LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into this 29th day of August,
1995, by and between the Lessor and Lessee hereinafter named.
1. DEFINITIONS AND BASIC PROVISIONS. The following definitions and basic
provisions shall be construed in conjunction with other provisions of this
Lease:
(a) "Lessor": MXM Mortgage L.P. d/b/a MPC Mortgage L.P., a Delaware
corporation
(b) "Lessee": Design Automation Systems, Inc.
(c) "Premises": approximately 4,270 square feet of Net Rentable Area
(the "Net Rentable Area of the Premises") on Floor 3 of the Building, as
shown on the plan attached hereto as Exhibit "A."
(d) "Building": the building located on a tract of land in Xxxxxx
County, Texas, as described on Exhibit "B" attached hereto and made a part
hereof for all purposes, more commonly known as Westchase III, and
containing approximately 163,696 square feet of Net Rentable Area (the "Net
Rentable Area of the Building").
(e) "Term" or "Lease Term": a period of 60 months (plus a partial
month if the Commencement Date is not on the first day of a month)
commencing on the Commencement Date (as defined in Section 2) and ending
on the last day of the 60th full calendar month thereafter, as same may be
extended only by the written agreement of the parties or an express
provision of this Lease.
(f) "Basic Monthly Rental": the sum of $ * per month,
which Lessee shall pay in advance on or before the first of each month
during the Lease Term. However, Basic Monthly Rental for the first month
of the Lease Term shall be prorated, if the actual Commencement Date does
not occur on the first day of a month.
*Months 01-12 $3,469.38 $9.75**
Months 13-24 $3,558.33 $10.00
Months 25-36 $3,647.29 $10.25
Months 37-48 $3,736.25 $10.50
Months 49-60 $3,825.21 $10.75
**per square foot of Net Rentable Area of the Premises per year.
(g) "Initial Basic Costs Amount": The actual Basic Costs (as defined
herein) for calendar year 1995.
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(h) "Prepaid Rental": $3,469.38, representing payment of rental for
the second month of the Lease Term, which Lessee shall pay upon its
execution of this Lease.
(i) "Security Deposit": N/A
(j) "Permitted Use": General business office purposes.
(k) "Lessor's Address": MXM Mortgage L.P. d/b/a MPC Mortgage L.P.
c/o Transwestern Property Company
0000 Xxxxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
with a copy to: MXM Mortgage L.P. d/b/a MPC Mortgage L.P.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: J. Xxxxxxx Xxxxxxxxx
(l) "Lessee's Address": Prior to the Commencement Date, Design
Automation Systems, Inc., __________________________________; thereafter,
0000 Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000.
(m) "Rent": Basic Monthly Rental, Basic Costs Excess, Parking Rent
and all other monetary obligations of Lessee hereunder.
(n) "Lessee's Proportionate Share": 2.60 percent, which represents
the ratio that the Net Rentable Area of the Premises bears to the Net
Rentable Area of the Building, subject to adjustment as provided in
Section 8(f).
(o) "Net Rentable Area": In the case of a single-tenancy floor, all
floor area measured from the inside surface of the outer glass or wall line
of the Building excluding only the areas ("Service Areas") used for
Building stairs, fire towers, elevator shafts, flues, vents, stacks, pipe
shafts and vertical ducts (which Service Areas shall be measured from the
midpoint of walls enclosing the Service Areas), but including any such
Service Areas which are for the specific use of a particular tenant such as
special stairs or special elevators, plus Lessee's Proportionate Share of
the square footage of the Building elevator and mechanical and electrical
rooms, maintenance areas, public areas and Building management offices
("Support Areas"). In the case of a floor to be occupied by more than one
tenant, all floor areas within the inside surface of the outer glass or
wall line enclosing the leased premises and measured to the midpoint of the
walls separating areas leased by or held for lease to other tenants or
areas devoted to Common Areas on the particular floor, but including a
proportionate part of the Common Areas located on such floor based upon the
ratio which the Lessee's Net Rentable Area (excluding Common Areas) on such
floor bears to the aggregate Net Rentable Area (excluding Common Areas) on
such floor plus Lessee's Proportionate Share of the Support Areas of the
Building. No deductions from Net Rentable Area shall be made for columns
or projections necessary to the Building. In the
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event of any dispute concerning the exact Net Rentable Area, the decision
of Lessor's designer, architect or engineer shall be binding on both
parties.
(p) "Allocated Number": Up to 15 garage parking spaces, which Lessee
may lease from time to time during the Term from Lessor in the Parking
Facilities (as hereinafter defined). Up to four of the parking spaces may
be marked by Lessee as "reserved."
(q) "Parking Rent": Lessor's prevailing monthly charge for assigned
and unassigned spaces in the parking garage adjacent to the Building on the
property described on Exhibit "B" (the "Parking Facilities"). Lessor and
Lessee stipulate that such prevailing rates, for the first 60 months of the
Lease Term are $0.00 per space per month for unassigned spaces and $0.00
per space per month for assigned spaces. In addition to the foregoing,
Parking Rent shall also include any taxes levied by any governmental
authorities on such Parking Rent, which additional amount shall be paid by
Lessee on demand from Lessor.
(r) "Calendar Year": A 12-month period commencing January 1 and
ending December 31.
(s) "Default Interest Rate": The interest rate which is equal to the
lower of (i) 18 percent per annum or (ii) the maximum non-usurious rate
allowed by applicable law.
(t) "Building Holidays": New Year's Day, Good Friday, Memorial Day,
Fourth of July, Labor Day, Thanksgiving Day, Christmas Day and any other
holidays commonly observed by lessors of comparable office Buildings in the
Market Area.
(u) "Building Standard": The quantity and quality of services,
materials, finishes and workmanship from time to time specified by Lessor
as standard for the Building.
(v) "Non-Building Standard": All materials, finishes and workmanship
used in connection with the construction and/or installation of leasehold
improvements which exceed or deviate from Building Standard in terms of
quantity or quality (or both).
(w) "Market Area": Westchase area of Houston.
(x) "Project": The Building, the Parking Facilities and/or any other
improvements now or hereafter located on the land described on Exhibit "B."
(y) "Common Areas": The portions of the Project intended to be used
by more than one tenant, including without limitation the Parking
Facilities, corridors, elevator foyers, rest rooms, mechanical rooms,
janitor closets, telephone and equipment rooms, vending areas and other
similar facilities.
2. CONDITION OF PREMISES; COMMENCEMENT DATE.
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Lessee has inspected the Premises, the Common Areas of the Building, and
the Parking Facilities, is familiar with their condition and accepts same in
their present condition, "AS IS," including any latent defects. Lessee
acknowledges that Lessor is not obligated to do any further construction or make
any additional improvements. As used herein, the term, the term "Commencement
Date" shall mean the first to occur of September 15, 1995, or the date that
Lessee first occupies any portion of the Premises for its intended Permitted
Use.
3. GRANTING CLAUSE. In consideration of the obligation of Lessee to pay
Rent as herein provided and in consideration of the other terms, covenants and
conditions hereof, Lessor hereby demises and leases to Lessee, and Lessee hereby
takes from Lessor, the Premises, to have and to hold the same for the Lease Term
specified herein, all upon the terms and conditions set forth in this Lease.
4. SERVICES BY LESSOR.
(a) So long as Lessee is not in default hereunder and Lessee is
occupying the Premises, Lessor agrees to furnish Lessee the following
services:
(i) Hot and cold water at those points of supply provided for
the public use of tenants.
(ii) Heating, ventilation and air conditioning ("HVAC") in
season, between the hours of 7:00 a.m. and 6:00 p.m. Monday through
Friday and 8:00 a.m. and 1:00 p.m. Saturday, exclusive of Building
Holidays (such hours being hereinafter referred to as "Business
Hours"), and at such temperatures and in such amounts as are
reasonably considered by Lessor to be standard for comparable
buildings in the Market Area. If Lessee requires HVAC outside
Business Hours, Lessor shall furnish it to Lessee only at Lessee's
request, and Lessee shall bear the entire charge therefor, which
charge shall be payable on demand and in an amount equal to the rate
Lessor at such time is charging for such service plus 15% of such
costs to cover Lessor's overhead costs.
(iii) Passenger elevator service in common with other tenants
for ingress to and egress from the Premises, provided that Lessor may
reduce the number of operating elevators to not less than one before
or after Business Hours.
(iv) Janitorial cleaning services as are reasonably considered
by Lessor to be standard for comparable buildings in the Market Area.
(v) Electric lighting for public areas and special service
areas of the Building in the manner and to the extent reasonably
deemed by Lessor to be standard for comparable buildings in the Market
Area.
(vi) Ballast and lamp replacement for Building Standard ceiling
mounted fluorescent lighting fixtures located in the Premises.
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(vii) Electric energy that Lessee shall reasonably require for
normal office equipment such as personal computers, standard business
office word processing and photocopying equipment, telecopiers,
typewriters, dictation machines, calculators and other machines of
similar electrical consumption, and lighting in the Premises, provided
that Lessor shall not be obligated to provide (unless otherwise
specifically agreed in writing) dedicated circuits or electrical power
in excess of Building Standard.
(viii) Security services as Lessor may from time to time
reasonably deem to be standard for comparable buildings in the Market
Area. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, LESSEE
EXPRESSLY ACKNOWLEDGES AND AGREES THAT LESSOR IS NOT WARRANTING THE
EFFICACY OF ANY SUCH SECURITY PERSONNEL, SERVICE, PROCEDURES OR
EQUIPMENT AND THAT LESSEE IS NOT RELYING AND SHALL NOT HEREAFTER RELY
ON ANY SUCH PERSONNEL, SERVICE, PROCEDURES OR EQUIPMENT. LESSOR SHALL
NOT BE RESPONSIBLE OR LIABLE IN ANY MANNER FOR FAILURE OF ANY SUCH
SECURITY PERSONNEL, SERVICES, PROCEDURES OR EQUIPMENT TO PREVENT OR
CONTROL, OR APPREHEND ANY ONE SUSPECTED OF, PERSONAL INJURY OR
PROPERTY DAMAGE IN, ON OR AROUND THE PROJECT.
(b) Notwithstanding anything herein to the contrary, the obligations
of Lessor 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 Lessor 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 Lessor hereunder.
(c) The failure to any extent to furnish, or any stoppage of, any
services shall not render Lessor liable in any respect for damages to
either person or property, nor be construed as an eviction of Lessee or
work an abatement of rent, nor relieve Lessee from fulfillment of any
covenant or agreement hereof. Should any equipment or machinery necessary
for the services set forth in subsection (a) above break down, or for any
cause cease to function properly, Lessor shall use reasonable diligence to
repair same promptly, but Lessee shall have no claim for rebate of rent or
damages on account of any interruptions in service occasioned thereby or
resulting therefrom. 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 subsection (a) above
which continues for five business days after receipt by Lessor of written
notice thereof from Lessee, and such failure, stoppage or interruption
is not caused by Force Majeure (as hereinafter defined), a casualty
covered by Section 13 below, a failure on the part of a public utility,
or by any act or omission of Lessee, its agents, employees or
contractors, Lessee shall be entitled, as its sole and exclusive remedy,
to an abatement of Basic Monthly Rent and Basic Costs Excess in
proportion to the untenantability of the Premises caused by such
failure, stoppage or
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interruption, with such abatement to begin on the sixth business day
after the receipt by Lessor of written notice of such occurrence and
continuing until such failure or stoppage or interruption has been cured.
5. RENT PAYMENTS.
(a) Lessee shall pay all Rent hereunder at the times and in the
manner herein provided. Unless otherwise expressly provided herein, all
Rent shall be due and payable without demand, notice, offset, reduction or
abatement. All payments of Rent shall be made to Lessor at Lessor's
Address unless otherwise directed in writing by Lessor. The obligation of
Lessee to pay Rent is an independent covenant, and no act or circumstance,
whether constituting a breach of covenant by Lessor or not, shall release
or modify Lessee's obligation to pay Rent.
(b) Lessee shall pay to Lessor Basic Monthly Rental as provided in
Section 1(f) and Basic Costs Excess as provided in Section 8.
(c) Lessee shall pay Lessor the reasonable cost for the replacement
of all Non-Building Standard electric, fluorescent, and other lamps and
ballasts.
(d) In the event payment of any installment or portion of Rent is not
made within 10 days of the date due, a late charge of five percent of said
overdue amount(s) will be added and owing as additional Rent to compensate
Lessor for additional administrative handling, which amount will be due
immediately. If such failure to pay Rent continues beyond such 10 day
period, any and all due and unpaid Rent shall bear interest at the Default
Interest Rate from the date such Rent became due until the date such Rent
is received by Lessor. Such interest, as accrued, shall be immediately due
and payable as additional Rent hereunder. The collection of such late
charge and/or such interest by Lessor shall be in addition to and
cumulative of any and all other remedies available to Lessor. It is the
intention of Lessor and Lessee 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, Lessor shall credit the amount of any such
excess paid by Lessee against any amount owing under this Lease or if all
amounts owing under this Lease have been paid, Lessor shall refund to
Lessee the amount of such excess paid by Lessee. Lessor and Lessee agree
that Lessor 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.
6. ASSIGNMENT OR SUBLETTING.
(a) Lessee shall not sublet, mortgage, assign or otherwise encumber
this Lease, the Premises, or any portion thereof, or allow the Premises, or
any portion thereof, to be used for any purpose other than the Permitted
Use without the prior written consent of Lessor, which consent may be
withheld by Lessor in Lessor's sole good faith judgment. Without
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limitation, Lessor may withhold its consent if such proposed assignment or
subletting would not be for the Permitted Use hereunder or if Lessor is
dissatisfied with the credit worthiness or business reputation of the
proposed assignee or sublessee, such proposed assignment or subletting
would violate an exclusive use provision granted to any other tenant in the
Building, or such proposed assignee or sublessee would increase the traffic
in or other use of the Common Areas. In the event the Lessee desires to
assign or sublet the Premises, Lessee shall provide Lessor with not less
than 30 days prior written notice of Lessee's request, specifying in detail
any and all terms of such assignment or sublease ("Lessee's Request").
Lessor reserves the right to cancel and terminate this Lease upon 60 days
prior written notice by giving written notice to Lessee within 30 days
after Lessor's receipt of Lessee's Request. In the event that Lessor has
not notified Lessee of its approval or denial of Lessee's Request, or of
Lessor's exercise of its right to terminate this Lease, within 30 days
after Lessor's receipt of Lessee's Request, Lessor shall be deemed to have
(i) denied Lessee's request to assign or sublease this Lease and (ii) not
exercised its right to terminate. In addition, in the event Lessor
consents to an assignment or sublease of the Premises, and such assignment
or sublease results in rental payments in excess of the monthly payments
due and owing under the terms of this Lease (other than pursuant to this
provision), such excess rental payments shall be deemed to be rental
payments due and owing solely to Lessor. In the event that Lessor elects
to have any proposed sublease or assignment document submitted by Lessee
reviewed by an attorney on Lessor's behalf, Lessee agrees to pay on demand
the reasonable attorney's fees incurred by Lessor in connection with such
review. At Lessor's request, Lessee shall use the standard form of
assignment and subletting agreement proposed by Lessor (with such
modifications as are reasonably necessary to reflect the agreement between
Lessee and the proposed subtenant or assignee). In addition, in the event
Lessor consents to an assignment or sublease of the Premises which
contemplates alterations or renovations and Lessor incurs any architectural
or engineering design fees in connection therewith, Lessee shall pay Lessor
on demand the amount of such fees incurred by Lessor.
(b) No assignment, subletting or other transfer by Lessee shall
relieve Lessee of Lessee's obligations under this Lease. Any consent by
Lessor to an assignment, subletting or other transfer by Lessee shall not
be deemed to be a waiver of Lessor's right to withhold its consent to any
future assignment, sublease or other transfer by Lessee nor a consent to
any future assignment or sublease or other transfer, but shall only be
deemed to be a consent to the one assignment, sublease or other transfer
for which such consent is given.
(c) If Lessee is a corporation, then any transfer of this Lease from
Lessee by merger, consolidation or dissolution or any change in ownership
or power to vote a majority of the voting stock in Lessee outstanding at
the time of execution of this Lease shall constitute an assignment for the
purpose of this Lease. For purposes of this section, the term "voting
stock" shall refer to shares of stock regularly entitled to vote for the
election of directors of the corporation involved. If Lessee is a general
partnership having one or more corporations as partners or if Lessee is a
limited partnership having one or more corporations as general partners,
the provisions of the preceding sentence shall apply to each of such
corporations as if such corporation alone had been the Lessee hereunder.
If Lessee
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is a general partnership (whether or not having any corporation as
partners) or if Lessee is a limited partnership (whether or not having
any corporation as general partners), the transfer of the partnership
interest or interests constituting a majority shall constitute an
assignment for purposes of this Lease.
7. TRANSFER OF LESSOR'S RIGHTS. Lessor shall have the right to transfer
and assign, in whole or in part, its rights and obligations hereunder and in the
Project. Such transfers or assignments, however made, shall in all things be
respected and recognized by Lessee. Lessee shall look solely to Lessor's
successor in interest for performance under this Lease.
8. OPERATING EXPENSES.
(a) For each Calendar Year (or portion thereof) during the Term, in
addition to the other Rent due hereunder, Lessee shall pay the amount by
which Basic Costs (as hereinafter defined) exceed the Initial Basic Costs
Amount set forth in Section 1(g) ("Basic Costs Excess"). Such payments of
Basic Costs Excess shall be made as follows:
(i) Prior to the Commencement Date and before the beginning of
each Calendar Year (or portion thereof) thereafter during the Term,
Lessor shall furnish Lessee with Lessor's estimate of Basic Costs
Excess for such Calendar Year. On or before the first day of each
month during such Calendar Year, in addition to other Rent due
hereunder at such time, Lessee shall pay a monthly installment equal
to 1/12 of the estimated Basic Costs Excess for such Calendar Year.
Lessor shall have the right to adjust such estimated Basic Costs
Excess before the beginning of each calendar quarter and 1/12 of such
adjusted estimated Basic Costs Excess shall be payable on the first
day of each month thereafter during such Calendar Year.
(ii) Within 150 days after the conclusion of each Calendar Year
during Lessee's occupancy, or as soon thereafter as practicable,
Lessor shall furnish to Lessee a statement of actual Basic Costs for
the previous Calendar Year (or fraction thereof if the Commencement
Date occurred after the first day of the previous Calendar Year). A
lump sum payment (which payment shall be considered a payment of Rent
for all purposes) will be made by Lessee, within 30 days of the
delivery of that statement, equal to the excess, if any, of the actual
Basic Costs over the aggregate amount paid by Lessee hereunder for
Basic Costs Excess for such Calendar Year. If the amount of the
actual Basic Costs is less than the aggregate amount actually paid by
Lessee hereunder for Basic Costs Excess for such Calendar Year, Lessor
shall (provided Lessee is not in default hereunder) at Lessor's
election either refund such difference (the "Basic Costs Overage") to
the Lessee within 30 days of the issuance of that statement, or apply
such Basic Costs Overage to the next accruing installments of Rent due
hereunder. The effect of this reconciliation payment or adjustment
shall be that Lessee will pay with respect to each Calendar Year (or
portion thereof) during the Term, in addition to the other Rent due
hereunder, the amount by which Basic Costs exceeds the Initial Basic
Costs Amount.
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(b) As used herein "Basic Costs" means: (i) Lessee's Proportionate
Share of all Operating Expenses (as defined below), which costs shall
include all expenditures by Lessor to maintain all facilities in operation
at the beginning of the Term and such additional facilities in subsequent
years as Lessor may consider necessary or beneficial for the operation of
the Project; and (ii) an amount equal to Lessee's Proportionate Share of
the management fee paid by Lessor with respect to the Project. All
Operating Expenses shall be determined according to generally accepted
accrual accounting principles which shall be consistently applied.
"Operating Expenses" as used herein means all reasonable expenses, costs,
and disbursements of every kind which Lessor shall pay or incur in
connection with the ownership, operation and maintenance of the Project,
including without limitation, the following:
(i) Wages, salaries and fees of all personnel or entities
(exclusive of Lessor's executive personnel) engaged in the operation,
maintenance, traffic control or access control of the Project,
including taxes, insurance, and benefits relating thereto; provided,
however, that if during the Term such personnel or entities are
working on other projects of Lessor, their wages, salaries, fees, and
related expenses, shall be appropriately allocated among all of such
projects and only that portion of such expenses reasonably allocable
to the Project shall be included in Operating Expenses.
(ii) All supplies, tools, equipment and materials used in the
operation and maintenance of the Project.
(iii) Cost of all maintenance, janitorial, and service
agreements for the Project and the equipment therein, including,
without limitation, alarm service, access control, traffic control,
janitorial service, security services, if any, window cleaning,
elevator maintenance and landscaping.
(iv) Cost of all insurance relating to the Project, including,
without limitation, the cost of casualty and liability insurance
applicable to the Project and Lessor's personal property used in
connection therewith and the cost of rent loss or business
interruption insurance in such amounts as Lessor elects to carry.
(v) All taxes, assessments, and other governmental charges,
whether federal, state, county or municipal, and whether assessed by
taxing districts or authorities presently taxing the Project or by
others, subsequently created or otherwise, and any other taxes and
assessments attributable to the Project or its operation, exclusive of
any inheritance, gift, franchise, income, corporate or profit taxes
which may be assessed against Lessor; provided, however, that if at
any time during the Term, the present method of taxation or assessment
is changed so that all or any part of the taxes, assessments, levies,
impositions or charges now levied, assessed or imposed on real estate
and improvements thereof shall be discontinued and as a substitute
thereof or in lieu of or in addition thereto, any taxes, assessments,
levies, impositions or charges shall be levied, assessed and/or
imposed wholly or partially as a capital levy or otherwise on the
rents received from the Project or the rents reserved herein
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or any part thereof, then such substitute or additional taxes,
assessments, levies, impositions or charges to the extent so
levied, assessed or imposed, shall be deemed to be included within
Operating Expenses to the extent that such substitute or additional
tax would be payable if the Project were the only property of the
Lessor subject to such tax. At Lessor's option, Lessee shall be
responsible for ad valorem taxes on its personal property and on
the value of leasehold improvements to the Premises to the extent
that they exceed Building Standard improvements, in which event
Lessor may make a reasonable allocation of the ad valorem taxes
assessed on the Building to give effect to this provision.
(vi) Cost of repairs and general maintenance undertaken by
Lessor in its sole discretion on or of the Project (excluding repairs
and general maintenance paid by Lessee or by proceeds of insurance or
other third parties, and alterations attributable solely to tenants of
the Building).
(vii) Amortization of the cost of installation of capital items
which are primarily to reduce operating costs for the benefit of all
the Building's tenants or enhance the Project or which may be required
by any governmental authority, including without limitation any
asbestos abatement. All such costs, including interest costs, shall
be amortized over the reasonable life of the capital items, according
to generally accepted accounting principles, but in no event shall
such amortization extend beyond the reasonable life of the Building.
(viii) Cost of all utilities for the Project, including the cost
of water, electricity, gas, fuel oil, heating, lighting, air
conditioning and ventilating for the Project.
(ix) Lessor's central accounting costs, and legal, appraisal,
and management fees relating to the operation of the Project.
(c) Notwithstanding anything contained in Section 8(b) above to the
contrary, the following shall be excluded from "Operating Expenses":
(i) Costs of repairs or other work occasioned by fire,
windstorm or other casualty, or condemnation, to the extent reimbursed
to Lessor by insurers or by governmental authorities in eminent
domain.
(ii) Leasing commissions, attorney's fees, costs and
disbursements and other expenses incurred in connection with
negotiations for leases with tenants, other occupants, or prospective
tenants or other occupants of the Building and similar costs incurred
in connection with disputes between Lessor and tenants, other
occupants, or prospective tenants or other occupants of the Building.
(iii) Costs incurred in renovating, decorating, redecorating or
otherwise improving (as opposed to making repairs to) space for
tenants in, or other occupants of, the Building, or vacant, leasable
space in the Building.
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(iv) Costs of correcting defects (including latent defects) in
the construction of the Building, the Parking Facilities, or in the
equipment used therein, except that, for the purposes hereof,
conditions (not occasioned by construction defects) resulting from
ordinary wear and tear, asbestos abatement or alterations of the HVAC
system to meet legal requirements, and use, fire, casualty, vandalism,
and other matters not occasioned by construction defects shall not be
deemed to be defects.
(v) Except as provided in Section 8(b)(vii), depreciation and
amortization, or costs of a capital nature, in accordance with
generally accepted accounting principles, consistently applied.
(vi) Lessor's costs of services or utilities which are not
Building Standard and which are not available to Lessee without
specific charge therefor, but which are provided to another tenant or
occupant and for which such other tenant or occupant is specifically
charged by Lessor.
(vii) Costs (limited to penalties, fines and associated legal
expenses) incurred by Lessor due to the violation by Lessor, Lessee
or any tenant in the Building of the terms and conditions of this
Lease or of the leases of other tenants in the Building and applicable
federal, state, and local governmental laws, codes and similar
regulations that would not have been incurred but for any such
violations by Lessor, Lessee, or other tenants in the Building it
being intended that each party shall be responsible for the costs
resulting from its own violation of such leases and laws, codes and
regulations as same shall pertain to the Building and the Parking
Facilities. Notwithstanding the foregoing, interest or penalties
incurred in connection with assessments or taxes which are reasonably
contested by Lessor shall be included in Operating Expenses.
(viii) Except for the management fee paid by Lessor with respect
to the Project and other fees to the Lessor specifically provided in
this Lease, overhead and profit increments paid to subsidiaries or
other affiliates of Lessor for services on or to the Project, to the
extent that the costs of such services exceed competitive costs for
such services rendered by non-affiliated persons or entities of
similar skill, competence and experience.
(ix) Interest on debt or amortization payments on any mortgage
or mortgages, and rental under any ground or underlying leases or
lease (except to the extent the same may be made to pay or reimburse,
or may be measured by, ad valorem taxes).
(x) Costs of Lessor's general overhead and general
administrative expenses (individual, partnership or corporate, as the
case may be), which costs would not be chargeable to Operating
Expenses, in accordance with generally accepted accrual accounting
principles, consistently applied.
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(xi) Any compensation paid to clerks, attendants or other
persons in commercial concessions (such as a snack bar or restaurant),
if any, operated by Lessor.
(xii) All items and services for which Lessee specifically
reimburses Lessor (other than Basic Cost Excess) or which Lessee pays
third persons.
(xiii) Advertising and promotional expenses incurred to publicize
the Building.
(d) Nothing in Section 8(b) or (c) shall be construed as requiring
Lessor to provide any services which are not specifically set forth in this
Lease as obligations of Lessor.
(e) If the Building is not fully occupied during any Calendar Year of
the Term, an adjustment shall be made in computing the Operating Expenses
for that Calendar Year so that the Operating Costs shall be increased for
that year to the amount that, in Lessor's reasonable judgment, would have
been incurred had the total Net Rentable Area of the Building been occupied
during that year.
(f) If the number of square feet of (i) the Net Rentable Area of the
Building or (ii) the Net Rentable Area of the Premises changes, the
Lessee's Proportionate Share shall be adjusted effective as of the date of
any such change. Any changes made pursuant to this Subsection (f) will not
alter the computation of Basic Costs for prior periods.
9. INDEMNITY. Lessee shall indemnify and hold harmless Lessor, its
agents and employees from all claims, causes of action, costs, losses, damages
and reasonable attorneys fees incurred by any such party as a result of the
negligent or willful act or omission of Lessee, its agents or employees in, on
or about the Project, or the default of Lessee hereunder. Subject to any
contrary provisions of Section 21 of this Lease or Exhibit "C," Lessor shall
indemnify and hold harmless Lessee, its agents and employees from all claims,
causes of action, costs, losses, damages and reasonable attorneys fees incurred
by any such party as a result of the negligent or willful act or omission of
Lessor, its agents or employees in, on or about the Project.
10. LEGAL USE AND VIOLATIONS OF INSURANCE COVERAGE. Lessee will not
occupy or use, nor permit any portion of the Premises to be occupied or used for
any purpose other than the Permitted Use and not for any business or purpose
which is unlawful in part or in whole or in Lessor's good faith judgment
disreputable in any manner, or extra hazardous, nor permit anything to be done
which will in any way increase the rate of fire insurance on the Building or
contents, and in the event that, by reason of any acts of Lessee or its conduct
of business, there shall be any increase in the rate of insurance on the
Building or its contents, then Lessee hereby agrees to pay such increase.
Lessee shall maintain the Premises in a clean and sanitary condition and shall
comply with all laws, ordinances, orders, rules and regulations (state, federal
and municipal, and other agencies or bodies having any jurisdiction thereof)
with reference to use, condition or occupancy of the Premises. Without
limitation of the foregoing, Lessee shall not, without Lessor'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
12
provisions of 42 U.S.C. Section 9601 et seq. or any other applicable
environmental law which may now or hereafter be in effect. If Lessor does
give written consent to Lessee pursuant to the foregoing sentence, Lessee
shall comply with all applicable laws, rules and regulations pertaining to
and governing such use by Lessee, 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.
11. INSURANCE. During the Lease Term, Lessee shall, at its own cost and
expense, for the benefit and protection of Lessor and Lessee (naming Lessee as
insured and Lessor, and any other party in interest from time to time designated
by Lessor in written notice to Lessee, as additional insureds) maintain and
provide (a) comprehensive general liability insurance coverage (including
contractual liability coverage) in an amount not less than $2,000,000 to more
than one person arising out of any one accident or occurrence and for damages to
property in an amount not less than $1,000,000 extended to include personal
injury and (b) fire and extended coverage casualty insurance covering Lessee's
personal property in the Premises and all Non-Building Standard leasehold
improvements in the Premises, with limits not less than 90% of replacement
value. All insurance provided hereunder shall be secured from responsible
companies acceptable to the Lessor and qualified to do business and in good
standing in the state where the Premises are located. All such insurance
policies shall be maintained by Lessee in full force and effect during the
entire Lease Term. Lessee shall provide to Lessor, as soon as practicable after
obtaining same but in no event later than 10 days after Lessee takes possession
of all or any part of the Premises, certificates of insurance in form reasonably
acceptable to Lessor, indicating that such policies are in force and providing
for 30 day notice to Lessor prior to cancellation or amendment.
12. WAIVER OF SUBROGATION. Notwithstanding anything herein to the
contrary, neither Lessor nor Lessee shall be liable (by way of subrogation or
otherwise) to the other party (or to any insurance company insuring the other
party) for any personal injury or loss or damage to any of the property of
Lessor or Lessee, as the case may be, to the extent covered by insurance carried
or required to be carried by a party hereto even though such loss might have
been occasioned by the negligence or willful acts or omissions of the Lessor or
Lessee or their respective employees, agents, contractors or invitees. All
policies of fire, extended coverage or similar casualty insurance which either
party obtains as required hereunder shall include a clause or endorsement
denying the insurer any rights of subrogation against the other party.
13. CASUALTY DAMAGE.
(a) If the Premises or the portion of the Common Areas which serve
the Premises (the "Material Common Areas") are damaged by any cause or
means whatsoever not caused or contributed to by the negligence or fault
of Lessee, its agents, employees or contractors, said damage can be
repaired within a period of 60 working days from the date of such casualty
by using standard working methods and procedures, and Lessor's mortgagee
does not elect to take the insurance proceeds otherwise payable to Lessor
and apply same to the mortgage held by such mortgagee, Lessor shall within
a reasonable time after the occurrence of said damage enter and make
repairs provided however that Lessor's obligation to repair shall be
limited to repairing damage to Building Standard items or improvements, and
this Lease shall not be affected but shall continue in full force and
effect, except as provided in
13
subsection (c) below. Lessee shall be obligated to restore or repair
all Non-Building Standard items or leasehold improvements in the
Premises.
(b) If, however, (i) such damage to the Premises or to the Material
Common Areas cannot be repaired within a period of 60 working days from the
date of such casualty by using standard working methods and procedures
and/or (ii) any other portion of the Building not referred to in subsection
(a) above is damaged by any cause or means whatsoever and in Lessor's good
faith judgment, it is not commercially practicable to repair and restore
the Building, the Lessor shall have the option of either (x) terminating
this Lease upon 30 days prior written notice and Lessee shall pay Rent
hereunder to such date of termination and surrender the Premises to Lessor
no later than the date of such termination or (y) keeping this Lease in
full force and restoring the Building Standard items in the Premises and
the Material Common Areas to substantially the same condition as existed
prior to the date of such occurrence. Lessor shall give Lessee written
notice of Lessor's election within 60 days after the date of such casualty.
If Lessor so elects to continue the Lease and restore the Premises, Lessor
shall within a reasonable time after the date of the notice of said
election enter and make repairs, and this Lease shall not be affected
except as provided in Subsection (c) below.
(c) Notwithstanding anything herein to the contrary, Basic Monthly
Rental and Basic Costs Excess shall be reduced or abated from the date of
the casualty until the date of substantial completion by Lessor of its work
under (a) or (b) above, or termination of this Lease, as applicable, in the
proportion (if any) that the Premises are untenantable during such period.
If, however, such damage is contributed to or results from the fault of the
Lessee, Lessee's employees, contractors, agents, or (if the damage is
within the Premises) visitors, such damage shall be repaired by Lessor at
the expense of the Lessee (together with an additional 15% to cover
Lessor's overhead), and all Rent shall continue without abatement or
reduction regardless of length of time of repair.
(d) The completion of the repairs of all such damages is subject to
reasonable delays resulting from survey of such damage, obtaining plans and
letting contracts for repair, adjustment for insurance loss, strikes, labor
difficulties, unavailability of material, or other causes beyond the
control of the party obligated to make such repairs. In no event shall
Lessor be liable to Lessee for damages for loss of business or
inconvenience which might result from any such damage, and Lessee hereby
waives any such claim for damages which may arise in connection with such
damage.
14. ALTERATIONS. Lessee will not make or allow to be made any alteration
or additions in or to the Premises without the prior written consent of Lessor,
which consent shall not unreasonably be withheld so long as such alterations or
additions do not affect any structural, mechanical, electrical or plumbing items
or installations in the Building and do not affect the appearance of the
exterior of the Building or the appearance of the Premises from the Common Areas
of the Building. Should Lessee desire to perform any alterations, Lessee shall
submit plans and specifications for same to Lessor for Lessor's written approval
before beginning such work. Upon receipt by Lessee of the written approval of
Lessor of such plans and specifications, and
14
upon payment by Lessee to Lessor of the reasonable fees incurred by Lessor to
have such plans and specifications reviewed, Lessee 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
Lessor, such approval not to be unreasonably withheld (provided that Lessor
may designate the contractors to be used for structural, mechanical,
electrical or plumbing work). Any and all such alterations, physical
additions or improvements shall become the property of the Lessor and shall
in no event be removed by the Lessee including those improvements made at the
Lessee's expense or under any agreement with the Lessee whereby the Lessee is
given an allowance or rent reduction in exchange for Lessee'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. The foregoing sentence shall not apply to movable, nonattached
trade fixtures of the Lessee. Notwithstanding the foregoing, it is the
responsibility of the Lessee to restore the Premises to the condition that
existed when Lessee first took possession if Lessor so requests. If any
mechanic's lien is filed against the Premises or the real estate of which the
Premises form a part, which lien arises out of work done by or at the
direction of Lessee, Lessee shall cause same to be discharged within 10 days
after the lien is filed by Lessee paying or bonding over said lien. If
Lessee fails to comply with the foregoing sentence Lessor shall (without
limitation of its other rights or remedies) have the right, but not the
obligation, to discharge said lien and Lessee shall immediately reimburse
Lessor for any sum of money expended by Lessor in connection with obtaining
such discharge (together with an additional 15 percent thereof to cover
Lessor's administrative costs), which amount shall be deemed to be Rent
hereunder for all purposes.
15. LESSOR'S RIGHT OF ENTRY. Lessor, its agents, employees and
contractors shall have the right to enter on and about the Premises at all
reasonable times during the Term, upon reasonable notice to Lessee, except in
the event of an emergency (in which event no notice shall be required), to
inspect same, to show the Premises to prospective tenants, lenders or
purchasers, to determine if Lessee is in compliance with this Lease, to perform
the services or make the repairs Lessor is obligated or elects to perform under
this Lease, to repair adjoining premises, to cure any default of Lessee
hereunder that Lessor elects to cure, to remove any improvements or property
placed in the Premises in violation of this Lease, and/or to carry out any other
applicable provision of this Lease. Lessee waives any claim for damages
including loss of business resulting from any such entry.
16. REPAIRS. Lessee shall, at Lessee's sole cost and expense, keep the
Premises in sound condition and good repair, and shall at Lessor's option
perform or reimburse the cost incurred by Lessor of performing (together with an
additional 15 percent thereof to cover Lessor's administrative cost) the repair
or replacement of any damage or injury done to the Project or any part thereof
by Lessee or Lessee's agent's, employees, contractors or invitees. Lessee
shall, at Lessee's sole cost and expense, maintain its personal property and
Non-Building Standard leasehold improvements in good working order and Lessee
shall be solely responsible for any and all damage to the Premises, to the
premises or property of other tenants and/or to the Project caused by the
malfunction of such property. Lessee will not commit or allow any waste or
damage to be committed on any portion of the Premises, and shall, at termination
of this Lease
15
by lapse of time or otherwise, deliver up said Premises to Lessor in as good
condition as at date of possession, ordinary wear and tear excepted, in a
neat and clean condition. Upon termination or expiration of this Lease,
Lessor shall have the right to reenter and resume possession of the Premises.
17. SIGNS. Lessee 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 Lessor's prior written approval in
each instance. Lessee at Lessee's sole cost and expense shall maintain any such
sign, awning, canopy, decoration, lettering, advertising matter or similar item
as may be approved by Lessor, in good condition and repair at all times.
18. SUBORDINATION. Lessee hereby subordinates this Lease and all rights
of Lessee hereunder to any mortgage(s), vendor's lien, or similar instruments
which now are or which may from time to time hereafter be placed upon the
Building and to any further or additional advances made thereunder and any
renewals, extensions, or modifications of same. Any and all such mortgage(s),
liens or other instruments shall be superior to and prior to this Lease;
provided, however, that the holder of any such mortgage(s), lien or similar
instrument may, at its option, subordinate its lien to this Lease. Lessee
further covenants and agrees that if the mortgagee or other lienholder acquires
the Building as a purchaser at any foreclosure sale (any such mortgagee or other
lienholder or purchaser at a foreclosure sale being each hereinafter referred to
as the "Purchaser at Foreclosure") Lessee shall thereafter, but only at the
option of the Purchaser at Foreclosure, as evidenced by the written notice of
its election given to Lessee thereafter, remain bound by novation or otherwise
to the same effect as if a new and identical lease between the Purchaser at
Foreclosure, as landlord, and Lessee, as tenant, had been entered into for the
remainder of the Lease Term in effect at the institution of the foreclosure
proceedings. Lessee shall execute any instrument or instruments which may be
deemed necessary or desirable further to effect the subordination and attornment
of this Lease to each such mortgage, lien or instrument or to confirm any
election by the Purchaser at Foreclosure to continue the Lease in effect in the
event of foreclosure, as above provided. Notwithstanding anything contained
herein to the contrary, in the event of a foreclosure against the Building by
any mortgagee or lienholder, Lessee hereby waives any and all rights it may have
to terminate this Lease. Notwithstanding anything contained herein to the
contrary, in the event of any default by Lessor in performing its covenants or
obligations hereunder, Lessee shall not exercise any rights it may have on
account of such default until (a) Lessee gives written notice of such default
(which notice shall specify the exact nature of said default and how the same
may be cured) to each holder of any such mortgage(s), vendor's lien or similar
instrument who has theretofore notified Lessee in writing of its interest and
the address to which notices are to be sent, and (b) each such holder fails to
cure or cause to be cured said default within 30 days from the receipt by such
holder of such notice by Lessee.
19. ABANDONMENT. If the Premises are abandoned or vacated by Lessee,
Lessor shall have the right, but not the obligation, to: (a) relet same for the
remainder of the period covered hereby, and Lessee shall pay and satisfy (i) if
the basic monthly rental and basic costs excess received through such reletting
is not at least equal to the Basic Monthly Rental and Basic Costs
16
Excess provided hereunder, any deficiencies between the amount of Basic
Monthly Rental and Basic Costs Excess required by this Lease and that
received through reletting and (ii) all expenses incurred by Lessor for any
such reletting, including but not limited to, the cost of renovating,
altering and decorating for a new occupant, and/or (b) provide for the
storage of any personal property of Lessee or take title to the abandoned
personal property which title shall pass to Lessor under this Lease as a Xxxx
of Sale without additional payments or credit from Lessor to Lessee.
Notwithstanding the foregoing, during the last 90 days of the Lease Term, if
Lessee removes a substantial portion of Lessee's personal property or Lessee
has been in physical absence for 10 days, Lessee shall be deemed to have
vacated the Premises and Lessor shall have the right but not the obligation
to enter the Premises for purposes of renovating, altering and decorating the
Premises for occupancy at the end of the Lease Term by a new tenant without
in any way affecting Lessee's obligation to pay Rent and comply with all
other terms and conditions of this Lease.
20. HOLDING OVER. In case of holding over by Lessee after expiration or
termination of this Lease, Lessee shall, for the entire holdover period, pay as
liquidated damages a monthly rental equal to one and one-half times the Basic
Monthly Rental applicable to the last month of the Term and all attorney's fees
and expenses incurred by Lessor in enforcing its rights hereunder.
Notwithstanding the foregoing, no holding over by Lessee after the termination
or expiration of the Lease Term without the written consent of Lessor shall
operate to extend this Lease for a longer period than from day-to-day. Lessee
shall indemnify and hold harmless Lessor from and against any and all claims,
causes of action, costs, losses, damages and expenses including reasonable
attorneys' fees incurred by or sought from Lessor by any other tenant or
prospective tenant caused by Lessee's holding over.
21. DEFAULT AND REMEDIES.
(a) The occurrence of any of the following shall be deemed an "Event
of Default": (i) Lessee fails to pay any installment of Rent or any other
monetary obligation hereunder when due and such failure continues for five
days after written notice thereof from Lessor (but in no event shall Lessee
be entitled to such notice or grace period more than twice in any 12-month
period); (ii) Lessee deserts or vacates the Premises; (iii) Lessee fails to
occupy the Premises within 30 days after the Commencement Date; (iv) Lessee
fails to comply with any other term, provision, condition, or covenant of
this Lease or any of the rules and regulations now or hereafter established
for the government of the Project and such failure continues for a period
of 10 days after written notice from Lessor (provided that if such failure
cannot reasonably be cured within such 10 days Lessee shall have up to 30
days to cure such failure so long as Lessee commences the cure within such
10 days and thereafter diligently prosecutes same to completion); (v) any
petition is filed by or against Lessee or any guarantor of Lessee's
obligations hereunder ("Guarantor") under any section or chapter of Title
11, U.S.C., as amended, or under any similar law or statute of the United
States or of any state thereof; (vi) Lessee or any Guarantor becomes
insolvent or makes a transfer in fraud of creditors; (vii) Lessee or any
Guarantor makes a general assignment for the benefit of creditors; (viii) a
receiver is appointed for Lessee or any Guarantor or any of the assets of
Lessee or of any Guarantor; or (ix) any other event or
17
matter which is under another provision of this Lease specifically
designated an Event of Default,
(b) If an Event of Default shall occur, Lessor shall have the option
to do any one or more of the following without any notice or demand, in
addition to and not in limitation of any other remedies permitted by law or
by this Lease:
(i) Terminate this Lease, or terminate Lessee's rights under
this Lease (but not its obligations), and in either event Lessor shall
have the right to immediate possession of the Premises and may reenter
the Premises, change the locks and remove all persons and property
therefrom using all force necessary for this purpose without being
guilty in any manner of trespass or otherwise; and any and all damages
to Lessee, or persons holding under Lessee, by reason of such re-entry
are hereby expressly waived; and any such termination or re-entry on
the part of Lessor shall be without prejudice to any remedy available
to Lessor for arrears of rent, breach of contract, damages or
otherwise, nor shall the termination of this Lease or of Lessee's
rights under this Lease by Lessor acting under this subsection be
deemed in any manner to relieve Lessee from the obligation to pay the
Rent and all other amounts due or to become due as provided in this
Lease for and during the entire unexpired portion (or what would have
been the entire unexpired portion) of the Lease Term. In the event of
termination of this Lease or of Lessee's rights under this Lease by
Lessor as provided in this subsection, Lessor shall have the further
right, but not the obligation, to relet the Premises upon such terms,
conditions and covenants as are deemed proper by Lessor for the
account of Lessee, and in such event, Lessee shall pay to Lessor all
costs of renovating and altering the Premises for a new lessee or
lessees in addition to all brokerage and/or legal fees incurred in
connection therewith and Lessor shall credit Lessee only for such
amounts as are actually received from such reletting during the then
remaining Lease Term. Alternatively, at the election of Lessor,
Lessee covenants and agrees to pay as damages to Lessor, upon any such
termination by Lessor of this Lease or of Lessee's rights under this
Lease, such sum as at the time of such termination equals the amount
of the excess, if any, of the then present value of all the Rent which
would have been due and payable hereunder during the remainder of the
Lease Term (had Lessee kept and performed all agreements and covenants
of Lessee set forth in this Lease) over and above the then present
rental value of the Premises for said remainder of the Lease Term.
For purposes of present value calculations, Lessor and Lessee
stipulate and agree to a discount rate equal to the Federal Reserve
Discount Rate, as of the date that the Lease, or Lessee's rights under
this Lease, is or are terminated, as applicable.
(ii) Do whatever Lessee is obligated to do by the provisions of
this Lease and Lessor may enter the Premises, by force if necessary,
without being liable for or subject to any prosecution or any claim
for damages therefor, in order to accomplish this purpose. Lessee
shall reimburse Lessor upon demand for any expenses and interest which
Lessor may incur in thus effecting compliance with this Lease on
behalf of Lessee, plus 15 percent thereof to cover Lessor's
administrative costs.
18
(iii) Enter upon the Premises by use of a master key, a
duplicate key, or other peaceable means, and change, alter, and/or
modify the door locks on all entry doors of the Premises, thereby
permanently excluding Lessee, and its officers, principals, agents,
employees, representatives and invitees therefrom. In the event that
Lessor has either permanently repossessed the Premises pursuant to the
foregoing provisions of this Lease or has terminated this Lease by
reason of Lessee's default, Lessor shall not thereafter be obligated
to provide Lessee with a key to the Leased Premises at any time,
regardless of any amounts subsequently paid by Lessee; provided,
however, that in any such instance, during Lessor's normal business
hours and at the convenience of Lessor, Lessor will either (at
Lessor's option) (A) escort Lessee or its authorized personnel to the
Premises to retrieve any personal belongings or other property of
Lessee not subject to the Lessor's lien or security interest described
herein, or (B) obtain a list from Lessee of such personal property as
Lessee intends to remove, whereupon Lessor shall remove such property
and make it available to Lessee at a time and place designated by
Lessor. However, if Lessor elects option (B), Lessee shall pay, in
cash in advance, all costs and expenses estimated by Lessor to be
incurred in removing such property and making it available to Lessee
and all moving and/or storage charges theretofore incurred by Lessor
with respect to such property (plus an additional 15 percent thereof,
to cover Lessor's administrative costs). If Lessor elects to exclude
Lessee from the Premises without permanently repossessing or
terminating pursuant to the foregoing provisions of this Lease, then
Lessor shall not be obligated to provide Lessee a key to reenter the
Premises until such time as all delinquent rental and other amounts
due under this Lease have been paid in full and all other defaults, if
any, have been completely cured to Lessor's satisfaction (if such cure
occurs prior to any actual permanent repossession or termination), and
Lessor has been given assurance reasonably satisfactory to Lessor
evidencing Lessee's ability to satisfy its remaining obligations under
this Lease. The foregoing provision shall override and control any
conflicting provisions of the Texas Property Code, as well as any
successor statute governing the right of a lessor to change the door
locks of commercial tenants.
(iv) Notwithstanding anything herein to the contrary, to the
full extent permitted under applicable law, Lessee hereby releases
Lessor from any and all duty to relet the Premises or otherwise
mitigate damages. Lessor shall not be liable, nor shall Lessee's
obligations hereunder be diminished, because of Lessor's failure to
relet the Premises or collect rent due with respect to such reletting.
In no event shall Lessee be entitled to any excess rents received by
Lessor. In the event, and only in the event, that (despite such
waiver) Texas law requires Lessor to attempt to mitigate damages,
Lessor shall use reasonable efforts to relet the Premises on such
terms and conditions as Lessor in its good faith judgment may
determine (including without limitation a term different than the
Term, rental concessions, alterations and repair of the Premises)
provided, however, that Lessor shall not be obligated to relet the
Premises before leasing all other unoccupied portions of the Building.
19
(v) In the event that pursuant to this Section 21, a
determination needs to be made regarding the amount of Rent that
Lessee would have paid hereunder following the termination of this
Lease (or termination of the rights of possession of Lessee under this
Lease) the parties stipulate that Lessee would have paid Parking Rent
during such applicable period based on the greater of (A) the actual
Parking Rent payable by Lessee during the last month prior to such
termination or (B) the Parking Rent prevailing during the last month
prior to such termination for three unassigned parking spaces per
1,000 square feet of Net Rentable Area of the Premises.
(vi) Notwithstanding anything herein to the contrary, including
without limitation Section 9, during any period that any Event of
Default exists, Lessor shall be liable only for the gross negligence
or willful misconduct of Lessor, its agents or employees.
(vii) The foregoing list of remedies of Lessor is without
limitation of all other rights or remedies, available at law or equity
to Lessor as a result of a default of Lessee hereunder.
22. CROSS DEFAULT. In the event Lessee or Lessee's subsidiary or
affiliate shall have other leases for other premises in the Building, any
default by Lessee or by such subsidiary or affiliate of Lessee under such other
leases shall at Lessor's election be deemed to be an Event of Default herein and
Lessor shall be entitled to enforce all rights and remedies as provided for an
Event of Default herein.
23. ATTORNEY'S FEES. In the event that Lessee defaults in the performance
of any of the terms, covenants, agreements or conditions contained in this
Lease, and Lessor places the enforcement of this Lease, or any part thereof, or
the collection of any Rent due, or to become due hereunder, or recovery of
possession of the Premises in the hands of an attorney, Lessee shall pay all of
Lessor's attorney's fees, costs and expenses. In the event of litigation
between Lessee and Lessor regarding this Lease, the prevailing party shall be
entitled to recover from the non-prevailing party the reasonable attorneys fees,
costs and expenses reasonably incurred by the prevailing party.
24. WAIVER. No act or thing done by Lessor or its agents during the Term
shall be deemed an acceptance of a surrender of the Premises, and no agreement
to accept a surrender of the Premises shall be valid unless made in writing and
signed by Lessor. Lessor shall not be deemed to have waived any provision of
this Lease unless Lessor has expressly agreed in writing. Without limitation of
the foregoing, the receipt by Lessor of Rent with knowledge of the breach of any
covenant contained in this Lease shall not be deemed a waiver of such breach;
the failure of Lessor to enforce any provision of this Lease or any of the rules
and regulations attached hereto, or hereafter adopted, against Lessee and/or any
other tenant in the Building shall not be deemed a waiver and the failure of
Lessor to declare any default immediately upon occurrence thereof, or delay in
taking any action in correction therewith, shall not waive such default, but
Lessor shall have the right to declare any such default at any time and take
action as might be lawful or authorized hereunder, either in law or in equity.
20
25. NUISANCE. Lessee shall conduct its business, and control its agents,
employees, contractors and invitees, in such a manner as not to create any
nuisance or interfere with, annoy, or disturb other tenants or Lessor in the
Project.
26. CONDEMNATION. If the Premises or the Building shall be taken or
condemned, in whole or part, for any public purpose, the Lease Term shall, upon
such taking, at the option of Lessor, forthwith cease and terminate. If 20
percent or more of the Premises shall be permanently taken or condemned for any
public purpose, Lessee shall have the option, as its sole and exclusive remedy
with respect to such condemnation, to terminate this Lease upon 30 days written
notice by providing written notice thereof to Lessor no later than 10 days after
the effective date of the taking. Lessor shall receive such award from any such
taking and Lessee shall have no claims thereto.
27. FORCE MAJEURE. Whenever a period of time is herein prescribed for
action (other than the payment of money) to be taken by Lessor or Lessee, such
party shall not be liable or responsible for, and there shall be excluded from
the computation for any such period of time, any delays due to strikes, riots,
acts of God, shortages of labor or materials, war, governmental laws,
regulations or restrictions or any other cause of any kind whatsoever which is
beyond the control of such party ("Force Majeure").
28. LIEN FOR RENT. Lessee hereby grants a security interest to Lessor in
all of the goods, wares, furniture, fixtures, office equipment, supplies and
other property of Lessee now or hereinafter placed in or upon the Premises and
all proceeds thereof as security for all of Lessee's obligations under this
Lease. Such security interest shall be in addition to and cumulative of the
Lessor's statutory lien. Lessor agrees that upon request in writing, it shall
subordinate this security interest to a bonafide third party security interest
of a third party lender placed upon said goods, wares, furniture, fixtures,
office equipment, supplies and other property of Lessee now or hereafter placed
in or upon the Premises. Upon request by Lessor, Lessee shall execute and
deliver to Lessor a financing statement in form sufficient to perfect the above
described security interest of Lessor and if Lessee fails to do so, Lessor is
hereby irrevocably appointed as Lessee's attorney-in-fact with full power and
authority to execute one or more financing statements on Lessee's behalf and
take such additional action on Lessee's behalf as may be necessary to perfect
such security interest in the event that Lessee fails to take such action upon
request. Such power of attorney is coupled with an interest. Lessor has all of
the rights and remedies of a secured party under the Texas Uniform Commercial
Code. Lessee acknowledges that 10 days written notice to Lessee is commercially
reasonable notice of any public or private sale made by Lessor pursuant to this
Section 28. Lessee shall not remove or caused to be removed from the Premises
any of the property covered by this Section unless and until Lessee has
satisfied all of its obligations under this Lease or Lessee has consented to
such removal in writing.
29. SEVERABILITY. If any clause or provision of this Lease is illegal,
invalid, or unenforceable under present or future laws effective during the
Lease Term, then and in that event, it is the intention of the parties hereto
that the remainder of this Lease shall not be affected thereby, and it is also
the intention of the parties to this Lease that in lieu of each clause or
21
provision that is illegal, invalid or unenforceable, there be added as a part of
this Lease a clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable. The caption of each paragraph or section hereof is added as a
matter of convenience only and shall be considered to be of no effect in the
construction of any provision or provisions of this Lease.
30. PARKING. The Allocated Number of parking spaces shall, unless
otherwise specifically agreed by Lessor, be leased by Lessee on an unassigned
basis and shall be used in common with the other tenants, in such locations as
may be designated by Lessor from time to time, all subject to Lessor's rules and
regulations from time to time adopted. Lessee agrees that (a) the use by
Lessee, or by Lessee's agents, employees, contractors or invitees of the Parking
Facilities does not create a bailment; (b) the use of the Parking Facilities is
at the user's own risk; (c) Lessor shall not be responsible in any manner for
any damage or loss to the vehicles or other personal property of Lessee or of
Lessee's agents, employees, contractors or invitees; and (d) Lessor shall have
the right to tow any vehicle wrongfully parked in the Parking Facilities.
Lessee shall indemnify and hold harmless Lessor from all claims, causes, costs,
losses, damages or reasonable attorneys fees incurred by Lessor as a result of
any claim by Lessee, its agents, employees, contractors or visitors that its or
their cars have been wrongfully towed by Lessor.
31. SECURITY DEPOSIT. Upon the occurrence of any Event of Default by
Lessee, Lessor shall have the right, but not the obligation, without prejudice
to any other remedy, to use the Security Deposit paid to Lessor by Lessee as
herein provided to the extent necessary to make good any arrears of Rent and any
other damage, injury, expense or liability caused to Lessor by such Event of
Default. In the event that Lessor so uses all or any portion of the Security
Deposit, Lessee shall immediately pay to Lessor the amount necessary to return
the Security Deposit to its original amount. Such Security Deposit shall not be
considered an advance payment of Rent or a measure of Lessor's damages in case
of default by Lessee. Such Security Deposit shall be refunded to Lessee without
interest within 60 days after the later of (a) the expiration or termination of
the Term and (b) the date all obligations of Lessee under the Lease have been
fulfilled including, without limitation the payment of Basic Costs Excess for
the final year of the Lease. Lessor shall have the absolute right to commingle
the Security Deposit with any other funds held by Lessor as Lessor deems fit,
without any liability to Lessee whatsoever. Lessor shall have the right to
assign the Security Deposit in connection with any transfer of Lessor's interest
in the Building, the Premises or this Lease and upon so doing, Lessor shall be
relieved and released of all obligations to Lessee for such Security Deposit and
Lessee agrees to look solely to Lessor's successor-in-interest for the return of
any of the Security Deposit.
32. QUIET POSSESSION. Lessor hereby covenants that Lessee, upon paying
Rent as herein required, and performing all covenants and agreements herein
contained on the part of Lessee, shall and may peacefully and quietly have, hold
and enjoy during the Lease Term the Premises, subject to matters of record on
the date of this Lease.
33. RULES OF BUILDING. Lessee and Lessee's agents, employees, contractors
and invitees, will comply fully with all requirements or rules of the Project
which are attached as Exhibit "D" and made a part hereof as though fully set out
herein. Lessor shall at all times have the right to
22
change such rules and regulations or to amend them in such manner as Lessor
shall in good xxxxx xxxx advisable for safety, care and cleanliness of the
Project and its tenanted areas and for preservation of good order therein,
all of which rules and regulations, changes, and amendments shall be
applicable to all tenants of the Building and will be forwarded to Lessee in
writing and shall be carried out and observed by Lessee. In the event of any
conflict between the body of this Lease and any such rules and regulations,
the body of this Lease shall control. Lessor has the right, exercisable
without notice and without liability to Lessee, to change the name and street
address of the Building at any time during the Term and Lessee hereby waives
any and all claims against Lessor with respect to same.
34. ENTIRE AGREEMENT. As a material consideration for the execution of
this Lease, Lessee agrees and warrants and represents that there are and were no
(and Lessee has not relied on any) verbal representations, understandings,
stipulations, agreements or promises pertaining thereto not incorporated in
writing herein; and it is likewise agreed that this Lease shall not be altered,
waived, amended or extended except as otherwise provided herein, unless set
forth in writing and signed by the parties to this Lease or their authorized
agents. Lessee acknowledges and agrees that Lessor's obligations and warranties
are limited to those expressly stated in this Lease and shall not include any
implied duties or implied warranties, now or in the future. No representations
or warranties have been made by Lessor to Lessee other than those specifically
contained in this Lease.
35. ADDENDA; RECORDING. Any addenda to this Lease must be in written form
and, when signed by the contracting parties, shall be deemed a part of this
Lease to the same full extent as if incorporated herein. Lessee shall not
record this Lease nor any memorandum hereof without the prior written consent of
Lessor and any violation of the foregoing by Lessee shall be deemed to be an
Event of Default hereunder for all purposes.
36. EXECUTION. The submission of this Lease by Lessor, its agent or
representative, for examination or execution by Lessee does not constitute an
option or offer to lease the Premises upon the terms and conditions contained
herein or a reservation of the Premises in favor of Lessee, it being intended
hereby that this Lease shall only become effective upon the execution hereof by
both Lessor and Lessee and delivery of a fully executed counterpart hereof to
Lessee.
37. RELOCATION OF LESSEE. Lessor shall have the sole right to relocate
Lessee to any comparable space in the Building upon giving Lessee 90 days prior
written notice, and upon the relocation of Lessee, the new space shall be deemed
to be the Premises hereunder for all purposes. Lessor shall pay Lessee's
expenses associated with Lessee's relocation including the cost of any tenant
improvements necessary to make the new space comparable to the Leased Premies.
38. FINANCIAL STATEMENTS. Lessee warrants and represents that (a) all
financial statements, operating statements or other financial data at any time
given to Lessor by or on behalf of Lessee, any Guarantor, any subsidiary of
Lessee, any affiliate of Lessee and any proposed subtenant or assignee of
Lessee, 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 (b) there have been no material changes between the
respective dates thereof and the date of this Lease in
23
any such financial statements, operating statements or other financial data
given to Lessor prior to the date hereof by or on behalf of Lessee or any
Guarantor. A breach of any of the foregoing warranties and representations
shall, at the election of Lessor, be deemed an Event of Default hereunder.
39. BINDING EFFECT. The provisions of this Lease shall be binding upon
and inure to the benefit of Lessor and Lessee, respectively, and to their
respective heirs, legal representatives, successors and assigns, subject to the
provisions of Section 6 hereof. Lessor and Lessee each represent and warrant to
the other that the person and/or entity executing this Lease on behalf of such
warranting party has the authority to execute this Lease on behalf of such party
and bind such party hereto.
40. NOTICES. Any notice required or permitted to be given hereunder by
one party to the other shall be deemed to be given when personally delivered or
mailed, postage prepaid by Certified or Registered mail, addressed to the
respective party to whom notice is intended to be given at the address of such
party indicated in Section 1, and such addresses may be changed from time to
time by written notice to the other party pursuant to this Section.
41. BROKERS. Lessee represents and warrants to Lessor that neither it nor
its officers or agents nor anyone on its behalf has dealt with any real estate
broker in the negotiation or making of this Lease, and Lessee agrees to
indemnify and hold Lessor harmless from the claim or claims of any broker or
brokers claiming to have shown or interested Lessee in the Building or Premises
or claiming to have caused Lessee to enter into this Lease.
42. LIMITATION OF LESSOR'S LIABILITY. Notwithstanding anything herein to
the contrary, (a) in no event shall Lessor be liable for consequential or
special damages and (b) the warranties, representations, covenants and
agreements herein made and entered into by Lessor are made and entered into by
it solely for the purpose of binding its interest in the Project, and it is
expressly agreed by Lessee on behalf of Lessee and all persons claiming by,
through or under Lessee, that no personal liability is assumed by or shall at
any time arise or be asserted against Lessor, its agents, officers, employees,
partners or shareholders or against their respective successors, legal
representatives or assigns on account of this Lease or on account of any of the
warranties, representations, covenants and agreements contained herein, either
express or implied, all such liability, if any, being hereby expressly waived
and released by Lessee on behalf of Lessee and all persons claiming by, through
or under Lessee to the extent permitted by law, and that recourse hereunder, if
any, by Lessee or by Lessee's successor or assigns, shall be limited exclusively
to Lessor's said interest in the Project.
43. ESTOPPEL CERTIFICATE. The Lessee shall from time to time upon not
less than 10 days prior request by Lessor or mortgagee of Lessor, deliver to
Lessor a statement in writing certifying (a) that this Lease is unmodified and
in full force and effect (or if there have been modifications that the Lease as
modified is in full force and effect); (b) the dates to which Rent has been
paid; (c) that the Lessor is not in default under any provision of this Lease,
or, if in default, the nature thereof in detail; and (d) such other matters as
Lessor may reasonably request. The Lessee hereby irrevocably appoints the
Lessor as attorney-in-fact for the Lessee with full power and authority
24
to execute and deliver in the name of the Lessee any such certificate in the
event the Lessee fails to do so on request. Such power of attorney is
coupled with an interest.
44. REVIEW AND CONSTRUCTION. Prior to its execution of this Lease, Lessee
has had this Lease reviewed by an attorney on behalf of Lessee, or has had the
opportunity to do so, and the parties hereto agree that based on the foregoing,
this Lease shall not be construed in favor of one party over the other based on
the drafting of this Lease.
45. JOINT AND SEVERAL LIABILITY. In the event that this Lease is executed
on behalf of Lessee by more than one person, each such person shall be jointly
and severally liable for the obligations of Lessee hereunder.
46. TIME OF THE ESSENCE. Time is of the essence in the performance of
this Lease and all performance deadlines, time schedules and conditions
precedent to exercising a right shall be strictly adhered to without delay
except where otherwise expressly provided.
47. SURVIVAL. Notwithstanding anything herein to the contrary, the
obligations of the parties set forth in Sections 9, 10, 20 and 42 shall survive
the termination or expiration of this Lease.
48. ADA COMPLIANCE. Lessee shall, at Lessee's sole cost comply with all
requirements of the Americans with Disabilities Act [Public Law 101-336 (July
26, 1990) as that act may be amended from time to time ("ADA") which are
applicable to the Premises, including, without limitation, to provide any
accommodations or alterations which are required to be made to the Premises to
accommodate disabled employees and customers of Lessee.
49. RIGHT OF FIRST REFUSAL. If at any time during the Primary Term of
this Lease the 2,889 square feet of space contiguous to the Premises on the
third floor of the Building as shown on Exhibit "A" becomes available and Lessor
desires to lease that space to a third party ("Refusal Space"), Lessor shall
notify Lessee of its intention to lease the Refusal Space and the economic terms
(such as rent, leasehold improvements and allowance, etc.) upon which Lessor is
willing to lease the Refusal Space to a proposed tenant. The Lessee may, within
seven days after it receives that notification from the Lessor, elect to lease
the Refusal Space upon the same term and economic terms as set forth in Lessor's
notification. If the Lessee does not accept this offer within the seven days
provided above, the right of first refusal shall cease to exist, and the Lessor
shall have the right to lease the Refusal Space to the proposed tenant.
IN WITNESS WHEREOF this Lease is entered into by the parties as of the date
first set forth above.
LESSEE: LESSOR:
DESIGN AUTOMATION SYSTEMS, INC. MXM MORTGAGE L.P.
d/b/a MPC MORTGAGE L.P.
25
By: By: MXM GENERAL PARTNER, INC.,
------------------------------ sole general partner
Name:
---------------------------
As Its:
-------------------------
By:
----------------------
Name:
--------------------
As Its:
-------------------
A-ii
FIRST AMENDMENT OF LEASE
THIS AGREEMENT made as of this 16th day of June 1998, by and
between Transwestern Westchase III, L.P. ("Landlord"), successor in interest to
MXM. Mortgage L.P. dba MPC Mortgage L.P. ("Previous Landlord") with an address
at 0000 Xxxxxxxx, Xxxxx #000, Xxxxxxx, Xxxxx 00000 (hereinafter referred to as
"Landlord") and Design Automation Systems, Inc., with an address at 0000
Xxxxxxxx, Xxxxx #000 Xxxxxxx, Xxxxx 00000, (hereinafter referred to as
"Tenant").
W I T N E S S E T H:
WHEREAS, Previous Landlord and Tenant entered into a Lease Agreement
(hereinafter called the "Lease") dated December 1, 1995 covering approximately
4,270 square feet of net rentable area on the third floor of that certain
building known as Westchase III (hereinafter called the "Building") located at
0000 Xxxxxxxx, Xxxxxxx, Xxxxx 00000; and
WHEREAS, it is the desire of the of the parties hereto to amend said Lease
in certain aspects.
NOW THEREFORE, in consideration of the premises and the mutual benefits to
be derived therefrom, it is hereby agreed by and between the parties that said
Lease shall be amended as follows:
1. Effective on the Commencement Date, as hereinafter defined, approximately
2,179 square feet of net rentable area ("Expansion Space A") located on the
fourth (4th) floor of the building known as Westchase III, being shown
crosshatched on Exhibit "A" attached hereto and made a part hereof and
approximately 1,154 square feet of net rentable area ("Expansion Space B")
located on the fourth (4th) floor of the building known as Westchase III, being
shown crosshatched on Exhibit "B" attached hereto and made a part hereof, shall
be included in the Lease upon the same terms and conditions as contained in the
Lease, except as hereinafter specifically set forth, bringing the total square
footage of net rentable area to 7,603 square feet. Expansion spaces shall be
known as Xxxxx 000 xxx Xxxxx 000.
2. The projected commencement Date for the Expansion Space "A" and the
Expansion Space "B" is July 1, 1998; however, the Commencement Date for the
Expansion Space "A" and Expansion Space "B" shall not occur until after the
Expansion Space "A" and Expansion Space "B" shall be deemed ready for
occupancy. In the event the improvements to the Expansion Space "A" and
Expansion Space "B" should not be completed or said Expansion Space "A" and
Expansion Space "B" should not be ready for occupancy by said Commencement
Date for any reason, Landlord shall not be liable or responsible for any
claims, damages or liabilities in connection therewith or by reason thereof.
The Expansion Space shall be deemed ready for occupancy by Tenant on the date
that Landlord's leasehold improvements will be completed so as to enable
Tenant to begin business within the Expansion Spaces and the Commencement
Date shall occur seven (7) days after such notice from Landlord to Tenant,
unless the Expansion Space is occupied earlier by Tenant, and, in such event,
Commencement Date will be the date of such earlier occupancy. It is
expressly agreed and understood that in the event of Lessee Delay, the
Commencement Date and Lessee's obligations under the Lease, including without
limitation the obligation to pay Rent, shall be adjusted so that the
Commencement Date shall be the date that the Commencement Date would have
occurred but for such Lessee Delay. If the Commencement Date for Expansion
Space "A" and Expansion Space "B" do not occur on the same day, then the
rental rate will be prorated accordingly.
Page 1
3. Effective on the Commencement Date, Base Rental per month for the
approximate 7,603 square feet of the total leased space, shall be as follows:
MONTHLY AMOUNT
Commencement Date - 11/30/98 $8,507.92
12/1/98 to 5/31/99 $8,596.88
6/1/99 to 11/30/99 $8,735.75
12/1/99 to 5/31/00 $8,824.71
6/1/00 to 11/30/00 $8,963.59
"Tenant's Share of Actual Operating Cost" in each year shall be adjusted a
provided for in paragraph 8 of the Lease.
4. Landlord agrees to provide Tenant with a Tenant Improvement Allowance equal
to $3.50 per square foot of net rentable area for the entire expansion
space, which consists of 3,333 square feet of net rentable area. The Work
Letter from the Lease dated 12/1/95 will govern this expansion.
5. Lessee will be granted an additional eleven (11) unassigned parking spaces
at no cost for the initial term of the lease.
In all other respects, the Lease dated December 1, 1995, shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment of
Lease the day and year first above written.
TENANT:
DESIGN AUTOMATION SYSTEMS, INC.
/s/ Xxxx X. Xxxx
--------------------------------
By: Xxxx X. Xxxx
-----------------------------
Its: President
---------------------------
LANDLORD:
TRANSWESTERN WESTCHASE III, L.P.
By: Transwestern Investment Company, L.L.C., as authorized Agent
/s/ Xxxx Xxxxxxxxx
---------------------------------
By: Xxxx Xxxxxxxxx
Its: Vice President
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