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EXHIBIT 10.25
LEASE AGREEMENT
BETWEEN
XETEL CORPORATION
AS TENANT,
AND
BRAKER PHASE III, LTD.
AS LANDLORD,
COVERING ALL OF THE BUILDING
KNOWN AS
XXXXXX CENTER III -- BUILDING 3,
LOCATED AT
0000 XXXXX XXXXX XXXX
XXXXXX, XXXXX.
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LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into by and between BRAKER
PHASE III, LTD., a Texas limited partnership, hereinafter referred to as
"Landlord," and XETEL CORPORATION, a Delaware corporation, hereinafter referred
to as "Tenant."
1. PREMISES AND TERM.
A. Demise and Premises. In consideration of the mutual obligations
of Landlord and Tenant set forth herein, Landlord leases to Tenant, and Tenant
hereby takes from Landlord, certain leased premises (the "Premises") situated
within the County of Xxxxxx, State of Texas located on the property described
on EXHIBIT "A" attached hereto and incorporated herein by reference (the
"Property"), as shown on EXHIBIT "B" attached hereto and incorporated herein by
reference, to have and to hold, subject to the terms, covenants and conditions
in this Lease. The Premises shall be comprised of a building (and related
improvements, amenities and parking areas) to be constructed by Landlord on the
Property and known as Xxxxxx Center III -Building 3 (collectively, the
"Building"), which Building shall be part of an industrial park owned by
Landlord and known as Xxxxxx Center III (the "Project"). The term of this
Lease shall commence on the Commencement Date hereinafter set forth and, unless
sooner terminated as provided herein, shall end on the last day of the month
that is one hundred and fifty (150) months after the Commencement Date.
B. Commencement of Term. Landlord shall construct the Building and
the Premises in accordance with the Work Letter. The "Commencement Date" shall
be deemed to be the earliest of: (i) the date upon which Substantial Completion
(as hereinafter defined) of the Building and the Premises and other
improvements to be erected by Landlord in accordance with the Work Letter has
been achieved, (ii) the date on which the Building, the Premises and such other
improvements would have been Substantially Completed but for Tenant Delays (as
hereinafter defined), or (iii) the date on which Tenant occupies any part of
the Premises, other than solely for purposes of moving into the Premises or
performing any construction or preparation activities pursuant to the Work
Letter; provided, however, in the event that the Commencement Date would
otherwise occur prior to April 1, 1997 pursuant to either clause (i) or (ii)
above, the Commencement Date shall be April 1, 1997.
C. Completion of Premises.
(1) The term "Substantial Completion" and its derivatives
shall mean the date when all of the following have
occurred:
(i) All of the Landlord's Work and Tenant's Work (as
those terms are defined in the Work Letter) have
been completed by Landlord in accordance with
Landlord's Final Plans and Tenant's Contract
Documents, subject to minor field variations and
Punchlist Items (as defined below);
(ii) Building elevator service for the Premises has
commenced;
(iii) All of the Building's sanitary sewer, electrical,
and other systems are completed and in good order
and operating condition, except for Punchlist
Items;
(iv) Landlord has obtained a permanent or temporary
Certificate of Occupancy, permitting continuous
legal use of the Building and the Premises for the
uses permitted under paragraph 12 hereof (provided
that Landlord shall satisfy all conditions within
Landlord's Work and Tenant's Work required to
convert a temporary certificate of occupancy to a
permanent certificate of occupancy within one
hundred eighty (180) days of issuance of the
temporary certificate of occupancy);
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(v) All parking areas have been sufficiently completed
to provide Tenant with the immediate use of the
parking spaces pursuant to paragraph 6 of this
Lease;
(vi) HVAC for the Premises is installed and operational
according to the specifications for such equipment;
(vii) Landlord has delivered to Tenant written
certification that Landlord has met its obligations
under clauses (i) through (vi) of this subsection;
provided, however, that if and to the extent that
compliance with any of the conditions set forth in
clauses (i) through (vi) above would have occurred
earlier but for Tenant Delays, the compliance with
that condition shall be deemed to have occurred on
the date that it would have occurred but for the
Tenant Delays; and
(viii) Landlord has delivered to Tenant a certificate of
Landlord's Architect stating that the Base Building
Work, Landlord's Work and Tenant's Work have been
substantially completed in accordance with the
plans and specifications therefor, subject to minor
field variations and Punchlist Items.
(2) Landlord shall provide Tenant with at least forty-five
(45) days prior written notice of the date on which, in
Landlord's judgment, Substantial Completion will occur and
shall thereafter keep Tenant informed as to any material
change in Landlord's estimate of the date on which
Substantial Completion will occur (no less frequently than
once every two (2) weeks until one month before
anticipated move-in, at which time no less frequently than
once per week).
(3) Within ninety (90) days after Substantial Completion,
Landlord shall deliver to Tenant one complete set of "as-
built" or "record" plans and specifications for the Base
Building Work, Landlord's Work and Tenant's Work.
(4) Within sixty (60) days after Substantial Completion,
Landlord and Tenant shall execute an agreement
supplementary hereto, setting forth the Commencement Date
and the date of the end of the Term.
(5) The term "Punchlist Items" means details of construction,
decoration and mechanical adjustment which, in the
aggregate, are minor in character and do not, either by
their nature or because of the repair or completion work
necessary, materially interfere with Tenant's use or
enjoyment of the Premises or the Building. Punchlist
Items shall be completed by Landlord within thirty (30)
days after the date that Tenant furnishes to Landlord its
punchlist in accordance with this Lease, provided that if
such items cannot reasonably be completed within such 30-
day period, Landlord shall not be required to complete
such items within such 30-day period so long as it
diligently pursues the same to completion and completes
same within ninety (90) days after Tenant furnishes to
Landlord such punchlist. If Landlord has obtained a
temporary Certificate of Occupancy, then Landlord shall,
with due diligence, complete any remaining Landlord's Work
and Tenant's Work required to obtain a permanent
Certificate of Occupancy for the Premises.
(6) For a period of one (1) year after Substantial Completion
of the Premises, Tenant shall be entitled to bring to
Landlord's attention by written notice any deficiencies in
Landlord's construction that come to Tenant's attention,
and Landlord shall thereafter promptly correct the same at
Landlord's expense; provided that Landlord shall have no
obligation to correct such items after such 1-year period,
nor to correct any item subject to a warranty previously
assigned to Tenant. The foregoing warranty is in addition
to any warranty provided by any contractor, subcontractor,
materialmen or supplier in connection with construction of
the Premises.
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(7) The term "Excusable Delays" means any delay resulting from
strikes, lockouts or other labor or industrial
disturbance, civil disturbance, future order of any
government, court or regulatory body claiming
jurisdiction, act of the public enemy, war, riot,
sabotage, blockade, embargo, failure or inability to
secure materials, supplies or labor through ordinary
sources by reason of shortages or priority or similar
regulation or order of any government or regulatory body,
lightning, earthquake, fire, storm, hurricane, tornado,
flood, washout, explosion, unusually inclement weather, or
any cause whatsoever beyond the reasonable control of the
party from whom performance is required, or any of such
party's contractors, subcontractors, or other
representatives, whether or not similar to any of the
causes hereinabove stated; provided, however, that for
purposes of this definition, a party's lack of funds shall
not be deemed to be a cause beyond the control of that
party. There shall further be excluded from Excusable
Delays, as they might otherwise apply to extend any
deadlines, any delays resulting from the negligence or
willful misconduct of a party or such party's contractors,
agents, employees or representatives, or resulting from
any events occurring after May 1, 1997.
(8) The term "Tenant Delay" means any actual delay to
Substantial Completion and which is proximately caused by
any act or omission of Tenant, its agents or contractors,
including, without limitation, (i) delays caused by
changes by Tenant in or additions to Tenant's Leasehold
Improvements, (ii) delays in submission of Tenant's
Preliminary Space Plan and/or Contract Documents (as those
terms are defined in the Work Letter) or in the giving of
authorizations or approvals by Tenant but not by Landlord,
or (iii) delays resulting from the specification of
materials or equipment in Tenant's Contract Documents that
prevent timely completion under normal circumstances. No
Tenant Delay pursuant to the immediately preceding
sentence shall be deemed to have occurred unless Landlord
promptly (i.e., within fifteen (15) days after the initial
cause of the delay) and specifically notifies Tenant in
writing of such delay or, alternatively, Tenant has
received actual notice of such delay within such 15-day
period. There shall be further excluded from the number
of days of Tenant Delays any days of delay which are
proximately caused by any act or omission of Landlord, its
agents or contractors, including the failure to timely
provide to Tenant and/or its agents and representatives
complete information regarding the Building necessary for
the preparation of Tenant's Contract Documents.
2. BASE RENT AND ADDITIONAL RENT.
A. Base Rental. Tenant agrees to pay to Landlord, during the term
of this Lease, rent for the Premises ("Base Rental"), in advance, without
demand, deduction or set off (other than pursuant to express, limited rental
abatement, offset or credit provisions contained in this Lease), at the
following rates (unless adjusted as provided in paragraph 10.c of the Work
Letter):
Months 1 - 60 $.565/sq.ft. of Rentable Area $52,262.50 per month
Months 61 - 96 $.60/sq.ft. of Rentable Area $55,500.00 per month
Months 97 - 150 $.63/sq.ft. of Rentable Area $58,275.00 per month
Monthly installments of Base Rental shall be due and payable on or before the
fifth (5th) day of each calendar month succeeding the Commencement Date, except
that all payments due hereunder for any fractional calendar month shall be
prorated; provided, however, Tenant shall not be liable to Landlord for Base
Rental for Months 1-3 during the term of this Lease.
B. Tenant's Pro Rata Share of Operating Expenses. In addition to
any other sums due from Tenant under this Lease, Tenant shall pay to Landlord,
as additional rent, in the manner and at the times set forth in EXHIBIT "D"
attached hereto, Tenant's Pro Rata Share of Operating Expenses (as defined in
EXHIBIT "D") for each Lease Year (as defined in EXHIBIT "D"). As used herein,
"Tenant's Pro Rata Share" shall mean a fraction,
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the numerator of which is the Rentable Area (as defined in EXHIBIT "D")
contained in the Premises and the denominator of which is the Rentable Area of
the Project; provided, however, (i) to the extent an Operating Expense is
attributable only to the Building or the Premises, Tenant's Pro Rata Share of
that Operating Expense shall be the entire amount of the Operating Expense, and
(ii) with respect to the Operating Expenses attributable to the Project,
notwithstanding the provisions of "EXHIBIT D," such Operating Expenses shall
only include costs and expenses incurred in connection with common area
expenses and facilities benefitting the entire Project, such as Project signage
and common area landscaping.
3. LANDLORD'S REPAIRS AND MAINTENANCE. Landlord, at its own cost
and expense (except to the extent included within Operating Expenses), shall
maintain in good repair, reasonable wear and tear excluded, (i) the roof, slab
and foundation of the Building, (ii) the structural soundness of the exterior
walls and supports of the Building, (iii) the parking areas of the Premises and
(iv) the plumbing, pipes and conduits located within the Project but outside
the Premises. The term "walls" as used herein shall not include windows, glass
or plate glass, any doors, special store fronts or office entries, and the term
"foundation" as used herein shall not include loading docks. Tenant shall
promptly give Landlord written notice of defect or need for repairs. Landlord
shall cure such defects or complete its required repairs within thirty (30)
days after receipt of written notice from Tenant of such defects or the need
for such repairs, provided that if such cure or repairs cannot reasonably be
completed within such 30-day period, Landlord shall not be required to complete
such cure or repairs within such 30-day period so long as it commences to cure
same within such 30-day period and diligently pursues the same to completion.
If Landlord fails to commence any repairs which it is obligated to make
pursuant to this paragraph 3 within thirty (30) days after receipt of Tenant's
written demand for the same, or fails to complete such repairs in accordance
with the preceding sentence of this paragraph 3, Tenant shall have the right to
complete such repairs on Landlord's behalf, in which event Landlord shall
promptly reimburse Tenant in the amount of the reasonable, actual cost of such
repairs, so long as Tenant provides Landlord with written invoices and other
documentation evidencing the amount of such costs and, if Landlord does not so
reimburse Tenant within thirty (30) days after demand therefor, Tenant shall
receive a credit against its next accruing obligations for Base Rental under
this Lease for such amounts, but Landlord shall be liable for such
reimbursement or credit only to the extent such costs would not be included in
Operating Expenses. Notwithstanding the foregoing provisions of this paragraph
3, upon the occurrence of an emergency need for repairs to any portion of the
Premises for which Landlord would otherwise be responsible hereunder, the party
first becoming aware of such emergency shall immediately notify the other of
the nature of the needed repair, whereupon Tenant and Landlord shall reasonably
cooperate with each other to agree upon the most expeditious and cost effective
means to accomplish the needed repairs and to prevent and remedy damages to the
Premises and the personal property situated therein. Without limiting the
generality of the foregoing, Tenant and Landlord shall each have the right to
take whatever immediate action they may reasonably deem necessary to protect
any person from injury or to protect the Premises and Tenant's inventory and
equipment therein from further damage. For purposes of this paragraph 3,
"emergency need for repairs" means any damage to, failure of or needed repair
to any portion of the Premises, the Building, or the Project that poses an
immediate threat to the safety of any person or material damage to Tenant's
inventory or equipment within the Premises. Unless otherwise expressly
stipulated herein (including the Work Letter), Landlord shall not be required
to make any improvements or repairs of any kind or character on or to the
Property, or any portion thereof, during the term of this Lease.
4. TENANT'S REPAIRS AND MAINTENANCE.
A. Maintenance of Premises and Appurtenances. Tenant, at its own
cost and expense, shall (i) maintain all parts of the Premises and promptly
make all necessary repairs and replacements to the Premises (except those for
which Landlord is expressly responsible hereunder) and (ii) keep the parking
areas, driveways and alleys surrounding the Premises in a clean and sanitary
condition. Tenant's obligation to maintain, repair and make replacements to
the Premises shall cover, but not be limited to, pest control (including
termites), trash removal and the maintenance, repair and replacement of all
HVAC, electrical, plumbing, sprinkler and other mechanical systems (the
"Building Systems"), subject, however, to Landlord's express obligations
hereunder.
B. System Maintenance. Tenant, at its own cost and expense, shall
enter into a regularly scheduled preventive maintenance/service contract with a
maintenance contractor reasonably approved by Landlord for servicing all hot
water, heating and air conditioning systems and equipment within the Premises.
The service contract
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must include all services suggested by the equipment manufacturer in its
operations/maintenance manual and must become effective within thirty (30) days
of the date Tenant takes possession of the Premises. At Tenant's option, such
maintenance may be performed by employees of Tenant so long as (i) Tenant
maintains proper records and makes such records reasonably available to
Landlord for review and (ii) Tenant's performance of such maintenance complies
with the other requirements of this paragraph 4B.
5. TENANT'S ALTERATIONS; PERSONAL PROPERTY TAXES. Except as
contemplated in the Work Letter, Tenant shall not make any alterations,
additions or improvements to the Premises without the prior written consent of
Landlord. However, subject to the conditions described below, Landlord's
consent shall not be required for nonstructural interior alterations, additions
or improvements that (a) have an aggregate cost of no more than $100,000.00,
(b) are not visible from the exterior of the Premises, (c) may be removed and
installed without material injury to the Premises, and (d) do not alter or
materially and adversely affect the operation of any Building System. Tenant's
right to implement the alterations, additions and improvements described in the
immediately preceding sentence without Landlord's consent is expressly
conditioned upon all of the following: (i) Tenant shall provide Landlord with
plans and specifications for the proposed alterations, additions or
improvements no less than ten (10) days before the date on which Tenant
anticipates commencing implementation of the same, (ii) Tenant shall provide
Landlord with copies of the as-built plans and specifications reflecting all
such alterations, improvements or additions as completed within thirty (30)
days after the completion thereof, and (iii) Landlord shall have the right to
prohibit any proposed alterations, additions or improvements which it
determines, in its reasonable discretion, (W) will alter or materially and
adversely affect the operation of any Building System, (X) actually constitute
structural alterations, (Y) cannot be removed without material injury to the
Premises, or (Z) will adversely affect the structural integrity of any portion
of the Building. Notwithstanding anything to the contrary in the foregoing,
Tenant shall obtain all permits and governmental approvals necessary for the
performance of such alterations, additions or improvements prior to the
commencement thereof, and shall comply with all applicable governmental and
legal requirements in such performance. Additionally, Tenant, at its own cost
and expense, may erect such shelves, bins, machinery and trade fixtures as it
desires, provided that (a) such items do not alter the basic character of the
Premises or the Building; (b) such items do not overload or damage same; (c)
such items may be removed without injury to the Premises; and (d) the
construction, erection or installation thereof complies with all applicable
governmental laws, ordinances, regulations and with Landlord's specifications
and requirements. Without implying any consent of Landlord thereto, all
alterations, additions, improvements and partitions erected by Tenant shall be
and remain the property of Tenant during the term of this Lease. All shelves,
bins, machinery and trade fixtures installed by Tenant shall be removed on or
before the earlier to occur of the date of termination or expiration of this
Lease or vacating the Premises, at which time Tenant shall restore the Premises
to their original condition, ordinary wear and tear excepted. All alterations,
installations, removals and restorations shall be performed in a good and
workmanlike manner so as not to damage or alter the primary structure or
structural qualities of the Building or other improvements situated on the
Premises or of which the Premises are a part and, if not required to be
removed, shall become the property of Landlord upon the expiration or earlier
termination of this Lease. Tenant shall be liable for all taxes levied or
assessed against any personal property or fixtures placed in or on the
Premises. If any such taxes are levied or assessed against Landlord or
Landlord's property and (i) Landlord pays the same or (ii) the assessed value
of Landlord's property is increased by inclusion of such personal property and
fixtures and Landlord pays the increased taxes, then Tenant shall pay to
Landlord, upon demand, the amount of such taxes.
6. PARKING. Landlord shall provide Tenant and its employees,
customers and licensees with the exclusive use of three hundred (300) parking
spaces (reduced by the number of spaces eliminated due to Tenant's use of any
proposed spaces for non-parking purposes) as designated by Landlord within the
Premises and the adjacent areas outlined on EXHIBIT "B" (the "Permitted Parking
Areas"), subject to all reasonable rules and regulations promulgated by
Landlord. Landlord shall not be responsible for enforcing Tenant's parking
rights against any third parties. If Tenant reasonably requires additional
parking spaces, then, within forty-five (45) days after written request from
Tenant, Landlord shall provide Tenant with such required parking spaces up to a
maximum of an additional fifty (50) parking spaces (i.e., a total of 350
parking spaces, reduced as provided above) within the Permitted Parking Areas.
Landlord shall construct gates limiting access from adjacent properties to the
driveway areas located within the Premises, as shown on EXHIBIT "B" attached
hereto. Tenant shall be provided with a key to such gates (Landlord and Tenant
being the only parties entitled to have a key thereto), and Tenant shall
provide access through such driveway areas to other lessees of the Project on
an "as needed" basis. If daily access to such
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driveway areas is required for such lessees (or if less than daily access is
required but average frequency exceeds ten (10) times per week), Landlord
shall, at no expense to Tenant, provide a guard service at such gates in order
to monitor and control such access (which in all events shall only be limited
access as required and not general through traffic access). Notwithstanding
the foregoing, Tenant shall in all events allow access to such driveways for
emergency vehicles.
7. SIGNS. Any signage Tenant desires for the Premises (excluding
signage provided for in Landlord's Final Plans or Tenant's Contract Documents
as reasonably approved by Landlord) shall be subject to Landlord's prior
written approval, which approval shall not be unreasonably withheld,
conditioned or delayed, and which approval shall not be withheld so long as
such signage proposed by Tenant is consistent in size, location and materials
as the signage originally approved in Landlord's Final Plans or Tenant's
Contract Documents. Except as provided for in Landlord's Final Plans or
Tenant's Contract Documents as approved by Landlord, Tenant shall be obligated
to reasonably repair, paint and/or replace the Building facia surface to which
its signs are attached upon Tenant's vacation of the Premises or the removal or
alteration of its signage. Tenant shall not, without Landlord's prior written
approval (which approval shall not be unreasonably withheld, conditioned or
delayed), (i) make any changes to the exterior of the Premises, (ii) install
any exterior lights, decorations, balloons, pennants, banners or painting, or
(iii) 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. All signs, decorations, advertising media, blinds,
draperies and other window treatment or bars or other security installations
visible from outside the Premises shall conform in all respects to reasonable
and uniformly enforced criteria established by Landlord or shall be otherwise
subject to Landlord's prior written approval, which approval shall not be
unreasonably withheld, conditioned or delayed.
8. UTILITIES. Landlord agrees to provide to the Premises running
water, sanitary sewer, gas and electricity service and telephone service
conduits and pull boxes from the boundary of the Property. Tenant shall pay
for all water, gas, heat, light, power, telephone, sewer, sprinkler charges and
other utilities and services used on or at the Premises, together with any
taxes, penalties, surcharges or the like pertaining to such services and
utilities used in connection with the Premises, and any maintenance charges for
utilities. Such services shall be separately metered as provided in the Work
Letter. Except as hereinafter expressly provided to the contrary, Landlord
shall not be liable for any interruption or failure of utility service on the
Premises and Tenant shall have no rights or claims as a result of any such
failure. However, notwithstanding the foregoing, if Tenant is prevented from
carrying on its normal business operations within the Premises as a direct
result of an interruption of any of the utilities serving the Premises that is
caused by either (i) damage to or failure of utility systems, pipes or
transmission lines that are controlled by Landlord and situated within the
Project, but outside of the Premises, or (ii) damage to utility systems, pipes
or transmission lines that are situated within the Project which is caused by
the negligence of Landlord or Landlord's employees or agents, then if such
interruption continues for ten (10) consecutive days after written notice of
the same to Landlord, Tenant's obligation for Base Rental shall be abated after
such ten day period until the cessation of such interruption (provided,
however, that if such interruption of utilities affects less than the entirety
of the Premises, then Tenant's obligation for Base Rental shall be abated only
by an amount equal to the product of (A) a fraction, the numerator of which is
the Rentable Area of the portion of the Premises in which Tenant is unable to
carry on its normal business operations and the denominator of which is the
Rentable Area of the Premises, and (B) the then applicable Base Rental). If
such interruption continues for thirty (30) consecutive days after written
notice of the same to Landlord, then Tenant may terminate this Lease upon
written notice to Landlord at any time before the cessation of such
interruption. To the extent of any conflict between this paragraph 8 and
paragraph 10, paragraph 10 shall control.
9. INSURANCE.
A. Landlord's Insurance. Subject to reimbursement under paragraph
2.B herein, Landlord shall maintain fire and extended coverage insurance
covering the Building and all alterations, additions and improvements thereto
not made by Tenant in an amount not less than ninety percent (90%) (or such
greater percentage as is necessary to comply with the coinsurance requirements
of any insurance policy) of the "replacement cost" thereof (as defined in the
Replacement Cost Endorsement to be attached to such policy), insuring against
the perils of, among other things, fire, lightning, vandalism and malicious
mischief.
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B. Tenant's Insurance. Tenant, at its own expense, shall maintain
during the term of this Lease a policy or policies of worker's compensation and
comprehensive general liability insurance, including personal injury and
property damage, with contractual liability endorsement, in the amount of Five
Hundred Thousand Dollars ($500,000.00) for property damage and One Million
Dollars ($1,000,000.00) per occurrence and Three Million Dollars
($3,000,000.00) in the aggregate for personal injuries or deaths of persons
occurring in or about the Premises in connection with Tenant's use or occupancy
thereof. Tenant, at its own expense, also shall maintain during the term of
this Lease, fire and extended coverage insurance covering not less than ninety
percent (90%) of the replacement cost (as defined in the Replacement Cost
Endorsement to be attached to such policy) of (i) all alterations, additions,
partitions and improvements installed or placed on the Premises by Tenant or by
Landlord on behalf of Tenant after Substantial Completion of Landlord's Work
and Tenant's Work and (ii) all of Tenant's personal property contained within
the Premises. Said policies shall (i) name Landlord as an additional insured
and insure Landlord's contingent liability under or in connection with this
Lease (except for the worker's compensation policy), (ii) be issued by an
insurance company which is acceptable to Landlord, and (iii) provide that said
insurance shall not be cancelled unless thirty (30) days prior written notice
has been given to Landlord. Said policy or policies or certificates thereof
shall be delivered to Landlord by Tenant on or before the Commencement Date and
upon each renewal of said insurance.
C. Prohibited Uses. Tenant will not permit the Premises to be used
for any purpose or in any manner that would (i) void the insurance thereon,
(ii) increase the insurance risk or cost thereof, or (iii) cause the
disallowance of any sprinkler credits; including without limitation, use of the
Premises for the receipt, storage or handling of any product, material or
merchandise that is explosive or highly inflammable, unless such use is
permitted under paragraph 13 hereof.
10. FIRE AND CASUALTY DAMAGE.
A. Total or Substantial Damage and Destruction. If the Premises or
the Building should be damaged or destroyed by fire or other peril, Tenant
shall immediately give written notice to Landlord of such damage or
destruction. If (i) the Premises or the Building should be totally destroyed
by any peril covered by the insurance to be provided by Landlord under
paragraph 9.A above, (ii) the Premises or the Building should be so damaged
thereby that, in Landlord's reasonable, good faith estimation, rebuilding or
repairs cannot be completed within two hundred seventy (270) days after the
date of such damage, or (iii) such damage or destruction occurs during the last
eighteen (18) months of the term of the Lease and Landlord makes a good faith
determination that it is impractical to rebuild or restore the Building and the
Premises, then Landlord may, at its option, terminate the Lease by notifying
Tenant in writing of such termination at any time prior to the forty-fifth
(45th) day after the date on which Landlord receives written notice from Tenant
of such damage or destruction, and the rent shall be abated during the
unexpired portion of this Lease effective upon the date of the occurrence of
such damage or destruction; provided, however, that Tenant, at its sole cost
and expense, shall have the option, but not the obligation, to restore the
Premises to substantially its previous condition, in which event this Lease
shall thereafter continue in full force and effect upon the same terms and
conditions as existed prior to the casualty (subject to a fair diminution of
rent during the time of such rebuilding or repairs to the extent the Premises
are unfit for Tenant's use thereof consistent with Tenant's use immediately
prior to such casualty), so long as (i) the damage or destruction did not occur
during the last eighteen (18) months of the term of the Lease and Landlord
makes a good faith determination that it is impractical to rebuild or restore
the Building and the Premises, (ii) Tenant's restoration work can be completed
within twelve (12) months of the date such casualty occurred and (iii) Tenant
notifies Landlord in writing of its intention to restore the Premises within
thirty (30) days of Landlord's aforesaid termination notice. If Landlord
elects to rebuild or repair such damage or destruction and such rebuilding and
repair cannot reasonably be completed within two hundred seventy (270) days
after Landlord's receipt of notice from Tenant of such damage or destruction,
Landlord shall notify Tenant of the number of days in which Landlord shall be
obligated to restore the Premises to substantially its previous condition,
during which period Landlord shall allow Tenant a fair diminution of rent to
the extent the Premises are unfit for Tenant's use thereof; provided, however,
Tenant may elect to terminate this Lease by delivering written notice of such
election to Landlord within thirty (30) days after Tenant receives such notice
from Landlord. If this Lease is terminated pursuant to this paragraph 10.A,
then Landlord shall promptly reimburse to Tenant any rent or other sums paid by
Tenant that relate to periods of time after the effective date of such
termination. If this Lease is
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terminated pursuant to this paragraph 10.A, Landlord shall promptly reimburse
to Tenant any rent or other sums paid by Tenant that relate to periods of time
after the effective date of such termination. For purposes of this paragraph
10, a "fair diminution of rent" shall mean a proportionate reduction of
Tenant's rent obligation based on the portion of the Rentable Area that is
rendered unusable as a result of the damage to the Premises until rebuilding
and repair of the damaged or destroyed portion of the Premises are
substantially completed.
B. Partial Damage or Destruction. If the Premises or the Building
should be damaged by any peril covered by the insurance to be provided by
Landlord under paragraph 9.A above and, in Landlord's reasonable, good faith
estimation, rebuilding or repairs can be substantially completed within two
hundred seventy (270) days after the date of such damage, then this Lease shall
not terminate and Landlord shall, with all reasonable dispatch but not longer
than two hundred seventy (270) days after the date of such damage, restore the
Premises to substantially its previous condition, except that Landlord shall
not be required to rebuild, repair or replace any part of the partitions,
fixtures, additions and other improvements that may have been constructed,
erected or installed in or about the Premises for the benefit of or by or for
Tenant after Substantial Completion of Landlord's Work and Tenant's Work.
Landlord shall allow Tenant a fair diminution of rent during the time of such
rebuilding or repairs to the extent the Premises are unfit for Tenant's use
thereof.
C. Lienholders' Rights in Proceeds. Notwithstanding anything herein
to the contrary, in the event the holder of any indebtedness secured by a
mortgage or deed of trust covering the Premises requires that the insurance
proceeds be applied to such indebtedness, then Landlord shall have the right to
terminate this Lease by delivering written notice of termination to Tenant
within fifteen (15) days after such requirement is made known to Landlord by
any such holder, whereupon all rights and obligations hereunder shall cease and
terminate; provided that Tenant shall continue to have the option, but not the
obligation, to restore the Premises under the terms set forth in paragraph
10.A. Landlord shall provide Tenant with a copy of any such mortgage or deed
of trust instrument and related relevant documentation created after the date
hereof.
D. Waiver of Subrogation. Notwithstanding anything in this Lease to
the contrary, Landlord and Tenant hereby waive and release each other of and
from any and all rights of recovery, claims, actions or causes of action
against each other, or their respective agents, officers and employees, for any
loss or damage that may occur to the Premises, improvements to the Building or
personal property and Building contents within the Building and/or Premises,
for any reason regardless of cause or origin, including, without limitation,
the negligence or fault of the other party to the extent insurance coverage
exists for such loss or damage or would exist if such other party were in full
compliance with its insurance obligations under paragraph 9 hereof. Each party
to this Lease agrees immediately after execution of this Lease to give written
notice of the terms of the mutual waivers contained in this subparagraph to
each insurance company that has issued to such party policies of fire and
extended coverage insurance and, if necessary, to have the insurance policies
properly endorsed to provide that the carriers of such policies waive all
rights of recovery under subrogation or otherwise against the other party.
E. Substantial Completion of Restoration Work. For purposes of this
paragraph 10, Landlord's rebuilding and repairs shall be considered
"substantially complete" when Landlord has restored the damaged or destroyed
portion of the Premises to substantially the same condition as existed
immediately before the happening of the casualty and to such a degree as to
allow Tenant to fully use the Premises as permitted under this Lease, subject
to Landlord's completion of Punchlist Items and Tenant's completion of Tenant's
required repairs hereunder.
F. Tenant's Rights. If Landlord fails to substantially complete the
rebuilding and repair of the Premises within two hundred seventy (270) days as
required by paragraph 10.B above or such other period as may be specified in
the notice from Landlord to Tenant pursuant to paragraph 10.A above, as
applicable, then this Lease shall terminate thirty (30) days after Landlord
receives written notice, if any, from Tenant that Tenant has elected to
terminate this Lease pursuant to this paragraph 10.F; provided that, if
Landlord substantially completes such rebuilding and repairs prior to the
expiration of thirty (30) days following Landlord's receipt of Tenant's
termination notice, this Lease shall not so terminate and shall continue in
full force and effect.
11. LIABILITY AND INDEMNIFICATION. Except for any claims, rights of
recovery and causes of action that Landlord has released, and except for those
matters for which Landlord is obligated to indemnify
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Tenant pursuant to the Work Letter and this Lease, Tenant shall hold Landlord
harmless from and defend Landlord against any and all claims or liability (i)
for any injury or damage to any person or property whatsoever occurring in, on
or about the Premises or any part thereof, the Building and/or other common
areas, the use of which Tenant may have in accordance with this Lease, if (and
only if) such injury or damage shall be caused primarily by the act, neglect,
fault or omission of any duty by Tenant, its agents, servants, employees or
invitees, (ii) arising primarily from the conduct or management of any work
done by the Tenant in or about the Premises, (iii) arising primarily from
transactions of the Tenant, and (iv) for all costs, reasonable counsel fees,
expenses and liabilities incurred in connection with any such claim or action
or proceeding brought thereon. The provisions of this paragraph 11 shall
survive the expiration or termination of this Lease. Landlord shall not be
liable in any event for personal injury or loss of Tenant's property caused by
fire, flood, water leaks, rain, hail, ice, snow, smoke, lightning, wind,
explosion, interruption of utilities or other occurrences unless due to the
gross negligence or willful misconduct of Landlord. Tenant shall give prompt
notice to Landlord of any significant accidents known to Tenant involving
injury to persons or property. Furthermore, Landlord shall not be responsible
for lost or stolen personal property, equipment, money or jewelry from the
Premises or from the public areas of the Building or the Project, regardless of
whether such loss occurs when the area is locked against entry, unless such
loss is due to the gross negligence or willful misconduct of Landlord. Unless
otherwise expressly provided in this Lease, Landlord shall not be liable to
Tenant or Tenant's employees, customers or invitees for any damages or losses
to persons or property caused by any lessees in the Building or the Project, or
for any damages or losses caused by theft, burglary, assault, vandalism or
other crimes. Landlord strongly recommends that Tenant provide its own
security systems and services and secure Tenant's own insurance in excess of
the amounts required elsewhere in this Lease, to protect against the above
occurrences if Tenant desires additional protection or coverage for such risks.
Tenant shall give Landlord prompt notice of any criminal or suspicious conduct
known to Tenant within or about the Premises, the Building or the Project,
and/or any personal injury or property damage caused thereby. Landlord may,
but is not obligated to, enter into agreements with third parties for the
provision, monitoring, maintenance and repair of any courtesy patrols or
similar services or fire protective systems and equipment and, to the extent
same is provided in Landlord's sole discretion, Landlord shall not be liable to
Tenant for any damages, costs or expenses which occur for any reason (unless
due to the gross negligence or willful misconduct of Landlord) in the event any
such system or equipment is not properly installed, monitored or maintained or
any such services are not properly provided. Landlord shall use reasonable
diligence in the maintenance of existing lighting, if any, in the parking
garage or parking areas servicing the Premises, and Landlord shall not be
responsible for additional lighting or any security measures in the Project,
the Premises or the parking areas.
12. USE. The Premises shall be used and occupied by Tenant during
the term of this Lease for the purpose of conducting a manufacturing and
assembly services facility, with, at Tenant's option, attendant office areas
and dining amenities, and for receiving, storing, shipping and selling (other
than retail) products, materials and merchandise made and/or distributed by
Tenant, and for research and development and general office purposes, and for
no other purpose or use without the prior written consent of Landlord, which
consent shall not be unreasonably withheld, conditioned or delayed. Tenant
shall comply with all governmental laws, ordinances and regulations applicable
to the use of the Premises, and shall promptly comply with all governmental
orders and directives for the correction, prevention and abatement of nuisances
in or upon or connected with the Premises and arising out of Tenant's use
thereof, all at Tenant's sole expense. Tenant shall not take any action that
would constitute a nuisance or would unreasonably interfere with or endanger
Landlord or any other lessees of the Project.
13. HAZARDOUS WASTE. The term "Hazardous Substances," as used in
this Lease, shall mean pollutants, contaminants, toxic or hazardous wastes,
radioactive materials or any other substances, the use and/or the removal of
which is required or the use of which is restricted, prohibited or penalized by
any "Environmental Law," which term shall mean any currently effective federal,
state or local statute, ordinance, regulation or other law of a governmental or
quasi-governmental authority relating to pollution or protection of the
environment or the regulation of the storage or handling of Hazardous
Substances. Tenant hereby agrees that: (i) no activity will be conducted on
the Premises that will produce any Hazardous Substance, except for such
activities that are part of the ordinary course of Tenant's business activities
(the "Permitted Activities"), provided said Permitted Activities are conducted
in accordance with all Environmental Laws and have been approved in advance in
writing by Landlord, which approval shall not be unreasonably withheld,
conditioned or delayed, and, in connection therewith, Tenant shall be
responsible for obtaining any required permits or authorizations and paying any
fees and providing any testing required by any
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governmental agency; (ii) the Premises will not be used in any manner for the
storage of any Hazardous Substances, except for the temporary storage of such
materials that are used in the ordinary course of Tenant's business (the
"Permitted Materials"), provided such Permitted Materials are properly stored
in a manner and location meeting all Environmental Laws and have been approved
in advance in writing by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed, and, in connection therewith, Tenant shall be
responsible for obtaining any required permits or authorizations and paying any
fees and providing any testing required by any governmental agency; (iii) no
portion of the Premises will be used as a landfill or a dump; (iv) Tenant will
not install any underground tanks of any type; (v) Tenant will not allow any
surface or subsurface conditions to exist or come into existence that
constitute, or with the passage of time may constitute, a public or private
nuisance; (vi) Tenant will not permit any Hazardous Substances to be brought
onto the Premises, except for the Permitted Materials, and if so brought or
found located thereon, the same shall be immediately removed, with proper
disposal, and all required clean-up procedures shall be diligently undertaken
by Tenant at its sole cost pursuant to all Environmental Laws. Landlord hereby
consents to Tenant's use, storage and disposal of the substances listed on the
attached EXHIBIT "E" and agrees that such substances are additional "Permitted
Materials" as such term is used herein, provided that Tenant comply with the
terms of this paragraph 13 in the storage, use and disposal of such additional
Permitted Materials. Landlord and Landlord's representatives shall have the
right but not the obligation to enter the Premises pursuant to the terms of
paragraph 14 for the purpose of inspecting the storage, use and disposal of any
Permitted Materials to ensure compliance with all Environmental Laws. Should
it be determined, in Landlord's reasonable, good faith opinion, that any
Permitted Materials are being improperly stored, used or disposed of, then
Tenant shall immediately take such corrective action as reasonably requested by
Landlord. Should Tenant fail to commence such corrective action within
twenty-four (24) hours of Landlord's request to Tenant to do so and thereafter
diligently prosecute the same to completion, Landlord shall have the right to
perform such work and Tenant shall reimburse Landlord, on demand, for any and
all reasonable costs associated with said work. If at any time during or after
the term of this Lease, the Premises is found to be contaminated with Hazardous
Substances in violation of Environmental Law, Tenant shall diligently institute
proper and thorough clean-up procedures, at Tenant's sole cost, but only to the
extent such contamination was caused by Tenant or arose out of Tenant's use or
occupancy of the Premises. Tenant agrees to indemnify and hold Landlord
harmless from all claims, demands, actions, liabilities, costs, expenses,
damages, penalties and obligations of any nature arising from or as a result of
any contamination of the Premises with Hazardous Substances arising from the
use of the Premises by Tenant, but excluding any such contamination caused by
the activities of third parties not within Tenant's reasonable control.
Landlord shall indemnify, defend and hold harmless Tenant from and against any
and all claims, demands, actions, liabilities, costs, expenses, damages,
penalties and obligations of any nature arising from or as a result of any
contamination of the Project, the Building or the Premises with Hazardous
Substances existing prior to the date Tenant occupies the Premises and any such
contamination caused by the acts or omissions of Landlord, its employees,
agents and contractors. The foregoing indemnifications, and the other
responsibilities of Tenant and Landlord under this paragraph 13, shall survive
the termination or expiration of this Lease.
14. INSPECTION. After at least one (1) business day's prior written
notice to Tenant (or without prior notice, if under emergency circumstances),
Landlord's agents and representatives shall have the right to enter the
Premises at any reasonable time during business hours (or at any time in case
of emergency) (i) to inspect the Premises; (ii) to make such repairs as may be
required or permitted pursuant to this Lease; and/or (iii) during the last six
(6) months of the Lease term, for the purpose of showing the Premises to
prospective tenants, purchasers or lenders. In addition, Landlord shall have
the right to erect a suitable sign (subject to Tenant's prior written and
reasonable approval) on the Premises stating the Premises are available for
lease during the last six (6) months of the term of this Lease. Landlord shall
(i) make a good faith effort to minimize disruption to Tenant's business
operations when exercising its rights pursuant to this paragraph 14 and (ii)
reasonably cooperate with Tenant for purposes of exercising its right of entry
into the Premises in accordance with such reasonable security procedures as
Tenant may implement from time to time. Except under emergency circumstances
(which shall mean circumstances that pose an immediate threat to the safety of
any person or material damage to property), Tenant may require that a
representative of Tenant accompany Landlord on any such entry and inspection.
Tenant shall notify Landlord in writing at least thirty (30) days prior to
vacating the Premises and shall arrange to meet with Landlord for a joint
inspection of the Premises prior to vacating. If Tenant fails to give such
notice or to arrange for such inspection, then Landlord's inspection of the
Premises shall be deemed correct for the purpose of determining Tenant's
responsibility for repairs and restoration of the Premises, so long as
Landlord's inspection is reasonable and done in good faith.
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15. ASSIGNMENT AND SUBLETTING. Tenant shall not have the right to
sublet, assign or otherwise transfer or encumber this Lease, or any interest
therein, without the prior written consent of Landlord, which consent shall not
be unreasonably withheld, conditioned or delayed. Notwithstanding the
foregoing, Tenant shall have the right, without Landlord's prior written
consent, to sublease up to fifteen percent (15%) of the Rentable Area of the
Premises for purposes related to Tenant's business in the Premises, provided
that space subleased shall not have a separate external entrance. In the event
of a proposed sublease or assignment requiring Landlord's consent under this
paragraph 15, Landlord shall have the option (to be exercised within thirty
(30) days from submission of Tenant's written request) to cancel this Lease (i)
as to all of the Premises if Tenant proposes to assign this Lease or sublease
seventy-five percent (75%) or more of the Premises or (ii) as to the portion of
the Premises proposed to be sublet if Tenant proposes to sublet less than
seventy-five percent (75%) of the Premises. Any attempted assignment,
subletting, transfer or encumbrance by Tenant in violation of the terms and
covenants of this paragraph 15 shall be void. No assignment, subletting or
other transfer, whether or not consented to by Landlord or permitted hereunder,
shall relieve Tenant of its liability under this Lease. If an Event of Default
occurs while the Premises or any part thereof are assigned or sublet, then
Landlord, in addition to any other remedies herein provided or provided by law,
may collect directly from the assignee or sublessee all rents payable to the
Tenant and apply such rent against any sums due Landlord hereunder. No such
collection shall be construed to constitute a novation or a release of Tenant
from the further performance of Tenant's obligations hereunder. The following
shall additionally constitute an assignment of this Lease by Tenant for the
purposes of this paragraph 15: (i) the sale, transfer, exchange, liquidation
or other distribution of more than fifty percent (50%) of Tenant's assets
(other than this Lease) which is not in the ordinary course of Tenant's
business; or (ii) the mortgage, pledge, hypothecation or other encumbrance of
or grant of a security interest by Tenant in this Lease, or of any of Tenant's
rights hereunder. Notwithstanding any other provision in this Lease to the
contrary, Landlord's consent shall not be required for (i) any assignment of
this Lease or any sublease of all or any portion of the Premises to an
affiliate of Tenant, provided that Tenant provides Landlord with written notice
thereof no less than fifteen (15) days prior to the effective date or
commencement of such assignment or sublease, or (ii) Tenant's reincorporation
in another state. For purposes of this paragraph 15, an "affiliate" means any
partnership, association or corporation or other entity at least fifty-one
percent (51%) of the legal and equitable ownership interest of which is owned
by, or under common ownership with, Tenant.
16. CONDEMNATION. If all or substantially all of the Premises are
taken for any public or quasi-public use under governmental law, ordinance or
regulation, or by right of eminent domain or private purchase in lieu thereof,
then this Lease shall terminate and the rent shall be abated during the
unexpired portion of this Lease, effective on the date of such taking. If less
than all or substantially all of the Premises are taken for any public or
quasi-public use under any governmental law, ordinance or regulation, or by
right of eminent domain or private purchase in lieu thereof and if the taking
does not prevent or materially interfere with the use of the remainder of the
Premises for the purpose for which they were leased to Tenant, then this Lease
shall not terminate, but Tenant shall receive a fair diminution of rent. If
less than all or substantially all of the Premises are taken for any public or
quasi-public use under any governmental law, ordinance or regulation, or by
right of eminent domain or private purchase in lieu thereof, and such taking
prevents or materially interferes with the use of the remainder of the Premises
for the purpose for which they were leased to Tenant, then this Lease, at the
option of Tenant, exercised by written notice to Landlord within thirty (30)
days after such taking, shall terminate and the rent shall be abated during the
unexpired portion of this Lease, effective on the date of such taking. If this
Lease does not terminate, then this Lease will continue and Landlord will
promptly restore the Premises to substantially its previous condition, to the
extent reasonably possible under the circumstances, and allow Tenant a fair
diminution of rent. For purposes of this paragraph 16, a "fair diminution of
rent" shall mean a proportionate reduction of Tenant's rent obligation based on
the portion of the Rentable Area that is subject to the taking or that is
rendered unusable as a result of the taking. If this Lease terminates pursuant
to this paragraph 16, Landlord shall promptly reimburse to Tenant any rent or
other sums paid by Tenant that relate to periods of time after the effective
date of such termination. All compensation awarded in connection with or as a
result of any of the foregoing proceedings shall be the property of Landlord,
and Tenant hereby assigns any interest in any such award to Landlord; provided,
however, Landlord shall have no interest in any separate award made to Tenant
for loss of business or goodwill, for the taking of Tenant's trade fixtures,
personal property and unamortized leasehold improvements, or relating solely to
Tenant's statutory right of compensation for its moving expenses. Nothing
herein shall prevent Tenant's pursuit of such separate award for the foregoing
items.
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17. HOLDING OVER. At the termination of this Lease by its expiration
or otherwise, Tenant shall immediately deliver possession of the Premises to
Landlord with all repairs and maintenance required herein to be performed by
Tenant completed. If, for any reason, Tenant retains possession of the
Premises after the expiration or termination of this Lease, unless the parties
hereto otherwise agree in writing, such possession shall be deemed to be a
tenancy at will only, and all of the other terms and provisions of this Lease
shall be applicable during such period, except that Tenant shall pay Landlord
from time to time, upon demand, as rental for the period of such possession, an
amount equal to one and one-half times the rent in effect on the date of such
termination of this Lease, computed on a daily basis for each day of such
period. No holding over by Tenant, whether with or without consent of
Landlord, shall operate to extend this Lease except as otherwise expressly
provided. The preceding provisions of this paragraph 17 shall not be construed
as consent for Tenant to retain possession of the Premises in the absence of
written consent thereto by Landlord.
18. QUIET ENJOYMENT. Landlord represents that it has the authority
to enter into this Lease and that, so long as Tenant pays all amounts due
hereunder and is not in default under all other covenants and agreements herein
set forth (after lapse of any applicable notice and cure periods), Tenant shall
peaceably and quietly have, hold and enjoy the Premises for the term hereof
without hindrance or molestation from Landlord or any party claiming by,
through or under Landlord, subject to the terms and provisions of this Lease.
19. EVENTS OF DEFAULT. The following events (herein individually
referred to as an "Event of Default") each shall be deemed to be a default in
or breach of Tenant's obligations under this Lease:
A. Tenant shall fail to pay any installment of the rent herein
reserved when due, or any other payment or reimbursement to Landlord required
herein when due, and such failure shall continue for a period of ten (10) after
the date Tenant receives written notice thereof from Landlord; provided,
however, Landlord shall be obligated to provide such notice to Tenant, and
Tenant shall have the benefit of such 10-day notice and grace period, only
twice during any twelve-month period.
B. Tenant shall fail to discharge, bond around or otherwise dispose
of any lien placed upon the Premises in violation of paragraph 22 hereof within
thirty (30) days after Tenant receives written notice from Landlord that any
such lien or encumbrance has been filed against the Premises; provided,
however, Tenant may contest such lien as provided in paragraph 22.
C. Tenant shall default in the performance of any of its obligations
under any other lease to Tenant from Landlord, and same shall remain uncured
after the lapsing of any applicable cure periods provided for under such other
lease.
D. Tenant shall fail to comply with any term, provision or covenant
of this Lease (other than those listed above in this paragraph), and shall not
cure such failure within thirty (30) days after written notice thereof from
Landlord; provided, however, if such failure may not reasonably be cured within
such 30-day period, then Tenant shall have such additional time as may be
necessary to cure such failure so long as Tenant promptly commenced such cure
and diligently prosecutes it to completion.
20. REMEDIES. Upon each occurrence of an Event of Default, Landlord
shall have the option to pursue any one or more of the following remedies
without any notice or demand, except as otherwise indicated:
(a) Terminate this Lease by giving Tenant written notice
thereof;
(b) Enter upon and take possession of the premises without
terminating this Lease, accompanied by written notice to Tenant thereof;
(c) Make such payments and/or take such reasonable action and
pay and/or perform whatever Tenant is obligated to pay or perform under the
terms of this Lease, and Tenant agrees that Landlord shall not be liable for
any damages resulting to Tenant from such action, unless taken in bad faith;
and/or
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(d) In the case of an Event of Default under paragraph 19A
above, alter all locks and other security devices at the Premises, with or
without terminating this Lease, and pursue, at Landlord's option, one or more
remedies pursuant to this Lease, and Tenant hereby expressly agrees that
Landlord shall not be required to provide to Tenant the new key to the
Premises, regardless of hour, including Tenant's regular business hours;
provided that Landlord shall give Tenant notice of from whom, on a 24-hour
basis, Tenant may obtain a new key to the Premises upon payment in full by
Tenant of all past due amounts then owing under this Lease;
and in any such event Tenant shall immediately vacate the Premises, and if
Tenant fails so to do, Landlord, without waiving any other remedy it may have,
may, to the maximum extent permitted by law and without breaching the peace,
enter upon and take possession of the Premises and expel or remove Tenant and
any other person who may be occupying such Premises or any part thereof,
without being liable for prosecution or any claim of damages therefor, except
as otherwise provided by applicable law.
A. Damages Upon Termination. If Landlord terminates this Lease, at
Landlord's option, Tenant shall be liable for and shall pay to Landlord the sum
of all rental and other payments owed to Landlord hereunder accrued to the date
of such termination, plus, as liquidated damages, an amount equal to (1) the
present value of the total rental and other payments owed hereunder for the
remaining portion of the Lease term discounted at the rate of eight percent
(8%) per annum, calculated as if such term expired on the date set forth in
paragraph 1, less (2) the present value of the then fair market rental for the
Premises for such period discounted at the rate of eight percent (8%) per
annum.
B. Damages Upon Repossession. If Landlord repossesses the Premises
without terminating this Lease, Tenant, at Landlord's option, shall be liable
for and shall pay Landlord on demand all rental and other payments owed to
Landlord hereunder, accrued to the date of such repossession, plus all amounts
required to be paid from time to time by Tenant to Landlord until the date of
expiration of the term as stated in paragraph 1, diminished by all amounts
actually received by Landlord through reletting the Premises during such
remaining term (but Tenant shall have no claim in any amounts received by
Landlord in excess of rental and other payments owed to Landlord hereunder).
Actions to collect amounts due by Tenant to Landlord under this paragraph 20B
may be brought when such amounts become due, without the necessity of
Landlord's waiting until expiration of the Lease term.
C. Costs of Reletting, Removing, Repairs and Enforcement. Upon an
Event of Default, in addition to any sum provided to be paid under this
paragraph 20, Tenant also shall be liable for and shall pay to Landlord (i)
reasonable brokers' fees and all other reasonable costs and expenses incurred
by Landlord in connection with reletting the whole or any part of the Premises;
(ii) the reasonable costs of removing, storing or disposing Tenant's or any
other occupant's property; (iii) the reasonable costs of repairing, altering,
remodeling or otherwise putting the Premises into condition acceptable to a new
Tenant or Tenants; (iv) any and all reasonable costs and expenses incurred by
Landlord in effecting compliance with Tenant's obligations under this Lease;
and (v) all reasonable expenses incurred by Landlord in enforcing or defending
Landlord's rights and/or remedies hereunder, including without limitation, all
reasonable attorneys' fees and all court costs incurred in connection with such
enforcement or defense.
D. Late Charge. In the event Tenant fails to make any payment due
hereunder within ten (10) days after the date Tenant receives written notice
thereof from Landlord, including without limitation any rental or escrow
payment, in order to help defray the additional cost to Landlord for processing
such late payments and not as interest, Tenant shall pay to Landlord a late
charge in an amount equal to five percent (5%) of such payment; provided,
however, Landlord shall be obligated to provide such notice to Tenant, and
Tenant shall have the benefit of such 10-day notice and grace period, only
twice during any twelve-month period. 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 liquidated damages or as limiting Landlord's
remedies in any manner.
E. Interest on Past Due Amounts. If Tenant fails to pay any sum
which at any time becomes due to Landlord under any provision of this Lease as
and when the same becomes due hereunder, and such failure continues for sixty
(60) days after the due date for such payment, then Tenant shall pay to
Landlord interest on such overdue
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amounts from the date due until paid at an annual rate which equals the lesser
of (i) fourteen percent (14%) or (ii) the highest rate then permitted by law.
F. No Implied Acceptances or Waivers. Exercise by Landlord of any
one or more remedies hereunder granted or otherwise available shall not be
deemed to be an acceptance by Landlord of Tenant's surrender of the Premises,
it being understood that such surrender can be effected only by the written
agreement of Landlord. Tenant and Landlord further agree that forbearance by
Landlord to enforce any of its rights under this Lease or at law or in equity
shall not be a waiver of Landlord's right to enforce any one or more of its
rights, including any right previously forborne, in connection with any
existing or subsequent default. No re-entry or taking possession of the
Premises by Landlord shall be construed as an election on its part to terminate
this Lease, unless a written notice of such intention is given to Tenant, and,
notwithstanding any such reletting or re-entry or taking possession of the
Premises, Landlord may at any time thereafter elect to terminate this Lease for
a previous default. Pursuit of any remedies hereunder shall not preclude the
pursuit of any other remedy herein provided or any other remedies provided by
law, nor shall pursuit of any remedy herein provided constitute a forfeiture or
waiver of any rent due to Landlord hereunder or of any damages occurring to
Landlord by reason of the violation of any of the terms, provisions and
covenants contained in this Lease. Landlord's acceptance of any rent following
an Event of Default hereunder shall not be construed as Landlord's waiver of
such Event of Default. No waiver by Landlord of any violation or breach of any
of the terms, provisions and covenants of this Lease shall be deemed or
construed to constitute a waiver of any other violation or default.
Notwithstanding anything to the contrary in the foregoing, no violation or
breach of this Lease which has been waived by Landlord or for which Landlord
has forborne its enforcement rights shall constitute an Event of Default,
provided any conditions to such waiver or forbearance have been satisfied.
G. Reletting of Premises. In the event of any termination of this
Lease and/or repossession of the Premises for an Event of Default, Landlord
shall use reasonable efforts to relet the Premises and to collect rental after
reletting, with no obligation to accept any lessee that Landlord deems
undesirable or to expend any funds in connection with such reletting or
collection of rents therefrom. Tenant shall not be entitled to credit for or
reimbursement of any proceeds of such reletting in excess of the rental and
other amounts owed hereunder for the period of such reletting. Landlord may
relet the whole or any portion of the Premises for any period, to any Tenant
and for any use or purpose.
H. Landlord's Default. If Landlord fails to comply with or observe
any agreement or perform any of its obligations hereunder within thirty (30)
days after written notice from Tenant specifying such failure (unless such
failure cannot reasonably be cured within such 30-day period and Landlord
commences to cure such failure within such 30-day period and thereafter
continuously and diligently pursues such cure to completion or unless another
time period for such cure is expressly provided for elsewhere in this Lease),
then Tenant's exclusive remedies shall be an action for damages, an action for
specific performance and any other relief expressly granted to Tenant under any
other provision of this Lease. No waiver by Tenant of any violation or breach
of any of the terms contained in this Lease shall waive Tenant's rights
regarding any future violation of such term or violation of any other term.
Unless and until Landlord fails to so cure any default after such notice,
Tenant shall not have any remedy or cause of action by reason thereof. All
obligations of Landlord hereunder will be construed as covenants, not
conditions; and all such obligations will be binding upon Landlord only during
the period of its possession of the Premises and not thereafter. In the event
of the transfer by Landlord of its interest in the Premises, Landlord shall
thereupon be released and discharged from all covenants and obligations of the
Landlord thereafter accruing, provided, however, that (i) Landlord's transferee
must first assume in writing (a copy of which must be delivered to Tenant) all
obligations of Landlord thereafter arising under this Lease, and (ii) Landlord
shall remain liable for all obligations under this Lease arising from or
relating to the period preceding such transfer. Notwithstanding any other
provision of this Lease, Landlord shall not have any personal liability
hereunder. In the event of any breach or default by Landlord in any term or
provision of this Lease, Tenant agrees to look solely to the equity or interest
then owned by Landlord in the Premises or the Building; however, in no event,
shall any deficiency judgment or any money judgment of any kind be sought or
obtained against any Landlord.
I. Tenant's Personal Property. If Landlord repossesses the Premises
pursuant to the authority herein granted, or if Tenant vacates or abandons all
or any part of the Premises, then, in addition to Landlord's rights under
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paragraph 26 hereof, Landlord shall have the right to remove and store, all of
the furniture, fixtures and equipment at the Premises, including that which is
owned by or leased to Tenant, at all times prior to any foreclosure thereon by
Landlord or repossession thereof by any lessor thereof or third party having a
lien thereon. In addition to the Landlord's other rights hereunder, Landlord
may dispose of the stored property if Tenant does not claim the property within
thirty (30) days after the date the property is stored. Landlord shall give
Tenant at least thirty (30) days prior written notice of such intended
disposition. Landlord shall also have the right to relinquish possession of
all or any portion of such furniture, fixtures, equipment and other property to
any person ("Claimant") who presents to Landlord a copy of any instrument
represented by Claimant to have been executed by Tenant (or any predecessor of
Tenant) granting Claimant the right under various circumstances to take
possession of such furniture, fixtures, equipment or other property, without
the necessity on the part of Landlord to inquire into the authenticity or
legality of said instrument. The rights of Landlord herein stated shall be in
addition to any and all other rights that Landlord has or may hereafter have at
law or in equity; and Tenant stipulates and agrees that the rights granted
Landlord under this paragraph 20 are commercially reasonable. Landlord hereby
waives and disclaims all statutory, contractual and other Landlord's liens and
security interests relating to Tenant's obligations under this Lease.
J. Abandonment of Premises. If Tenant vacates or abandons all or
substantially all of the Premises for a period of ninety (90) or more
consecutive days, then Landlord shall have the right and option to terminate
this Lease upon written notice to Tenant at any time after the expiration of
such 90-day period and prior to the date on which Tenant re-occupies the
Premises.
21. MORTGAGES. Tenant accepts this Lease subject and subordinate to
any mortgages and/or deeds of trust now or at any time hereafter constituting a
lien or charge upon the Premises or the improvements situated thereon or the
Building, provided, however, that if the mortgagee, trustee or holder of any
such mortgage or deed of trust elects to have Tenant's interest in this Lease
superior to any such instrument, then by notice to Tenant from such mortgagee,
trustee or holder, this Lease shall be deemed superior to such lien, whether
this Lease was executed before or after said mortgage or deed of trust.
Tenant, at any time hereafter on demand, shall execute any instruments,
releases or other documents that may be required by any mortgagee for the
purpose of subjecting and subordinating this Lease to the lien of any such
mortgage; provided that (i) such instruments, releases or other documents shall
contain a written agreement that, in the event of a foreclosure sale or
conveyance in lieu of foreclosure, the purchaser at foreclosure shall not
disturb Tenant's possession of the Premises and shall recognize Tenant's rights
under the Lease so long as Tenant is not in default under the Lease (or the
holder of such mortgage has delivered such non-disturbance agreement to Tenant
in a separate instrument), (ii) such instruments, releases or other documents
shall not modify the terms of the Lease or increase Tenant's obligations or
liabilities under the Lease and (iii) so long as Landlord is not in default
under such Mortgage and Tenant is not in default under the Lease, such
instrument will provide that insurance proceeds will be applied to restoration
of the Premises as required under this Lease. Tenant shall not terminate this
Lease or pursue any other remedy available to Tenant hereunder for any default
on the part of Landlord without first giving written notice by certified or
registered mail, return receipt requested, to any mortgagee, trustee or holder
of any such mortgage or deed of trust, the name and post office address of
which Tenant has received written notice, specifying the default in reasonable
detail and affording such mortgagee, trustee or holder the same opportunity
given to Landlord hereunder to make performance, at its election, for and on
behalf of Landlord.
22. MECHANIC'S LIENS. Tenant has no authority, express or implied,
to create or place any lien or encumbrance of any kind or nature whatsoever
upon, or in any manner to bind the interest of Landlord or Tenant in the
Premises. Tenant will save and hold Landlord harmless from any and all loss,
cost or expense, including without limitation attorneys' fees, based on or
arising out of asserted claims or liens against the leasehold estate or against
the right, title and interest of the Landlord in the Premises or under the
terms of this Lease. Tenant shall have the right to contest in good faith the
validity or existence of any such lien by appropriate procedures, provided that
Tenant shall bond around or otherwise dispose of such lien within thirty (30)
days after Tenant receives written notice from Landlord that such lien has been
filed against the Premises.
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23. MISCELLANEOUS.
A. Interpretation. 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. Unless the context otherwise requires, when used
in this Lease words of any gender contain the other gender, words in the
singular include the plural, words in the plural include the singular, and
words such as, "without limitation", "herein" and "hereof" refer to this Lease,
in its entirety (including the Exhibits attached to this Lease) or as
expressly limited in connection with the use of such words.
B. Binding Effect. Except as otherwise herein expressly provided,
the terms, provisions and covenants and conditions in this Lease shall apply
to, inure to the benefit of and be binding upon the parties hereto and upon
their respective heirs, executors, personal representatives, legal
representatives, successors and assigns. Landlord shall have the right to
transfer and assign, in whole or in part, its rights and obligations in the
Premises and in the Building and other property that are the subject of this
Lease.
C. Evidence of Authority. Tenant and Landlord agree to furnish to
the other, promptly upon demand, a corporate resolution, proof of due
authorization by partners or other appropriate documentation evidencing the due
authorization of such party to enter into this Lease.
D. Force Majeure. Except as otherwise expressly provided in the
Work Letter, whenever a period of time is herein prescribed for action to be
taken by either Landlord or Tenant, other than for obligations which can be
cured by the payment of money (e.g., maintaining insurance or payment of rent),
if the performance by Landlord or Tenant of its obligations hereunder is
delayed or prevented by material shortages, acts of God, labor disputes or
other events beyond the control of Landlord or Tenant, then the period for
performance by Landlord or Tenant shall be automatically extended for the same
amount of time that Landlord or Tenant has been so delayed or hindered.
E. Payments Constitute Rent. Notwithstanding anything in this Lease
to the contrary, all amounts payable by Tenant to or on behalf of Landlord
under this Lease, whether or not expressly denominated as rent, shall
constitute rent.
F. Estoppel Certificates. Landlord and Tenant agree, from time to
time, within ten (10) business days after written request of the other party,
to deliver to the other party or such party's designee, an estoppel certificate
stating whether this Lease is in full force and effect, the date to which rent
has been paid, the unexpired term of this Lease, any defaults existing under
this Lease (or the absence thereof) and such other factual or legal matters
pertaining to this Lease as may be reasonably requested by the requesting
party.
G. Entire Agreement. This Lease constitutes the entire
understanding and agreement of Landlord and Tenant with respect to the subject
matter of this Lease, and contains all of the covenants and agreements of
Landlord and Tenant with respect thereto. Landlord and Tenant each acknowledge
that no representations, inducements, promises or agreements, oral or written,
have been made by Landlord or Tenant, or anyone acting on behalf of Landlord or
Tenant, which are not contained herein, and any prior agreements, promises,
negotiations or representations not expressly set forth in this Lease are of no
force or effect. THIS LEASE, INCLUDING ONLY THE EXHIBITS ATTACHED HERETO,
EMBODIES THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND SUPERSEDES ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS, INCLUDING ANY LETTERS OF INTENT, IF ANY,
RELATING TO THE SUBJECT MATTER HEREOF. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
HEREIN, LANDLORD HAS NOT MADE, AND TENANT MAY NOT RELY ON, ANY REPRESENTATIONS
OR WARRANTIES WITH REGARD TO THE BUILDING, PREMISES OR OTHERWISE, EXPRESSED OR
IMPLIED. IN PARTICULAR, LANDLORD HAS NOT AUTHORIZED ANY AGENT OR BROKER TO
MAKE A REPRESENTATION OR WARRANTY IN ADDITION TO OR INCONSISTENT WITH THE TERMS
OF THIS LEASE AND TENANT MAY NOT RELY ON ANY SUCH ADDITIONAL OR INCONSISTENT
REPRESENTATION OR WARRANTY. Landlord's agents and employees do not and will not
have authority to make exceptions, changes or amendments to this Lease, or
factual representations not expressly contained in this Lease. Under no
circumstances shall Landlord or Tenant be considered an agent of the other.
This Lease may not be altered, changed or amended except by an instrument in
writing signed by both parties hereto. Notwithstanding the foregoing, Landlord
and Tenant acknowledge their execution of that certain Escrow Agreement of even
date herewith relating to a prior lease by Tenant of other space in Xxxxxx
County, Texas.
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H. Survival of Obligations. All obligations of Landlord and Tenant
hereunder not fully performed as of the expiration or earlier termination of
the term of this Lease shall survive the expiration or earlier termination of
the term hereof, including without limitation all payment obligations with
respect to taxes and insurance and all obligations concerning the condition and
repair of the Premises. Upon the expiration or earlier termination of the term
hereof, and prior to Tenant vacating the Premises, Tenant shall deliver to
Landlord the Premises in substantially the same condition as on the
Commencement Date, reasonable wear and tear, permitted alterations and
improvements and casualty and condemnation excluded. Tenant shall also, within
thirty (30) days after vacating the Premises, pay to Landlord the amount, as
reasonably estimated by Landlord in good faith, of Tenant's obligation
hereunder for real estate taxes and insurance premiums for the year in which
the Lease expires or terminates. All such amounts shall be used and held by
Landlord for payment of such obligations of Tenant hereunder, with Tenant being
liable for Tenant's share of any additional costs therefor within thirty (30)
days after demand by Landlord, or with any excess to be returned to Tenant
within thirty (30) days after all such obligations have been determined and
satisfied, as the case may be.
I. Severability of Terms. If any clause or provision of this Lease
is illegal, invalid or unenforceable under present or future laws effective
during the term of this Lease, then, in such event, it is the intention of the
parties hereto that the remainder of this Lease shall not be affected thereby,
and 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.
J. Effective Date. All references in this Lease to "the date
hereof" or similar references shall be deemed to refer to the last date, in
point of time, on which all parties hereto have executed this Lease.
K. Brokers' Commissions. Landlord and Tenant represent and warrant
to each other that neither has dealt with nor will deal with any broker, agent
or other person in connection with this transaction or future related
transactions and that no broker, agent or other person brought about this
transaction, and Landlord and Tenant each agree to indemnify and hold the other
harmless from and against any claims by any broker, agent or other person
claiming a commission or other form of compensation by virtue of having dealt
with the indemnifying party with regard to this leasing transaction.
L. Equal Participation; Ambiguity. Landlord and Tenant hereby agree
and acknowledge that this Lease has been fully reviewed and negotiated by both
Landlord and Tenant, and that Landlord and Tenant have each had the opportunity
to have this Lease reviewed by their respective legal counsel, and,
accordingly, in the event of any ambiguity herein, Tenant and Landlord hereby
waive the rule of construction that such ambiguity shall be resolved against
the party who prepared the final version or any earlier draft of this Lease.
M. Third Party Rights. Nothing herein expressed or implied is
intended, or shall be construed, to confer upon or give to any person or
entity, other than the parties hereto, any right or remedy under or by reason
of this Lease.
N. Exhibits and Attachments. All exhibits, attachments, riders and
addenda referred to in this Lease, and the exhibits listed herein below and
attached hereto, are incorporated into this Lease and made a part hereof for
all intents and purposes as if fully set out herein. All capitalized terms
used in such documents shall, unless otherwise defined therein, have the same
meanings as are set forth herein.
O. Applicable Law. This Lease has been executed in the State of
Texas and shall be governed in all respects by the laws of the State of Texas.
It is the intent of Landlord and Tenant to conform strictly to all applicable
state and federal usury laws. All agreements between Landlord and Tenant,
whether now existing or hereafter arising and whether written or oral, are
hereby expressly limited so that in no contingency or event whatsoever shall
the amount contracted for, charged or received by Landlord for the use,
forbearance or retention of money hereunder or otherwise exceed the maximum
amount which Landlord is legally entitled to contract for, charge or collect
under the applicable state or federal law. If, from any circumstance
whatsoever, fulfillment of any provision hereof at the
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time performance of such provision shall be due shall involve transcending the
limit of validity prescribed by law, then the obligation to be fulfilled shall
be automatically reduced to the limit of such validity, and if from any such
circumstance Landlord shall ever receive as interest or otherwise an amount in
excess of the maximum that can be legally collected, then such amount which
would be excessive interest shall be applied to the reduction of rent
hereunder, and if such amount which would be excessive interest exceeds such
rent, then such additional amount shall promptly be refunded to Tenant.
24. NOTICES. Each provision of this instrument or of any applicable
governmental laws, ordinances, regulations and other requirements with
reference to the sending, mailing, telecopying or delivering of notice or the
making of any payment by Landlord to Tenant or with reference to the sending,
mailing, telecopying or delivering of any notice or the making of any payment
by Tenant to Landlord shall be deemed to be complied with when and if the
following steps are taken:
(i) All rent and other payments required to be made by
Tenant to Landlord hereunder shall be payable to Landlord at the address for
Landlord set forth below or at such other address as Landlord may specify from
time to time by written notice delivered in accordance herewith. Tenant's
obligation to pay rent and any other amounts to Landlord under the terms of
this Lease shall not be deemed satisfied until such rent and other amounts have
been actually received by Landlord.
(ii) All payments required to be made by Landlord to
Tenant hereunder shall be payable to Tenant at the address set forth below, or
at such other address within the continental United States as Tenant may
specify from time to time by written notice delivered in accordance herewith.
(iii) Except as expressly provided herein, any written
notice, document or payment required or permitted to be delivered by hand or
facsimile transmission (in the later case, subject to electronic confirmation)
hereunder shall be deemed to be delivered when received, and any other notice
hereunder shall be deemed to be delivered, whether actually received or not,
when deposited in the United States Mail, postage prepaid, Certified or
Registered Mail, addressed to the parties hereto at the respective addresses
set out below, or at such other address as they have theretofore specified by
written notice delivered in accordance herewith.
25. CONDITION OF PREMISES. TENANT WAIVES THE BENEFIT OF ANY AND ALL
IMPLIED WARRANTIES, INCLUDING IMPLIED WARRANTIES OF FITNESS OR SUITABILITY FOR
PURPOSE.
26. OPTION TO LEASE ADDITIONAL SPACE. Provided that no Event of
Default then exists under this Lease and provided that Tenant has not assigned
this Lease nor sublet greater than fifteen percent (15%) of the Rentable Area
of the Premises, Tenant shall have the right and option to lease all of
Building C in the Project (the "Additional Space"), a building to be
constructed approximately in the location shown on EXHIBIT "B" attached hereto
and consisting of approximately 51,300 square feet of Rentable Area, on the
terms set forth hereinbelow; provided, however, if Tenant does not notify
Landlord in writing on or before October 1, 1997 that Tenant elects to lease
the Additional Space, Tenant's right to lease such space shall terminate and
expire. The terms for Tenant's lease of the Additional Space shall be as
follows: (i) Tenant's Credit (as defined in paragraph 10.c of the Work Letter)
shall equal $10.00 per square foot of Rentable Area within the Additional
Space; and (ii) Base Rental for the Additional Space shall equal $0.62 per
square foot of Rentable Area during years one through three, $0.65 per square
foot of Rentable Area during years four and five, $0.68 per square foot of
Rentable Area during years six through eight, and $0.72 per square foot of
Rentable Area for the balance of the term of Tenant's lease of the Additional
Space. Tenant and Landlord shall execute an amendment to this Lease
incorporating such Additional Space and such terms within fifteen (15) days
after Tenant's notification to Landlord. If Tenant fails or refuses to execute
such amendment within such 15-day period, Tenant's right to lease the
Additional Space shall terminate and expire. Except as provided above,
Tenant's lease of the Additional Space shall be upon the same terms and
conditions of the Lease (including the Work Letter); provided, however: (i)
Tenant shall have the use of 420 parking spaces, in the aggregate, within the
Permitted Parking Areas pursuant to its lease of the Building and the
Additional Space, less any spaces eliminated by Tenant's use of any proposed
spaces for non-parking purposes; (ii) the term of Tenant's lease of the
Additional Space shall commence on a commencement date calculated in accordance
with paragraph 1 above, and
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shall end on the last day of the term of this Lease, as set forth in paragraph
1 herein; and (iii) within sixty (60) days after Tenant's notification to
Landlord of its election to lease the Additional Space, Landlord and Tenant
shall mutually approve plans for Base Building Work on the Additional Space and
Tenant shall submit Contract Documents for the Additional Space to Landlord,
provided that in any event Landlord and Tenant shall mutually approve plans for
Base Building Work on the Additional Space and Tenant shall submit Contract
Documents for the Additional Space to Landlord on or before the later to occur
of October 1, 1997, or Landlord's completion of the building shell for the
Additional Space. Landlord shall provide to Tenant plans and specifications
for Base Building Work on the Additional Space on or before June 1, 1997. If,
after the Commencement Date for the Additional Space, Tenant reasonably
requires additional parking spaces above the 420 parking spaces described
above, then, within forty-five (45) days after written request from Tenant,
Landlord shall provide Tenant with such required parking spaces up to a maximum
of an additional thirty (30) parking spaces (i.e., a total of 450 parking
spaces, reduced as provided above) within the Permitted Parking Areas.
Landlord agrees to execute and record in the Real Property Records of Xxxxxx
County, Texas, a memorandum of Tenant's option to lease the Additional Space
under this paragraph 26, in the form of EXHIBIT "G" attached hereto.
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EXECUTED BY LANDLORD, this __________ day of ___________________________,
1996.
XXXXXX PHASE III, LTD.
By: 2800 Industrial, Inc. General Partner
By:
-----------------------------------
D. Xxxx Xxxxx, Xx.
Vice President
Address: c/o Hill Partners, Inc.
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Telecopy No. 512-835-1222
EXECUTED BY TENANT, this __________ day of _____________________________
______, 1996.
XETEL CORPORATION
By:
---------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Telecopy No. 000-000-0000
EXHIBIT "A" - Property Description
EXHIBIT "B" - Site Plan
EXHIBIT "C" - Work Letter
EXHIBIT "D" - Operating Expenses
EXHIBIT "E" - Additional Permitted Materials
EXHIBIT "F" - Specifications for Roof Deck Insulation
EXHIBIT "G" - Memorandum of Option to Lease
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EXHIBIT "A"
Property Description
Xxx 0, XXXXXXXXXXX XXXXXXX FOUR, a subdivision of Xxxxxx County,
Texas, according to the map or plat thereof recorded in Volume
86, Page 42B, of the Plat Records of Xxxxxx County, Texas.
A portion of the following properties are within the Permitted
Parking Areas:
Lot 2, STONEHOLLOW SECTION FOUR, a subdivision of Xxxxxx County,
Texas, according to the map or plat thereof recorded in Volume
86, Page 42B, of the Plat Records of Xxxxxx County, Texas.
Lot 2, Stonehollow Section Two, a subdivision in Xxxxxx County,
Texas, according to the map or plat thereof recorded in Volume
86, Page 15C-16A, of the Plat Records of Xxxxxx County, Texas.
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EXHIBIT "B"
Site Plan of Premises, Additional Space and Permitted Parking Areas and
Driveway Areas
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EXHIBIT "C"
Work Letter
1. Definitions. All capitalized terms that are not defined herein
have the same meaning ascribed to them in the Lease. As used in this exhibit,
the following terms have the meanings set forth below:
"Base Building" has the meaning set forth in Section 4 hereof.
"Base Building Work" has the meaning set forth in Section 4
hereof.
"Landlord's Final Plans" has the meaning set forth in Section 5
hereof.
"Landlord's Preliminary Plans" has the meaning set forth in
Section 4 hereof.
"Landlord's Representative" has the meaning set forth in Section
3 hereof.
"Landlord's Work" means the Base Building Work.
"Preliminary Space Plans" has the meaning set forth in Section 6a
hereof.
"Reserved Work" means the labor, materials and work required to
complete certain work shown on Tenant's Contract Documents, such as that
relating to manufacturing equipment, computer equipment, telephones, copy
equipment, audio/visual equipment, word processing equipment, furnishings and
accessories, art work and interior landscaping, that may be performed by Tenant
through a contractor selected by Tenant and approved by Landlord, which
approval shall not be unreasonably withheld, conditioned or delayed.
"Tenant's Architect" has the meaning set forth in Section 3
hereof.
"Tenant's Contract Documents" has the meaning set forth in
Section 6c hereof.
"Tenant's Leasehold Improvements" means all of the leasehold
improvements (excluding Reserved Work, if any) to be constructed within the
Premises at Tenant's expense as fully described in Tenant's Contract Documents.
"Tenant's Representative" has the meaning set forth in Section 3
hereof.
"Tenant's Work" means the labor, materials and work required to
complete Tenant's Leasehold Improvements.
"Work Costs" has the meaning set forth in Section 10 hereof.
"Work Cost Report"has the meaning set forth in Section 10a
hereof.
2. Performance of Work. To induce Tenant to enter into the Lease,
Landlord agrees, without compensation to Landlord, to perform Landlord's Work
at Landlord's expense. In addition, Tenant hereby engages Landlord as Tenant's
construction manager, without compensation to Landlord, to perform Tenant's
Work at Tenant's expense, all subject to and in accordance with the terms of
this Work Letter.
3. Representatives. Landlord hereby appoints D. Xxxx Xxxxx
("Landlord's Representative") to act on behalf of Landlord in all matters
covered by this Work Letter. Tenant hereby appoints Xxxx Xxxx and Xxxx
Xxxxxxxx
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(collectively, "Tenant's Representative") to act on behalf of Tenant in all
matters covered by this Work Letter. In addition, The Austin Group ("Tenant's
Architect"), acting through Xxx Xxxxxx, will represent Tenant in technical
matters that affect the quality, cost or timing with respect to construction
and completion of the Premises. All inquiries, requests, instructions,
authorizations and other communications with respect to the matters covered by
this Work Letter shall be made to Landlord's Representative, on the one hand,
or Tenant's Representative, on the other hand, as appropriate. Either Landlord
or Tenant may designate different or additional representatives under this Work
Letter at any time by giving ten (10) days prior written notice to the other.
4. Base Building Work. Landlord has delivered to Tenant the
existing construction drawings and specifications ("Landlord's Preliminary
Plans") for (i) the shell, elevators and stairwells of the Building, including
a stairway and mezzanine railing within Tenant's main public entranceway in the
Building, (ii) primary plumbing (with a two inch (2") water line), sprinklers
and electric power facilities, (iii) the parking areas, loading docks and truck
courts, and (iv) any other items necessary to construct the Building, other
than Tenant's Leasehold Improvements and Reserved Work (if any). Landlord's
Preliminary Plans shall also include plans for the installation of insulation
in the roof deck to provide insulation over the entire roof area within the
Building shell in accordance with the specifications set forth in EXHIBIT "F"
attached hereto (which will eliminate the need to insulate the perimeter walls
in the Building required to be insulated by the current City of Austin Energy
Code if the interior space is air conditioned), construction of interior
stairwells to connect the mezzanine to the ground floor as required by law and
Tenant's reasonable requirements, and one elevator to provide passenger service
between the ground floor and the mezzanine level. The work required to be
accomplished as shown on Landlord's Preliminary Plans is herein referred to as
the "Base Building Work" and the improvements to be constructed pursuant
thereto are herein referred to as the "Base Building." Landlord shall, at its
expense, promptly proceed with due diligence to erect and construct the
Building and the parking areas and perform the Base Building Work substantially
in accordance with Landlord's Final Plans (as defined below); provided,
however, Tenant shall be liable for the costs of installing electric power
facilities to the Building which exceed $47,780.00. All such work shall be
performed by Landlord in a first-class, workmanlike manner, and in compliance
with all applicable laws, ordinances, rules and regulations (including, without
limitation, the Americans with Disabilities Act) of any authority having
jurisdiction over the Building, the Premises, the Project, Landlord and/or
Tenant.
5. Finalization of Landlord's Plans. Tenant may require
modifications, amendments and revisions to Landlord's Preliminary Plans in
order to accommodate Tenant's use and occupancy of the Premises, Landlord
acknowledging that Landlord is erecting and constructing the Building for
Tenant's use and occupancy thereof pursuant to the Lease and that no other
tenants will be leasing space in the Building from Landlord. Within ten (10)
days after the date of this Lease, Tenant shall submit to Landlord in writing
any requested changes to Landlord's Preliminary Plans, and Tenant and Landlord
shall thereafter work together in good faith to finalize Landlord's plans in
accordance with the procedures set forth below in this Section 5 of this Work
Letter (such plans as mutually agreed upon herein referred to as "Landlord's
Final Plans"). Tenant shall review Landlord's Preliminary Plans and shall
notify Landlord in writing within ten (10) days after the date of this Lease of
any revisions thereto that Tenant requests. Representatives of both parties
shall make themselves available within five (5) calendar days after Landlord
receives Tenant's suggested revisions to discuss and resolve open matters.
Landlord shall promptly revise Landlord's Preliminary Plans to incorporate any
agreed changes and shall resubmit them for Tenant's approval, which approval
shall not be unreasonably withheld, conditioned or delayed. If Tenant
withholds approval of all or any part of Landlord's Preliminary Plans, then
Tenant shall give Landlord a detailed written statement of its objections. If
Landlord disagrees with Tenant's objections, then Landlord and Tenant's
Representative shall promptly meet and attempt to resolve Tenant's objections.
If an equitable solution cannot be achieved reasonably promptly, then Landlord
may, by acting within ten (10) calendar days after Landlord's receipt of
Tenant's disapproval notice, submit all disputed matters to arbitration. If
Landlord elects not to submit all disputed matters to arbitration, Landlord
shall promptly revise and resubmit Landlord's Preliminary Plans to comply with
Tenant's objections. If Landlord elects arbitration, then the arbitrators for
each party shall be their respective architectural representatives, who shall
choose, as a third arbitrator, an independent architect. All arbitration shall
be conducted in accordance with Section 12 below.
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6. Tenant's Plans. Tenant shall submit to Landlord plans describing
Tenant's Leasehold Improvements in accordance with the following procedure:
a. Preliminary Space Plans. Tenant shall submit to Landlord,
on or before November 1, 1996, Preliminary Space Plans (herein so called)
showing: locations of all partitions and doors, annotated to indicate special
mechanical/electrical/ plumbing requirements; areas requiring ceilings and
lighting; special use areas with requirements such as extra floor loading, or
slab penetrations; special HVAC and/or electrical needs; special acoustical
separation requirements; and extraordinary City of Austin building and fire
code considerations. Landlord shall review Tenant's Preliminary Space Plans
and shall notify Tenant in writing within ten (10) calendar days after receipt
thereof of any revisions that Landlord requests, and Landlord's reasons
therefor. Landlord and Tenant shall thereafter work together in good faith to
mutually agree on a final set of such plans.
b. Tenant's Contract Documents. On or before January 2,
1997, Tenant shall submit to Landlord,working drawings and specifications
consisting of complete architectural and engineering plans, with HVAC,
plumbing, electrical and structural documentation ("Tenant's Contract
Documents") for the proposed construction of all ceilings, lighting, HVAC,
plumbing, special use areas, partitions, doors, room finish schedules,
locations of electrical outlets, telephone and data outlets and all other
relevant information for the interior finish of, and installation of Tenant's
Leasehold Improvements in, the Premises. Landlord shall review Tenant's
Contract Documents and notify Tenant in writing within ten (10) calendar days
after receipt of Tenant's Contract Documents of any revisions thereto that
Landlord requests. Representatives of both parties shall make themselves
available within five (5) calendar days after Tenant's Architect receives
Landlord's suggested revisions to discuss and resolve open matters. Tenant's
Architect shall promptly revise Tenant's Contract Documents to incorporate any
agreed changes and shall resubmit them for Landlord's approval, which approval
shall not be unreasonably withheld, conditioned or delayed. If Landlord
withholds approval of all or any part of Tenant's Contract Documents, then
Landlord shall give Tenant's Representative and Tenant's Architect a detailed
written statement of its objections. If Tenant disagrees with Landlord's
objections, then Tenant's Representative, Tenant's Architect and Landlord's
Representative shall promptly meet and attempt to resolve Landlord's
objections. If an equitable solution cannot be achieved reasonably promptly,
then Tenant may, by acting within ten (10) calendar days after Tenant's receipt
of Landlord's disapproval notice, submit all disputed matters to arbitration.
If Tenant elects not to submit all disputed matters to arbitration, Tenant's
Architect shall promptly revise and resubmit Tenant's Contract Documents to
comply with Landlord's objections. If Tenant elects arbitration, then the
arbitrators for each party shall be their respective architects or
representatives, who shall choose, as a third arbitrator, an independent
architect. All arbitration shall be conducted in accordance with Section 12
below.
7. Bid Process.
a. General Contractor and Subcontractors. Landlord and
Tenant shall mutually agree upon a general contractor ("General Contractor")
for construction of Tenant's Leasehold Improvements. In the event of any
subcontract to be let which will exceed $5,000.00 in value, General Contractor
shall seek and obtain not less than three (3) bids from qualified
subcontractors mutually approved by Landlord and Tenant for such subcontract,
and shall contract with the lowest acceptable bidder for such work, unless
Tenant approves a lower number of bidders or a higher bid.
b. Pricing of Tenant's Leasehold Improvements. Promptly
after mutual approval of Tenant's Contract Documents as provided in Section 6
above, General Contractor shall proceed immediately with the pricing of the
Tenant's Work provided for in Tenant's Contract Documents. Tenant's Architect,
through or in concert with Landlord's Representative, shall be available to
answer the General Contractor's or bidders' questions with regard to documents
prepared by Tenant's Architect. If resulting clarifications or information
substantively affect a bid, then an addendum to Tenant's Contract Documents
shall be issued by Tenant's Architect to bidders through Landlord's
Representative. If final pricing of Tenant's Leasehold Improvements exceeds
$1,300,000.00, then Tenant may redesign or modify Tenant's Contract Documents
(subject to Landlord's reasonable approval thereof) at Tenant's expense in
order to cause the final pricing to not exceed such amount, and any delays
caused thereby shall be Tenant Delays.
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c. Alternative for General Contractor Bids. At Tenant's
option, exercised by written notice to Landlord on or before the date Tenant
submits to Landlord Tenant's Preliminary Space Plans, Tenant may require that
the construction of Tenant's Leasehold Improvements be performed under a
construction contract awarded to a general contractor selected pursuant to bids
received from not less than three (3) general contractors reasonably approved
by Landlord and Tenant. The award of such construction contract to such
general contractor shall be determined by Tenant, subject to Landlord's
reasonable approval thereof. Upon such award, such general contractor shall be
the "General Contractor" for the purposes of this Work Letter, and the
provisions of subparagraphs a and b of this Section 7 shall no longer be
applicable, other than the last sentence of subparagraph b.
d. Submittal of Design/Build Plans. Notwithstanding the
foregoing, Tenant may, at Tenant's sole discretion and with respect to either
paragraphs 7(a) and 7(b) above or paragraph 7(c) above, submit architectural
plans and description of requirements and request design/build of electrical,
mechanical and specialty construction items.
8. Construction of Tenant's Leasehold Improvements.
a. Construction Contract. Landlord and General Contractor
shall enter into a contract for construction of Tenant's Leasehold Improvements
(the "Construction Contract").
b. Separate Contracts. The Reserved Work may be performed by
Tenant through contractors selected by Tenant and approved by Landlord, which
approval shall not be unreasonably withheld, conditioned or delayed. Tenant
shall notify Landlord in writing, before the subcontracts are let for bid by
General Contractor, of the portion of the Tenant's Work that is Reserved Work.
For any Reserved Work, Tenant shall submit reasonable details regarding the
proposed subcontractor, including financial and other pertinent information
(including, without limitation, the labor organization affiliation, or lack of
such an affiliation, of any subcontractor), certificates of insurance to be
maintained by Tenant's subcontractors, hours of construction, proposed
construction methods and details with respect to the financial security (other
than payment and performance bonds which shall not be required) to ensure
timely completion of the work by the subcontractor and payment by the
subcontractor to its employees and subcontractors of all costs of the work.
Before any Reserved Work has commenced, but not thereafter, Landlord may
exclude from the Building any subcontractor proposed to perform any part of the
Reserved Work, if Landlord demonstrates to Tenant that the contractor is
incompatible with other contractors and/or subcontractors performing work at
the Building. If Tenant performs any Reserved Work, then Landlord shall allow
Tenant prompt and reasonable access to the Premises as soon as the Base
Building Work and Tenant's Work are, in Landlord's reasonable opinion,
sufficiently complete to permit commencement of the Reserved Work without undue
interference with the completion of the Base Building Work and the Tenant's
Work. If the General Contractor performing the Base Building Work is then
still on site, Tenant shall comply with all reasonable requests of the General
Contractor that are communicated to Tenant in writing. If Tenant elects to
perform the Reserved Work, then Tenant is responsible for delay in Substantial
Completion or disruption in the construction schedule that proximately results
from Tenant's performance of those activities. Subcontractors performing
Reserved Work are subject to reasonable rules promulgated by Landlord for
scheduling and safety. Landlord shall furnish to Tenant a copy of those rules
(which shall not be changed during the performance of the Reserved Work) before
any subcontracts are let for bid by General Contractor.
c. Utilities and Services. During normal working hours of
the Building construction project, Landlord shall furnish, at Tenant's expense,
water, electricity, adequate elevator service to move personnel within the
capacity and purpose for which they were designed, and HVAC to the Premises
during the performance of any of the Reserved Work, but only to the extent of
the utilities and services provided for in the Base Building design reflected
in Landlord's Final Plans. After normal working hours, Landlord shall furnish,
at Tenant's expense, hoists to elevate and lift Tenant's materials and
equipment necessary to perform the Reserved Work. Landlord shall designate the
method established for scheduling elevator and hoist use, and shall advise
Tenant of any advance notice requirements for scheduling and securing elevators
or hoists for use in performing the Reserved Work, without unreasonable delay
and conflict with other contractors or Landlord.
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d. Progress Meetings. During the construction of Tenant's
Leasehold Improvements, Tenant's Representative may schedule "job progress"
meetings frequently enough to permit regular monitoring of the scheduling and
status of Tenant's Leasehold Improvements. Upon reasonable prior notice of any
such meeting to Landlord's Representative, Landlord's Representative shall
cause the attendance thereat of representatives of the General Contractor and
all major subcontractors having influence on the scheduling or cost of Tenant's
Leasehold Improvements.
9. Inspection and Scheduling.
a. The General Contractor, Tenant and Tenant's Architect may
inspect the Base Building Work, Tenant's Leasehold Improvements, Landlord's
Work and Tenant's Work, as they progress. Landlord shall be available, and
cause its subcontractors and architect to be reasonably available, to Tenant or
Tenant's Architect from time to time, on reasonable prior notice, as necessary
or desirable to review the Base Building Work, Tenant's Leasehold Improvements,
Landlord's Work and Tenant's Work.
b. Landlord shall submit to Tenant with Landlord's
Preliminary Plans the proposed construction schedule for the Base Building
Work. Landlord shall promptly inform Tenant of any material delays encountered
in completing the Base Building Work and shall promptly deliver to Tenant, and
consult with Tenant with respect to, all revisions of the construction
schedules therefor.
c. Landlord, at its expense, shall obtain all approvals,
permits and other consents required to commence, perform and complete the
Landlord's Work and Tenant's Work, other than Reserved Work; shall cause the
Landlord's Work and Tenant's Work, other than Reserved Work, to comply with all
applicable laws, except that Tenant's Architect is responsible for Tenant's
Contract Documents being in compliance with the City of Austin building and
fire codes and all other laws; and shall maintain for inspection by Tenant and
Tenant's Architect copies of all approvals, permits, inspection reports and
other governmental consents obtained by Landlord.
10. Payment for Work Costs.
a. The term "Work Costs," with respect to Tenant's Work,
means the sum of the actual costs and charges incurred pursuant to the
Construction Contract, including any change orders thereto. Upon Landlord's
receipt thereof, Landlord shall deliver to Tenant copies of all draw requests
prepared by General Contractor (the "Work Cost Report"). When and if
applicable, the Work Cost report shall be accompanied by an invoice from
Landlord for the amount due from Tenant for Work Costs in excess of unused
Tenant Credit.
b. Tenant shall pay, within fifteen (15) days after it
receives an invoice from Landlord, together with the Work Cost Report, the
balance due currently, subject to (i) confirmation by Tenant's Architect, not
to be unreasonably withheld, of the satisfactory completion of Tenant's Work,
and (ii) to the extent applicable, retainage of an amount not to exceed ten
percent (10%) of Work Costs for the completion of Punchlist Items. Landlord
shall submit a final Work Cost Report to Tenant on completion of all of
Landlord's Work and Tenant's Work, together with a written certification from
Landlord that all Work Costs due to the General Contractor and the
subcontractors have been duly paid, bonded or otherwise adequately secured or
that they will be paid from the sums paid by or on behalf of Tenant.
c. The term "Tenant's Credit" shall mean $925,000.00, except
as otherwise provided below. Tenant's Credit may be used solely for Work Costs
and Reserved Work. At any time prior to execution of the Construction Contract
by Landlord and General Contractor, Tenant may notify Landlord in writing that
Tenant elects to decrease Tenant's Credit to either (i) $832,500.00 or (ii)
$740,000.00. Such decrease in Tenant's Credit shall become effective upon
Landlord's and Tenant's execution of an amendment to the Lease within fifteen
(15) days of Tenant's election notice as aforesaid, providing as follows:
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(i) In the event Tenant elects to decrease the Tenant's
Credit to $832,500.00, the Base Rental under paragraph 2A of the
Lease shall be decreased as follows:
Months 1 - 60 $.55/sq.ft. $50,875.00 per month
Months 61 - 96 $.585/sq.ft. $54,112.50 per month
Months 97 - 150 $.615/sq.ft. $56,887.50 per month
(ii) In the event Tenant elects to decrease the Tenant's
Credit to $740,000.00, Base Rental under paragraph 2A of the
Lease shall be decreased as follows:
Months 1 - 60 $.535/sq.ft. $49,487.50 per month
Months 61 - 96 $.57/sq.ft. $52,725.00 per month
Months 97 - 150 $.60/sq.ft. $55,500.00 per month
d. All Work Costs which are not expressly provided for in the
Construction Contract shall be subject to verification by Tenant and Tenant's
Architect (who shall have access to Landlord's and the General Contractor's
books and records for this purpose) and correction if necessary, without either
party's being prejudiced by any payments made or accepted hereunder (whether
during the course of the work or on completion). In the event of any dispute
regarding such Work Costs which the parties are unable to resolve by agreement,
either party may refer the matter to arbitration in accordance with Section 12
below.
11. Cleaning. As part of the Construction Contract, Landlord shall
require that General Contractor provide a final cleaning of the Premises (other
than cleaning required as a result of Reserved Work) immediately before
Tenant's acceptance of "Substantial Completion," consisting of cleaning to a
condition expected for a good building cleaning and maintenance program.
12. Arbitration. In the event of a dispute between Landlord and
Tenant with respect to any issue of fact or with respect, specifically, to any
matter referred to herein to be resolved by arbitration, Tenant's
Representative and Landlord's Representative shall meet to immediately resolve
that matter in good faith and as expeditiously as possible. If that matter
cannot be resolved within five (5) business days after Tenant's Representative
and Landlord's Representative have met, then a third arbitrator shall be
jointly selected by Tenant's Representative and Landlord's Representative, and
that arbitrator shall be an independent architect unaffiliated with either
Tenant or Landlord and having at least five years experience as to the subject
matter in question. If Tenant's Representative and Landlord's Representative
cannot mutually agree on the third arbitrator within two (2) business days
after their meeting, then the third arbitrator shall be appointed by a judge of
any Judicial District Court of Xxxxxx County, Texas, or by any successor court,
on application of Landlord or Tenant. After being duly appointed, the
arbitrator shall proceed with all reasonable dispatch to determine the question
submitted. For this purpose Landlord's Representative and Tenant's
Representative shall make themselves available to the third arbitrator to
furnish such information, data, statistics and other matters as the third
arbitrator shall deem necessary to reach its conclusion. Landlord's
Representative and Tenant's Representative shall have the right to take
discovery, submit evidence, with the privilege of cross-examination on the
question at issue, and join others in the arbitration. The decision of the
arbitrator shall be in writing and in duplicate, one counterpart thereof to be
delivered to each of Landlord and Tenant. The award of the arbitrator shall be
binding, final and conclusive on Landlord and Tenant, and may be entered in any
court having jurisdiction thereover. The costs of the arbitration shall be
borne by the party against whom any questions so submitted is resolved unless
differently allocated in the arbitration award. Nothing herein contained shall
preclude either Landlord or Tenant from seeking any injunctive relief.
13. Insurance. Landlord, or Landlord's General Contractor or
subcontractors, shall obtain and maintain at all times during the construction
of Landlord's Work and Tenant's Work pursuant to this Work Letter, the
following insurance and will furnish to Tenant valid certificates of insurance
insuring Landlord or its General Contractor or subcontractors, in the following
amounts and forms, in a form, with substance and from an insurer reasonably
acceptable to Tenant:
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a. Worker's compensation in exact compliance with the laws of
the state of Texas with coverage limits of not less than
$500,000.00.
b. Comprehensive general liability insurance including
insurance for operations, elevators, contractor's
protective liability, completed operations (for two years
after the date of Substantial Completion), blanket
contractual liability, broad form property damage, and
full form personal injury as follows:
1. Bodily injury liability
$500,000.00 each occurrence
$1,000,000.00 aggregate, completed operations,
products
2. Property damage liability
$500,000.00 each occurrence
$500,000.00 aggregate, operations
$500,000.00 aggregate, protective
$500,000.00 aggregate, products, completed
operations
$500,000.00 aggregate, contractual
c. Excess liability insurance, including automobile, in
combination with the units available for comprehensive
general liability insurance, as follows:
$2,000,000.00 each occurrence
$2,000.000.00 aggregate, products, completed
operations
d. Automobile liability and property damage in minimum limits
of $500,000.00 for each person and $1,000,000.00 in the
aggregate.
14. Warranties. Landlord shall require that the warranties of all
subcontractors, manufacturers and suppliers relating to items for which Tenant
is responsible for the maintenance and repair thereof be transferrable and
assignable to Tenant and, upon Tenant's written request, Landlord shall
transfer or assign to Tenant any such warranty.
15. Miscellaneous. In the event of a conflict between the provisions
of this Work Letter and the provisions of the Lease, the provisions of this
Work Letter shall control.
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EXHIBIT "D"
Operating Expenses
1. Tenant shall pay to Landlord Tenant's Pro Rata Share of Operating
Expenses in accordance with the following:
a. "Operating Expenses" shall be computed in accordance with
good accounting practice on an accrual basis and shall mean all noncapital
costs, expenses and disbursements of every kind and nature, to the extent
customarily included within the definition of "operating expenses" in leases of
similar buildings in Austin, Texas, that Landlord shall pay or become obligated
to pay in connection with the ownership, management, operation and/or
maintenance of the Building or the Project (provided that references to the
"Project" in this paragraph 1a of EXHIBIT "D" shall not refer to the buildings
within the Project unless the context requires otherwise), which costs and
expenses shall include, but not be limited to, the following:
i. all taxes, assessments, and other governmental
charges, whether federal, state, county or municipal, and whether they
be by taxing districts or authorities, taxing the Premises, including
any tax levied against rent payable under this Lease, but excluding
federal and state income taxes, net profits taxes, franchise taxes and
estate and inheritance taxes;
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ii. all costs and expenses of operating, maintaining
and repairing the Building or the Project in connection with Landlord's
performance of its obligations under paragraph 3 of the Lease or
otherwise, except those costs and expenses which are paid by Tenant or
reimbursed to Landlord by other tenants;
iii. costs of all utilities for the Building or the
Project, including the cost of electricity, gas, water, and sewer
services, but excluding the cost of any such utilities charged directly
to and paid by Tenant or any other tenant of the Building or the
Project.
iv. all supplies and materials used in the operation
and maintenance of the Building or the Project, but excluding the cost
or value of rent reductions, tenant improvement allowances and other
concessions given by Landlord to any other tenant of the Building or the
Project;
v. the cost of all insurance relating to the Building
or the Project, including the cost of casualty and liability insurance
applicable to the Building or the Project and Landlord's personal
property used in connection therewith;
vi. amortization in accordance with generally accepted
accounting principles of costs of, or rental expenses for, any
machinery, equipment or other improvements installed by Landlord for the
purpose of (i) reducing energy costs in the Building or the Project or
other Operating Expenses or (ii) causing the Building or the Project to
comply with any applicable law, ordinance or regulation enacted after
the Commencement Date, but excluding such amortization costs or rental
expenses incurred with respect to machinery, equipment or improvements
installed for the exclusive benefit of another tenant in the Project;
vii. amortization in accordance with generally accepted
accounting principles of the costs of capital improvements reasonably
made by Landlord to the Building or the Project (A) for purposes of
improving the Building or the Project in connection with Landlord's
performance of its obligations under paragraph 3 of the Lease, or (B)
for purposes of reducing Operating Expenses, but in all events excluding
improvements installed for the exclusive benefit of another tenant of
the Project;
viii. general maintenance costs and expenses incurred in
connection with the Building or the Project (including security,
maintenance of all landscaping, waste removal, nontenant alterations and
decorations, repairs to any part of the Building or the Project, and all
labor utilized and supplies consumed with respect to any general
Building or Project maintenance);
ix. management costs of the Building or the Project
(including any management fee payable by Landlord with respect to the
Building or the Project (but in no event to exceed customary and
standard management fees paid in arms length transactions), audit and
accounting expenses, and legal fees) but excluding leasing and brokerage
commissions and legal fees incurred in connection with Landlord's
leasing of the Building or the Project or involving disputes with other
tenants of the Project; and
x. wages, salaries, fees, pension benefits, taxes,
unemployment and disability insurance, worker's compensation insurance,
social security benefits and any other expenses reasonably incurred with
respect to all personnel engaged in the operation, maintenance, leasing
or security of the Building or the Project.
Operating Expenses shall exclude expenses due to:
i. personal property taxes owed by other tenants of
any building of the Project;
ii. penalties and interest for late payment of taxes
due by Landlord and timely paid by Tenant, or due to violation of laws
or governmental regulations;
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iii. casualty losses and public liability claims paid by
third parties or which would be paid by third parties in the event
Landlord was in full compliance with its insurance obligations under
paragraph 9A of the Lease;
iv. interest or principal payments on debts of Landlord
secured by the Premises, the Building or the Project;
v. costs of work or services furnished or performed on
behalf of other tenants at such tenant's costs;
vi. fees payable to affiliates of Landlord outside the
range of fees payable for similar services in the Austin area in an arms
length transaction;
vii. costs of maintaining and repairing buildings or
parking areas within the Project outside of the Premises; and
viii. capital repairs or improvements made to the
Building which are covered by Landlord's warranties under the Lease or
which are performed to correct design or structural defects or to bring
the Building into conformity with applicable building codes in effect at
the time of the construction of the Building.
b. Tenant's Pro Rata Share of Operating Expenses. Tenant's
Pro Rata Share of Operating Expenses for any Lease Year shall be equal to the
product of (i) Tenant's Pro Rata Share as determined pursuant to paragraph 2C
of the Lease multiplied by (ii) the Operating Expenses for a Lease Year. As
used herein, "Lease Year" shall mean a period of twelve (12) consecutive
calendar months commencing on the first (1st) day of January and ending on the
thirty-first (31st) day of December; provided that, the first (1st) Lease Year
shall commence on the Commencement Date and end on the thirty-first (31st) day
of December of the same calendar year as the Commencement Date, and the last
Lease Year shall end on the last day of the term of the Lease.
c. Estimated Expenses. Tenant's Pro Rata Share of Operating
Expenses for each Lease Year of the term of the Lease shall be estimated in
good faith by Landlord, and notice of the estimated amounts will be given to
Tenant at least fifteen (15) days before the Commencement Date and at least
thirty (30) days before the beginning of each Lease Year thereafter. For each
full Lease Year of the Lease term, Tenant shall pay to Landlord each month, as
additional rent, at the same time the monthly installment of Base Rental is
due, an amount equal to one-twelfth (1/12) of the estimated Tenant's Pro Rata
Share of Operating Expenses due for that Lease Year. If the first and last
Lease Years are less than full calendar years, then Tenant shall pay to
Landlord, each month for those Lease Years, an amount equal to the amount of
estimated Tenant's Pro Rata Share of Operating Expenses for the partial Lease
Year divided by the number of full calendar months in the partial year.
d. Estimate Revisions. At any time, and from time to time,
during the Lease term, Landlord may, by giving notice to Tenant, change the
monthly amount then payable by Tenant for Tenant's estimated Pro Rata Share of
Operating Expenses to reflect the actual Tenant's Pro Rata Share of Operating
Expenses for the then current Lease Year more accurately. If Landlord's notice
increases the estimated amount of Tenant's Pro Rata Share of Operating
Expenses, Landlord shall include with such notice copies of operating
statements, invoices or other information reasonably supporting the revised
estimation. Tenant shall begin paying the revised estimated amount with the
next monthly payment of Base Rental due after receipt by Tenant of Landlord's
notice.
e. Annual Adjustments. On or before June 1 of each Lease
Year, Landlord will prepare and deliver to Tenant a statement setting forth the
calculation of the actual Tenant's Pro Rata Share of Operating Expenses for the
previous Lease Year. Within thirty (30) days after receipt of the statement of
the actual Tenant's Pro Rata Share of Operating Expenses, Tenant shall pay to
Landlord, or Landlord will credit against the next rental or other payment or
payments due from Tenant, as the case may be, the difference between the actual
Tenant's Pro Rata
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Share of Operating Expenses for the preceding Lease Year and the estimated
Tenant's Pro Rata Share of Operating Expenses paid by Tenant during that Lease
Year; provided, however, if Tenant is entitled to a credit against its next
rental or other payment due to Landlord as provided above, Tenant may, at its
option, within five (5) days after receipt of Landlord's statement of the
actual Tenant's Pro Rata Share of Operating Expenses, request in writing a cash
payment in lieu of such credit, which cash payment Landlord shall deliver to
Tenant within thirty (30) days after receipt of such request.
f. Final Partial Year. If the Lease term expires, or this
Lease terminates, before a final determination of the actual Tenant's Pro Rata
Share of Operating Expenses, then the amount of adjustment between the
estimated Tenant's Pro Rata Share and the actual Tenant's Pro Rata Share of
Operating Expenses payable for the preceding Lease Year and/or the final
partial Lease Year of the Lease term will be estimated by Landlord, in good
faith, based on the best data available to Landlord at the time of the
estimate. Before the scheduled last day of the Lease term, or as soon as
possible (but in no event more than sixty (60) days) after an earlier
termination date, an adjustment will be made between Landlord and Tenant. The
obligations set forth in the preceding sentence shall survive the expiration or
earlier termination of this Lease.
g. Calculation of Rentable Area. As used in the Lease, the
term "Rentable Area" shall mean and refer to the gross area as determined by
the roofline of the building in question. The Rentable Area of the Premises
has been calculated on the basis of the foregoing definition in general, and is
hereby stipulated for all purposes hereof to be 92,500 square feet, whether the
same should be more or less as a result of minor variations resulting from
actual construction and completion of the Premises or the Building. The term
"Rentable Area of the Project" shall mean the aggregate total of the Rentable
Area of all buildings constructed within the Project, including the Premises.
If during the term of this Lease the dimensions of the Premises are amended to
increase or decrease the space included within the Premises, the Rentable Area
of the Premises shall be amended accordingly.
2. Within ninety (90) days after Landlord provides Tenant with the
notice required by paragraph 1c above, Tenant may question the amount of or
propriety of any item included therein or excluded therefrom. Landlord agrees
to maintain complete and accurate records of all Operating Expenses for two (2)
years after the close of the calendar year (or portion thereof) to which they
pertain. Tenant shall have the right to audit Landlord's books and records
relating to Tenant's Pro Rata Share of Operating Expenses for the two (2)
immediately preceding Lease Years. If such audit is performed by a certified
public accountant, reasonably approved by Landlord, and establishes that
Landlord's computation of Tenant's Pro Rata Share of Operating Expenses for any
such Lease Year exceeds the actual amount of Tenant's Pro Rata Share of
Operating Expenses for such year by more than five percent (5%) of such actual
amount, then Landlord shall reimburse Tenant for Tenant's reasonable expenses
incurred in connection with such audit. If such audit establishes that
Landlord's computation of Tenant's Pro Rata Share of Operating Expenses does
not exceed the actual amount of Tenant's Pro Rata Share of Operating Expenses
for such year by five percent (5%) or less of such actual amount, then Tenant
shall reimburse Landlord for Landlord's reasonable expenses incurred in
connection with such audit. According to the findings of such audit, Landlord
shall, at Tenant's election, credit Tenant's rent or refund to Tenant all
overpaid amounts, if applicable, or Tenant shall pay to Landlord all underpaid
amounts, if applicable.
Initials ___ ___
D-4
35
EXHIBIT "E"
Additional Permitted Materials
Initials ___ ___
E-1
36
Initials ___ ___
E-2
37
EXHIBIT "F"
Specifications for Roof Deck Insulation
Initials ___ ___
F-1
38
EXHIBIT "G"
Memorandum of Option to Lease
STATE OF TEXAS )
)
COUNTY OF XXXXXX )
This Memorandum of Option to Lease is executed as of the __________ day
of _____________________, 1996, between XETEL CORPORATION, a Delaware
corporation ("Tenant"), and BRAKER PHASE III, LTD., a Texas limited partnership
("Landlord").
Landlord has granted to Tenant the option to lease a building to be
constructed on the real property described as Xxx 0, Xxxxxxxxxxx Xxxxxxx Xxx, a
subdivision in Xxxxxx County, Texas, recorded in Volume 86, Page 15C-16A, of
the Plat Records of Xxxxxx County, Texas, which building is commonly referred
to as Xxxxxx Center III, Building C (the "Building"). This Memorandum of
Option to Lease is executed solely to provide notice to third parties of the
existence of such option. Tenant's option to lease the Building must be
exercised by written notice to Landlord on or before October 1, 1997. This
Memorandum shall be terminated upon the filing in the Real Property Records of
Xxxxxx County, Texas, of a certificate executed by Landlord and either (i)
stating that Tenant has exercised its option to lease the Building and setting
forth the expiration date of such lease, or (ii) dated after October 1, 1997,
and stating that Tenant has failed to exercise its option to lease the
Building.
This Memorandum is not intended to modify or amend any of the terms of
Tenant's option to lease the Building and, in the event of any conflict between
such terms and the terms of this Memorandum, terms of such option shall
prevail.
EXECUTED as of the date first written above.
XXXXXX PHASE III, LTD.
By: 2800 Industrial, Inc. General Partner
By:
---------------------------------
D. Xxxx Xxxxx, Xx.
Vice President
XETEL CORPORATION
By:
---------------------------------------
Name:
---------------------------------
Title:
---------------------------------
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Initials ___ ___
X-0
00
XXXXX XX XXXXX )
)
COUNTY OF XXXXXX )
This instrument was acknowledged before me on the ______________ day of
_ ________________________, 1996, by D. Xxxx Xxxxx, Xx., Vice President of 2800
Industrial, Inc., General Partner of Braker Phase III, Ltd., a Texas limited
partnership, on behalf of said limited partnership.
---------------------------------------------
Notary Public, State of Texas
Printed Name:
------------------------------
My commission expires:
---------------------
STATE OF TEXAS )
)
COUNTY OF XXXXXX )
This instrument was acknowledged before me on the _______________ day of
__________________________, 1996, by ________________________________________,
_________________________________ of Xetel Corporation, a Delaware
corporation, on behalf of said corporation.
---------------------------------------------
Notary Public, State of Texas
Printed Name:
------------------------------
My commission expires:
---------------------
Initials ___ ___
G-2
40
Memorandum of Option to Lease
STATE OF TEXAS )
)
COUNTY OF XXXXXX )
This Memorandum of Option to Lease is executed as of the __________ day
of _____________________, 1996, between XETEL CORPORATION, a Delaware
corporation ("Tenant"), and BRAKER PHASE III, LTD., a Texas limited partnership
("Landlord").
Landlord has granted to Tenant the option to lease a building to be
constructed on the real property described as Xxx 0, Xxxxxxxxxxx Xxxxxxx Xxx, a
subdivision in Xxxxxx County, Texas, recorded in Volume 86, Page 15C-16A, of
the Plat Records of Xxxxxx County, Texas, which building is commonly referred
to as Xxxxxx Center III, Building C (the "Building"). This Memorandum of
Option to Lease is executed solely to provide notice to third parties of the
existence of such option. Tenant's option to lease the Building must be
exercised by written notice to Landlord on or before October 1, 1997. This
Memorandum shall be terminated upon the filing in the Real Property Records of
Xxxxxx County, Texas, of a certificate executed by Landlord and either (i)
stating that Tenant has exercised its option to lease the Building and setting
forth the expiration date of such lease, or (ii) dated after October 1, 1997,
and stating that Tenant has failed to exercise its option to lease the
Building.
This Memorandum is not intended to modify or amend any of the terms of
Tenant's option to lease the Building and, in the event of any conflict between
such terms and the terms of this Memorandum, terms of such option shall
prevail.
EXECUTED as of the date first written above.
XXXXXX PHASE III, LTD.
By: 2800 Industrial, Inc. General Partner
By:
---------------------------------
D. Xxxx Xxxxx, Xx.
Vice President
XETEL CORPORATION
By:
---------------------------------------
Name:
---------------------------------
Title:
---------------------------------
Address: 0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
41
STATE OF TEXAS )
)
COUNTY OF XXXXXX )
This instrument was acknowledged before me on the ______________ day of
_ ________________________, 1996, by D. Xxxx Xxxxx, Xx., Vice President of 2800
Industrial, Inc., General Partner of Braker Phase III, Ltd., a Texas limited
partnership, on behalf of said limited partnership.
---------------------------------------------
Notary Public, State of Texas
Printed Name:
------------------------------
My commission expires:
---------------------
STATE OF TEXAS )
)
COUNTY OF XXXXXX )
This instrument was acknowledged before me on the _______________ day of
__________________________, 1996, by ________________________________________,
_________________________________ of Xetel Corporation, a Delaware
corporation, on behalf of said corporation.
---------------------------------------------
Notary Public, State of Texas
Printed Name:
------------------------------
My commission expires:
---------------------
