1
EXHIBIT 10.22
GRANITE TOWER AT THE CENTRE
---------------------------
OFFICE LEASE
BETWEEN
520 PARTNERS, LTD.
------------------
LANDLORD,
AND
HOME INTERIORS & GIFTS, INC.
----------------------------
TENANT
2
TABLE OF CONTENTS
ARTICLE 1 GENERAL PROVISIONS...........................................................................1
1.01. INTRODUCTION PROVISIONS AND DEFINITIONS...................................................1
ARTICLE 2 PREMISES ....................................................................................2
2.01. PREMISES..................................................................................2
2.02. IMPROVEMENTS BY LANDLORD..................................................................2
2.03. CONDITION.................................................................................3
ARTICLE 3 TERMS ......................................................................................3
3.01. TERM......................................................................................3
3.02. COMMENCEMENT..............................................................................3
3.03. LATE POSSESSION...........................................................................3
3.04. EARLY POSSESSION .........................................................................3
3.05. ACCEPTANCE OF PREMISES....................................................................3
ARTICLE 4 RENTAL ......................................................................................4
4.01. BASE RENT ................................................................................4
4.02. PAYMENT OF RENT ..........................................................................4
4.03. SECURITY DEPOSIT ........................................................................4
ARTICLE 5 OPERATING EXPENSE ...........................................................................5
5.01. OPERATING EXPENSE REIMBURSEMENT .........................................................5
5.02A. OPERATING EXPENSES........................................................................6
5.02B. TENANT'S ELECTRICITY CHARGE...............................................................7
5.03. PRORATION AND ADJUSTMENT OF OPERATING EXPENSES............................................8
ARTICLE 6 USE..........................................................................................8
6.01. USE.......................................................................................8
ARTICLE 7 LANDLORD'S SERVICES .........................................................................8
7.01. LANDLORD'S SERVICES.......................................................................8
7.02. ADDITIONAL SERVICES.......................................................................9
7.03. INTERRUPTION OF SERVICES.................................................................10
7.04. KEYS AND LOCKS...........................................................................10
7.05. SIGNS....................................................................................10
ARTICLE 8 ALTERATIONS AND REPAIRS.....................................................................10
8.01. ALTERATIONS..............................................................................10
8.02. REMOVAL OF TRADE FIXTURES AND PERSONAL PROPERTY..........................................11
8.03. REPAIRS BY LANDLORD......................................................................11
8.04. REPAIRS BY TENANT........................................................................12
ARTICLE 9 INSURANCE...................................................................................12
9.01. LANDLORD'S INSURANCE.....................................................................12
9.02. TENANT'S INSURANCE...................................................................... 12
9.03. WAIVER OF SUBROGATION....................................................................13
9.04. INDEMNITY................................................................................13
ARTICLE 10 CASUALTY.....................................................................................14
10.01. CASUALTY..................................................................................14
10.02. END OF TERM CASUALTY......................................................................14
ARTICLE 11 CONDEMNATION.................................................................................14
11.01. CONDEMNATION..............................................................................14
11.02. CONDEMNATION AWARD........................................................................14
ARTICLE 12 ACCESS.......................................................................................15
12.01. ACCESS....................................................................................15
ARTICLE 13 SUBORDINATIONS AND ATTORNMENT................................................................15
13.01. SUBORDINATION.............................................................................15
13.02. ATTORNMENT................................................................................15
13.03. QUIET ENJOYMENT...........................................................................15
ARTICLE 14 ASSIGNMENT...................................................................................15
14.01. ASSIGNMENT................................................................................15
14.02. CONSENT...................................................................................16
14.03. TRANSFER BY LANDLORD......................................................................16
ii
3
ARTICLE 15 DEFAULT......................................................................................16
15.01. DEFAULT BY TENANT.........................................................................16
15.02. RIGHTS UPON DEFAULT BY TENANT.............................................................17
15.03. EXPENSE OF REPOSSESSION...................................................................19
15.04. CUMULATIVE REMEDIES: WAIVER OR RELEASE....................................................19
15.05. ATTORNEY'S FEES...........................................................................19
15.06. FINANCIAL STATEMENTS......................................................................19
15.07. LANDLORD'S CONTRACTUAL SECURITY INTEREST..................................................19
15.08. USE AND STORAGE OF PERSONAL PROPERTY......................................................20
15.09. DEFAULT BY LANDLORD.......................................................................20
ARTICLE 16 ENVIRONMENTAL................................................................................20
16.01. HAZARDOUS WASTE...........................................................................20
ARTICLE 17 MISCELLANEOUS................................................................................21
17.01. SUBSTITUTE PREMISES.......................................................................21
17.02. ESTOPPEL LETTERS..........................................................................21
17.03. HOLDOVER .................................................................................21
17.04. SURRENDER.................................................................................22
17.05. NOTICE....................................................................................22
17.06. RULES AND REGULATIONS.....................................................................22
17.07. LANDLORD'S LIABILITY......................................................................22
17.08. TEXAS DTPA WAIVER.........................................................................22
17.09 AMERICANS WITH DISABILITIES ACT...........................................................22
17.10. INABILITY TO PERFORM......................................................................23
17.11. TENANT AUTHORIZATION......................................................................23
17.12. BROKER....................................................................................23
17.13. MEMORANDUM OF LEASE.......................................................................23
17.14. PARKING...................................................................................23
17.15. OTHER TAXES...............................................................................23
17.16. JOINT AND SEVERAL LIABILITY...............................................................23
17.17. ACCEPTANCE BY LANDLORD....................................................................23
17.18. TIME OF ESSENCE...........................................................................23
17.19. ENTIRE AGREEMENT..........................................................................24
17.20. AMENDMENT.................................................................................24
17.21. SEVERABILITY..............................................................................24
17.22. SUCCESSORS................................................................................24
17.23. CAPTIONS..................................................................................24
17.24. NUMBER AND GENDER.........................................................................24
17.25. GOVERNING LAW.............................................................................24
17.26. RIGHTS RESERVED TO LANDLORD...............................................................24
17.27. VISIBLE AREAS CLAUSE......................................................................24
17.28. NO PRESUMPTION AGAINST DRAFTER ...........................................................25
17.29 EXAMINATION OF LEASE......................................................................25
17.30 DEFINED TERMS AND MARGINAL HEADINGS.......................................................25
17.31 NO REPRESENTATIONS........................................................................25
17.32 NO LIGHT, AIR OR VIEW EASEMENT............................................................25
17.33 SURVIVAL OF INDEMNITIES.................................................................. 25
EXHIBITS
EXHIBIT "A" - FLOOR PLAN................................................................................27
EXHIBIT "B" - LEGAL DESCRIPTION.........................................................................31
EXHIBIT "C" - RULES AND REGULATIONS.....................................................................32
EXHIBIT "D" - WORK LETTER...............................................................................35
EXHIBIT "D-1" - BUILDING SHELL IMPROVEMENTS.............................................................38
EXHIBIT "E" - ACCEPTANCE OF PREMISES MEMORANDUM.........................................................39
EXHIBIT "F" - PARKING GARAGE............................................................................40
RIDER 1 - TENANT'S RIGHT OF FIRST REFUSAL...............................................................41
SCHEDULE A..............................................................................................42
RIDER 2 - TENANT'S RENEWAL OPTION.......................................................................45
RIDER 3 - EXPANSION OPTION..............................................................................46
SCHEDULE B..............................................................................................47
RIDER 4 - CAP ON CERTAIN OPERATING EXPENSES.............................................................48
RIDER 5 - SIGNAGE.......................................................................................49
ANNEX 1.................................................................................................50
iii
4
LEASE
THIS LEASE ("Lease") is entered into as of the 17th day of August,
1999, by and between 520 Partners, Ltd. ("Landlord"), and Home Interiors &
Gifts, Inc. ("Tenant").
W I T N E S S E T H:
ARTICLE 1
1.01. INTRODUCTORY PROVISIONS AND DEFINITIONS. The Lease provisions and
definitions set forth in this Section 1.01 and all exhibits, riders, and other
attachments to this Lease are incorporated into this Lease and made a part
hereof. Capitalized terms used in this Lease without definitions have the
respective meanings assigned to them in this Section.
(a) Addresses for notices
due under this Lease
(See Article 17)
Landlord's Name
and Address: 520 Partners, Ltd.
0000 XxXxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Attn: Property Manager
Tenant's Name and Home Interiors & Gifts, Inc.
Address: 0000 Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax:______________________________________
Attn: Xxxxxx X. Xxxxxx, Xx. and Xxxx Xxxxx
With Copies To:
Weil, Gotshel & Xxxxxx
000 Xxxxxxxx Xxxxx, #0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx Xxxxxxx
(b) Building: Granite Tower at The Centre
0000 Xxxxxx Xxxx Xxxx
Xxxxxx, Xxxxx 00000
containing approximately 240,153 square feet
of total rentable area
(c) Premises: Approximately 74,139 square feet of rentable
area on the fifth, sixth and seventh floors
of the Building, designated as Suite Nos.
500, 600 and 700 respectively. (See Exhibit A)
Surface Parking Garage Parking
(d) Parking: 83 Unreserved spaces @ $ 0.00 214 Unreserved spaces @ $ 0.00
per month each per month each
10 Reserved spaces @ $ 0.00
per month each (See Exhibit "F")
Tenant shall have the continuing right to substitute at any time and from time to time up to ten (10) unreserved garage
spaces for ten (10) covered reserved spaces at a monthly cost of $20.00 per space.
(e) Permitted Use: General Office Use and all other lawful purposes (per Article 6
herein)
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
1
5
(f) Primary Term: Ten ( 10 ) years and zero ( 0 ) months (See Article 3)
(g) Commencement Date: January 3, 2000, subject to Exhibit "D" hereto, paragraph 2.4
(See Article 3)
(h) Expiration Date: January 2, 2010 subject to Exhibit "D" hereto, paragraph 2.4
(See Article 3)
(i) Tenant's Pro Rata
Share: 30.87% (See Article 5)
(j) Base Rent:
Rate per Square Base Base
Rental Foot of Annual Monthly
Period Rentable Area Rent Rent
January 3, 2000 - December 31, 2004 $21.80 $1,616,230.20 $134,685.85
January 1, 2005 - January 2, 2010 $22.80 $1,690,369.20 $140,864.10
(k) Base Operating
Expense: Operating Expenses per square foot of rentable area for the calendar
year 2000 (excluding electricity) as grossed up for 95% occupancy,
fully assessed taxes (See Article 5.)
(l) Security Deposit: Waived (See Article 4)
(m) Guarantor: N/A (See "Rider No. " )
(n) Tenant's Broker: The Staubach Company (such broker is represented by
Xxxx Xxxxx )
(o) Address for Payment of Base Rent:
(See Article 4)
520 Partners, Ltd.
X.X. Xxx 000000
Xxxxxx, Xxxxx 00000-0000
ARTICLE 2
2.01. PREMISES. In consideration of the obligation of Tenant to pay
Rent as herein provided and in consideration of the other terms, covenants and
conditions hereof, Landlord hereby does lease, let and demise unto Tenant, and
Tenant hereby does lease and rent from Landlord, upon and subject to the
provisions of this Lease, rentable area which is hereby stipulated and for all
purposes hereof agreed to be as stated in 1.01(c) above and as reflected on the
floor plan(s) attached hereto as Exhibit "A" and incorporated herein for all
purposes (such space so leased to Tenant is herein called the "Premises")
located in the Building as set forth in Article 1.01(b) and situated on the
tract of "Land" herein so called and described in Exhibit "B" attached hereto
and incorporated herein for all purposes, together with the parking spaces
described in Article 1.01 (d) (the Building, the Land, and the parking area and
garage being hereinafter collectively referred to as the "Project"), TO HAVE AND
TO HOLD said Premises for the Term, subject to the provisions of this Lease.
2.02. IMPROVEMENTS BY LANDLORD. Subject to delays caused solely by
Tenant, Tenant's agents or contractors, Landlord shall substantially complete
Tenant's Improvements (as defined in Exhibit "D" attached hereto) to be
constructed or installed by Landlord pursuant to Exhibit "D" attached hereto and
incorporated herein for all purposes, on or before December 1, 1999. All
installations now or hereafter placed on the Premises in excess of the Tenant's
Improvements as set forth in Exhibit "D" shall be for Tenant's account and at
Tenant's cost (and Tenant shall pay ad valorem taxes and increased insurance
thereon), which costs shall be payable by Tenant to Landlord as additional rent
hereunder promptly upon being invoiced therefor, and failure by Tenant to pay
same in full within thirty (30) days of invoice shall constitute an event of
default by Tenant hereunder giving rise to all remedies available to Landlord
under this Lease and at law for non-payment of rent. In the event that Tenant's
Improvements and remainder of the Premises are not Substantially Complete (as
defined in Exhibit "D") by December 1, 1999 (subject to Force Majeure and Tenant
Delay), then Tenant may withhold from Base Rent liquidated damages in an amount
equal to one (1) day of Base Rent for each one (1) day of delay from and after
December 1, 1999 until December 31, 1999 and two (2) days of Base Rent for each
one (1) day of delay from and after January 1, 2000 until Substantial Completion
occurs.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
2
6
2.03. CONDITION OF PREMISES. Landlord represents and warrants that (a)
the Building is in material compliance with all governmental laws, ordinances
and codes (including, without limitation, all building codes) applicable to the
Building, and (b) the levelness of floor slabs is materially equivalent to that
contained in comparable buildings. Tenant has inspected the Premises and the
common areas of the Building and the parking facilities, is familiar with their
condition and accepts same in their present "AS IS" condition. Tenant
acknowledges that Landlord is not obligated to do any further construction or
make any additional improvements, except as provided in Section 2.02 and Exhibit
"D" hereof.
2.04. MODIFICATIONS OF AREA. Upon Substantial Completion (as defined in
Exhibit "D") of the Premises, at Tenant's request and expense, Landlord's
architect and Tenant's architect shall jointly remeasure and recalculate the
rentable area of the Premises in accordance with the Standards contained in the
published by Building Owners and Managers Association International as revised
and readopted June 7, 1996. In the event the rentable area of the Premises as
recalculated differs from the amount of rentable area set forth in 1.01(c)
hereof, then this Lease will be amended by the parties to reflect such
difference in rentable area, including, without limitation, the difference in
Base Rent and Tenant's Pro Rata Share (as both are hereinafter defined).
ARTICLE 3
3.01. TERM. Subject to the other provisions hereof, this Lease shall be
and continue in full force and effect for the Primary Term as set forth in
Section 1.01(f) and commencing on the Commencement Date set forth in Section
1.01(g) (subject to Exhibit "D" hereto, paragraph 2.4) and expiring on the
Expiration Date set forth in Section 1.01(h). Such term, as it may be extended
or modified only by written agreement of the parties or pursuant to an express
provision of this Lease, is herein called the " Term".
3.02. COMMENCEMENT. The Commencement Date shall be January 3, 2000
(subject to Exhibit "D" hereto, paragraph 2.4).
3.03. LATE POSSESSION. Tenant Delays shall not delay the Commencement
Date, the Expiration Date or the commencement of installments of Rent.
3.04. EARLY POSSESSION. If prior to the Commencement Date, Tenant shall
enter into possession of all or any part of the Premises, such possession shall
be subject to all of the provisions of this Lease, and the Term and the payment
of all Rent shall commence, with respect to all or such part of the Premises as
are so occupied by Tenant, on the date of such entry, and the total amount of
all Rent due hereunder shall be increased accordingly, provided that no such
early entry shall operate to change the Expiration Date provided for herein.
Notwithstanding the foregoing, Tenant and Tenant's contractors and consultants
shall have the right to enter upon the Premises prior to the Commencement Date
for the purpose of installing Tenant's telephone systems, office equipment,
trade fixtures and furnishings and such entry shall be subject to all terms and
conditions of this Lease other than the obligation to pay Rent.
3.05. ACCEPTANCE OF PREMISES MEMORANDUM. Upon Substantial
Completion (as defined in Exhibit "D") of Tenant's Improvements, Landlord and
Tenant shall execute the Acceptance of Premises Memorandum, a form of which is
attached hereto as Exhibit "E" and incorporated herein for all purposes. If
Tenant fails to execute a completed Acceptance of Premises Memorandum within
fifteen (15) days after the occurrence of Substantial Completion, Tenant shall
be deemed to have accepted the Premises and Substantial Completion shall be
deemed to have occurred on the date specified in Landlord's notice of
Substantial Completion.
ARTICLE 4
4.01. BASE RENT. Tenant, in consideration for this Lease and the
leasing of the Premises for the Term, agrees to pay to Landlord the Base Rent in
such amounts as set forth in Section 1.01(j) (subject to adjustments as provided
for herein). Base Rent is payable in advance, and without demand, on the first
day of each calendar month during the Term. If the Commencement Date is other
than the first day of a month, Tenant shall be required to pay only a pro rata
portion of the monthly installment of Base Rent for such partial month.
4.02. PAYMENT OF RENT. As used in this Lease, "Rent" shall mean the
Base Rent, the Operating Expense reimbursements pursuant to Section 5.01,
Tenant's Electricity Charge pursuant to Section 5.02B, the Parking Rent pursuant
to Section 17.14 hereof, and all other monetary obligations provided for in this
Lease to be paid by Tenant, all of which shall constitute rental in
consideration for this Lease and the leasing of the Premises. Without invoice or
other notice from Landlord, Tenant shall send Base Rent and other sums due
hereunder in legal tender of the United States of America to Landlord at the
address set forth in Section 1.01(o) or to such other person or at such other
address as Landlord may from time to time designate in writing. The Rent shall
be paid without notice, demand, abatement, deduction, or offset except as may be
expressly set forth in this Lease.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
3
7
Landlord shall, at its option, have the right to collect from Tenant,
ten cents ($.10) for each dollar ($1.00) of each installment of Rent which is
not received on its due date for any reason whatsoever and such non-payment
continues for five (5) days after written notice thereof has been given by
Landlord to Tenant and Tenant agrees to pay such amount immediately on demand as
liquidated damages to cover the additional costs of collecting and processing
such late payments. Tenant acknowledges that the late payment by Tenant to
Landlord of Rent due hereunder will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and such late charges represent a fair and reasonable
estimate of the cost that Landlord will incur by reason of the late payment by
Tenant. If such failure to pay Rent continues beyond a fifteen (15) day period,
any and all due and unpaid Rent shall bear interest at the lesser of (i)
eighteen percent (18%) per annum, or (ii) the maximum non-usurious rate allowed
by applicable law (the "Default Interest Rate"), from the date such Rent became
due until the date such Rent is received by Landlord. Such interest shall be
immediately due and payable as additional Rent hereunder. The collection of such
late charge and/or such interest by Landlord shall be in addition to and
cumulative of any and all other remedies available to Landlord.
It is the intention of Landlord and Tenant to conform to all applicable
laws concerning the contracting for, charging and receiving of interest. In the
event that any payments of interest required under this Lease are ever found to
exceed any applicable limits, Landlord shall credit the amount of any such
excess paid by Tenant against any amount owing under this Lease or if all
amounts owing under this Lease have been paid, Landlord shall refund to Tenant
the amount of such excess paid by Tenant. Landlord and Tenant agree that
Landlord shall not be subject to any applicable penalties in connection with any
such excess interest, it being agreed that any such excess interest contracted
for, charged or received pursuant to this Lease shall be deemed a result of a
bona fide error and a mistake. The obligation of Tenant to pay Rent is an
independent covenant, and, except as may otherwise be provided for herein, no
act or circumstance, whether constituting a breach of covenant by Landlord or
not, shall release or modify Tenant's obligation to pay Rent.
4.03. SECURITY DEPOSIT. Intentionally Deleted.
ARTICLE 5
5.01. OPERATING EXPENSE REIMBURSEMENT. The Base Rent payable under
Section 4.01 of this Lease includes an annual allocation for operating expenses
equal to the Operating Expense (defined in Section 5.02 hereof) per square foot
of rentable area of the Premises for the calendar year set forth in
Section1.01(k) (the "Base Operating Expense"). In the event that Tenant's Pro
Rata share of Operating Expenses (defined in Section 5.02A hereof) of the
Building during any calendar year of the Term shall exceed the Base Operating
Expense, Tenant shall pay to Landlord its proportionate share of the increase in
such Operating Expenses over the Base Operating Expense. On or before the first
day of each calendar year during the Term (or as soon thereafter as is
reasonably possible), Landlord shall provide to Tenant the reasonable Estimated
Operating Expense Increase for the upcoming year. In addition to the Base Rent,
Tenant shall pay in advance on the first day of each calendar month during the
Term, installments equal to 1/12th of Tenant's Pro Rata Share (as set forth in
Section 1.01 (i) of the Estimated Operating Expense Increase.
As soon as possible after the end of each calendar year during the
Term, Landlord shall furnish to Tenant a statement of the Actual Operating
Expense Increase (hereinafter defined) for the immediately preceding calendar
year, which statement shall specify the various types of Operating Expenses and
set forth Landlord's calculations of Tenant's Pro Rata Share of the Actual
Operating Expense Increase. If Tenant's Pro Rata Share of the Estimated
Operating Expense Increase paid to Landlord during the previous calendar year
exceeds Tenant's Pro Rata Share of the Actual Operating Expense Increase, then
Landlord shall, at Tenant's option, either refund the difference to Tenant at
the time Landlord furnishes the statement of the Actual Operating Expense
Increase or credit the amount overpaid by Tenant to Tenant's Pro Rata Share of
the Estimated Operating Expense Increase for the next calendar year. If Tenant's
Pro Rata Share of Estimated Operating Expense Increase paid to Landlord during
the previous calendar year is less than Tenant's Pro Rata Share of the Actual
Operating Expense Increase, then Tenant shall pay to Landlord the amount of such
underpayment. Any amount due Landlord as shown on any such statement shall be
paid by Tenant within sixty (60) days after it is furnished to Tenant.
The "Estimated Operating Expense Increase" shall equal Landlord's
reasonable estimate of Tenant's Pro Rata share of Operating Expenses for the
applicable calendar year, less the Base Operating Expense. Landlord's statement
of the Estimated Operating Expense Increase shall control for the year specified
in such statement and for each succeeding year during the Term until Landlord
provides a new statement of the Estimated Operating Expense Increase. The
"Actual Operating Expense Increase" shall equal Tenant's Pro Rata share of the
actual Operating Expenses for the applicable calendar year, less the Base
Operating Expense. If Operating Expenses change during a calendar year or if the
number of square feet of rentable area in the Premises changes, Landlord may
revise the estimated Additional Rent during such year by giving Tenant written
notice to that effect and thereafter Tenant shall pay to Landlord, in each of
the remaining months of such year, an amount commensurate with the change in the
estimated Additional Rent divided by the number of months remaining in such
year.
5.02A. OPERATING EXPENSES. The term "Operating Expenses" shall mean and
include all reasonable and customary amounts, expenses, and costs of whatsoever
nature (other than electricity) that Landlord incurs, pays or becomes obligated
to pay because of or in connection with the ownership, operation, management,
repair, or maintenance of the Project and Landlord's personal property used
solely in connection therewith. Operating Expenses shall be determined on an
accrual basis in accordance with generally accepted accounting principles
consistently applied
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
4
8
and shall include, without limitation, the following:
(a) Wages, salaries, fees, related taxes, insurance, benefits, and
reimbursable expenses of all personnel directly engaged in operating, repairing,
and maintaining the Project and providing traffic control about the Project;
provided, however, that if during the Term such personnel are also working on
other projects being operated by Landlord, their wages, salaries, fees and
related expenses shall be allocated by Landlord in good faith among all of such
projects and only that portion of such expenses incurred directly with respect
to the Project shall be included as an "Operating Expense."
(b) Cost of all labor, supplies, tools, equipment and materials used in
operating, repairing, and maintaining the Project.
(c) Cost of all utilities (except for electricity) for the Project,
including, without limitation, water, gas and fuel oil.
(d) Cost of all maintenance, security, window cleaning, elevator
maintenance, landscaping, repair, janitorial, and other similar service
agreements for the Project and the equipment and other personal property of
Landlord therein and thereon used solely in connection with the operation,
management, repair or maintenance of the Project.
(e) Cost of all insurance relating to the Project and its occupancy or
operations, including but not limited to (i) the cost of casualty and liability
insurance applicable to the Project or Landlord's personal property used solely
in connection with the operation of the Project, (ii) the cost of business
interruption insurance in such amounts as will reimburse Landlord for all losses
of earnings and other income attributable to the ownership and operation of the
Project, and (iii) the cost of insurance against such perils and occurrences as
are commonly insured against by prudent landlords.
(f) All taxes, assessments, and governmental charges and fees of
whatsoever nature, whether now existing or subsequently created, attributable to
the Project or its occupancy or operation, excluding only franchise and income
taxes of Landlord (but not excluding such taxes if imposed in the future wholly
or partially in lieu of present real estate, ad valorem, or similar taxes), and
including all such taxes whether assessed to or paid by Landlord or third
parties, but excluding such taxes to the extent, if any, that Tenant, any other
tenant of the Project, or any other party specifically reimburses Landlord
therefor (other than through the payment of Operating Expense reimbursements).
Section 41.413 of the Texas Property Tax Code gives Tenant the right to protest
a determination of the appraised value of the Land if Landlord does not so
protest and requires Landlord to deliver to Tenant a notice of any determination
of the appraisal value of the Land. Tenant agrees not to protest any valuation
unless Tenant notifies Landlord in writing of Tenant's intent to protest and
Landlord fails to protest the valuation within fifteen (15) days after Landlord
receives Tenant's written notice. Tenant shall be responsible for all costs
associated with any protest brought by Tenant, except that Tenant shall be
reimbursed for its costs from any refund or rebate of taxes obtained as a direct
result of Tenant's protest.
(g) Costs of repairs to and maintenance of the Project undertaken by
Landlord in its sole reasonable discretion on or of the Project, excluding any
such costs as are paid by the proceeds of insurance, by Tenant, or by other
third parties, and excluding any alterations of space occupied by other tenants
of the Building.
(h) A management fee customary in the marketplace for office buildings
comparable to the Building for management services rendered in connection with
the Project (as used in this Lease, "comparable" buildings shall mean Class A
office buildings in the North Dallas office market which are similar in age,
size, location and structure as the Building).
(i) The cost of capital investment items to the extent they are
generally designed and intended to reduce Operating Expenses for the benefit of
all of the Project's tenants or which may be required by any governmental
authority. All such costs, including interest costs, shall be amortized over the
reasonable life of the capital investment items, with the reasonable life and
amortization schedule being determined by Landlord according to generally
accepted accounting principles, but in no event to extend beyond the reasonable
life of the Building.
(j) Landlord's central accounting costs allocated by Landlord in good
faith among all projects of Landlord, and legal, appraisal (if such appraisal is
related to efforts to reduce Operating Expenses), and other such third party
fees directly relating to the operation of the Project.
(k) The fair market rental value of Landlord's and the property
manager's offices, if any, in the Building.
Nothing contained in this Section 5.02 shall be construed as requiring
Landlord to provide any services which are not specifically set forth in this
Lease as obligations of Landlord.
5.02 B. EXCLUSIONS FROM OPERATING EXPENSES. The term "Operating
Expenses" shall not include any item which is not customarily considered to be a
normal expense of maintenance, operation or repair, including, without
limitation, the following:
(a) electrical expenses.
(b) federal income and state franchise taxes payable by Landlord.
(c) costs for which Landlord actually receives reimbursement by
insurance or condemnation awards.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
5
9
(d) expenses incurred in leasing or procuring new tenants, including
advertising expenses, legal fees or leasing commissions paid to agents of
Landlord or other brokers.
(e) depreciation of the Building or Landlord's personal property at the
Building.
(f) interest on debt or amortization payments on any debt served by a
deed of trust on the Land.
(g) rental under any superior lease or sublease.
(h) dividends or partnership distributions paid by Landlord.
(i) (except as provided in Section 5.02A(i) above) cost of alterations
and capital improvements not treatable as expenses under generally accepted
accounting principals.
(j) costs for repair or maintenance that are reimbursed by others.
(k) above market or noncompetitive payments to venders.
(l) costs resulting from defects in design, construction or workmanship
with respect to the Building.
(m) costs due to Landlord's default under this Lease.
(n) costs due solely to the negligence or willful misconduct of the
Landlord, its employees, agents, contractors or assigns.
(o) costs, fines or penalties incurred due to a violation of law by
Landlord and the defense of same.
(p) any legal fees to resolve disputes involving Landlord.
(q) cost of artwork.
(r) any costs of work which is to be performed by Landlord under
Exhibit "D" of this Lease.
(s) expenses for vacant or vacated space.
(t) expenses incurred solely for the benefit of any other tenant.
(u) costs related to the addition of other buildings on, and/or
expansion of the Land.
(v) local or civic contributions
(w) any other unreasonable cost. To the extent that an expense is not
specifically included or excluded as a component of Operating Expenses, whether
such expense shall be treated as an Operating Expense, shall be determined in
accordance with generally accepted accounting principles, consistently applied.
5.02 C. TENANT'S ELECTRICITY CHARGE. Tenant covenants and agrees to pay
to Landlord as additional Rent without any setoff or deduction whatsoever
Tenant's Pro Rata Share as set forth in Section 1.01(i) of all electricity
consumed in the use, occupancy, and operation of the Building, the parking
garage associated with the Building and the exterior perimeter lights for the
remainder of the Building and Project (hereinafter called "Tenant's Electricity
Charge"). By the Commencement Date (or as soon thereafter as is reasonably
possible), Landlord shall give Tenant written notice of the reasonable estimated
amount of Tenant's Electricity Charge owing for the remainder of the calendar
year in which the Commencement Date occurs and the amount of the monthly
installment of Tenant's Electricity charge due for each month during such year.
By December 1 of the calendar year in which the Commencement Date occurs and by
December 1 of each calendar year thereafter (or as soon thereafter as is
reasonably possible), Landlord shall give Tenant written notice of the
reasonable estimated amount of Tenant's Electricity Charge for the next calendar
year and the amount of the monthly installment of Tenant's Electricity Charge
due for each month during such year. Beginning on the Commencement Date and
continuing on the first day of each month thereafter, Tenant shall pay to
Landlord the amount of the applicable monthly installment of Tenant's
Electricity Charge, without demand, offset or deduction, provided, however, if
the applicable installment covers a partial month, then such installment shall
be prorated on a daily basis.
(b) This subparagraph (b) applies to each calendar year during which
Tenant's Electricity Charge is owing except for the calendar year in which the
Expiration Date occurs. Within thirty (30) days after the end of each calendar
year or as soon thereafter as is reasonably possible, Landlord shall prepare and
deliver to Tenant a statement showing the actual amount of Tenant's Electricity
Charge for the applicable calendar year. If Tenant's total monthly payments of
estimated Tenant's Electricity Charge for the applicable year are less than the
actual amount of Tenant's Electricity Charge, then Tenant shall pay to Landlord
the amount of such underpayment within thirty (30) days. If Tenant's total
monthly
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
6
10
payments of estimated Tenant's Electricity Charge for the applicable year are
more than Tenant's actual Tenant's Electricity Charge, then Landlord shall
credit or against the next Tenant's Electricity Charge payment or payments due
from Tenant or refund to Tenant at Tenant's option the amount of such
overpayment within thirty (30) days.
(c) This subparagraph (c) applies to the calendar year during which the
Expiration Date occurs (the "Final Calendar Year"). Within ninety (90) days
after the Expiration Date or as soon thereafter as is reasonably possible,
Landlord shall prepare and deliver to Tenant a statement showing the actual
amount of Tenant's Electricity Charge for the period beginning January 1 of the
Final Calendar year and ending on the Expiration Date (such period is herein
called the "Final Electricity Period"). If Tenant's total monthly payments of
estimated Tenant's Electricity Charge for the Final Electricity Period are less
than Tenant's actual Tenant's Electricity Charge for such period, then Tenant
shall pay to Landlord the amount of such underpayment within thirty (30) days.
If Tenant's total monthly payments of estimated Tenant's Electricity Charge for
the Final Electricity Period are more than Tenant's actual Tenant's Electricity
Charge for such period, Landlord shall pay to Tenant the amount of such excess
payments, less any amounts then owed to Landlord within thirty (30) days.
Notwithstanding anything to the contrary hereinbefore contained,
Landlord may at any time during the Term hereof, elect to install meters
measuring electricity used in the Building and/or the Premises which may also
include meters measuring electricity used for heating and cooling the Building
and/or the Premises, and in such cases, Tenant's Pro Rata Share of such costs
shall then be based on actual use as measured by such meters but with any areas
sharing a meter being prorated on the basis that the area of the Premises bears
to the area covered by the meters.
Electrical power which is separately metered or is otherwise separately
assessable to tenants of the area served by such facilities and the cost of
normal and after-hours air conditioning supplied to tenants of the area so
served shall be excluded in computing Tenant's Electricity Charge as aforesaid.
5.03. PRORATION AND ADJUSTMENT OF OPERATING EXPENSES. If this Lease
commences on other than the first day of a calendar year, or if this Lease
expires or terminates on other than the last day of a calendar year, then the
Operating Expenses for all of such calendar year shall be prorated according to
the portion of the Term that occurs during such calendar year. If at any time
the Building is not fully occupied or Landlord is not supplying all services to
all portions of the Building during an entire calendar year, then, at Landlord's
option, Operating Expenses, the Actual Operating Expense Increase, and the
Estimated Operating Expense Increase shall be adjusted as though the Building
had been ninety-five percent (95%) occupied and Landlord were supplying all
services to such portions of the Building during the entire calendar year. Such
ninety-five percent (95%) gross up shall be applied to the Base Operating
Expense.
5.04 RIGHT TO AUDIT.
(a) Landlord shall maintain for a period of at least two (2)
years following the end of the period to which they pertain complete and
accurate books and records of all items of Operating Expenses and electricity
expenses paid or incurred by Landlord. Such books and records shall be kept at a
location in Dallas County, and Tenant's third-party auditors shall have the
right, with reasonable notice, to inspect, copy and audit such books and records
at any time during normal business hours. Landlord shall promptly repay Tenant
for any overpayments which Tenant's third-party auditors accurately identify
together with interest thereon at the rate of ten percent (10%) per annum from
the date paid by Tenant until full refund. If such overpayments exceed three
percent (3%) of the aggregate of Tenant's Operating Expense and Electricity
Charge for the period in question, then Landlord shall pay for the reasonable
cost of such audit. If Landlord fails to maintain sufficient documentation to
reasonably substantiate any item of Operating Expense or Electricity Charge,
Landlord shall on demand refund to Tenant its payment of such item, together
with interest thereon at the highest legal rate from the date paid until full
refund.
ARTICLE 6
6.01. USE. Tenant shall use and occupy the Premises only for the
Permitted Use set forth in Section 1.01(e) hereof, and for no other purposes.
Tenant shall not use or permit the Premises or any portion thereof to be used
for any purpose other than the Permitted Use or for any unlawful purpose or in
any unlawful manner, and shall comply with all federal, state, and local
governmental laws, ordinances, orders, rules and regulations applicable to the
Premises, the Project, and the occupancy thereof and Tenant shall give prompt
written notice to Landlord of any notification to Tenant of any claimed
violation thereof. Tenant shall not do or permit anything to be done in or about
the Premises, nor bring or keep anything therein which will in any way increase
the existing rate of or affect any fire or other insurance upon the Project or
any of its contents, or cause cancellation of any insurance policy covering the
Project or any part thereof or any of its contents. In the event that, solely by
reason of any acts of Tenant or its conduct of business, there shall be any
increase in the rate of insurance on the Building or its contents, Tenant hereby
agrees to pay such increase. Tenant shall not do or permit anything to be done
in or about the Premises and/or Project which will in any way obstruct or
interfere with the rights of other tenants or occupants of the Project or injure
or annoy them. Tenant shall not permit any nuisance in, on or about the
Premises. Tenant shall not commit or suffer to be committed any waste in or upon
the Premises. Without limitation of the foregoing, Tenant shall not, without
Landlord's prior written consent, use, store, install, spill, remove, release or
dispose of, within or about the Premises or any other portion of the Project,
any asbestos-containing materials or any solid, liquid or gaseous material now
or hereafter considered toxic or hazardous under the provisions of 42 U.S.C.
9601, et seq., or any other applicable environmental law which may now or
hereafter be in effect. If Landlord does give written consent to Tenant pursuant
to the foregoing sentence, Tenant shall comply with all applicable laws, rules
and regulations pertaining to and governing such use by Tenant, and shall remain
liable for the costs of any clean up or removal required to be performed with
respect to such asbestos-containing, toxic or hazardous materials.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
7
11
ARTICLE 7
7.01. LANDLORD'S SERVICES. Subject to the availability of necessary
service from the appropriate public utility or other entity responsible for
providing such service, Landlord shall, at Landlord's expense, except as
provided to the contrary in this Lease, furnish to Tenant in the occupied
portion of the Premises the following services, which shall be of a standard of
quality for buildings "comparable" to the Building:
(a) Air-conditioning and central heat at such temperatures and in such
amounts as are customary for buildings "comparable" to the Building, during
normal business hours for the Building as set forth in the Rules and Regulations
attached as Exhibit "C" attached hereto and incorporated herein for all
purposes.
(b) Janitorial cleaning services in the Premises and public and
exterior portions of the Building for all days, except Saturdays, Sundays and
holidays; provided, however, if Tenant's floor covering or other improvements is
other than Building Standard, Tenant shall pay the additional cleaning cost
attributable thereto as additional Rent within thirty (30) days of the
presentation of a statement therefor by Landlord. Such services will be provided
at such times and in accordance with Annex 1 hereto.
(c) Hot and cold water at those points of supply provided for general
use of other tenants in the Building.
(d) Normal and customary routine maintenance for all public,
structural, and exterior portions of the Project according to standards
customary for office buildings "comparable" to the Building.
(e) Electric lighting service for all public portions of the Project in
the manner and to the extent customary for office buildings "comparable" to the
Building.
(f) Automatic passenger elevator service for access to and egress from
the Premises. Freight elevator service, in common with other tenants, shall be
provided during reasonable business hours as prescribed by Landlord, exclusive
of Saturdays, Sundays, and holidays. Landlord may reduce the number of elevators
operating outside of business hours.
(g) All Building Standard fluorescent bulb replacement in all common
and public areas, toilet and restroom areas and stairwells, and the electrical
power required for Building Standard fluorescent fixtures; provided, however,
bulb replacement required for lights in the Premises which are above Building
Standard shall be paid for by Tenant in a manner determined by Landlord, in
Landlord's reasonable discretion.
(h) Electrical facilities to furnish sufficient power for typewriters,
calculating machines, personal computers and other machines of similar low
electrical consumption such that the total electrical power available shall be
at least six xxxxx per square foot of rentable area; but not including
electricity required for electronic data processing equipment, special lighting
in excess of Building Standard, and any other item of electrical equipment, the
electrical power equipment of which (singly) is more than 0.5 kilowatts per hour
at rated capacity or requires a voltage other than 110/120 volts single phase;
and provided that Landlord shall not be obligated to provide dedicated circuits
or electrical power in excess of Building Standard and provided that if the
installation of said electrical equipment requires additional air conditioning
capacity above that provided by the Building Standard system, then the
additional air conditioning installation and operating costs will be the
obligation of Tenant. Landlord, at its option, may cause a water meter, electric
current meter or such similar device to be installed on the Premises so as to
measure the amount of water and electric current consumed by Tenant. The cost of
any such meters and of the installation, maintenance and repair thereof shall be
paid for by Tenant and Tenant agrees to pay Landlord, after thirty (30) days of
demand by Landlord, for all such excess water and electric expense incurred. If
a separate meter is not installed or Landlord is prevented from installing a
separate meter by operation of law or other cause beyond Landlord's control,
such excess costs for such water and electric current will be established by an
estimate made by the utility company, electrical engineer, or an independent
consultant, which estimate shall be binding on Tenant. Landlord and Tenant agree
that in the event Landlord adopts a new method for measuring, allocating and
charging for electrical usage within the Building, the Lease shall be amended to
reflect the new method.
(i) Security services standard for office buildings i "comparable" to
the Building, including, without limitation, an electrically controlled security
card access system controlling access to the Building and parking garage, which
will grant access to individuals with authorized cards. NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, TENANT EXPRESSLY ACKNOWLEDGES AND AGREES THAT LANDLORD
IS NOT WARRANTING THE EFFICIENCY OF ANY SUCH SECURITY PERSONNEL, SERVICE,
PROCEDURES OR EQUIPMENT. LANDLORD SHALL NOT BE RESPONSIBLE OR LIABLE IN ANY
MANNER FOR FAILURE OF ANY SUCH SECURITY PERSONNEL, SERVICES, PROCEDURES OR
EQUIPMENT TO PREVENT, CONTROL, OR APPREHEND ANYONE SUSPECTED OF CAUSING PERSONAL
INJURY OR DAMAGE IN, ON OR AROUND THE PROJECT (EXCLUDING LANDLORD'S GROSS
NEGLIGENCE AND WILLFUL MISCONDUCT).
Notwithstanding anything hereinabove to the contrary, Landlord
reserves the right from time to time to make reasonable modifications to the
above standards for utilities and services that are provided to all tenants in
the Building.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
8
12
7.02. ADDITIONAL SERVICES. Landlord may impose a reasonable charge for
any utilities and services, (including without limitation, janitorial,
maintenance, security, air conditioning, electrical current and water), provided
by Landlord by reason of any use of the services at any time other than the
hours as set forth in the Rules and Regulations attached hereto as Exhibit "C"
or beyond the levels or quantities that Landlord agrees herein to furnish or
because of special electrical, cooling or ventilating needs created by Tenant's
hybrid telephone equipment, computers or other equipment; provided, however,
that Tenant's excessive use or consumption of heating, air conditioning and/or
electrical services in violation of Section 7.01 above, without Landlord's prior
written consent, shall constitute a Default under this Lease. Upon request of
Tenant to be given to the Property Manager of the Project before 3:00 p.m. of
the business day of requested extra usage, Landlord shall make available, at
Tenant's expense, after hours heat or air conditioning. The minimum charge and
the hourly rate for the use of after hours heat or air conditioning (HVAC) shall
be the actual cost of the utilities to Landlord of providing such service plus
an equipment depreciation charge as reasonably determined by Landlord's thirty
party engineers (such determination to be substantiated to the reasonable
satisfaction of Tenant). For purposes of this Lease, the hourly rate charged for
calendar year 2000 for such after hours HVAC is $12.58 per hour per floor.
7.03. INTERRUPTION OF SERVICES. Notwithstanding anything herein to the
contrary, the obligations of the Landlord to provide the services and utilities
provided above shall be subject to governmental regulation (e.g., rationing,
temperature, control, etc.) and any such regulation which requires Landlord to
provide or not provide such services or utilities other than as herein provided,
shall not constitute a default hereunder, but rather compliance with such
regulation shall be deemed to be compliance by Landlord hereunder. Any failure
or defect in Landlord's hereinabove described services shall not be construed as
an eviction of Tenant, nor entitle Tenant to any reduction, abatement, offset,
or refund of Rent or to any damages from Landlord and in no event shall Landlord
be liable for damage to persons or property (including, without limitation,
business interruption) or be in default hereunder as a result of any such
uncontrollable event or results or effects thereof. Landlord shall not be in
breach or default under this Lease, provided Landlord uses reasonable diligence
to restore any such failure or defect promptly after Landlord receives written
notice thereof. Notwithstanding the foregoing, in the event of the failure to
furnish, any stoppage of or other interruption in the furnishing of the services
or utilities described in Section 7.01, which continues for three (3)
consecutive business days after receipt by Landlord of written notice thereof
from Tenant, and such failure, stoppage or interruption is not caused by force
majeure (defined in Section 17.10 hereof), a casualty covered by Section 10.01
hereof, a failure on the part of a public utility, or by any negligent act or
omission of Tenant, its agents, employees or contractors, Tenant shall be
entitled, as its sole and exclusive remedy, to an abatement of Base Rent and
Actual Operating Expense Increases in proportion to the area of the Premises
that is rendered untenantable by such failure, stoppage or interruption, with
such abatement to begin on the fourth (4th) business day after the receipt by
Landlord of written notice of such occurrence and continuing until such failure,
stoppage or interruption has been cured.
7.04. KEYS AND LOCKS. Landlord shall furnish to Tenant two (2) keys for
each corridor door entering the Premises. Additional keys will be furnished at a
charge by Landlord on an order signed by Tenant or Tenant's authorized
representative. All such keys shall remain the property of Landlord. No
additional locks shall be allowed on any door of the Premises without Landlord's
written consent, and Tenant shall not make, or permit to be made, any duplicate
keys, except those furnished by Landlord. Upon termination of this Lease, Tenant
shall surrender to Landlord all keys to the Premises, and give to Landlord an
explanation of the combination of all locks for safes, safe cabinets and vault
doors, if any, in the Premises.
7.05. SIGNS. Landlord shall provide and install all letters and
numerals on entrance doors in or at the Premises. All such letters and numerals
are to be Building Standard graphics, and no other letters, numbers, or signage
shall be used or permitted on the Premises without the prior written consent of
Landlord. Tenant shall not place signs on the Premises which are visible from
outside the Premises, without Landlord's prior written consent. Tenant shall not
place or permit to be placed or maintained on any exterior door, wall or window
of the Premises any sign, awning, canopy, advertising matter or similar item of
any kind, and will not place or maintain any decoration, lettering or
advertising matter on the glass of any window or door of the Premises without
first obtaining Landlord's prior written approval in each instance. Tenant shall
maintain any such sign, awning, canopy, decoration, lettering, advertising
matter or similar item as may be approved by Landlord, in good condition and
repair at all times. The restrictions contained in this Section 7.05 shall not
apply to the interior of any floor on which Tenant is the sole tenant.
ARTICLE 8
8.01. ALTERATIONS. Tenant shall not make or allow to be made any
alterations, installations, additions, or improvements in or to the Premises or
install any equipment or machinery (other than standard office equipment and
unattached personal property), without Landlord's prior written consent, which
shall not be unreasonably withheld or delayed. The parties agree that it shall
be reasonable under this Lease for Landlord to withhold its consent to any
proposed work only where such work will have a material adverse effect on
load-bearing or corridor walls, Building systems or equipment or the Building
structure or will alter the Building's external appearance. Notwithstanding the
foregoing, Tenant may, without Landlord's consent, perform interior work to the
Premises (such as replacement of floor coverings, window coverings, fixtures,
equipment, signage). Notwithstanding anything to the contrary contained herein,
unless such alterations exceed $25,000.00 or affect the mechanical systems,
floor, roof or other structural components of the Premises, Tenant shall not be
required to obtain Landlord's prior written approval for alterations, provided,
however, Tenant shall notify Landlord to provide Landlord with as-built drawings
within ten (10) days of the completion of such alterations. Should Tenant desire
to perform any alterations which require Landlord's consent, Tenant shall submit
plans
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
9
13
and specifications for same to Landlord for Landlord's written approval before
beginning such work. Upon receipt by Tenant of the written approval of Landlord
of such plans and specifications, and upon payment by Tenant to Landlord of the
reasonable fees incurred by Landlord to have such plans and specifications
reviewed, Tenant may proceed to make such approved alterations so long as they
are in compliance with such approved plans and specifications and are performed
by a contractor approved by Landlord. Any and all such alterations, physical
additions or improvements, including those improvements made at the Tenant's
expense or under any agreement with the Tenant whereby the Tenant is given an
allowance or rent reduction in exchange for Tenant's agreement to install or
allow to be installed lease improvements, such as by way of example, but not
limitation, wall coverings, floor coverings or carpet, paneling, doors,
cabinets, appliances (such as refrigerators and dishwashers) and hardware, shall
become the property of Landlord at the expiration or termination of this Lease
or the termination of Tenant's right to possession of the Premises and shall in
no event be removed by Tenant; provided, however, that Landlord may require
Tenant, at Tenant's cost, to remove any or all of such items upon the expiration
or termination of this Lease or the termination of Tenant's right to possession
of the Premises (provided that Landlord had previously specified in writing in
connection with the approval of the plans and specifications relating thereto,
the requirement of removal) and, at Tenant's expense, repair any damage caused
by such removal. All installations shall be at Tenant's sole cost and expense.
Without in any way limiting Landlord's consent rights, Landlord shall not be
required to give its consent until (a) Landlord approves the contractor or
person making such and approves such contractor's insurance coverage to be
provided in connection with the work, (b) Landlord approves final and complete
plans and specifications for the work and (c) the appropriate governmental
agency, if any, has approved the plans and specifications for such work. All
work performed by Tenant or its contractor relating to the installations shall
conform to applicable governmental laws, rules and regulations, including,
without limitation, the Disability Acts. Upon completion of the installations,
Tenant shall deliver to Landlord "as built" plans. If Landlord performs such
installations at Tenant's request, Tenant shall pay Landlord, as additional
Rent, the cost thereof plus ten percent (10%) as reimbursement for Landlord's
overhead. Each payment shall be made to Landlord within ten (10) days after
receipt of an invoice from Landlord.
All work performed by Tenant with respect to the Premises shall (a) be
performed so as not to alter the exterior appearance of the Building, (b) be
performed so as not to adversely affect the structure or safety of the Building,
(c) comply with all building, safety, fire, and other codes and governmental and
insurance requirements, (d) be performed so as not to result in any usage in
excess of Building Standard quantities of water, electricity, gas, heating,
ventilating, or air-conditioning (either during or after such work) unless prior
written arrangements reasonably satisfactory to Landlord are made with respect
thereto, (e) be completed promptly and in a good and workmanlike manner and in a
quality equivalent to Building Standard, (f) be performed at Tenant's expense
and at such times and in such manner as Landlord may designate from time to time
to insure minimum disruption to other tenants in the Building, and (g) be
performed in such a manner that no valid mechanic's, materialman's, or other
similar liens be attached to Tenant's leasehold estate and in no event shall
Tenant permit, or be authorized to permit, any such liens (valid or alleged) or
other claims to be asserted against Landlord or Landlord's rights, estates, and
interests with respect to the Project or this Lease. Landlord will have the
right, but not the obligation, to inspect periodically the work in the Premises
and may require reasonable changes in the method of the work.
If any mechanic's lien is filed against the Premises or the Project or
any portion thereof, Tenant shall cause same to be discharged within twenty (20)
days after the lien is filed by paying or bonding over said lien. If Tenant
fails to comply with the foregoing sentence, Landlord shall (without limitation
of its other rights or remedies) have the right, but not the obligation, to
discharge said lien and Tenant shall immediately reimburse Landlord for any sum
of money expended by Landlord in connection with obtaining such discharge, which
amount shall be deemed to be Rent hereunder for all purposes. Landlord may
require, at Tenant's sole cost and expense, a lien and completion bond in an
amount equal to the estimated cost of any improvements, additions or alterations
in the Premises which have been approved by Landlord.
Any approval by Landlord (or Landlord's architect and/or engineers) of
any of Tenant's contractors or Tenant's drawings, plans or specifications which
are prepared in connection with any construction of improvements (including
without limitation, Tenant's Improvements) in the Premises shall not in any way
be construed as or constitute a representation or warranty of Landlord as to the
abilities of the contractor or the adequacy or sufficiency of such drawings,
plans or specifications or the improvements to which they relate, for any use,
purpose or condition.
8.02. REMOVAL OF TRADE FIXTURES AND PERSONAL PROPERTY. Tenant agrees to
remove all of its trade fixtures, personal property and, at Landlord's request,
certain other non-Building standard additions, installations, and/or
improvements (provided that Landlord had previously specified in writing in
connection with the approval of the plans and specifications relating thereto,
the requirement of removal) on or before the date of expiration or termination
of the Term, and shall promptly reimburse Landlord for the cost of repairing all
damage done to the Premises or the Project by such removal and the cost of
restoring the Premises to its original condition, casualty and reasonable wear
and tear excepted, after such removal. If Tenant fails to deliver the Premises
in the condition aforesaid, then Landlord may restore the Premises to such a
condition at Tenant's expense. All property required to be removed pursuant to
this Section not removed within the time period required hereunder shall
thereupon be conclusively presumed to have been abandoned by Tenant and Landlord
may, at its option, take over possession of such property and either (a) declare
the same to be the property of Landlord by written notice to Tenant at the
address provided herein or (b) at the sole cost and expense of Tenant, remove
and store and/or dispose of the same or any part thereof in a commercially
reasonable manner.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
10
14
8.03. REPAIRS BY LANDLORD. Landlord shall repair and maintain at its
cost the structural portions of the Project, including the basic plumbing, air
conditioning, heating and electrical systems installed or furnished by Landlord,
and all areas of the Project for the common non-exclusive use of all tenants in
the Project, in accordance with the standard for office buildings "comparable"
to the Building. Any maintenance or repairs caused solely by the negligence or
willful misconduct of Tenant or any of Tenant's employees, agents, invitees or
contractors shall be made by Landlord at Tenant's reasonable expense. Landlord
shall not be liable for any damages, compensation or claim for loss of the use
of the whole or any part of the Premises or Tenant's personal property, or any
inconvenience, loss of business, or annoyance arising from any such repair
and/or maintenance performed by Landlord hereunder, except for damage resulting
from Landlord's gross negligence or willful misconduct. Landlord reserves the
right to make such repairs, changes, alterations, additions, or improvements in
or to any portion of the Project and the fixtures and equipment thereof as it
may reasonably deem necessary or desirable.
8.04. REPAIRS BY TENANT. Tenant shall, at Tenant's sole cost and
expense, keep the Premises and any appliances in good condition and repair.
Tenant shall, upon the expiration or earlier termination of this Lease,
surrender the Premises to the Landlord in good condition, ordinary wear and tear
and casualty excepted. Any injury or damage to the Premises or Project, or the
appurtenances or fixtures thereof, caused by or resulting from the negligence or
willful misconduct of Tenant or Tenant's employees, servants, agents, invitees,
assignees, or subtenants shall be repaired or replaced by Tenant, or at Tenant's
option by Landlord at the reasonable expense of Tenant. If Tenant fails to
maintain the Premises or fails to repair or replace any damage to the Premises
or Project resulting from the negligence of Tenant, its employees, servants,
agents, invitees, assignees or subtenants and such failure persists for twenty
(20) days after notice from Landlord, Landlord may, but shall not be obligated
to cause such maintenance, repair or replacement to be done, as Landlord
reasonably deems necessary, and Tenant shall immediately pay to Landlord all
reasonable costs related thereto.
ARTICLE 9
9.01. LANDLORD'S INSURANCE. Landlord covenants and agrees that from
and after the date of this Lease, Landlord will carry and maintain the insurance
set forth in Section 9.01(a) and (b) of this article.
(a) Commercial general liability insurance covering the Building and
all common areas of the Project, but excluding the Premises, insuring against
claims for personal or bodily injury or death or property damage occurring upon,
in or about the Building or common areas of the Project to afford protection to
the limit of not less than $2,000,000.00 combined single limit in respect to
injury or death to any number of persons and property damage arising out of any
one (1) occurrence. This insurance coverage shall extend to, but will not
modify, any liability of Landlord arising out of the indemnities provided for in
this Lease.
(b) Landlord shall at all times during the Term hereof maintain in
effect a policy or policies of "special form" or "all risks" insurance covering
the Building (excluding property required to be insured by Tenant) in an amount
equal to 100% of the full replacement cost thereof, providing protection against
perils included within the standard Texas form of "special form" or "all risks"
insurance coverage, with no exclusions thereunder with respect to sprinkler
damage, vandalism and malicious mischief and with any such deductibles as
Landlord may from time to time determine.
Any insurance provided for in Subsections 9.01(a) and (b) above may be
effected by self-insurance or by a policy or policies of blanket insurance
covering additional items or locations or assureds, provided that the
requirements of Sections 9.01(a) and (b) are otherwise satisfied. Tenant shall
have no rights in any policy or policies maintained by Landlord.
9.02. TENANT'S INSURANCE. Tenant covenants and agrees that from and
after the date of delivery of the Premises from Landlord to Tenant, Tenant will
carry and maintain, at its sole cost and expense, the insurance set forth in
paragraphs (a), (b), (c) and (d) of this subsection. No policy shall be
cancellable or subject to reduction of coverage except after thirty (30) days'
prior written notice to Landlord.
(a) Commercial general liability insurance covering the Premises and
Tenant's use thereof against claims for personal or bodily injury or death or
property damage occurring upon, in or about the Premises to afford protection to
the limit of not less than $1,000,000.00, combined single limit, in respect to
injury or death to any number of persons and all property damage arising out of
any one (1) occurrence. The foregoing commercial general liability insurance
will include, without limitation, the following required endorsements, to wit:
(i) Landlord will be included as "additional insured" using an additional
insured endorsement form as may be applicable from time to time or at any time
during the Term of this Lease and acceptable to Landlord, without modification
(and under the commercial umbrella, if any); and (ii) a waiver of subrogation in
favor of Landlord using such form as may be applicable from time to time or at
any time during the Term of this Lease and acceptable to Landlord (and under the
commercial umbrella, if any). This insurance coverage shall extend to, but will
not modify, any liability of Tenant arising out of the indemnities provided for
in this Lease.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
11
15
(b) "Special form" or "all risks" insurance coverage covering all
fixtures, equipment and personalty located in the Premises, in an amount not
less than one hundred percent (100%) of the full replacement cost thereof, with
no exclusions permitted thereunder with respect to vandalism, malicious mischief
or sprinkler leakage.
(c) Workers' compensation insurance insuring against and satisfying
Tenant's obligations and liabilities under the workers' compensation laws of the
State of Texas.
(d) Employer's liability insurance in an amount not less than
$1,000,000.00.
All such insurance will be issued and underwritten by companies
reasonably acceptable to Landlord, duly licensed in the State of Texas, and will
contain endorsements that (a) such insurance may not lapse with respect to
Landlord or Property Manager or be canceled or amended with respect to Landlord
or Property Manager without the insurance company giving Landlord and Property
Manager at least thirty (30) days' prior written notice of such cancellation or
amendment, (b) Tenant will be solely responsible for payment of premiums, (c) in
the event of payment of any loss covered by such policy, Landlord or Landlord's
designees will be paid first by the insurance company for Landlord's loss and
(d) Tenant's insurance is primary in the event of overlapping coverage which may
be carried by Landlord.
Tenant shall deliver to Landlord duplicate originals of all policies of
insurance required by this Section or duly executed originals of the
certificates of such insurance (in form and content acceptable to Landlord)
evidencing in-force coverage, within ten (10) days prior to the commencement of
construction of Tenant's Improvements. Further, Tenant shall deliver to Landlord
renewals thereof at least thirty (30) days prior to the expiration of the
respective policy terms.
In no event shall Landlord be responsible for loss or damage with
respect to Tenant's personal property unless caused by Landlord's gross
negligence.
Any insurance provided for in Subsections 9.02(a) through (d) above may
be effected by self-insurance or by a policy or policies of blanket insurance
covering additional items or locations or assureds, provided that (i) the
requirements of such sections are otherwise satisfied, and (ii) Tenant shall
indemnify and hold Landlord harmless from and against any claims, costs,
expenses and liabilities that would otherwise be covered by the insurance
required under Section 9.02 if such insurance were in force. Except as provided
above, Landlord shall have no rights in any policy or policies maintained by
Tenant.
9.03. WAIVER OF SUBROGATION. Landlord and Tenant each hereby waives any
rights it may have against the other (including, but not limited to, a direct
action for damages) on account of any loss or damage occasioned to Landlord or
Tenant, as the case may be (whether or not such loss or damage is caused by the
fault, negligence or other tortious conduct, acts or omissions of Landlord or
Tenant or their respective officers, directors, employees, agents or invitees),
to their respective property, the Premises, its contents or to any other portion
of the Building or the Property arising from any risk covered by the current
Texas State Board of Insurance promulgated form of "special form" or "all risks"
insurance coverage required to be carried by Landlord and Tenant, respectively,
under Sections 9.01(b) and 9.02(b) above. If a party waiving rights under this
Section is carrying a fire and extended coverage insurance policy in the
promulgated form used in the State of Texas and an amendment to such promulgated
form is passed, such amendment shall be deemed not a part of such promulgated
form until it applies to the policy being carried by the waiving party. Without
in any way limiting the foregoing waivers and to the extent permitted by
applicable law, the parties hereto each, on behalf of their respective insurance
companies insuring the property of either Landlord or Tenant against any such
loss, waive any right of subrogation that Landlord or Tenant or their respective
insurers may have against the other party or their respective officers,
directors, employees, agents or invitees and all rights of their respective
insurance companies based upon an assignment from its insured. Each party to
this Lease agrees immediately to give to each such insurance company written
notification of the terms of the mutual waivers contained in this Section and to
have said insurance policies properly endorsed, if necessary, to prevent the
invalidation of said insurance coverage by reason of said waivers. The foregoing
waiver shall be effective whether or not the parties maintain the required
insurance.
9.04. INDEMNITY. Tenant will indemnify and hold Landlord and Landlord's
respective officers, directors, employees and agents (including, but not limited
to Landlord's property manager) harmless from all claims, demands, actions,
damages, loss, liabilities, judgments, costs and expenses, including without
limitation, attorney's fees and court costs (each a "Claim" and collectively the
"Claims") which (i) are suffered by, recovered from or asserted against
Landlord, (ii) are not paid by insurance carried by Tenant or Landlord (without
in any way affecting the requirements of or Landlord's rights under Sections
9.01 and 9.02 above and (iii) arise from or in connection with (a) the use or
occupancy of the Premises and/or any accident, injury or damage occurring in or
at the Premises or (b) any breach by Tenant of any representation or covenant in
this Lease; provided, however, such indemnification of Landlord by Tenant shall
not include any Claim waived by Landlord under Section 9.03 above, any Claim to
the extent caused by the gross negligence or willful misconduct of Landlord or
any Claim relating to hazardous or toxic materials except to the extent such
Claim arises out of a breach by Tenant of any of the provisions of Section 16.01
of this Lease.
Landlord will indemnify and hold Tenant and Tenant's respective
officers, directors, employees and agents harmless from all Claims which are
suffered by, recovered from or asserted against Tenant and which are not paid by
proceeds of insurance carried by Landlord or Tenant and which arise from or in
connection with (i) the use of the common areas of the Project and/or any
accident, injury or damage occurring in or on the Common Areas solely as a
result of Landlord's gross negligence or (ii) any breach by Landlord of any
representation or covenant in this Lease;
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
12
16
provided, however, such indemnification of Tenant by Landlord shall not include
any Claim waived by Tenant under Section 9.03 above, any Claim to the extent
caused by the negligence or willful misconduct of Tenant or any Claim relating
to hazardous or toxic materials except to the extent such Claim arises out of a
breach by Landlord of any of the provisions of Section 16.01 of this Lease.
ARTICLE 10
10.01. CASUALTY. If the Premises or Project, or any portion of either,
shall be damaged by fire or other casualty covered by the insurance carried by
Landlord hereunder, and the cost of repairing such damage shall not be greater
than twenty percent (20%) of the then full replacement cost thereof, then,
subject to the following provisions of this Article, Landlord shall repair the
Premises and/or Project.
If the Premises or Project shall be damaged (a) by fire or other
casualty not covered by insurance carried by Landlord hereunder, (b) by fire or
other casualty covered by insurance carried by Landlord hereunder and Landlord's
mortgagee requires that such insurance proceeds be used to retire the mortgage
debt, or (c) to an extent greater than twenty percent (20%) of the then full
replacement cost thereof, then Landlord shall have the option to either (i)
repair or reconstruct the same to substantially the same condition as
immediately prior to such fire or other casualty, or (ii) terminate this Lease
by so notifying Tenant within sixty (60) days after the date of such fire or
other casualty, such termination to be effective as of the date of such notice.
In the event Landlord shall elect to repair or reconstruct in accordance with
subclause (i) of this Section, Landlord shall so notify Tenant in writing within
sixty (60) days after the date of such casualty. In the event Landlord shall be
obligated to repair or reconstruct or shall have elected to repair or
reconstruct, then such repair or reconstruction shall be completed by Landlord
within one hundred eighty (180) days after the casualty if the damage was not
greater that thirty percent (30%) and two hundred forty (240) days after the
casualty if the damage was greater than fifty percent (50%) (subject to Tenant
Delays and delays caused by force majeure). In the event Landlord fails to
complete any repair or reconstruction within the foregoing time periods, Tenant
shall have the option to terminate this Lease by so notifying Landlord with such
termination to be effective as of Tenant's notice. Furthermore, notwithstanding
anything to the contrary contained herein, if the Premises or the Project should
be so damaged by fire or other casualty such that the damage cannot, in
Landlord's reasonable opinion, be repaired within two hundred forty (240) days
after such casualty, then Landlord shall notify Tenant of same (the "Major
Damage Notice" ) whereupon either Landlord or Tenant may terminate this Lease by
delivering written notice to the other party within thirty (30) days after
receipt of the Major Damage Notice.
The Rent required to be paid hereunder shall be abated in proportion to
the portions of the Premises, if any, which are rendered untenantable by fire or
other casualty hereunder until repairs of the Premises are completed, or if the
Premises are not repaired, until the termination date hereunder. Other than such
Rent abatement, no damages, compensation or claim shall be payable by Landlord
for loss of the use of the whole or any part of the Premises, Tenant's personal
property, or any inconvenience, loss of business, or annoyance arising from any
such repair and reconstruction unless caused by the gross negligence or willful
misconduct of Landlord.
If the damage results from default or negligence of Tenant, its agents,
employees, licensees or invitees, then Tenant shall not be entitled to any
abatement or reduction of any Rent or other sums due hereunder. If this Lease is
terminated as provided in (c)(ii) above, all Rent shall be apportioned and paid
up to the termination date. Landlord shall not be required to repair or replace
any furniture, furnishings or other personal property which Tenant may be
entitled to remove from the Premises or any property constructed and installed
by or for Tenant in the Premises.
10.02. END OF TERM CASUALTY. Notwithstanding anything to the contrary
in this Article 10, Landlord shall not have any obligation whatsoever to repair,
reconstruct or restore the Premises or the Project when the damage resulting
from any casualty covered under this Article 10 occurs during the last eighteen
(18) months of the Term or any extension thereof.
ARTICLE 11
11.01. CONDEMNATION. If all or substantially all of the Premises shall
be taken by virtue of eminent domain or for any public or quasi-public use or
purpose, this Lease and the estate hereby granted shall terminate on the date
the condemning authority takes possession. If only a part of the Premises is so
taken, or if a portion of the Project not including the Premises is taken, this
Lease and the estate hereby granted shall, at the election of Landlord, either
(i) terminate on the date the condemning authority takes possession by
Landlord's giving notice thereof to Tenant within thirty (30) days after the
date of such taking, or (ii) continue in full force and effect as to that part
of the Premises not so taken and the Base Rent shall be reduced (from and after
the date of such taking of possession) in the proportion that the number of
square feet of the Premises so taken, if any, bears to the total number of
square feet contained in the Premises.
11.02. CONDEMNATION AWARD. Landlord shall be entitled to the whole of
any and all awards which may be paid or made in connection with any such taking.
As long as it does not diminish the amount of Landlord's award
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
13
17
hereunder, Tenant shall have the right to assert a claim for and recover from
the condemning authority, but not from Landlord, such compensation as may be
awarded on account of Tenant's moving and relocation expenses and depreciation
to and loss of Tenant's movable personal property.
ARTICLE 12
12.01. ACCESS. Without being deemed guilty of an eviction of Tenant and
without abatement of Rent, Landlord or its authorized agents shall have the
right to enter the Premises, subject to Tenant's security requirement, upon
reasonable notice, to inspect the Premises, to show the Premises to prospective
lenders, purchasers or tenants (if within the last six (6) months of the Term)
and to fulfill Landlord's obligations or exercise its rights under this Lease.
Tenant hereby waives any claim for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet enjoyment of
the Premises and any other loss occasioned thereby unless caused by the
negligence or willful misconduct of Landlord. For each of the aforesaid
purposes, Landlord shall at all times have and retain a key with which to unlock
the doors to and within the Premises, excluding Tenant's vaults and safes.
Landlord shall have the right to use any and all reasonable means which Landlord
may deem proper to enter the Premises in an emergency without liability for such
entry.
ARTICLE 13
13.01. SUBORDINATION. Provided that Tenant receives a non-disturbance
agreement in a form reasonably acceptable to Tenant from the Underlying Party
(hereinafter defined), this Lease is and shall be subject and subordinate to any
and all ground or similar leases affecting the Project, all mortgages which may
now or hereafter encumber or affect the Project and to all renewals,
modifications, consolidations, replacements and extensions of any such leases
and/or mortgages; provided, however, that at the option of any Underlying Party,
this Lease shall be superior to the lease or mortgage of such Underlying Party.
The provisions of this Section 13.01 shall be self-operative and shall require
no further consent or agreement requested by any such landlord or mortgagee in
connection with this Section 13.01, Tenant shall, however, execute promptly any
appropriate certificate or instrument evidencing same that Landlord may request.
As used in this Lease, the term "Underlying Party" shall mean the holder of the
Landlord's interest under any ground or similar lease and/or the mortgagee or
purchaser at foreclosure with respect to any mortgage. Tenant agrees that any
Underlying Party may unilaterally subordinate its mortgage or lease to this
Lease at any time by filing a notice of such subordination in the Official
Public Records of Real Property of the County where the Building is located.
13.02. ATTORNMENT. In the event of the termination of any ground or
similar lease affecting the Project or the enforcement by the trustee or the
beneficiary under any mortgage or deed of trust of remedies provided by law or
by such mortgage or deed of trust, Tenant will, upon request of any person or
party succeeding to the interest of Landlord as the result of such termination
or enforcement, automatically become the Tenant of such successor in interest
without change in the terms or other provisions of this Lease; provided,
however, that such successor in interest shall not be bound by (a) any payment
of Rent for more than one (1) month in advance. Upon request by any such
successor in interest, Tenant shall execute and deliver within ten (10) days of
receipt an instrument or instruments confirming the attornment provided for
herein. The failure by Tenant to execute such instrument(s) shall be deemed an
event of Default hereunder.
13.03. QUIET ENJOYMENT. Tenant, upon paying the Rent and keeping and
performing all of the conditions and covenants herein contained, shall and may
peaceably and quietly enjoy the Premises for the Term, subject to all applicable
laws and ordinances, applicable insurance requirements and regulations, and the
provisions of this Lease.
ARTICLE 14
14.01. ASSIGNMENT. Tenant shall not assign or in any manner transfer
this Lease or any estate or interest herein, or sublet the Premises or any part
thereof, or grant any license, concession or other right of occupancy of any
portion of the Premises without the prior written consent of Landlord, which
shall not be unreasonably withheld or delayed or conditioned. If Tenant desires
at any time to enter into an assignment of this Lease or a sublease of the
Premises or any portion thereof, Tenant shall give written notice to Landlord of
its desire to do so, which notice shall contain (i) the name of the proposed
assignee or subtenant, (ii) the nature of the proposed assignee's or subtenant's
business to be carried on in the Premises, (iii) the terms and provisions of the
proposed assignment or sublease, and (iv) and such other information as Landlord
may reasonably request concerning the proposed assignee or subtenant. Landlord
shall give Tenant notice of either its consent or its denial of consent to the
proposed assignment or sublease within ten (10) days. If Tenant is a
corporation, partnership or other entity, and if at any time during the term of
this Lease or any renewal or extension thereof, the person or persons who own a
majority of either the outstanding voting interest or all outstanding ownership
interests of Tenant at the time of execution of this Lease cease to own a
majority of such interest (except as a result of transfers by devise or
descent), the loss of a majority of such interest shall be deemed an assignment
of this Lease by Tenant and therefore subject in all respects to the provisions
of this Section 14.01. The previous sentence
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
14
18
shall not apply, however, if Tenant is a corporation and at the time of the
execution of this Lease the outstanding voting shares of capital stock of Tenant
are listed on a recognized security exchange or over the counter market.
Notwithstanding anything to the contrary contained herein, Tenant shall have the
right without Landlord's consent: (a) to assign or convey this Lease or any
interest hereunder, to one or more Permitted Assignees (as defined below); (b)
to sublet the Premises, or any portion thereof, to one or more Permitted
Assignees; and (c) to permit the use of the Premises, or any portion thereof, by
one or more Permitted Assignees. As used herein, the term "Permitted Assignee"
shall mean: (i) any entity of which Tenant is a subsidiary (on any level); (ii)
any entity which is a subsidiary of Tenant (on any level); (iii) any entity with
which Tenant is owned or commonly controlled; (iv) any entity with which Tenant
is merged or consolidated; (v) any entity which is merged or consolidated with
Tenant; (vi) any entity which acquires all or substantially all of Tenant's
assets.
In the event, however, that such written consent of Landlord is granted
or is not required, if the rent due and payable by a sublessee under any such
permitted sublease (or a combination of the rent payable under such sublease
plus any bonus or other consideration therefor or incident thereto) exceeds the
hereinabove provided Rent payable under this Lease or if with respect to a
permitted assignment, permitted license or other transfer by Tenant permitted by
Landlord, the consideration payable to Tenant by the assignee, licensee or other
transferee exceeds the Rent payable under this Lease, then Tenant shall be bound
and obligated to pay Landlord fifty percent (50%) of net profits of all such
excess rental and other excess consideration within ten (10) days following
receipt thereof by Tenant from such sublessee, assignee, licensee or other
transferee, as the case might be. Tenant shall, despite any permitted assignment
or sublease, remain directly and primarily liable for the performance of all of
the covenants, duties, and obligations of Tenant hereunder and Landlord shall be
permitted to enforce the provisions of this Lease against Tenant or any assignee
or sublessee without demand upon or proceeding in any way against any other
person.
14.02. CONSENT. Consent by Landlord to a particular assignment or
sublease shall not be deemed a consent to any other or subsequent transaction.
If this Lease is assigned or if the Premises or any portion thereof are
subleased without the permission of Landlord, then Landlord may nevertheless
collect rent from the assignee or sublessee and apply the net amount collected
to the Rent payable hereunder, but no such transaction or collection of rent or
application thereof by Landlord shall be deemed a waiver of any provision hereof
or a release of Tenant from the performance by Tenant of its obligations
hereunder.
14.03. TRANSFER BY LANDLORD. In the event of the transfer and
assignment by Landlord of its interest in this Lease and in the Project to a
person expressly assuming Landlord's obligations under this Lease, Landlord
shall thereby be released from any further obligations hereunder, and Tenant
agrees to look solely to such successor in interest of the Landlord for
performance of such obligations. Any security given by Tenant to secure
performance of Tenant's obligations hereunder may be assigned and transferred by
Landlord to such successor in interest, and Landlord shall thereby be discharged
of any further obligation relating thereto.
ARTICLE 15
15.01. DEFAULT BY TENANT. Each of the following shall constitute a
"Default" by Tenant:
(a) The failure of Tenant to pay the Base Rent, any other installment
of Rent, or any part thereof when due and the continuance of such failure for
ten (10) days after receipt of written notice from Landlord; provided, however,
Landlord shall not be required to give such ten (10) day notice, and Tenant
shall not be entitled to same, more than two (2) times during any calendar year,
and any such subsequent failure during such calendar year shall be a Default
upon the occurrence thereof without any notice whatsoever to Tenant; or
(b) Tenant shall fail to fulfill or perform, in whole or in part, any
of its obligations under this Lease (other than the payment of Rent) and such
failure or non-performance shall continue for a period of thirty (30) days after
written notice thereof has been given by Landlord to Tenant, provided that if
such obligation cannot reasonably be performed within thirty (30) days, then
Tenant shall have such time as is reasonably necessary to effect such
performance if Tenant commences performance within such thirty (30) day period
and diligently prosecutes the same; or
(c) The entry of a decree or order by a court having jurisdiction
adjudging Tenant or any guarantor to be bankrupt or insolvent or approving as
properly filed a petition seeking reorganization of Tenant or such guarantor
under the National Bankruptcy Act, or any other similar applicable Federal or
State law, or a decree or order of a court having jurisdiction for the
appointment of a receiver or liquidator or a trustee or assignee in bankruptcy
or insolvency of Tenant or such guarantor or its property or for the winding up
or liquidation of its affairs; or Tenant or any guarantor shall institute
proceedings to be adjudicated a voluntary bankruptcy or shall consent to the
filing of any bankruptcy, reorganization, receivership or other proceeding
against Tenant or such guarantor, or any such proceedings shall be instituted
against Tenant or any guarantor and the same shall not be vacated within thirty
(30) days after the same are commenced; or
(d) Tenant shall make an assignment for the benefit of Tenant's
creditors or admit in writing Tenant's inability to
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
15
19
pay the debts of Tenant generally as they may become due; or
(e) Tenant shall fail to vacate the Premises upon the expiration or
termination of this Lease; or
(f) If Tenant is a corporation or limited partnership, Tenant fails to
maintain its right to do business in the State of Texas or fails to pay any
applicable annual franchise taxes as and when same become finally due and
payable; or
(g) If Tenant is a corporation or partnership, Tenant dissolves or
liquidates or otherwise fails to maintain its corporate or partnership
structure, as applicable.
15.02. RIGHTS UPON DEFAULT BY TENANT.
(a) This Lease and the Term and estate hereby granted and the demise
hereby made are subject to the limitation that if and whenever there shall occur
any event of Default, as enumerated above, Landlord may, at Landlord's option,
without any notice or demand whatsoever (any such notice and demand being
expressly waived by Tenant) and without judicial process, except as specified
herein or as required by law, in addition to any other remedy or right given
hereunder or by law or equity do any one or more of the following:
(1) Terminate this Lease by written notice to Tenant, in which event
Tenant shall immediately surrender possession of the Premises to
Landlord;
(2) Terminate Tenant's right to possession of the Premises under this
Lease without terminating the Lease itself, by written notice to
Tenant, in which event Tenant shall immediately surrender possession of
the Premises to Landlord;
(3) Enter upon and take possession of the Premises and expel or remove
Tenant and any other occupant therefrom, with or without having
terminated this Lease;
(4) Alter locks and other security devices at the Premises so that
Tenant will not have access to the Premises with or without having
terminated this Lease or Tenant's right to possession under the Lease
(provided, that Landlord's rights under this Subsection 15.02(a)(4) may
only be exercised in the case of a monetary default hereunder);
(5) In the event of any Default described in subsection (b) of Section
15.01, Landlord shall have the right to enter upon the Premises by
lawful means and do whatever Tenant is obligated to do under the terms
of this Lease; and Tenant agrees to reimburse Landlord on demand for
any expenses which Landlord may reasonably incur in thus effecting
compliance with Tenant's obligations under this Lease, and Tenant
further agrees that Landlord shall not be liable for any damages
resulting to Tenant from such action (excluding Landlord's negligence
and willful misconduct).
(b) It is hereby expressly stipulated by Landlord and Tenant that any
of the above listed actions including, without limitation, termination of this
Lease, termination of Tenant's right to possession, and re-entry by Landlord,
will not affect the obligations of Tenant for the unexpired Term of this Lease,
including the obligations to pay unaccrued monthly Rent and other charges
provided in this Lease for the remaining portion of the Term of the Lease.
(c) Exercise by Landlord of any one or more remedies hereunder granted
or otherwise available shall not be deemed to be an acceptance of surrender of
the Premises by Tenant, whether by agreement or by operation of law, it being
understood that such surrender can be effected only by the written agreement of
Landlord. No authorized alteration of locks or other security devices and no
permitted removal or other exercise of dominion by Landlord over the property of
Tenant or others at the Premises shall be deemed unauthorized or constitute a
conversion. All claims for damages by reason of such re-entry and/or
repossession and/or alteration of locks or other security devices are hereby
waived, as are all claims for damages by reason of any distress warrant,
forcible detainer proceedings, sequestration proceedings or other legal process
(in each instance excluding Landlord's negligence willful misconduct).
Tenant agrees that any re-entry by Landlord may be pursuant to a
judgment obtained in forcible detainer proceedings or other legal proceedings or
without the necessity for any legal proceedings, as Landlord may elect, and
Landlord shall not be liable in trespass or otherwise.
(d) In the event Landlord elects to terminate this Lease by reason of
an event of Default, then notwithstanding such termination, the Tenant shall be
liable for and shall pay to the Landlord, at the address specified in Section
1.01(a) above, the sum of all Rent accrued to the date of such termination,
plus, as damages, the cost of recovering, reletting and remodeling the Premises,
and an amount equal to the total of the Rent provided in this Lease for the
remaining portion of the Term of the Lease (had such Term not been terminated by
Landlord prior to the Expiration Date stated in Section 3.01), less the
reasonable rental value of the Premises for such period, such amount to be
discounted to present value at the rate of six percent (6%) per annum.
In the event Landlord elects to terminate this Lease by reason of an
event of Default, in lieu of exercising the right of Landlord under the
preceding paragraph, Landlord may instead hold Tenant liable for all Rent
accrued to the date of such termination, plus such Rent as would otherwise have
been required to be paid by Tenant to Landlord during the period following
termination of the Term measured from the date of such termination by Landlord
until the Expiration Date stated in Section 3.01 (had Landlord not elected to
terminate the Lease on account of such event of Default)
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
16
20
diminished by any net sums thereafter received by Landlord through reletting the
Premises during said period (after deducting expenses incurred by Landlord as
provided in Section 15.03 hereof). Actions to collect amounts due by Tenant as
provided for in this paragraph may be brought from time to time by Landlord
during the aforesaid period, on one or more occasions, without the necessity of
Landlord's waiting until expiration of such period; and in no event shall Tenant
be entitled to any excess of rent obtained by reletting over and above the Rent
provided for in this Lease. If Landlord elects to exercise the remedy prescribed
in this paragraph, this election shall in no way prejudice Landlord's right at
any time hereafter to cancel said election in favor of the remedy prescribed in
the preceding paragraph.
(e) In the event that Landlord elects to repossess the Premises without
terminating the Lease, then Tenant shall be liable for and shall pay to Landlord
at the address specified in Section 1.01(a) above, all Rent accrued to the date
of such repossession, plus Rent required to be paid by Tenant to Landlord during
the remainder of the Term until the Expiration Date of the Term as stated in
Section 3.01, diminished by any net sums thereafter received by Landlord through
reletting the Premises during said period (after deducting expenses incurred by
Landlord as provided in Section 15.03). Actions to collect amounts due by Tenant
as provided in this paragraph may be brought from time to time by Landlord
during the aforesaid period, on one or more occasions, without the necessity of
Landlord's waiting until expiration of the Term and in no event shall Tenant be
entitled to any excess of any rent obtained by reletting over and above the Rent
provided for in this Lease.
(f) Notwithstanding anything contained or implied herein to the
contrary, Tenant has not waived, shall not be deemed to have waived, and shall
be entitled to all of the rights and remedies of a tenant under Chapter 93 of
the Texas Property Code. Landlord shall comply with all common law and statutory
duties to mitigate Landlord's damages; provided, however, Landlord shall be
entitled to lease other available space in the Building prior to re-letting the
Premises, and in no event shall Landlord be obligated to re-let the Premises at
a rental rate less than the rate then being charged for comparable space in the
Building.
15.03. EXPENSE OF REPOSSESSION. It is further agreed that, in addition
to payments required pursuant to Section 15.02 above, Tenant shall compensate
Landlord for all reasonable expenses incurred by Landlord in repossession
(including among other expenses, the total amount of any increase in insurance
premiums caused by the vacancy of the Premises), and all reasonable expenses
incurred by Landlord in reletting (including among other expenses, repairs,
remodeling, replacements, advertisements and brokerage fees).
15.04. CUMULATIVE REMEDIES; WAIVER OR RELEASE. Landlord may restrain or
enjoin any breach or threatened breach of any covenant, duty or obligation of
Tenant herein contained without the necessity of proving the inadequacy of any
legal remedy or irreparable harm. The remedies of Landlord hereunder shall be
deemed cumulative and not exclusive of each other. No action, omission or
commission by Landlord, including specifically, the failure to exercise any
right, remedy or recourse, shall be deemed a waiver or release of the same. A
waiver or release shall exist and be effective only as set forth in a written
document executed by Landlord, and then only to the extent recited therein. A
waiver or release with reference to any one event shall not be construed as
continuing as to, or as a bar to, or as a waiver or a release of, any right,
remedy or recourse as to any other or subsequent event.
15.05. ATTORNEYS' FEES. In the event of any legal action or proceeding
brought by either party against the other arising out of this Lease, the
prevailing party in such action shall be entitled to recover from the
non-prevailing party therein reasonable attorneys' fees and costs incurred in
such action (including, without limitation, all costs of appeal) and such amount
shall be included in any judgment rendered in such proceeding.
15.06. FINANCIAL STATEMENTS. Tenant warrants and represents that (i)
all financial statements, operating statements or other financial data at any
time given to Landlord by or on behalf of Tenant and any guarantor are, or will
be, as of their respective dates, true and correct in all material respects and
do not (or will not) omit any material liability, direct or contingent; and (ii)
there have been no material changes between the respective dates thereof and the
date of this Lease in any such financial statements, operating statements or
other financial data given to Landlord prior to the date hereof by or on behalf
of Tenant or any guarantor. A breach of any of the foregoing warranties or
representations shall, at the election of Landlord, be deemed a Default
hereunder.
15.07. LANDLORD'S CONTRACTUAL SECURITY INTEREST. Intentionally Deleted.
15.08. USE AND STORAGE OF PERSONAL PROPERTY. In the event that Landlord
shall have taken possession of the Premises pursuant to the authority herein
granted, then Landlord shall have the right to remove from the Premises in a
commercially reasonable manner all or any portion of such furniture, fixtures,
equipment and other property located thereon and place same in storage at any
premises within the county where the Building is located, including premises
owned by Landlord or an affiliate of Landlord; and in such event, Tenant shall
be liable to Landlord for costs reasonably incurred by Landlord in connection
with such removal and storage and shall indemnify and hold Landlord harmless
from all loss, damage, cost, expense and liability in connection with such
removal and storage (excluding loss caused by Landlord's gross negligence or
willful misconduct). 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") claiming to be entitled to possession thereof who
presents to Landlord a copy of any instrument represented to Landlord 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
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
17
21
necessity on the part of Landlord to inquire into the authenticity of said
instrument copy or Tenant's (or Tenant's predecessor's) signature thereon and
without the necessity of Landlord's making any nature of investigation or
inquiry as to the validity of the factual or legal basis upon which Claimant
purports to act; and Tenant agrees to indemnify and hold Landlord harmless from
all cost, expense, loss, damage and liability incident to Landlord's
relinquishment of possession of all or any portion of such furniture, fixtures,
equipment or other property to Claimant (excluding loss caused by Landlord's
gross negligence or willful misconduct). The rights of Landlord herein stated
shall be in addition to any and all other rights which Landlord has or may
hereafter have at law or in equity; and Tenant stipulates and agrees that the
rights herein granted Landlord are commercially reasonable.
15.09. DEFAULT BY LANDLORD. Landlord shall be in default under this
Lease if Landlord fails to perform any of its obligations hereunder and said
failure continues for a period of thirty (30) days after Tenant delivers written
notice thereof to Landlord (to each of the addresses required by this Section)
and each mortgagee who has a lien against any portion of the Property and whose
name and address has been provided to Tenant, provided that if such failure
cannot reasonably be cured within said thirty (30) day period, Landlord shall
not be in default hereunder if the curative action is commenced within said
thirty (30) day period and is thereafter diligently pursued until cured. Any
notice of a failure to perform by Landlord shall be sent to Landlord at the
addresses and to the attention of the parties set forth in Section 1.01(a). Any
notice of a failure to perform by Landlord not sent to Landlord at all addresses
and/or to the attention of all parties required under this Section and to each
mortgagee who is entitled to notice or not sent in compliance with Section 17.05
below shall be of no force or effect. In the event of a default by Landlord,
after all cure periods, Tenant shall be entitled to remedy such default and
offset from Rent the reasonable out-of-pocket expenses actually incurred by
Tenant in so doing.
ARTICLE 16
16.01. HAZARDOUS WASTE. Tenant hereby represents and warrants to
Landlord the following:
(a) No toxic or hazardous substances or wastes, pollutants or
contaminants (including, without limitation, asbestos, urea formaldehyde, the
group of organic compounds known as polychlorinated biphenyls, petroleum
products including gasoline, fuel oil, crude oil and various constituents of
such products, radon, and any hazardous substance as defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
USC 9601-9657, as amended ("CERCLA") (collectively, "Environmental Pollutants")
will be generated, treated, stored, released or disposed of, or otherwise
placed, deposited in or located on the Premises or Project by Tenant or any of
its agents, employees or contractors, and no activity shall be undertaken on the
Premises or Project by Tenant or any of its agents, employees or contractors
that would cause or contribute to (i) the Premises to become a generation,
treatment, storage or disposal facility within the meaning of, or otherwise
bring the Premises within the ambit of the Resource Conservation and Recovery
Act of 1976 ("RCRA"), 42 USC 6901 et. seq., or any similar state law or local
ordinance, (ii) a release or threatened release of toxic or hazardous wastes or
substances, pollutants or contaminants, from the Premises or Project within the
meaning of, or otherwise result in liability in connection with the Premises
within the ambit of CERCLA, or any similar state law or local ordinance, or
(iii) the discharge of pollutants or effluents into any water source or system,
the dredging or filling of any waters, or the discharge into the air of any
emissions, that would require a permit under the Federal Water Pollution
Control Act, 33 USC 1251 et. seq., or the Clean Air Act, 42 USC 7401 et. seq.
or any similar state law or local ordinance. The foregoing does not preclude
Tenant's operation of its art department on the Premises, but only so long as
such activities comply with applicable environmental laws.
(b) Tenant agrees to indemnify and hold Landlord harmless from and
against and to reimburse Landlord with respect to, any and all claims, demands,
causes of action, loss, damage, liabilities, costs and expenses (including
attorneys' fees and court costs) of any and every kind or character, known or
unknown, fixed or contingent, asserted against or incurred by Landlord at any
time and from time to time by reason of or arising out of the breach of any
representation or warranty contained in Section 16.01(a) above. Landlord shall
have the right at Tenant's expense to periodically inspect, take samples for
testing and otherwise investigate the Premises for the presence of hazardous or
toxic materials.
(c) All representations and warranties contained in this Article 16
shall survive the expiration or termination of this Lease.
16.02. HAZARDOUS WASTE. Landlord hereby represents and warrants to
Tenant the following:
(a) No toxic or hazardous substances or wastes, pollutants or
contaminants (including, without limitation, asbestos, urea formaldehyde, the
group of organic compounds known as polychlorinated biphenyls, petroleum
products including gasoline, fuel oil, crude oil and various constituents of
such products, radon, and any hazardous substance as defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
USC 9601-9657, as amended ("CERCLA") (collectively, "Environmental Pollutants")
will be generated, treated, stored, released or disposed of, or otherwise
placed, deposited in or located on the Premises or Project by Landlord or any of
its agents, employees or contractors, and no activity shall be undertaken on the
Premises or Project by Landlord or any of its agents, employees or contractors
that would cause or contribute to (i) the Premises to become a generation,
treatment, storage or disposal facility within the meaning of, or otherwise
bring the Premises within the ambit of the Resource Conservation and
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
18
22
Recovery Act of 1976 ("RCRA"), 42 USC 6901 et. seq., or any similar state law
or local ordinance, (ii) a release or threatened release of toxic or hazardous
wastes or substances, pollutants or contaminants, from the Premises or Project
within the meaning of, or otherwise result in liability in connection with the
Premises within the ambit of CERCLA, or any similar state law or local
ordinance, or (iii) the discharge of pollutants or effluents into any water
source or system, the dredging or filling of any waters, or the discharge into
the air of any emissions, that would require a permit under the Federal Water
Pollution Control Act, 33 USC 1251 et. seq., or the Clean Air Act, 42 USC 7401
et. seq. or any similar state law or local ordinance.
(b) Landlord agrees to indemnify and hold Tenant harmless from and
against and to reimburse Landlord with respect to, any and all claims, demands,
causes of action, loss, damage, liabilities, costs and expenses (including
attorneys' fees and court costs) of any and every kind or character, known or
unknown, fixed or contingent, asserted against or incurred by Tenant at any time
and from time to time by reason of or arising out of the breach of any
representation or warranty contained in Section 16.01(a) above. Landlord shall
have the right at Tenant's expense to periodically inspect, take samples for
testing and otherwise investigate the Premises for the presence of hazardous or
toxic materials.
(c) All representations and warranties contained in this Article 16
shall survive the expiration or termination of this Lease.
ARTICLE 17
17.01. SUBSTITUTE PREMISES. Intentionally Deleted.
17.02. ESTOPPEL LETTERS. Tenant agrees, periodically, to execute and
acknowledge, within ten (10) days after Landlord's request, a certificate
stating whether this Lease is in full force and effect, whether any amendments
or modifications exist, whether there are any defaults hereunder, and any such
other related information as may be reasonably requested. Any such certificate
may be relied upon by any ground lessor, prospective purchaser, secured party,
mortgagee or any beneficiary under any mortgage, deed of trust on the Building
or the Land or any part thereof or interest of Landlord therein to which such
certificate is addressed.
17.03. HOLDOVER. If Tenant shall remain in possession of the Premises
after the expiration or earlier termination of this Lease, Tenant will be deemed
to be a tenant at sufferance and shall be subject to immediate eviction and
removal and shall pay for each month or partial month of holdover period as rent
an amount equal to one hundred fifty percent (150%) of the prevailing then
actual rental rate for the Premises on the date of such expiration or
termination. The remaining in possession by Tenant or the acceptance by Landlord
of the payment of said rent shall not be construed as an extension or renewal of
this Lease unless extended by Landlord pursuant to the preceding sentence. The
rental payable to Landlord under this Section shall not be deemed to be in lieu
of any damages or other remedy to which Landlord may be entitled by virtue of
Tenant's holding over. In no event shall Tenant ever be liable to Landlord for
consequential or punitive damages as a result of Tenant's holdover.
17.04. SURRENDER. Upon the expiration or earlier termination of the
Lease or upon the exercise by Landlord of its right to re-enter the Premises
without termination of this Lease, Tenant shall peacefully quit and surrender
the Premises in good order and condition, excepting ordinary wear and tear, but
subject to Sections 8.01 and 8.02 hereof.
17.05. NOTICE. Any notice or communication required or permitted in
this Lease shall be given in writing, sent by (i) personal delivery, (ii)
expedited delivery service with proof of delivery, (iii) United States
registered or certified mail, return receipt requested or (iv) prepaid telegram
(provided that such telegram is confirmed by expedited delivery service or by
mail in the manner previously described), addressed as provided in
Section1.01(a) or to such other address or to the attention of such other person
as shall be designated from time to time in writing by the applicable party and
sent in accordance herewith. Notice also may be given by telex or fax, provided
each such transmission is confirmed (and such confirmation is supported by
documented evidence) as received and further provided a telex or fax number, as
the case may be, is set forth in Section 1.01(a). Any such notice or
communication shall be deemed to have been delivered, whether actually received
or not, when deposited in the US Mail, postage paid, certified or return receipt
requested at the address and in the manner provided herein, or any such notice
or communication shall have been deemed to have been given as of the date so
delivered and actually received at the address and in the manner provided herein
in the case of personal delivery, telegram, telex or fax.
17.06. RULES AND REGULATIONS. Tenant, as well as any assignee or
sublessee approved by Landlord, will comply with the Rules and Regulations of
the Project adopted by Landlord, which are set forth in Exhibit "C" attached
hereto and made a part hereof for all purposes. Landlord shall have the right to
change such Rules and Regulations or to amend them in any reasonable manner for
the safety, care and cleanliness of the Project, and the Premises, and for
preservation of good order therein, all of which changes and amendments will be
sent by Landlord to Tenant in writing and shall be thereafter binding upon,
carried out and observed by Tenant. Tenant shall further be responsible for the
compliance with such Rules and Regulations by the employees, servants, agents
and invitees of Tenant. Such Rules and Regulations shall be consistently applied
against all tenants.
17.07. LANDLORD'S LIABILITY. If Tenant shall recover a money judgment
against Landlord, such judgment shall be satisfied only out of the right, title
and interest of Landlord in the Property as the same may then be encumbered and
Landlord shall not be liable for any deficiency, it being agreed that Landlord
shall never be personally liable for any such judgment. If Landlord is found to
be in default hereunder by reason of its failure to give a consent that it is
required
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
19
23
to give hereunder, Tenant's sole remedy will be an action for specific
performance or injunction. The foregoing sentence shall in no event be construed
as mandatorily requiring Landlord to give consents under this Lease. In no event
shall Landlord be liable to Tenant for consequential or special damages by
reason of a failure to perform (or a default) by Landlord hereunder or
otherwise. In no event shall Tenant have the right to levy execution against any
property of Landlord other than its interest in the Property as hereinbefore
expressly provided.
17.08. WAIVER OF CONSUMER RIGHTS. Tenant hereby waives its rights under
the Texas Deceptive Trade Practices - Consumer Protection Act, Section 17.41 et.
seq. of the Texas Business and Commerce Code, a law that gives consumers special
rights and protections. After consultation with an attorney/legal counsel of its
own selection, Tenant voluntarily consents to this waiver. Tenant covenants and
warrants that such attorney/legal counsel was not directly or indirectly
identified, suggested or selected by Landlord or agent of Landlord.
17.09. AMERICANS WITH DISABILITIES ACT AND TEXAS ARCHITECTURAL BARRIERS
ACT.
(a) As used herein, "Disability Acts" shall mean the Americans with
Disabilities Act (Public Law (July 26, 1990)) and the Texas Architectural
Barriers Act (Article 9102, Tex. Rev. Civ. St. (1991)) and any other similar
federal, state or local laws applicable to the Building and the Premises,
respectively (herein, collectively, the "Disability Acts").
(b) Tenant agrees to cause the Premises to comply with all requirements
of the Disability Acts. Tenant agrees to indemnify and hold Landlord harmless
from any and all expenses, liabilities, costs or damages suffered by Landlord as
a result of additional obligations which may be imposed on the Building or the
Property under any of the Disability Acts by virtue of Tenant's operations
and/or occupancy. Tenant acknowledges that it will be wholly responsible for any
accommodations or alterations which need to be made to the Premises to
accommodate disabled employees, customers and invitees of Tenant. No provision
in this Lease should be construed in any manner as permitting, consenting to or
authorizing Tenant to violate requirements under any of the Disability Acts and
any provision of the Lease which could arguably be construed as authorizing a
violation of any of the Disability Acts shall be interpreted in a manner which
permits compliance with such Disability Acts and is hereby amended to permit
such compliance.
(c) Landlord agrees to cause the restrooms, parking lots, parking
garage, lobbies and other public or common areas of the Project to comply with
all requirements of the Disability Acts. Landlord agrees to indemnify and hold
Tenant harmless from any and all expenses, liabilities, costs or damages
suffered by Tenant as a result of Landlord's failure to so perform under this
Section 17.09.
17.10. INABILITY TO PERFORM. If, by reason of inability reasonably to
obtain and utilize labor, materials, equipment, or supplies, or by reason of
circumstances directly or indirectly the result of any state of war or national
or local emergency, or by reason of any laws, rules, orders, regulations,
action, non-action, or requirements of any governmental authority now or
hereafter in force, or by reason of strikes or riots, or by reason of accidents
in, damage to, or the making of repairs, replacements, or improvements to the
Project or the Premises, or any of the equipment of either, or by the reason of
any other cause beyond the reasonable control of Landlord ("force majeure"),
Landlord shall be unable to perform or shall be delayed in the performance of
any obligation hereunder, then this Lease and the obligation of Tenant to pay
the Base Rent or additional items of Rent and to perform and comply with all of
the other covenants and agreements hereunder shall in no manner be affected or
impaired, and such nonperformance or delay in performance by Landlord shall not
give rise to any claim against Landlord for damages or constitute a total or
partial eviction, constructive or otherwise. Landlord shall exercise due
diligence in undertaking to remedy such inability to perform or delay in
performance with all reasonable dispatch, but shall not be required to adjust a
labor dispute against its will.
17.11. TENANT AUTHORIZATION. If Tenant signs as a corporation, each of
the persons executing this Lease on behalf of Tenant represents and warrants
that Tenant is a duly organized and existing corporation, that Tenant has and is
qualified to do business in Texas, that the corporation has full right and
authority to enter into this Lease, and that all persons signing on behalf of
the corporation were authorized to do so by appropriate corporate actions. If
Tenant is a general partnership, limited partnership, trust, or other legal
entity, each individual executing this Lease on behalf of said entity represents
and warrants that he or she is duly authorized to execute this Lease on behalf
of such entity and in accordance with such entity's governing instruments, and
that this Lease is binding upon such entity. Upon the Landlord's request, Tenant
shall furnish Landlord with proper proof of due authorization for Tenant's
execution of this Lease as Landlord shall require.
17.12. BROKER. Tenant warrants that it has had no dealings with any
real estate broker or agent in connection with the negotiation of this Lease,
excepting only the broker named in of Section 1.01 (n) and that it knows of no
other real estate brokers or agents who are or might be entitled to a commission
in connection with this Lease. Tenant agrees to indemnify and hold harmless
Landlord from and against any liability or claim, whether meritorious or not,
arising from Tenant's actions. Landlord has agreed to pay the fees of the broker
(but only the broker) named in Section 1.01(n) to the extent that Landlord has
agreed to do so pursuant to a written agreement with such broker.
17.13. MEMORANDUM OF LEASE. Without the prior written consent of
Landlord (which may be granted or withheld in Landlord's sole discretion),
Tenant shall not record this Lease or a memorandum or other instrument with
respect to this Lease.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
20
24
17.14. PARKING. "Exhibit "F" attached hereto, sets forth the agreements
between Landlord and Tenant relating to the parking garage. The parking areas
for the garage and for surface parking shall be designated for automobile
parking on a first come, first serve non-exclusive basis for all Property
tenants (including Tenant) and their respective employees, customers, invitees
and visitors. Parking and delivery areas for all vehicles shall be in accordance
with parking regulations established from time to time by Landlord, with which
Tenant agrees to conform. Tenant shall only permit parking of automobiles by its
employees, customers and agents in appropriate designated parking areas. Tenant
covenants that at all times during the term of this Lease Tenant shall not use
in excess of four (4) garage and surface parking spaces for each one thousand
(1,000) square feet in the Premises for Tenant's employees, visitors and
invitees.
17.15. OTHER TAXES. Tenant shall be liable for all taxes levied or
assessed against personal property, furniture or fixtures placed by Tenant on
the Premises. If such taxes for which Tenant is liable are levied or assessed
against Landlord or Landlord's property and if Landlord elects to pay the same,
or if the assessed value of the Project is increased by the inclusion of
personal property, furniture or fixtures, placed by Tenant on the Premises, and
Landlord elects to pay the taxes based on such increase, Tenant shall pay to
Landlord within thirty (30) days of demand, that part of such taxes for which
Tenant is primarily liable hereunder. Tenant shall be liable for any and all
sales, use or other taxes levied in connection with the Premises and Tenant's
parking.
17.16. JOINT AND SEVERAL LIABILITY. If there is more than one Tenant,
the obligations hereunder imposed upon Tenant shall be joint and several. If
there is a guarantor of the obligations hereunder imposed upon Tenant, there
shall be a joint and several obligation of Tenant and such guarantor, and
Landlord shall not be required to first proceed against Tenant before proceeding
against such guarantor, nor shall any such guarantor be released from its
guaranty for any reason whatsoever.
17.17. ACCEPTANCE BY LANDLORD. The acceptance by Landlord as evidenced
by the execution of this Lease by its duly authorized representative is subject
to the condition precedent of obtaining written approval of the terms and
provisions of this Lease by any financial institution possessing the right to
approve the form and content of each lease at the Building. In the event
Landlord is unable to obtain the required written approval from any financial
institution, this Lease shall become null and void ab initio and shall have no
further legal force and effect.
17.18. TIME OF ESSENCE. Time is of the essence of this Lease and all of
its provisions in which performance is a factor.
17.19. ENTIRE AGREEMENT. This Lease, including the Exhibits attached
hereto (which Exhibits are hereby incorporated herein and shall constitute a
portion hereof), contains the entire agreement between Landlord and Tenant with
respect to the subject matter hereof.
17.20. AMENDMENT. Any agreement hereafter made between Landlord and
Tenant shall be ineffective to modify, release or otherwise affect this Lease,
in whole or in part, unless such agreement is in writing and signed by the party
to be bound thereby.
17.21. SEVERABILITY. If any term or provision of this Lease shall, to
any extent, be held invalid or unenforceable by a final judgment of a court of
competent jurisdiction, the remainder of this Lease shall not be affected
thereby.
17.22. SUCCESSORS. Subject to the limitations and conditions set forth
elsewhere herein, this Lease shall bind and inure to the benefit of the
respective heirs, legal representatives, successors, and assigns of the parties
hereto. All rights, powers, privileges, immunities, and duties of Landlord under
this Lease, including, but not limited to, any notices required or permitted to
be delivered by Landlord to Tenant hereunder, may, at Landlord's option, be
exercised or performed by Landlord's agent or attorney.
17.23. CAPTIONS. The captions in this Lease are inserted only as a
matter of convenience and for reference only and they in no way define, limit,
or describe the scope of this Lease or the intent of any provisions hereof.
17.24. NUMBER AND GENDER. All genders used in this Lease shall include
the other genders, the singular shall include the plural, and the plural shall
include the singular, whenever and as often as may be appropriate.
17.25. GOVERNING LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of Texas.
17.26. RIGHTS RESERVED TO LANDLORD. Landlord, in addition to all other
rights which it may possess, hereby expressly reserves the following rights
exercisable from time to time, subject to the other provisions of this Lease;
(a) To change the name of the Building.
(b) To install and maintain signs on the exterior and interior of the
Building, except in the Premises.
(c) To prescribe the location and style of the suite number and
identification sign or lettering for the Premises occupied by Tenant, except on
floors where Tenant is the only tenant.
(d) To retain at all times, and to use in appropriate instances, pass
keys to the leased Premises occupied by Tenant.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
21
25
(e) To grant to anyone the right to conduct any lawful, reputable
business or render any service in the Building, whether or not it is the same as
or similar to the use expressly permitted to Tenant by Section 1.01(e) hereof.
(f) To exhibit the leased Premises during the last 12 months of the
Term at reasonable hours, and upon reasonable notice to Tenant, and to decorate,
remodel, repair, alter or otherwise prepare the Premises for reoccupancy at any
time after Tenant vacates or abandons the Leased Premises.
(g) To have access for Landlord to any mail chutes according to the
rules of the United States Postal Service.
(h) To require all persons entering or leaving the Building during such
hours as Landlord may from time to time reasonably determine to identify
themselves to watchmen (by registration or otherwise), and to establish their
right to enter or leave in accordance with the provisions of the applicable
Building Rules and Regulations. Landlord shall not be liable in damages for any
error with respect to admission to or eviction or exclusion from the Building of
any person. In case of fire, invasion, insurrection, mob, riot, civil disorder,
public excitement, hazardous condition or other commotion, or the threat
thereof, Landlord reserves the right to limit or prevent access to the Building
during the continuance of the same, shut down elevator service, activate
elevator emergency controls, or otherwise take such action or preventive
measures deemed necessary by Landlord for the safety of tenants or other
occupants of the Building or the protection of the Building and the property in
the Building. Tenant agrees to fully cooperate in any reasonable safety program
developed by Landlord.
(i) To control and prevent access to common areas and other non-general
public areas pursuant to the provisions of the applicable Building Rules and
Regulations.
(j) Provided that reasonable access to the Premises shall be maintained
and the business of Tenant shall not be unreasonably interfered with or
disrupted unreasonably, Landlord reserves the right to relocate, enlarge, reduce
or change lobbies, exits or entrances in or to the Building and to decorate and
to make, at Landlord's own expense (except to the extent same constitutes
Operating Expenses), repairs, alterations, additions and improvements,
structural or otherwise, in or to the Building or any part thereof, and any
adjacent building, land, street or alley, including for the purpose of
connection with or entrance into or use of the Building in conjunction with any
adjoining or adjacent building or buildings, now existing or hereafter
constructed, and may for such purposes erect scaffolding and other structures
reasonably required by the character of the work to be performed, and in that
connection Landlord may temporarily close public entry ways, other public
spaces, stairways or corridors and interrupt or temporarily suspend any services
or facilities agreed to be furnished by Landlord, all without the same
constituting an eviction of Tenant in whole or in part and without abatement of
Rent by reason of loss or interruption of the business of Tenant or otherwise
and without relieving Tenant from the performance of any of Tenant's obligations
under this Lease. Landlord may at its option make any repairs, alterations,
improvements and additions in and about the Building and the Premises during
ordinary business hours and if Tenant desires to have such work done during
other than business hours and Landlord consents to such change, Tenant shall pay
all REASONABLE overtime and additional expenses resulting therefrom.
(k) To designate and approve, prior to installation, all types of
window shades, blinds, drapes, awnings, and similar equipment, and to control
all internal lighting that may be visible from the exterior of the Building.
17.27 VISIBLE AREAS CLAUSE. Tenant agrees to keep any visible portion
of the Premises (the "Visible Area") in a neat, clean and attractive condition
at all times. Tenant shall cause the walls in the Visible Area to be painted or
covered with wall coverings, and the interior of the Visible Area shall be
tastefully furnished, as determined by Landlord in its sole and absolute
discretion.
17.28 NO PRESUMPTION AGAINST DRAFTER. Landlord and Tenant understand,
agree and acknowledge that: (i) this Lease has been freely negotiated by both
parties; and (ii) that in any controversy, dispute, or contest over the meaning,
interpretation, validity, or enforceability of this Lease or any of its terms or
conditions, there shall be no inference, presumption or conclusion drawn
whatsoever against either party by virtue of that party having drafted this
Lease or any portion thereof.
17.29 EXAMINATION OF LEASE. Submission by Landlord of this instrument
to Tenant for examination or signature does not constitute a reservation of or
option for lease. This Lease will be effective as a lease or otherwise only upon
execution by and delivery to both Landlord and Tenant.
17.30 DEFINED TERMS AND MARGINAL HEADINGS. The words "Landlord" and
"Tenant" as used herein shall include the plural as well as singular. If more
than one person is named as Tenant, the obligations of such persons are joint
and several. The headings and titles to the articles, sections and subsections
of this Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part of this Lease.
17.31 NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of
light, air or view by any structure which may be erected on the Project or lands
adjacent to the Project shall in no way affect this Lease or impose any
liability on Landlord (even if Landlord is the adjacent land owner).
17.32 SURVIVAL OF INDEMNITIES. Each indemnity agreement and hold
harmless agreement contained herein shall survive the expiration or termination
of this Lease.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
22
26
IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this Lease as
of the day and year first above written.
LANDLORD: 520 Partners, Ltd., TENANT: Home Interiors & Gifts, Inc.
a Texas Limited Partnership
By: SF Realty, Inc.
Its: General Partner
By: /s/ XXX XXXXXXXXX By: /s/ XXXXXX X. XXXXXX, XX.
-------------------------- --------------------------------
Name: Xxx Xxxxxxxxx Name: Xxxxxx X. Xxxxxx, Xx.
-------------------------- --------------------------------
Title: Director of Leasing Title: Chief Executive Officer
-------------------------- --------------------------------
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
23
27
EXHIBIT "A"
FLOOR PLAN
(PAGE 1 OF 3)
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
24
28
EXHIBIT A
FLOOR PLAN
(PAGE 2 OF 3)
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
25
29
EXHIBIT A
FLOOR PLAN
(PAGE 3OF 3)
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
26
30
EXHIBIT "B"
LEGAL DESCRIPTION
Xxx 0-X, Xxxxx X Xxxxxxx Xxxxx xx Xxx Xxxxxx, Xxxx
of Farmers Branch, County of Dallas, State of Texas.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
27
31
EXHIBIT "C"
RULES AND REGULATIONS
1. The sidewalks, walks, plaza entries, corridors, concourses, ramps,
staircases, escalators and elevators of the Project shall not be obstructed or
used by Tenant, or the employees, agents, servants, visitors or licenses of
Tenant for any purpose other than ingress and egress to and from the Premises.
No bicycle or motorcycle shall be brought into the Building or kept on the
Premises without the prior written consent of Landlord.
2. No freight, furniture or bulky matter of any description will be
received into the Project or carried into the elevators except in such a manner,
during such hours and using such elevators and passageways as may be approved by
Landlord, and then only upon having been scheduled in advance. Any hand trucks,
carryalls, or similar equipment used for the delivery or receipt of merchandise
or equipment shall be equipped with rubber tires, side guards and such other
safeguards as Landlord shall require.
3. Landlord shall have the right to prescribe the weight, position and
manner of installation of safes or other heavy equipment which shall, if
considered necessary by Landlord, be installed in a manner which shall insure
satisfactory weight distribution. All damage done to the Project by reason of a
safe or any other article of Tenant's office equipment being on the Premises
shall be repaired at the expense of Tenant. The time, routing and manner of
moving safes or other heavy equipment shall be subject to prior approval by
Landlord.
4. Only persons authorized by Landlord will be permitted to furnish
newspapers, towels, barbering, shoe shining, janitorial services, floor
polishing and other similar services and concessions to Tenant, and only at
hours and under regulations fixed by Landlord.
5. Tenant, or the employees, agents, servants, visitors or licensees of
Tenant, shall not at any time leave, place or discard any rubbish, paper,
articles or objects of any kind whatsoever outside the doors of the Premises or
in the corridors, stairways or passageways of the Project.
6. Landlord shall have the right to prohibit any advertising by Tenant
which, in Landlord's opinion, tends to impair the reputation of the Project or
its desirability for offices and, upon written notice from Landlord, Tenant will
refrain from or discontinue such advertising.
7. Tenant shall not place, or cause or allow to be placed, any sign,
placard, picture, advertisement, notice or lettering whatsoever, in, about or on
the exterior of the Premises, Building or Project except in and at such places
as may be designated by Landlord and consented to by Landlord in writing. Any
such sign, placard, advertisement, picture, notice or lettering so placed may be
removed by Landlord without notice to and at the expense of Tenant. All
lettering and graphics on corridor doors shall conform to the Building Standard
prescribed by Landlord. No trademark shall be displayed in any event.
8. Canvassing, soliciting or peddling in the Building and/or Project is
prohibited, and Tenant shall cooperate to prevent same.
9. Landlord shall have the right to exclude any person from the Project
other than during customary business hours as set forth in the Lease, and any
person in the Project will be subject to identification by employees and agents
of Landlord. All persons in or entering the Project shall be required to comply
with the security policies of the Project. If Tenant desires any additional
security service for the Premises, Tenant shall have the right (with the advance
written consent of Landlord) to obtain such additional service at Tenant's sole
cost and expense. Tenant shall keep doors to unattended areas locked and shall
otherwise exercise reasonable precautions to protect property from theft, loss
or damage. Landlord shall not be responsible for the theft, loss or damage of
any property or for any error with regard to the exclusion from or admission to
the Project of any person. In case of invasion, mob, riot or public excitement,
Landlord reserves the right to prevent access to the Project during the
continuance of same by closing the doors or taking other measures for the safety
of the tenants and protection of the Project and property or persons therein.
10. Tenant shall not do any cooking (other than warming in a microwave
oven) or conduct any restaurant or cafeteria for the sale or service of food or
beverages to its employees or to others. Tenant may, however, operate a coffee
bar and vending machines for drinks and snacks by and for its employees.
12. Tenant shall not bring or permit to be brought or kept in or on the
Premises or Project any inflammable, combustible, corrosive, caustic, poisonous,
or explosive substance, or cause or permit any odors to permeate in or emanate
from the Premises, or permit or suffer the Premises to be occupied or used in a
manner offensive or objectionable to Landlord or other occupants of the Project
by reason of light, radiation, magnetism, noise, odors and/or vibrations, or
interfere in any way with other tenants or those having business in the Project.
The foregoing does not preclude Tenant's operation of its art department on the
Premises, but only so long as such activities comply with applicable
environmental laws.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
28
32
13. No additional locks or bolts of any kind shall be placed on any
door in the Project or the Premises and no lock on any door therein shall be
changed or altered in any respect. Landlord shall furnish two keys for each lock
on exterior doors to the Premises and shall, on Tenant's request and at Tenant's
expense, provide additional duplicate keys. Tenant shall not make duplicate
keys. All keys shall be returned to Landlord upon the termination of this Lease,
and Tenant shall give to Landlord explanations of the combinations of all safes,
vaults and combination locks remaining with the Premises. Landlord may at all
times keep a pass key to the Premises. All entrance doors to the Premises shall
be left closed at all times and left locked when the Premises are not in use.
Landlord agrees to furnish to Tenant, at Landlord's expense, two (2) CardKeys
for access to the Building during such times as the Building is not open to the
public. Upon written request from Tenant, or other parties authorized by Tenant,
Landlord will furnish additional CardKeys to Tenant at Tenant's expense. Should
any CardKeys be lost or stolen, Tenant will immediately notify Landlord and
Landlord will issue replacement CardKeys with a different computer code number.
Such replacement CardKeys will be at Tenant's expense.
14. Tenant shall give immediate notice to Landlord in case of theft,
unauthorized solicitation or accident in the Premises or in the Project or of
defects therein or in any fixtures or equipment, or of any known emergency in
the Project.
15. Tenant shall not use the Premises or permit the Premises to be used
for photographic, multilith or multigraph reproductions, except in connection
with its own business and not as a service for others without Landlord's prior
permission.
16. Tenant shall not use or permit any portion of the Premises to be
used as an office for a public stenographer or typist, offset printing, the sale
of liquor or tobacco, a xxxxxx or manicure shop, an employment bureau, a labor
union office, a doctor's or dentist's office, a dance or music studio, any type
of school, or for any use other than those specifically granted in this Lease.
17. Tenant shall not advertise for laborers giving the Premises as an
address, nor pay such laborers at a location in the Premises.
18. The requirements of Tenant will be attended to only upon
application of Landlord in the Building or at such other address as may be
designated by Landlord in the Lease. Employees of Landlord shall not perform any
work or do anything outside of their regular duties, unless under special
instructions from the office of Landlord.
19. Tenant shall not place a load upon any floor of the Premises which
exceeds the load per square foot which such floor was designed to carry and
which is allowed by law. Business machines and mechanical and electrical
equipment belonging to Tenant which cause noise, vibration, electrical or
magnetic interference, or any other nuisance that may be transmitted to the
structure or other portions of the Project or to the Premises to such a degree
as to be objectionable to Landlord or which interfere with the use or enjoyment
by other tenants of their premises or the public portions of the Project shall
be placed and maintained by Tenant, at Tenant's expense, in settings of cork,
rubber, spring type, or other vibration eliminators sufficient to eliminate
noise or vibration.
20. No awning, draperies, shutters or other interior or exterior window
coverings that are visible from the exterior of the Building or from the
exterior of the Premises within the Building may be installed by Tenant.
21. Tenant shall not place, install or operate within the Premises or
any other part of the Project any engine, stove, or machinery, or conduct
mechanical operations therein, without the written consent of Landlord.
22. No portion of the Premises or any part of the Project shall at any
time be used or occupied as sleeping or lodging quarters.
23. Tenant shall at all times keep the Premises neat and orderly.
24. The toilet rooms, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed and no
foreign substance of any kind whatsoever shall be thrown therein and the expense
of any breakage, stoppage or damage resulting from the violation of this rule
shall be borne by the tenant who or whose employees or invitees shall have
caused it.
25. Landlord reserves the right to exclude or expel from the Project
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in violation
of any of the Rules and Regulations of the Project.
26. Normal business hours shall be deemed to be 7:00 a.m. through 7:00
p.m. on weekdays and 8:00 a.m. through 1:00 p.m. on Saturdays, exclusive of
holidays. Holidays shall, for purposes of this Lease, be deemed to be New Year's
Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Day after
Thanksgiving, Christmas Day and any other holidays commonly observed by
landlords of comparable buildings in the market area of the Project.
27. Landlord reserves the right, without the approval of Tenant, to
rescind, add to and amend any rules or regulations, to add new rules and
regulations, and to waive any rules or regulations with respect to any tenant or
tenants, provided, that these Rules are uniformly applied against all tenants.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
29
33
28. Tenant shall use no other method of heating or cooling than that
supplied by Landlord.
29. Tenant shall comply with all local and federal codes and
ordinances.
30. Tenant and its agents, employees and invitees shall observe and
comply with the driving and parking signs and markers on the Project grounds and
surrounding areas.
31. No animals or birds shall be brought to or kept in or about the
Project.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
30
34
EXHIBIT "D"
WORK LETTER
1. Plans.
1.1 Space Plan. On or before September 6, 1999, Tenant's designated space
planner, at Tenant's expense, shall prepare and deliver to Landlord a space plan
for the Premises showing, regardless of the quantities of such items, the
location of all partitions and doors and the lay-out of the Premises
(hereinafter referred to as "Space Plan"), Landlord will reasonably approve or
disapprove in writing the space plan within three (3) business days after
receipt from Tenant and if disapproved, Landlord shall provide Tenant and
Tenant's space planner with specific reasons for disapproval. The extent to
which Landlord shall be able to disprove items in the space plan shall be
limited to elements affecting load-bearing or corridor walls, Building systems
(mechanical and electrical), items visible from the exterior of the Building,
and items visible from common or public areas within the Building. If Landlord
fails to approve or disapprove the space plan on or before the end of such three
(3) business day period, Landlord shall be deemed to have approved the last
submitted space plan.
1.2 Compliance With Disability Acts. Tenant shall promptly provide Landlord and
Tenant's space planner and/or architect, as applicable, with all information
needed to cause the construction of Tenant's Improvements to be completed such
that Tenant, the Premises and Tenant's Improvements (as constructed) will be in
compliance with The Disability Acts. Tenant shall indemnify and hold harmless
Landlord from and against any and all claims, liabilities and expenses
(including, without limitation reasonable attorneys' fees and expenses) incurred
by or asserted against Landlord by reason of or in connection with any violation
of the Disability Acts by Tenant and/or Tenant's Improvements or the Premises
not being in compliance with The Disability Acts. The foregoing indemnity shall
not include any claims, liabilities or expenses (including reasonable attorneys'
fees and expenses) arising out of the negligence of Landlord or Landlord's
employees, agents or contractors.
1.3 Construction Plans. Upon Landlord's approval of the Space Plan, Tenant's
space planner and engineer, at Tenant's expense, will prepare construction plans
(such construction plans, when approved, and all changes and amendments thereto
agreed to by Landlord and Tenant in writing, are herein called the "Construction
Plans") for all of Tenant's improvements requested pursuant to the Space Plan
(all improvements required by the Construction Plans are herein called "Tenant's
Improvements"), including complete detail and finish drawings for partitions,
doors, reflected ceiling, telephone outlets, electrical switches and outlets and
Building standard heating, ventilation and air conditioning equipment and
controls. Tenant shall separately contract with BL&P Engineering or another
third party reasonably approved by Landlord, for all mechanical, electrical and
plumbing drawings and design to be incorporated in such construction plans.
Within three (3) business days after construction plans are delivered to
Landlord, Landlord shall approve (which approval shall not be unreasonably
withheld so long as the plans do not interfere with the Building's systems to
provide service to any other Tenant in the Building and the materials utilized
in connection with Tenant's Improvements shall be compatible with the design,
architectural integrity and character of the Building) or disapprove same in
writing and if disapproved, Landlord shall provide Tenant and Tenant's space
planner and engineer specific reasons for disapproval. The extent to which
Landlord shall be able to disprove items in the Construction Plan shall be
limited to elements affecting load-bearing or corridor walls, Building systems
(mechanical and electrical), items visible from the exterior of the Building and
items visible from common or public areas with the BUILDING. The foregoing
process shall continue until the construction plans are approved by Landlord;
provided that if Landlord fails to respond in any three (3) business day period,
Landlord shall be deemed to have approved the last submitted construction plans.
1.4 Changes to Approved Plans. If any redrawing or re-drafting of either the
Space Plan or the Construction Plans is necessitated by Tenant's requested
changes (all of which shall be subject to Landlord's reasonable approval), the
expense of any such re-drawing or re-drafting required in connection therewith
and the expense of any work and improvements necessitated by such re-drawing or
re-drafting will be at Tenant's expense.
1.5 Coordination of Planners and Designers. If Tenant shall arrange for interior
design services, whether with Tenant's space planner or any other planner or
designer, it shall be Tenant's responsibility to cause necessary coordination of
its agents' efforts with Landlord's agents to ensure that no delays are caused
by Tenant or its agents or contractors to either the planning or construction of
the Tenant's Improvements.
2. Construction and Costs of Tenant's Improvements
2.1 Construction Obligation and Finish Allowance. The condition of the Premises
prior to construction of Tenant Improvements shall be in "Shell Condition", free
from any debris and in a broom clean condition. Shell Condition for the purposes
hereof consists of the structural parts of the Building, the roof thereof,
concrete floors, the exterior walls including exterior glass, the exterior
parking lot and garage with no Tenant Improvements installed, however, Landlord
shall, at Landlord's expense, furnish and install the improvements shown on
Exhibit "D-1". Pursuant to a separate agreement, Tenant shall retain The
Staubach Company (hereinafter "TSC" ) as Tenant's interior construction manager
("Construction Manager") to represent Tenant with respect to all aspects of
Tenant's Improvements. Tenant shall cause TSC to cooperate fully with Landlord's
Construction Manager (hereinafter "LCM") in the expeditious review and approval
of all Space Plans and Construction Plans and in all phases of the construction
process. TSC shall review and monitor on behalf of TENANT the construction of
the Tenant Improvements described in the Construction Plans in a good and
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
31
35
workmanlike manner. Tenant shall have the option in its sole discretion to
utilize Landlord's building standard doors, frames and hardware at Landlord's
actual cost. LCM shall manage the construction of the work in a good and
workmanlike manner and in connection therewith, shall perform certain services,
including, without limitation: (a) budgeting; (b) scheduling; (c) preparation of
bid invitation and summary of bids; (d) preparation of construction contract;
(e) management of construction process to meet Tenant objectives; (f) review and
process of contractor and subcontractor payment applications; (g) process change
orders; (h) attend weekly construction meetings; (i) deliver as-built documents
to Tenant. Upon approval by Landlord and Tenant of all of the completed
Construction Plans, the LCM and TSC will submit the completed Construction Plans
for pricing to the contractor (or contractors selected by Tenant subject to
Landlord's approval, which shall not be unreasonably withheld) ["Bidding
Contractor(s)]. Upon receipt of the bids from the Bidding Contractor(s), Tenant
shall resolve changes to the Construction Plans necessary to obtain a building
permit, achieve cost savings or otherwise coordinate with the Bidding Contractor
selected by Tenant as the "Tenant Contractor" as evidenced by an AIA contract
between Landlord and Tenant Contractor (and such changes shall be subject to
Landlord's review and approval, which approval shall not be unreasonably
withheld and shall be deemed given if not objected to within two (2) business
days of receipt of the request). The construction contract shall be between the
Tenant Contractor and Landlord and the costs of Tenant Improvements thereunder
shall not include costs for bonds, utility costs during construction, repairs
required for code performance of existing conditions, repair/corrections to
existing conditions to meet industry standards or work to common areas. Landlord
shall provide Tenant with an allowance of $2,001,753.00, or $27.00 per rentable
square foot (the "Finish Allowance"). which Finish Allowance shall be expended
for Tenant's Improvements, including both hard costs (construction costs) and
soft costs (design fees), along with moving expenses, telecom and cabling costs
and other expenses related to the construction of Tenant's Improvements,
including, without limitation, the costs of installing signage, supplemental
HVAC systems, satellite/antenna equipment and security systems. The Finish
Allowance shall be disbursed by Landlord, from time to time, for payment of the
contract sum required to be paid to the Tenant Contractor engaged to construct
Tenant's Improvements (the "Contract Sum") and the fees of the preparer of the
Construction Plans, and any other provider assisting in the design, construction
and relocation process (the foregoing costs are collectively referred to as the
"Permitted Costs"), upon delivery to Landlord of appropriate invoices, lien
waivers and similar documents. There shall be no construction management fee
paid by Tenant to Landlord's Construction Manager. Any unused Finish Allowance
will be paid or credited to Tenant in cash within thirty (30) days following
Substantial Completion at Tenant's election.
2.2 Excess Costs. If the sum of the Contract Sum exceeds the Finish Allowance,
then Tenant shall promptly pay Landlord all such excess costs ('Excess Costs")
within ten (10) business days after notification that such amount is due the
contractor(s). Tenant shall be responsible for direct payment of any designer
and vendors costs which are in excess of the Finish Allowance. Failure by Tenant
to timely tender to Landlord the full payment shall permit Landlord to stop all
work until the payment is received. All sums due Landlord under this Section 2.2
shall be considered Rent under the terms of this Lease and nonpayment shall
constitute a default under the Lease and entitle Landlord to any and all
remedies specified in this Lease. In the event the Finish Allowance exceeds the
Permitted Costs, Tenant shall receive 100% of the excess thirty (30) days
following commencement of the Lease. It is understood that Tenant will not be
required to pay any Excess Cost until all of the Finish Allowance is exhausted,
in that Tenant is not making payments pro rata with Landlord.
Notwithstanding anything to the contrary contained herein, Tenant may,
at Tenant's option, elect to reduce such Excess Costs by requesting that
Landlord pay up to five dollars ($5.00) per rentable square foot of the Premises
(the "Excess Allowance") and reimburse Landlord for such Excess Allowance in
equal monthly amounts amortized over the Term of this Lease at an interest rate
of ten percent (10%) per annum. In such event, Tenant shall provide Landlord
with written notice of Tenant's election at least thirty (30) days prior to
exhaustion of the Finish Allowance and provided further, Landlord and Tenant
shall, within ten (10) days after Tenant's election as aforesaid enter into a
separate agreement which agreement shall so state the amount so amortized,
payment dates and amounts due thereunder.
2.3 Liens Arising from Excess Costs. Tenant agrees to keep the Premises free
from any liens arising out of nonpayment of Excess Costs. In the event that any
such lien is filed and Tenant, within thirty (30) days following such filing
fails to cause same to be released of record by payment or posting of a proper
bond, Landlord shall have, in addition to all other remedies provided herein and
by law, the right, but not the obligation, to cause the same to be released by
such means as it in its sole discretion deems proper, including payment of or
defense against the claim giving rise to such lien. All sums paid by Landlord in
connection therewith shall constitute Rent under the Lease and a demand
obligation of Tenant to Landlord and such obligation shall bear interest at the
rate of eighteen percent (18%) per annum from the date of payment by Landlord
until the date paid by Tenant.
2.4. Delays. Delays in the completion of construction of Tenant's Improvements
attributable to actual delays caused by (a) the failure of Tenant or TSC to
promptly furnish information, input or other matters during the construction of
Tenant's Improvements; (b) changes by Tenant to the Approved Plans referenced in
paragraph 1.4; (c) materials selected by Tenant who's delivery and installation
exceed Project schedule; (d) errors and omissions of Tenant's architects; or (e)
the failure of the Construction Plans to be completed and approved in writing by
Landlord and Tenant on or before September 20, 1999, shall constitute "Tenant
Delays" (herein so called). All other delays, except for delays resulting from
force majeure, shall be considered Landlord Delays. In the event that Tenant's
Improvements are not Substantially Complete by the Commencement Date as set
forth in Article 1.01(g), then the Commencement Date shall be amended to be the
Adjusted Substantial Completion Date (hereinafter defined) and the Expiration
Date as set forth in Article 1.01(h) shall be adjusted forward by the same
number of days as is the Commencement Date, so that the term of the Lease will
be the term set forth in Article 1.01(f). The Adjusted Substantial Completion
Date shall be the date
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
32
36
Tenant's Improvements are Substantially Complete, adjusted backward, however, by
one day for each day of Tenant Delays, if any.
2.5. Substantial Completion and Punch List. The terms "Substantial
Completion" and "Substantially Complete," as applicable, shall mean
when Tenant's Improvements are sufficiently completed in accordance
with the Construction Plans so that Tenant can reasonably use the
Premises for the Permitted Use as set forth in Article 6 and shall
include (a) receipt of all government and regulatory approvals
necessary to legally occupy and use the Premises and (b) all work
substantially conforms with the Construction Plans, except for minor
"punchlist items". When Landlord considers Tenant's Improvements to be
Substantially Complete, Landlord will notify Tenant and within two (2)
business days thereafter, Landlord's representative and Tenant's
representative shall conduct a walk-through of the Premises and
identify any necessary touch-up work, repairs and minor completion
items as are necessary for final completion of Tenant's Improvements.
Neither Landlord's representative nor Tenant's representative shall
unreasonably withhold his or her agreement on punch list items.
Landlord will diligently use commercially reasonable efforts to cause
the contractor to complete all punch list items within thirty (30) days
after agreement thereof.
2.6 Tenant's Contractors. If Tenant should desire to enter the Premises or
authorize its agent to do so prior to the Commencement Date of the
Lease, to perform approved work not requested of the Landlord, Landlord
shall permit such entry upon, and subject to, the following terms and
conditions:
(a) Tenant, its contractors, workmen, mechanics, engineers, space
planners or such others as may enter the Premises
(collectively, "Tenant's Contractors"), shall work in harmony
with and do not in any way disturb or interfere with
Landlord's space planners, architects, engineers, contractors,
workmen, mechanics or other agents or independent contractors
in the performance of their work (collectively, "Landlord's
Contractors"), it being understood and agreed that if entry of
Tenant or Tenant's Contractors would cause, has caused or is
causing a material disturbance to Landlord or Landlord's
Contractors, then Landlord may, with notice, refuse admittance
to Tenant or Tenant's Contractors causing such disturbance;
and
(b) Tenant, Tenant's Contractors and other agents shall provide
Landlord sufficient evidence that each is covered under such
Worker's Compensation, public liability and property damage
insurance as Landlord may reasonably request for its
protection.
Landlord shall not be liable for any injury, loss or damage to any of Tenant's
installations or decorations made prior to the Commencement Date and not
installed by Landlord (excluding Landlord's gross negligence and/or willful
misconduct). Tenant shall indemnify and hold harmless Landlord and Landlord's
Contractors from and against any and all costs, expenses, claims, liabilities
and causes of action arising out of or in connection with work performed in the
Premises by or on behalf of Tenant (but excluding work performed by Landlord or
Landlord's Contractors or Landlord's or its Contractor's negligence or willful
misconduct). Landlord is not responsible for the function and maintenance of
Tenant's Improvements which are different than Landlord's standard improvements
at the Property or improvements, equipment, cabinets or fixtures not installed
by Landlord. Such entry by Tenant and Tenant's Contractors pursuant to this
Section 5 shall be deemed to be under all of the terms, covenants, provisions
and conditions of the Lease except the covenant to pay Rent. Landlord shall
indemnify and hold harmless Tenant and Tenant's contractors from and against any
and all costs, expenses, claims, liabilities and causes of action arising out of
or in connection with work performed in the Premises by or on behalf of Landlord
(but excluding work performed by Tenant or Tenant's contractors or Tenant's or
its contractor's negligence or willful misconduct).
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
33
37
EXHIBIT D-1
BUILDING SHELL IMPROVEMENTS
Landlord shall, at Landlord's expense, furnish and install the following
building standard improvements in accordance with all applicable governmental
laws and regulations as follows:
1. Building standard ceiling grid (2 x 4).
2. Building standard parabolic light fixtures (up to one fixture per 80
usable square feet).
3. Building standard ceiling tile.
4. Building standard horizontal mini blinds on all perimeter windows.
5. Building standard sprinkler system and heads. Tenant to pay for height
adjustment and relocation/additions if required by code.
6. Building standard air conditioning main ducts up to and including
variable air volume (VAV) and fan-powered mixing boxes. Tenant to pay
for all ducts and devices downstream from main boxes (i.e. flexible
ducts, diffusers, return-air grills, etc.).
7. Building standard restrooms.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
34
38
EXHIBIT "E"
FORM OF
ACCEPTANCE OF PREMISES MEMORANDUM
This Acceptance of Premises Memorandum is being executed pursuant to that
certain Lease Agreement (the "Lease') dated the ________________ day of
_______________, 1999 between 520 Partners, Ltd. ("Landlord") and Home Interiors
& Gifts, Inc. ("Tenant"), pursuant to which Landlord leased to Tenant and Tenant
leased from Landlord certain space in the office building located at 0000 Xxxxxx
Xxxx Xxxx in Dallas, Texas (the "Building"). Landlord and Tenant hereby agree
that:
1. Except for the Punch List Items (herein so called, as shown on the
attached Punch List), Landlord has fully completed the Tenant
Improvements and all other construction work required under the terms
of the Lease and the Work Letter attached thereto.
2. The Premises are tenantable, Landlord has no further obligation for
construction (except with respect to Punch List Items) and Tenant
acknowledges that the Building, the Premises and Tenant's Improvements
are satisfactory in all respects (latent defects excepted), except for
the Punch List Items and are suitable for the Permitted Use.
3. The Commencement Date of the Lease is the _________________ day of
_________________, 1999. If the date set forth in Section 1.01(g)of the
Lease is different than the date set forth in the preceding sentence,
then Section 1.01(g) of the Lease is hereby amended to be the
Commencement Date set forth in the preceding sentence.
4. The Expiration Date of the Lease is the __________________ day of
__________________ 20__. If the date set forth in Section 1.01(h) of
the Lease is different than the date set forth in the preceding
sentence, then Section 1.01(h) of the Lease is hereby amended to be the
Expiration Date set forth in the preceding sentence.
5. Tenant acknowledges receipt of the current Rules and Regulations for
the Building.
6. Tenant represents to Landlord that Tenant has obtained a Certificate of
Occupancy covering the Premises.
7. All capitalized terms not defined herein shall have the meaning
assigned to them in the Lease.
Agreed and Executed this ______________ day of _________________________, 1999.
LANDLORD
520 Partners, Ltd.
By: Granite Properties, Inc.
Its: General Partner
By:
---------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Director of Leasing
TENANT
Home Interiors & Gifts, Inc.
By:
---------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
---------------------------------
Title: Chief Executive Officer
---------------------------------
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
35
39
EXHIBIT "F"
PARKING GARAGE
1. Tenant shall pay Landlord the parking charges in such amount as set
forth in Section 1.01(d) of this Lease (hereinafter the "Parking Rent"). The
Parking Rent shall be payable in accordance with the policies established by
Landlord (or its agent) from time to time for payment of Parking Rent in such
garage. Tenant shall indemnify and hold harmless Landlord from and against all
claims, losses, liabilities, damages, costs and expenses (including, but not
limited to, attorneys' fees and court costs) arising or alleged to arise out of
Tenant's use of any such parking spaces unless caused by Landlord's negligence
and/or willful misconduct. Except as otherwise provided for in this Lease,
Tenant shall have no further rights to (a) any parking permit not taken at the
beginning of the original Term or (b) any parking permit taken at the beginning
of the original Term and thereafter released by Tenant or terminated by Landlord
for failure to pay Parking Rent or to comply with the other terms and conditions
for the leasing of such parking permit imposed by Landlord. Upon the proper
termination of this Lease, Tenant's rights to the parking permits then being
leased to Tenant hereunder shall terminate. In the event any of the above
parking spaces are or become unavailable at any time or from time to time
throughout the Term, whether due to casualty or any other cause, the Lease shall
continue in full force and effect, Tenant shall receive an abatement of Parking
Rent for those parking spaces rendered unavailable, which abatement shall
continue until such time as said parking spaces, or substitutes therefor, again
become available, and Landlord shall use its commercially reasonable efforts to
provide comparable substitute parking spaces for those spaces rendered
unavailable.
2. Tenant agrees to comply with all reasonable rules and regulations
now or hereafter established by Landlord relating to the use of the garage by
contract parking patrons. A condition of any parking shall be compliance by the
parking patron with garage rules and regulations, including any sticker or other
identification system established by Landlord. The following rules and
regulations are in effect until notice is given to Tenant of any change.
Landlord reserves the right to modify the following rules and regulations and/or
adopt such other reasonable and nondiscriminatory rules and regulations for the
garage as Landlord deems necessary for the operation of the garage. Landlord may
refuse to permit any person who violates the rules to park in the garage, and
any violation of the rules shall subject the car to removal.
RULES AND REGULATIONS
1. Cars must be parked entirely within the stall lines painted on
the floor.
2. All directional signs and arrows must be observed.
3. The speed limit shall be 5 miles per hour.
4. Parking is prohibited:
(a) in areas not striped for parking
(b) in aisles
(c) where "No Parking" signs are posted
(d) in cross hatched areas
(e) in such other areas as may be designated by Landlord
or Landlord's agent(s).
(f) in Visitor, Delivery, Handicapped or other specially
designated parking areas
5. Parking stickers or any other device or form of identification
supplied by Landlord shall remain the property of the Landlord and shall not be
transferable. There will be a replacement charge payable by Tenant equal to the
amount posted from time to time by Landlord for loss of any magnetic parking
card or parking sticker.
6. Garage managers or attendants are not authorized to make or allow
any exceptions to these Rules and Regulations.
7. Every xxxxxx is required to park and lock his own car. All
responsibility for damage to cars or persons is assumed by the xxxxxx.
8. No intermediate or full-size cars shall be parked in parking spaces
limited to compact cars.
9. All motorcycles/motorized bicycles are to be parked in the
designated motorcycle area, and will be removed from the property if not in the
designated area.
Failure to promptly pay the Parking Rent required hereunder or
persistent failure on the part of Tenant or Tenant's designated parkers to
observe the rules and regulations above shall give Landlord the right to
terminate Tenant's right to use the parking areas. No such termination shall
create any liability on Landlord or be deemed to interfere with Tenant's right
to quiet possession of the Premises.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
36
40
RIDER 1
TENANT'S RIGHT OF FIRST REFUSAL
A. For purposes of this Rider 1, the area within the Building described on
Schedule A attached to this Rider is hereinafter referred to as the
"ROFR Space". Prior to leasing any of the ROFR Space to a party other
than Tenant or the currently existing tenant of such ROFR Space,
Landlord shall deliver to Tenant a written statement ("Statement")
which shall reflect the basic terms upon which Landlord is then
intending to lease all or a portion of the ROFR Space to a prospective
tenant (the portion of the ROFR Space that is the subject of such
Statement is hereinafter referred to as the "Subject ROFR Space"), such
as rent, term, finish allowances, tenant inducements and the
description of the Subject ROFR Space. Tenant shall have seven (7) days
after receipt of the Statement within which to notify Landlord in
writing that it desires to lease the Subject ROFR Space upon the terms
and conditions contained in the Statement provided, however, (I) if
Tenant notifies Landlord of its election to lease the Subject ROFR
Space within two (2) years after the Commencement Date, Tenant shall
lease the Subject ROFR Space (which shall thereafter be part of the
Premises) for the number of months remaining for the Term of this
Lease, and upon the same terms and conditions set forth for the
original Premises (including the same Base Rent payable for the
original Premises during the remainder of the Primary Term, except that
(i) the Finish Allowance of $27.00 per square feet payable by Landlord
shall be reduced in direct proportion to the number of months remaining
on the Term as of Landlord's estimated delivery date of the Subject
ROFR Space to Tenant (ii) Tenant shall be entitled to four (4) parking
spaces for each one thousand (4:1000) rentable square feet of such ROFR
Space being added to the Premises, of which seventy-two percent (72%)
shall be located in the Parking Garage and the remainder shall be
located on the surface lot (all such parking space shall be at no cost
to Tenant), and (iii) if Tenant notifies Landlord of its election to
lease the Subject ROFR Space after the second (2nd) anniversary of the
Commencement Date but prior to the fifth (5th) anniversary of the
Commencement Date, Tenant shall lease the Subject ROFR Space upon the
same terms set forth in (I) immediately preceding, except that the rate
of Base Rent, the amount of the Finish Allowance and other allowances
shall be based upon the then current market conditions for comparable
office space in comparable buildings in the LBJ/North Dallas market,
taking into account all relevant factors Failure by Tenant to notify
Landlord within such seven (7) day period shall be deemed an election
by Tenant not to lease the Subject ROFR Space and Landlord shall
thereafter have the right to lease such subject ROFR Space upon
substantially the same terms described in the Statement to a third
party. In the event Landlord does not enter into a lease with respect
to such subject ROFR Space within one hundred eighty days (180) after
the date of the Statement, Tenant's rights under this Rider 1 shall
automatically be reinstated with respect to said ROFR Space. In the
event Landlord intends to enter into a lease which materially differs
from the Statement delivered to Tenant, Tenant shall have the right to
lease the ROFR Space on such materially different terms.
B. Notwithstanding any provision or inference in this Rider to the
contrary, Tenant's rights under this Rider 1 shall expire and be of no
further force or effect upon the earlier of (i) the expiration or
earlier termination of the Primary Term of this Lease or (ii) the
existence of a Default by Tenant under this Lease at the time that
Tenant is entitled to exercise its rights under this Rider 1, or (iii)
the failure at such time of Tenant to occupy at least one and one-half
(1 1/2) floors in the Building.
C. Tenant acknowledges that the ROFR Space on floor 8 is subject to
certain expansion rights, right of first refusal and other rights in
favor of Xxxxxxxx-Xxxxxxxx, Inc. pursuant to a lease agreement between
Landlord and Carrker-Antinori (the "Xxxxxxxx-Xxxxxxxx Lease"), and the
ROFR Space on floor 4 is subject to certain right of first refusal and
other rights in favor of Great-West Life and Annuity Insurance Company
and Purchasing Management International Company pursuant to a lease
agreement between Landlord and Great-West Life Insurance Company (the
"Great-West Life Lease") and a lease agreement between Landlord and
Purchasing Management International Company ( the "Purchasing
Management Lease"). Accordingly, notwithstanding anything contained
herein to the contrary, Landlord and Tenant acknowledge that all of
Tenant's rights under this Rider 1 are subject to and subordinate to
all rights and obligations set forth in the Carrker-Antinori Lease, the
Great West Life Lease and the Purchasing Management Lease.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
37
41
SCHEDULE A
(PAGE 1 OF 3)
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
38
42
SCHEDULE A
(PAGE 2 OF 3)
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
39
43
SCHEDULE A
(PAGE 3 OF 3)
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
40
44
RIDER 2
RENEWAL OPTION
1. If, and only if, on the Expiration Date and the date Tenant notifies
Landlord of its intention to renew the term of this Lease (as provided
below), (i) a Default has not been declared and is continuing under
this Lease, (ii) Tenant or a Permitted Assignee then occupies at least
one and one-half (1 1/2) floors of the original Premises and (iii) this
Lease is in full force and effect, then Tenant, but not any assignee or
subtenant of Tenant other than affiliate, shall have and may exercise
an option to renew this Lease for two (2) additional term of five ( 5 )
years (the "Renewal Term") upon the same terms and conditions contained
in this Lease with the exceptions that (x) this Lease shall not be
further available for renewal and (y) the rental for the Renewal Term
shall be the "Renewal Rental Rate". The Renewal Rental Rate is hereby
defined to mean the then prevailing rents (including, without
limitation, those similar to the Basic Annual Rent and Additional Rent)
Payable by renewal tenants having a credit standing substantially
similar to that of Tenant, for properties of equivalent quality, size,
utility and location as the Premises, including any additions thereto,
located within the area described below and leased for a renewal term
approximately equal to the Renewal Term. The Renewal Rental Rate will
take into consideration the tenant inducements offered in the renewal
transactions considered by Landlord in determining the Renewal Rental
Rate.
2. If Tenant desires to renew this Lease, Tenant must notify Landlord in
writing of its desire to consider renewing on or before the date which
is at least nine (9) months but no more than twelve (12) months prior
to the Expiration Date. Landlord shall, within the next sixty (60)
days, notify Tenant in writing of Landlord's determination of the
Renewal Rental Rate and Tenant shall, within the next twenty (20) days
following receipt of Landlord's determination of the Renewal Rental
Rate, notify Landlord in writing of Tenant's acceptance or rejection of
Landlord's determination of the Renewal Rental Rate. If Tenant timely
notifies Landlord of Tenant's acceptance of Landlord's determination of
the Renewal Rental Rate, this Lease shall be extended as provided
herein and Landlord and Tenant shall enter into an amendment to this
Lease to reflect the extension of the term and changes in Rent in
accordance with this Rider. If Tenant timely notifies Landlord in
writing of Tenant's rejection of Landlord's determination of the
Renewal Rental Rate, Tenant shall deliver with such notification
Tenant's determination of the Renewal Rental Rate and Landlord and
Tenant shall, within the next ten (10) days, negotiate in good faith to
determine the Renewal Rental Rate. If Tenant does not notify Landlord
in writing of Tenant's acceptance or rejection of Landlord's
determination of the Renewal Rental Rate within the aforementioned
twenty (20) day period, this Lease shall end on the Expiration Date,
unless within such twenty (20) day period Tenant elects to have the
Renewal Rental Rate determined as follows:
(a) Within fourteen (14) days after Landlord's receipt of Tenant's
rejection notice, the parties shall select as an arbitrator an
independent MAI appraiser with at lease five (5) years experience in
appraising office space in Dallas, Texas (the "Arbitrator").
(b) Each party shall submit to the Arbitrator its determination of the
Renewal Rental Rate.
(c) Within fourteen (14) days of submission of the matter to the
Arbitrator, the Arbitrator shall determine the Renewal Rental Rate by
choosing whichever of the determinations submitted is more accurate
(the Arbitrator shall not substitute its own determination).
(d) Tenant shall have three (3) days after The Arbitrator's
determination to accept or reject the determination. In the event
Tenant accepts such determination, then this Lease shall be amended as
provided for above and of the Renewal Rental Rate shall be binding. as
determined by the Arbitrator. If Tenant should reject such Arbitrator's
determination, then this Lease shall end on the Expiration Date. The
fees and costs of the Arbitrator shall be borne equally by the parties.
3. The area with respect to which the Renewal Rental Rate will be
determined is the LBJ/North Dallas market.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
41
45
RIDER 3
EXPANSION OPTION
A. For purposes of this Rider 3, the area of the Building described on
Schedule B attached to this Rider is hereinafter referred to as the
"Expansion Space".
Subject to the remaining provisions of this Rider 3, Tenant shall have
the option and the right (the "Expansion Option") to lease all, but not
less than all, of the Expansion Space consisting of 11,055 rentable
square feet. Tenant must exercise the Expansion Option, if at all, by
delivering written notice to Landlord (the "Expansion Notice") on or
before January 1, 2004. If Tenant timely exercises the Expansion Option
with regard to the Expansion Space, Landlord and Tenant will in good
faith negotiate and enter into an amendment to this Lease within thirty
(30) days of Tenant's delivery of the Expansion Notice reflecting the
addition of the Expansion Space to the Premises with a Commencement
Date of December 1, 2004, provided, however, (i) the rate of Base Rent,
the amount of Finish Allowance and other allowances shall be based on
the then market conditions for comparable office space in comparable
buildings in the LBJ/North Dallas market taking into account all
relevant factors such as condition and size of the Expansion Space,
length of term, creditworthiness of Tenant, basis for payment of
operating expenses and all other relevant factors (ii) Tenant shall be
entitled to four (4) parking spaces for each one thousand (4:1000)
rentable square feet of such Expansion Space being added to the
Premises, of which seventy-two percent (72%) shall be located in the
Parking Garage and the remainder shall be located on the surface lot
(all such parking space shall be at no cost to Tenant), and in the
event that Landlord is unable to timely deliver the Expansion Space due
to the holding over of the existing tenant thereof, then the
Commencement Date of the Expansion Space shall be delayed until the
date that the Expansion Space is delivered to Tenant.
B. Notwithstanding anything to the contrary contained herein, all rights
and obligations under this Rider 3 shall automatically terminate upon
the earlier to occur of (i) failure by Tenant to timely exercise such
Expansion Notice on or before January 1, 2004; (ii) failure by Landlord
and Tenant to enter into a lease amendment for such Expansion Space
within thirty (30) days of Tenant's delivery of the Expansion Notice to
Landlord as a result of Tenant, or (iii) the existence of a Default by
Tenant under this Lease at the time that Tenant is entitled to exercise
its rights under this Rider 3, or (iv) the failure at such time of
Tenant to occupy at least one and one-half (1 1/2) floors in the
Building or (v) the earlier termination of this Lease.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
42
46
SCHEDULE B
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
43
47
RIDER 4
CAP ON CERTAIN OPERATING EXPENSES
For the purpose of determining Additional Rent, Operating Expenses (exclusive of
the Non-Capped Operating Expenses, as hereinafter defined) for any calendar year
shall not be increased over the amount of Operating Expenses (exclusive of
Non-Capped Operating Expenses) during the Base Year by more than seven percent (
7%) per year. It is understood and agreed that there shall be no cap on
Non-Capped Operating Expenses, which are hereby defined to mean all Utility
Expenses, Real Estate Taxes and Insurance Premiums. In addition, Tenant shall
receive the full benefit of any tax abatements granted during the Term of this
Lease to Landlord for the Building by the City of Farmers Branch or any other
taxing authority.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
44
48
RIDER 5
SIGNAGE
Landlord hereby grants Tenant the right (at Tenant's expense) to install its
name and logo on a non-exclusive basis on Landlord's existing monument sign at
the front of the Building. Subject to the approval of all applicable
governmental authorities, Landlord further grants Tenant the right (at Tenant's
expense) to install an additional monument sign at the front of Building at a
location reasonably acceptable to Landlord for the display of Tenant's name and
logo on an exclusive basis.
Additionally, Landlord hereby grants Tenant the right, (at Tenant's expense), to
display Tenant's name and corporate emblem, on the highest level of the exterior
portion of the Building facade at a location to be reasonably approved by
Landlord, subject to signage location rights, hereintofore granted to Xxxxxxxx,
which rights Tenant may attempt to purchase directly from Xxxxxxxx (such
purchase may include an exchange of Tenant's signage rights under this second
paragraph of Rider 5 with Xxxxxxxx). Landlord's consent shall not be required or
necessary for such purchase or exchange or the terms thereof. In the event that
(i) Tenant does not acquire Xxxxxxxx'x signage rights, and (ii) Xxxxxxxx'x
signage rights are hereafter no longer in effect then Tenant shall have the
option (at Tenant's expense) (such option to be exercised within fifteen (15)
days after Landlord's notice to Tenant thereof) to display Tenant's name and
corporate emblem on the exterior of the Building facade above the tenth floor,
however, Tenant recognizes that such building signage right above the tenth
floor is subject to building signage rights hereintofore granted in favor of the
Xxxxxxxx-Xxxxxxxx Lease. Landlord reserves the right to approve style, type of
construction, color size and location of any such sign. Landlord's approval
shall be submitted to Tenant in writing after receipt by Landlord of Tenant's
request accompanied by drawings, schematics and site location for said signage
together with any applicable plans and specifications for review. Installation
shall be subject to: (i) Tenant's receipt of all necessary governmental permits
and approvals, (ii) Landlord's written consent as provided above and (iii)
supervision by Landlord of installation. Notwithstanding the foregoing, in no
event shall Tenant be entitled to exterior building signage at more than one
level of the Building.
Tenant agrees to maintain such signage during the Term of this Lease and remove
such exterior signage installed by Tenant at Tenant's sole cost and expense when
the Premises are vacated or the Lease Term is terminated or otherwise, canceled
and to restore the exterior of the Building to the original condition,
reasonable wear and tear accepted. Any subletting or assignment other than to an
Permitted Assignee shall terminate Tenant's signage rights contained herein.
Tenant shall have the rights contained herein only so long as Tenant and/or any
Permitted Assignee) occupy at least one and one-half (1 1/2) floors of the
Building.
Home Interiors & Gifts, Inc.
Granite Tower at The Centre, 8/17/1999
45
