
heating apparatus, or any other service equipment affecting the Premises.
12. Tenant shall not permit storage outside the Premises,
including without limitation, outside storage of trucks and other vehicles, or
dumping of waste or refuse or permit any harmful materials to be placed in any
drainage system or sanitary system in or about the Premises.
13. All moveable trash receptacles provided by the trash
disposal firm for the Premises must be kept in the trash enclosure areas, if
any, provided for that purpose.
14. No auction, public or private, will be permitted on the
Premises or the Project.
15. No awnings shall be placed over the windows in the
Premises except with the prior written consent of Landlord.
16. The Premises shall not be used for lodging, sleeping or
cooking or for any immoral or illegal purposes or for any purpose other than
that specified in the Lease. No gaming devices shall he operated in the
Premises.
17. Tenant shall ascertain from Landlord the maximum amount of
electrical current which can safely be used in the Premises, taking into account
the capacity of the electrical wiring in the Project and the Premises and the
needs of other tenants, and shall not use more than such safe capacity.
Landlord's consent to the installation of electric equipment shall not relieve
Tenant from the obligation not to use more electricity than such safe capacity.
18. Tenant assumes full responsibility for protecting the
Premises from theft, robbery and pilferage.
19. Tenant shall not install or operate on the Premises any
machinery or mechanical devices of a nature not directly related to Tenant's
ordinary use of the Premises and shall keep all such machinery free of
vibration, noise and air waves which may be transmitted beyond the Premises.
20. Tenant shall not introduce, or release asbestos or PCBs
onto or from the Premises.
21. Tenant shall at all times conduct its operations in a good
and workmanlike manner, employing best management practices to minimize the
threat of any violation of Environmental Requirements.
-2-
ADDENDUM
41. FREE RENT. 1. Upon commencement of the above referenced
Lease Agreement, the parties agree that no base rent or additional rent under
Paragraph 6 shall be payable for the first three (3) months of the primary term
thereof. Notwithstanding anything to the contrary contained in the prior
sentence, Tenant shall be obligated from the commencement date of the Lease to
pay Tenant's proportionate share of utility charges.
2. Landlord agrees to forebear collection of Base Rent and additional rent under
Paragraph 6 of the lease during the period set forth elsewhere in this Agreement
("the Rent Waiver Period") and shall waive all rights to such Rent upon Tenant
timely performing all of its covenants and obligations under the Lease during
the term thereof. In the event that Tenant defaults on any of its covenants or
obligations under the Lease DURING THE FIRST TWELVE (12) MONTHS OF THE LEASE
TERM, the Rent owed during the Rent Waiver Period shall become automatically due
together with any other due but unpaid monetary obligations of Tenant.
42. RENEWAL OPTION. (a) Provided that Tenant is not THEN in
default (BEYOND ANY APPLICABLE CURE PERIOD) of any of the terms, covenants and
conditions hereof, and this Lease has not been assigned or the premises (or a
part thereof) sublet, Tenant shall have the right and option to extend the
original Lease TERM for one RENEWAL PERIOD OF 39 MONTHS (THE "RENEWAL PERIOD").
Such extension of the original LEASE TERM shall be on the same terms,
covenants, and conditions as provided for in the original LEASE TERM except
for this paragraph and except that the rental during the extended term shall be
at the fair market rental then in effect on equivalent properties, of equivalent
size, in equivalent areas. Tenant shall deliver written notice to Landlord of
Tenant's intent to exercise the renewal option granted herein not more than
twelve (12) months nor less than six (6) months prior to the expiration of the
original Lease TERM (THE "RENEWAL NOTICE"). In the event Tenant fails to deliver
such written notice within the time period set forth above, Tenant's right to
extend the term hereof shall expire and be of no further force and effect.
(b) WITHIN THIRTY (30) DAYS OF THE RENEWAL NOTICE, LANDLORD SHALL
NOTIFY TENANT OF THE MONTHLY BASE RENT FOR SUCH RENEWAL PERIOD (THE "RENTAL
NOTICE"). TENANT MAY ACCEPT THE TERMS SET FORTH IN THE RENTAL NOTICE BY WRITTEN
NOTICE (THE "ACCEPTANCE NOTICE") TO LANDLORD GIVEN WITHIN THIRTY (30) DAYS AFTER
RECEIPT OF THE RENTAL NOTICE. IF TENANT TIMELY DELIVERS THE ACCEPTANCE NOTICE,
THE LEASE TERM SHALL BE DEEMED EXTENDED FOR THE RENEWAL PERIOD.
43. HVAC WARRANTY. UPON COMMENCEMENT OF THIS LEASE,
notwithstanding Paragraph 11 of the
Lease Agreement, Landlord shall warranty the
operation of the heating, ventilation, and air conditioning system for the first
one hundred eighty (180) days of the Lease term. This warranty shall apply to
the all major components, (e.g., compressor, heater coil, etc.) of the
system, and shall remain intact only as long as Tenant provides regular
maintenance to the system as provided in the Lease. For the purposes of this
paragraph, major component work shall constitute an expense in excess of $250.00
per occurrence.
44. EARLY ACCESS. Landlord shall allow Tenant early access to
the Premises beginning August 1, 2002, FOR THE PURPOSE OF COMPLETING
MODIFICATIONS TO THE SPACE AS OUTLINED IN EXHIBIT C, provided that this Lease is
fully executed by Landlord and Tenant, Tenant has paid the Security Deposit and
Tenant has complied with the provisions of Paragraph 9 of the Lease. Effective
upon Tenant's occupancy, Tenant agrees to be bound by and comply with all terms
and conditions of the Lease including Tenant's obligation to pay for all
utilities furnished to the Premises as provided in Paragraph 7 of the Lease,
except that no amount of rent and escrow payments shall be due for the early
access period.
EXHIBIT A
PREMISES
[EXISTING FLOOR PLAN]
EXHIBIT A-1
LEGAL DESCRIPTION OF REAL PROPERTY
BEING 24,270 rentable square feet in a larger facility containing 90,206 total
square feet, located at 0000 Xxxx Xxxx, Xxxxxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000,
and situated on a tract of land more particularly described as follows:
Being a tract of land situated in the Xxxxx X. Xxxxxxx Survey, Abstract No.
1385, and the Xxxx Xxxxxx Survey Abstract No. 1097, Dallas County, Texas, and
being a part of Block 0, Xxxxxx Xxxx, Xxxx Xxxxxxxxxx Xxxx, an addition to the
City of Carrollton, Texas, as recorded by a plat in Volume 80208, Page 154 of
the Deed Records of Dallas County, Texas, and being more particularly described
as follows:
BEGINNING at a point lying on the intersection of the east line of Xxxx Road
(100 feet wide) and the south line of Cotton Belt West Industrial Park as record
on said plat, said south line also being the north line of the X.X. Xxxxxxx
Survey, Abstract No. 1171; thence North 00 degrees 11'03" East, with the said
east line of Xxxx Road, 471.06 feet; thence in a Northeasterly direction along a
curve to the right of a distance of 46.67 feet, a long chord that bears North 44
degrees 44'58" East, 42.10 feet; thence North 89 degrees 18'52" East, along the
south line of Champion Drive (60 feet wide), 393.82 feet to a point in the
center line of 30-foot wide drill track right-of-way as described in deed dated
August 13, 1980, from the Southwestern Town Lot Corporation to the St. Louis
Southwestern Railway Company of Texas, recorded August 21, 1980, in Volume
80165, pages 1201 to 1210 inclusive, Dallas County Deed Records; thence along
said center line of said drill tract right-of-way the following four (4)
courses:
1. South 00 degrees, 41'08" East, 41.48 feet;
2. South 07 degrees, 03'08" East, 85.62 feet;
3. In a Southeasterly direction along a curve to the left a
distance of 535.39 feet, said curve having a central angle of
80 degrees, 18'33", a radius of 381.97 feet and a long chord
that bears South 47 degrees 12'25" East, 492.63 feet; and
4. South 87 degrees 21'41" East, 39.61 feet to a point in the
west line of XxXxxxxx Drive; thence South 00 degrees 41'08"
East 34.76 feet to said south line of Cotton Belt West
Industrial Park; thence South 89 degrees 27'19" West, 837.48
feet to the PLACE OF BEGINNING containing 6.027 acres of land
more or less (262,6536.836 square feet).
RESERVING from the above described 6.02 acre parcel of land an easement for
railroad, transportation, and communication purposes together with the right to
grant same to others, over the easterly 153 feet of the southerly 15.0 feet of
the above described 6.027 acre parcel of land.
A-1
EXHIBIT B
B-1
B-2
EXHIBIT C
TENANT FINISH WORK
Landlord shall provide a Tenant Improvement Allowance of $5.00 per square foot,
or $121,350 total, for the construction of improvements to the leased Premises.
The Tenant Improvement Allowance shall include all expenses associated with
construction including architectural drawings and construction management fees.
Said management fees shall not exceed three percent (3%) of total construction
costs. Such improvements shall be constructed by a contractor selected by Tenant
and managed by Xxxxxxxx Xxxx Company in accordance with such plans and
specifications as may be prepared by Tenant and approved by Landlord. The agreed
Tenant Improvements and allowance for such improvements shall be completed by
June 30, 2003. In the event the actual costs and expenses of completing the
construction of such improvements to the leased Premises exceed $121,350, Tenant
shall pay all such excess costs and expenses to Landlord or, at Landlord's
direction, to such contractor, upon demand. If Tenant contracts the construction
for the agreed Tenant Improvements directly, with a mutually agreed contractor,
Landlord shall reimburse Tenant within thirty (30) days after receipt of paid
invoices by Tenant.
C-1
EXHIBIT D
HAZARDOUS MATERIAL LIST
Solder Dross -- Powdered lead oxide; a byproduct of the melted bar solder.
Hazards with this material are from inhalation and absorption through the skin.
Handling requirements are a particle respirator and gloves MUST be worn. Storage
within the building is sealed 5-gallon metal cans collected for removal. Removal
and reclamation is handled by solder products vendor. The maximum number of
5-gallon cans to be stored in the building is ten (10).
Liquid Flux -- Lonco SLS -- 65C (MSDS #P086) A flammable liquid containing IPA.
Handling requirements are eye protection. Storage within the building is in
5-gallon plastic drums in Chemical storage cabinet. Delivery of flux to the
product is in atomized forming a heated environment, which burn off the IPA
content. Material is used in a contained, well-vented area. The maximum number
of 5-gallon drums to be stored in the building is two (2).
Isopropyl Alcohol / 425 Thinner -- (MSDS #HCR000126, #199) A flammable liquid.
Handling requirements are eye protection. Storage within the building is in
5-gallon metal drums within a chemical storage cabinet. Collection of waste
alcohol is in a labeled 55-gallon drum. A hazardous material disposal company
handles disposal. The maximum number of 5-gallon drums to be stored in the
building is two (2).
Biral T & D Spray Lubricant -- A highly flammable liquid. Handling requirements
are product will not be used near open flames. Storage within the building is in
small spray cans. The maximum number of 16-ounce spray cans to be stored in the
building is two (2).
Kleenox Solder Oxide Reducing Powder -- (MSDS #1472) A corrosive, inorganic,
solid; N.O.S. Handling requirements are protective gloves and eye wear. Storage
within the building are small plastic jars in a well-ventilated area. Waste
powder is disposed of within the solder dross. The maximum number of 12-ounce
jars to be stored in the building is twelve (12).
Loctite 7360 Clean-up Solvent -- A flammable, explosive liquid containing
Nitromethane and Toluene. Handling requirements are protective gloves, eye wear
and no-use near open flames. Storage within the building is within small metal
cans. The maximum number of 16-ounce metal cans to be stored in the building is
two (2).
D-1
EXHIBIT E
TENANT EQUIPMENT
Equipment List with Power Requirements
BTU VIP70A Convection Reflow Ovens (2 each)
208V 72A 3 phase
27 KVA27 50/60 Hz
Zevatech FS-730/740/X Placement Machines (4 each)
200V 50/60 Hz
V 3.0K
Electrovert Ultrapak 445 18/F Wave Solder Machine
440V 3phase 20A
Air-Vac PCBRM-12 Solder Fountain
208V
HTI Screen Printers (2 each)
120V
White Vertical Carousel Series 2400A/B (ICT & Stockroom) (2 each)
240V 30A
Remstar HPS-251 Vertical Carousel (3 each)
240V 30A
Champion NRA 20-12 Air Compressor
460V
Xxxxx R5 Series Vacuum Pump
230V
Zeks Model 75HSBA100 Air Dryer
120V
Craft 25 SMT Rework Station
120V
Air-Vac DRS-22 SMT Rework Station
120V
E-1
Teredyne Z1800 In-Circuit Tester (2 each)
120V
Horizontal Carousel
240V
Blue M Bake Oven
240V
Various workbenches with Personal/Test computers and Solder stations
(approximately 40)
120V
E-2
