EXHIBIT 10.33
" " " " " " " " " " " " " " " " " " " " " " " " "
LEASE AGREEMENT
BETWEEN
PRENTISS PROPERTIES ACQUISITION PARTNERS, L. P.,
A DELAWARE LIMITED PARTNERSHIP,
(Landlord)
AND
APTIS, INC., dba APTIS SOFTWARE
A DELAWARECORPORATION
(Tenant)
1601 S. MoPac Expressway
Austin, Texas
Dated: ______, 1999
" " " " " " " " " " " " " " " " " " " " " " " " "
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TABLE OF CONTENTS - LEASE AGREEMENT
ARTICLE 1 BASIC LEASE INFORMATION AND CERTAIN DEFINITIONS.............1
ARTICLE 2 PREMISES AND QUIET ENJOYMENT................................4
ARTICLE 3 TERM; COMMENCEMENT DATE; DELIVERY AND ACCEPTANCE OF
PREMISES....................................................3
ARTICLE 4 RENT........................................................4
ARTICLE 5 OPERATING COSTS.............................................6
ARTICLE 6 PARKING.....................................................9
ARTICLE 7 SERVICES OF LANDLORD........................................7
ARTICLE 8 ASSIGNMENT AND SUBLETTING...................................8
ARTICLE 9 REPAIRS....................................................12
ARTICLE 10 ALTERATIONS................................................13
ARTICLE 11 LIENS......................................................10
ARTICLE 12 USE AND COMPLIANCE WITH LAWS...............................14
ARTICLE 13 DEFAULT AND REMEDIES.......................................11
ARTICLE 14 INSURANCE..................................................16
ARTICLE 15 DAMAGE BY FIRE OR OTHER CAUSE..............................17
ARTICLE 16 CONDEMNATION...............................................13
ARTICLE 17 INDEMNIFICATION............................................18
ARTICLE 18 SUBORDINATION AND ESTOPPEL CERTIFICATES....................19
ARTICLE 19 SURRENDER OF THE PREMISES..................................20
ARTICLE 20 LANDLORD'S RIGHT TO INSPECT................................15
ARTICLE 21 SECURITY DEPOSIT...........................................21
ARTICLE 22 BROKERAGE..................................................21
ARTICLE 23 OBSERVANCE OF RULES AND REGULATIONS........................21
ARTICLE 24 NOTICES....................................................16
ARTICLE 25 MISCELLANEOUS..............................................17
ARTICLE 26 SUBSTITUTION SPACE.........................................24
ARTICLE 27 OTHER DEFINITIONS..........................................24
ARTICLE 28 OPTION RENEWALS............................................25
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EXHIBITS AND RIDERS
The following Exhibits and Riders are attached hereto and by this
reference made a part of this Lease:
EXHIBIT A - FLOOR PLAN OF THE PREMISES
EXHIBIT B - THE LAND
EXHIBIT C - LEASEHOLD IMPROVEMENTS
ATTACHMENT 1 BASE PREMISES CONDITION
ATTACHMENT 2 TENANT FINISH READY CONDITION
ATTACHMENT 3 HVAC DESIGN CRITERIA
EXHIBIT D - FORM OF COMMENCEMENT NOTICE
RIDER NO. 1 - RULES AND REGULATIONS
RIDER NO. 2 SCHEDULE OF JANITORIAL SERVICES
RIDER NO.3 PARKING SCHEDULE
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INDEX OF DEFINED TERMS
Definitions of certain terms used in this Lease are found in the following
sections:
TERM LOCATION OF DEFINITION
Additional Rent Section 1.01N
Bankruptcy Code Section 8.06
Base Building Condition Exhibit C
Base Rent Section 1.01M
Base Year Operating Costs Section 1.01O
Basic Lease Information and Certain Definitions Article 1
Branch Exhibit C
Broker Section 1.01W
Building Section 1.01B
Building Standard Exhibit C
Business Days Article 27
Business Hours Section 1.01,Article 27
Central Exhibit C
Commencement Date Section 1.01F
Common Areas Article 27
days Article 27
Events of Default Section 13.01
Expiration Date Section 1.01G
herein, hereof, hereby, hereunder and words
of similar import Article 27
include and including Article 27
Interest Rate Section 4.02
Land Section 1.01C
Landlord Preamble
Landlord's Address for Notice Section 1.01T
Landlord's Address for Payment Section 1.01U
Landlord's Operating Costs Estimate Section 5.01
Landlord's Work Exhibit C
Leasehold Improvements Exhibit C
Net Rentable Area Article 27
Net Rentable Area of the Building Section 1.01J
Net Rentable Area of the Premises Section 1.01I
Non-Building Standard Exhibit C
Parking Facilities Section 1.01D
Parking Permits Section 1.01P
Permit Fees Section 1.01P
Project Section 1.01E
Premises Section 1.01A
Reference to Landlord as having "no liability
to Tenant" or being "without liability to
Tenant" or words of like import Article 27
Rent Section 1.01L
repair Article 27
Security Deposit Section 1.01R
Successor Landlord Section 18.02
Taxes Section 5.02
Tenant Preamble & Article 27
Tenant Delay Exhibit C
Tenant's Address for Notice Section 1.01V
Tenant's Allowance Exhibit C
Tenant's Permitted Uses Section 1.01Q
Tenant's Property Section 14.01A(a)
Tenant's Share Section 1.01K
Tenant's Work Exhibit C
Term Section 1.01H
termination of this Lease and words of like import Article 27
terms of this Lease Article 27
this Lease Preamble
Usable Area of Premises Exhibit C
year Article 27
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LEASE AGREEMENT
THIS LEASE AGREEMENT ("this Lease") is made and entered into by and
between PRENTISS PROPERTIES ACQUISITION PARTNERS, L. P., a Delaware limited
partnership ("Landlord") and APTIS, INC., dba APTIS SOFTWARE, a Delaware
corporation ("Tenant"), upon all the terms set forth in this Lease and in all
Exhibits and Riders hereto, to each and all of which terms Landlord and Tenant
hereby mutually agree, and in consideration of One Dollar ($1.00) and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and of the rents, agreements and benefits flowing between the
parties hereto, as follows:
ARTICLE 1
BASIC LEASE INFORMATION AND CERTAIN DEFINITIONS
Section 1.01. Each reference in this Lease to information and definitions
contained in the Basic Lease Information and Certain Definitions and each use of
the terms capitalized and defined in this Section 1.01 shall be deemed to refer
to, and shall have the respective meaning set forth in, this Section 1.01.
A. Premises: The entire Fourth Floor, "C" and "D"
Wings consisting of 50,738 square feet of
Net Rentable Area, and the entire "D"
wing portion of the 2nd Floor, consisting
of 24,711 square feet of Net Rentable
Area, of the Building, for a total of
75,449 square feet of net Rentable Area,
as such Premises are identified by
diagonal lines on the floor plans
attached as Exhibit A. Tenant shall be
allowed to substitute the "D" Wing
portion of the Third (3rd) Floor for the
"D" Wing portion of the Second (2nd)
Floor above, if Landlord has not leased
all of the Third Floor (both "C" and "D"
Wings) to a full floor user within six
(6) months from the date on the cover
page hereof.
If the Tenant shall elect to substitute the
"D" Wing portion of the Third (3rd) Floor,
the Landlord and Tenant shall execute a
document amending this provision of this
Lease.
B. Building: The four (4) story office building
containing two (2) contiguous wings,
owned by Landlord on that portion of the
Land generally located at 1601 S. MoPac
Expressway, Austin, Texas, and commonly
known as "Two Barton Skyway."
C. Land: That certain parcel of land described
under the caption "Land" in Exhibit B
hereof.
D. Parking Facilities: The parking garage which
is located immediately East of the Building,
together with all surface parking areas
located or to be located on the Land.
E. Project: The Land and all improvements thereon,
including the Building, the Parking
Facilities, and all Common Areas.
F. Commencement Date: That certain date on which the Term shall
commence, as determined pursuant to the
provisions of Article 3 hereof.
G. Expiration Date: Ten (10) years from the
Commencement Date.
H. Term: Ten (10) years, beginning on the
Commencement Date and ending at 11:59
p.m. on the Expiration Date, unless this
Lease is sooner terminated as provided
herein.
I. Net Rentable Area of the
Premises: The "Primary Premises" consist of
approximately 50,738 square feet and the
"Secondary Premises" consist of
approximately 24,711 square feet located on
the "D" Wing of the Second (2nd ) Floor, or
the Third (3rd) Floor if substituted as
provided above (collectively called the
"Premises").
J. Net Rentable Area of the
Building: 195,324 square feet.
K. Tenant's Share: 38.863%, representing a fraction, the
numerator of which is the Net
Rentable Area of the Premises and the
denominator of which is the Net Rentable
Area of the Building, subject to future
adjustment pursuant to the provisions of
Section 5.04 hereof.
L. Rent: The Base Rent and the Additional Rent.
M. Building Commencement Date: The date that Landlord actually
commences construction of the Building,
but in no event earlier than the date
this Lease is signed by Landlord and
Tenant.
N. Tenant Finish Ready
Condition: The condition of the Building, the Project
and the Premises completed with the
improvements described on Attachment 2 to
Exhibit C.
O. Substantial Completion Date: Twelve months following the Building
Commencement Date.
P. Base Condition Default: Failure of Landlord to substantially
complete (defined in Section 3.02 below) the
Project and deliver the Premises in the Base
Premises Condition within 30 days following
the Substantial Completion Date.
Q. Base Rent: The Base Rent for the first year of the
Term shall be $925,968.50 ($18.25 per
square foot per annum of Net Rentable
Area of the Primary Premises). The Base
Rent for the second year through the
fifth year of the Term shall be
$1,376,944.25 per annum ($18.25 per
square foot per annum of Net Rentable
Area of the Premises). The Base Rent for
the final five (5) years of the Term
shall be $1,418,441.20 per annum ($18.80
per square foot per annum of Net Rentable
Area of the Premises). Tenant may elect
to occupy all or a portion of the
Secondary Premises between the
Commencement Date and the Secondary
Premises Commencement Date. If Tenant so
elects, Tenant shall not be required to
pay Base Rent or Additional Rent on the
Secondary Premises until the Secondary
Premises Commencement Date regardless of
whether Tenant occupies all or a portion
of the Secondary Premises, provided,
however, Tenant shall compensate Landlord
for a portion of the Operating Costs for
the Secondary Premises being utilized by
Tenant at the rate of $3.00 per square
foot of Net Rentable Area, per annum. If
the Tenant shall elect to substitute the
"D" Wing portion of the Third (3rd) Floor
for the Secondary Premises, the Landlord
and Tenant shall execute a document
amending this portion of this Lease for
the Secondary Premises.
R. Additional Rent: The Additional Rent shall be
Tenant's Operating Costs Payment and all
other sums due and payable by Tenant
under the Lease.
S. Landlord's Operating Costs
Estimate: The estimate for the calendar year 2000 of
the Term is $8.50 per square foot of Net
Rentable Area of the Premises, subject to
the abatement of Operating Costs applicable
to the Secondary Premises.
T. Parking Spaces: Tenant shall be entitled to take
226 unassigned Parking Spaces, and 75
reserved Parking Spaces in the garage, at
no charge. Until the Secondary Premises
are occupied, the unassigned spaces shall
be reduced to 152 unassigned Parking
Spaces and 50 reserved Parking Spaces,
and increased at the ratio of one
unassigned space per 250 square feet of
Net Rentable Area of the Secondary Space
occupied The Landlord shall provide a
reasonable number of free, unassigned
Parking Spaces for Tenant's visitors.
The location of the reserved Parking
Spaces is shown on Rider 3 attached
hereto.
U. Tenant's Permitted Uses: Tenant may use the
Premises for executive, administrative and
other office uses or other uses consistent
with first class office buildings in Austin,
Travis County, Texas, for the conduct of
Tenant's business.
V. Security Deposit: As set forth in Article 21.
W. Broker: The Pinnacle Group
Mark A. Vickery
Mark A. Vickery Interests, Inc.
120 Austin Highway, Suite 106
San Antonio, Texas 78209
X. Landlord's Address for
Notice: Prentiss Properties Acquisition Partners, L.P.
3890 West Northwest Highway, Suite 400
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Dallas, Texas 75220
Attention: Michael V. Prentiss
with copies to: Prentiss Properties Acquisition Partners, L.P.
3860 West Northwest Highway, Suite 400
Dallas, Texas 75220
Attention: Dennis J. DuBois
Y Landlord's Address for
Payment: Prentiss Properties Acquisition Partners, L.P.
3890 West Northwest Highway, Suite 400
Dallas, Texas 75220
Z. Tenant's Address for
Notice: 1601 S. MoPac Expressway
Suite 400
Austin, Texas 78746
Attention: President
With copies to Billing Concepts, Corporation
7411 John Smith, Suite 200
San Antonio, Texas 78229-4898
Attention: Manny Fernandez, Facility Manager
AA. Business Hours: 7 a.m. to 7 p.m.--Monday through Friday
9 a.m. to 3 p.m.--Saturday
ARTICLE 2
PREMISES AND QUIET ENJOYMENT
Section 2.01. Landlord hereby leases the Premises to Tenant, and Tenant
hereby rents and leases the Premises from Landlord, for the Term. During the
Term, Tenant shall have the right to use, in common with others and in
accordance with the Rules and Regulations, the Common Areas.
Section 2.02. Provided that Tenant fully and timely performs all the terms
of this Lease on Tenant's part to be performed, including payment by Tenant of
all Rent, Tenant shall have, hold and enjoy the Premises during the Term without
hindrance or disturbance from or by Landlord; subject, however, to all of the
terms, conditions and provisions of any and all ground leases, deeds to secure
debt, mortgages, governmental laws, easements, protective covenants, and other
encumbrances now or hereafter affecting the Premises, or the Project.
ARTICLE 3
TERM; COMMENCEMENT DATE;
DELIVERY AND ACCEPTANCE OF PREMISES
Section 3.01. The Commencement Date for the Primary Premises shall be one
hundred twenty (120) days following the delivery of the Premises in Tenant
Finish Ready Condition as set forth on Attachment 2 to Exhibit "C, provided that
the Commencement Date shall not occur until Landlord has substantially completed
the Project, and completed the Premises in Base Premises Condition (collectively
called "Landlord's Construction"). Landlord shall deliver the Premises to Tenant
in Tenant Finish Ready Condition for construction of the Leasehold Improvements
sixty (60) days prior to the estimated date Landlord will substantially complete
the Premises in Base Premises Condition (defined in Exhibit C). The Commencement
Date for the Secondary Premises shall be the first anniversary of the
Commencement Date (the "Secondary Premises Commencement Date").
Section 3.02. Landlord shall cause the Building Commencement Date to occur
as soon as possible in the exercise of Landlord's reasonable business judgement,
but not later than forty-five (45) days following the date this Lease is signed
by Landlord and Tenant. If Landlord shall fail to commence construction of the
Building within such 45 day period, Tenant shall so notify Landlord and Landlord
shall immediately commence construction. If following such notice, Landlord
shall fail to commence construction, Tenant may terminate this Lease. Landlord
shall substantially complete Landlord's Construction no later than the
Substantial Completion Date. Landlord's Construction shall be deemed
"substantially complete" when all of the following conditions have been met: (i)
the Premises have been completed in Base Premises Condition (defined in Exhibit
C), and (ii) Landlord has substantially completed the Project in substantial
accordance with the Building Plans (defined in Exhibit C) and has received final
or temporary certificates of occupancy so that Tenant has the right to use the
Common Areas of the Building, the Parking Facilities, and the Common Areas of
the Project. In the event Landlord fails to substantially complete Landlord's
Construction on or before the Substantial Completion Date, the Tenant shall so
notify the Landlord and the Landlord shall substantially complete Landlord's
Construction same as soon as possible. The failure to substantially complete
Landlord's
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Construction within thirty (30) days following the Substantial Completion Date
shall be a Base Condition Default and shall entitle the Tenant to the following
rights:
(a) If such Base Condition Default is not cured on or before thirty days
following the Substantial Completion Date, but is cured no later than ninety
(90) days following the Substantial Completion Date, then the Commencement Date
shall be delayed until the date Landlord substantially completes Landlord's
Construction, and the commencement of the payment of Base Rent and Additional
Rent shall be delayed until such date, and for each day of delay after such 30
day period following the Substantial Completion Date until the date the Base
Condition Default is cured, the Tenant shall be entitled to a credit of one
additional day of Base Rent and Additional Rent.
(b) If such Base Condition Default is not cured on or before ninety (90)
days following the Substantial Completion Date the Tenant may, at its option,
elect to either (i) if Landlord reasonably determines that Landlord's
Construction will be substantially complete within 30 days following the end of
such 90 day period, continue the remedy set forth in 3.02 (a) above where the
Commencement Date and the commencement of the payment of Base Rent and
Additional Rent shall be delayed, and for each day of delay after such 30 day
period following the Substantial Completion Date until the date the Base
Condition Default is cured, the Tenant shall be entitled to a credit of one
additional day of Base Rent and Additional Rent; or (ii) cancel this Lease upon
written notice to the Landlord within 30 days following the end of such 90 day
period.
Section 3.03. The Net Rentable Area of the Premises and the Building are
approximately as stated in Sections 1.01, I and J, respectively. By written
instrument substantially in the form of Exhibit D attached hereto, Landlord
shall notify Tenant of the Substantial Completion Date, Commencement Date, the
Net Rentable Area of the Premises and all other matters stated therein. The
Commencement Notice shall be conclusive and binding on Tenant as to all matters
set forth therein, unless within five (5) days following delivery of such
Commencement Notice, Tenant contests any of the matters contained therein by
notifying Landlord in writing of Tenant's objections. The foregoing
notwithstanding, Landlord's failure to deliver any Commencement Notice to Tenant
shall not affect Landlord's determination of the Commencement Date.
Section 3.04. Tenant may not enter or occupy the Premises prior to the
date Landlord delivers the Premises in Tenant Finish Ready Condition without
Landlord's express written consent and any entry by Tenant shall be subject to
all of the terms of this Lease; provided however, that no such early entry shall
change the Commencement Date or the Expiration Date. It is the intent of the
parties that Tenant shall have reasonable access to the Premises prior to the
date Landlord delivers the Premises in Tenant Finish Ready Condition, so long as
such access does not interfere with the actions of Landlord.
Section 3.05. Except as set forth in a "punch list" or other document
identifying exceptions presented to Landlord within thirty (30) days of
occupancy, occupancy of the Premises or any portion thereof by Tenant or anyone
claiming through or under Tenant for the conduct of Tenant's, or such other
person's business therein shall be conclusive evidence that Tenant and all
parties claiming through or under Tenant (a) have accepted the Premises as
suitable for the purposes for which the Premises are leased hereunder, (b) have
accepted the Common Areas as being in a good and satisfactory condition and (c)
have waived any defects in the Premises and the Project. Landlord shall have no
liability, except for gross negligence or willful misconduct, to Tenant or any
of Tenant's agents, employees, licensees, servants or invitees for any injury or
damage to any person or property due to the condition or design of, or any
defect in, the Premises or the Project, including any electrical, plumbing or
mechanical systems and equipment of the Premises or the Project and the
condition of or any defect in the Land; and Tenant, for itself and its agents,
employees, licensees, servants and invitees, expressly assumes all risks of
injury or damage to person or property, either proximate or remote, resulting
from the condition of the Premises or the Project.
ARTICLE 4
RENT
Section 4.01. Tenant shall pay to Landlord, without notice, demand, offset
or deduction, in lawful money of the United States of America, at Landlord's
Address for Payment, or at such other place as Landlord shall designate in
writing from time to time: (a) the Base Rent in equal monthly installments, in
advance, on the first day of each calendar month during the Term, and (b) the
Additional Rent, at the respective times required hereunder. The first monthly
installment of Base Rent and Tenant's Operating Costs Payment payable under
Article 5 hereof shall be paid in advance on the date of Tenant's execution of
this Lease and applied to the first installments of Base Rent and Tenant's
Operating Costs Payment coming due under this Lease. Landlord shall place such
first monthly installment in a federally insured, interest bearing account to be
held until the Commencement Date whereupon the accrued interest on such first
monthly installment shall be paid to Tenant and the first monthly installment
shall be applied to Base Rent and Tenant's Operating Costs Payment as set forth
above. Payment of Rent shall begin on the Commencement Date; provided, however,
that, if either the Commencement Date or the Expiration Date falls on a date
other than the first day of a calendar month, the Rent due for such fractional
month shall be prorated on a per diem basis between Landlord and Tenant so as to
charge Tenant only for the portion of such fractional month falling within the
Term.
Section 4.02. All past due installments of Rent shall bear interest until
paid at a rate per annum (the "Interest Rate") equal to the greater of fifteen
percent (15%) or four percent (4%) above the prime rate of interest from time to
time publicly announced by Bank One, Texas, N.A., or any successor thereof; not
to exceed the maximum rate permitted under federal law or under the laws of the
State of Texas, the rate of interest on such past due installments of Rent shall
be the maximum rate of interest then permitted by applicable law.
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ARTICLE 5
OPERATING COSTS
Section 5.01. Tenant shall pay to Landlord, as Additional Rent, for each
year or fractional year during the Term an amount ("Tenant's Operating Costs
Payment") of money equal to Tenant's Share of Operating Costs, as hereinafter
defined, for such year, such amount to be calculated and paid as follows:
(a) On the first day of January of each year during the Term (or,
with respect to the year in which the Commencement Date occurs, the amount shown
in Section 1.01 S. above), or as soon thereafter as is practicable, Landlord
shall furnish Tenant with a statement ("Landlord's Operating Costs Estimate")
setting forth Landlord's reasonable estimate of Operating Costs for the
forthcoming year (or the fractional year in which the Commencement Date occurs,
as the case may be). On the first day of each calendar month during such year,
Tenant shall pay to Landlord one-twelfth of Tenant's Operating Costs Payment as
estimated on Landlord's Operating Costs Estimate. If for any reason Landlord has
not provided Tenant with Landlord's Operating Costs Estimate on the first day of
January of any year during the Term (or by the Commencement Date, as the case
may be), then, (i) until the first day of the calendar month following the month
in which Tenant is given Landlord's Estimate of Operating Costs, Tenant shall
continue to pay to Landlord on the first day of each calendar month the monthly
sum, if any, payable by Tenant under this Section 5.01 for the month of December
of the preceding year, and (ii) promptly after Landlord's Operating Costs
Estimate is furnished to Tenant or together therewith, Landlord shall give
notice to Tenant stating whether the installments of Tenant's Operating Costs
Payments previously made for such year were greater or less than the
installments of Tenant's Operating Costs Payments to be made for such year in
accordance with Landlord's Operating Costs Estimate, and (A) if there shall be a
deficiency, Tenant shall pay the amount thereof to Landlord within seven (7)
days after the giving of Landlord's Operating Costs Estimate, or (B) if there
shall have been an overpayment, Landlord shall apply such overpayment as a
credit against the next accruing installment(s) of Additional Rent due from
Tenant under this Section 5.01 until fully credited to Tenant, and (C) on the
first day of the first calendar month following the month in which Tenant is
given Landlord's Estimate of Operating Costs and on the first day of each
calendar month thereafter during the Term throughout the remainder of such year,
Tenant shall pay to Landlord an amount equal to one-twelfth (1/12th) of Tenant's
Operating Costs Payment. The foregoing notwithstanding, Landlord shall have the
right from time to time during any year to notify Tenant in writing of any
change in Landlord's Operating Costs Estimate, in which event such Tenant's
Operating Costs Payment, as previously estimated, shall be adjusted to reflect
the amount shown in such notice and shall be effective, and due from Tenant, on
the first day of each month during the year for which notice is given commencing
the second month following Landlord's giving of such notice.
(b) On the first day of March of each year during the Term
(beginning on the first day of March of the year following the year in which the
Commencement Date occurs), or as soon thereafter as is practicable, Landlord
shall furnish Tenant with a statement of the actual Operating Costs for the
preceding year. Within thirty (30) days after Landlord's delivery of such
statement, Tenant shall make a lump sum payment to Landlord in the amount, if
any, by which Tenants' Operating Costs Payment for such preceding year as shown
on such Landlord's statement, exceeds the aggregate of the monthly installments
of Tenant's Operating Costs Payments paid during such preceding year. If
Tenant's Operating Costs Payment, as shown on such Landlord's statement, is less
than the aggregate of the monthly installments of Tenant's Operating Costs
Payment actually paid by Tenant during such preceding year, then Landlord shall
apply such amount to the next accruing installment(s) of Additional Rent due
from Tenant under this Section 5.01 until fully credited to Tenant.
(c) If the Commencement Date occurs on a date other than the first
day of January, or if the Term ends on a date other than the last day of
December, the actual Operating Costs for the year in which the Commencement Date
or the Expiration Date occurs, as the case may be, shall be prorated so that
Tenant shall pay that portion of Tenant's Share of Operating Costs for such year
represented by a fraction, the numerator of which shall be the number of days
during such fractional year falling within the Term, and the denominator of
which is 365 (or 366, in the case of a leap year). The provisions of this
Section 5.01 shall survive the Expiration Date or any sooner termination
provided for in this Lease.
Section 5.02. For purposes of this Lease, the term "Operating Costs" shall
mean any and all expenses, costs and disbursements of every kind which Landlord
pays, incurs or becomes obligated to pay in connection with the operation,
management, repair and maintenance of all portions of the Project. All Operating
Costs shall be determined according to generally accepted accounting principles
which shall be consistently applied. Operating Costs include, but are not
limited to, the following:
(a) The portion of wages, salaries, and fees (including, but not limited
to, all reasonable educational, travel and professional fees) of all personnel
or entities (exclusive of Landlord's executive personnel) allocable to the
Project for any personnel engaged in the operation, repair, maintenance, or
security of the Project, including taxes, insurance, and benefits relating
thereto and the costs of all supplies and materials (including work clothes and
uniforms) used in the operation, repair, and maintenance or security of the
Project.
(b) Cost of performance by Landlord's personnel of, or of all service
agreements for, maintenance, janitorial services, access control, alarm service,
window cleaning, elevator maintenance and landscaping for the Project. The
foregoing project shall include rental of personal property used by Landlord's
personnel in the maintenance and repair of the Project.
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(c) All utilities for the Project, including water, sewer, power,
electricity, gas, fuel, lighting and all other utilities; and all
air-conditioning, heating and ventilating costs for the Project.
(d) Cost of all insurance, including casualty and liability insurance
applicable to the Project and to Landlord's equipment, fixtures and personal
property used in connection therewith, business interruption or rent insurance
against such perils as are commonly insured against by prudent landlords, such
other insurance as may be required by any lessor or mortgagee of Landlord and
such other insurance which Landlord considers reasonably necessary in the
operation of the Project, together with all appraisal and consultants' fees in
connection with such insurance.
(e) All Taxes. For purposes hereof, the term "Taxes" shall mean (i) all
taxes, assessments, and other governmental charges, applicable to or assessed
against the Project or any portion thereof, or applicable to or assessed against
Landlord's personal property used in connection therewith, whether federal,
state, county, or municipal and whether assessed by taxing districts or
authorities presently taxing the Project or the operation thereof or by other
taxing authorities subsequently created, or otherwise, and any other taxes and
assessments attributable to or assessed against all or any part of the Project
or its operation, and (ii) any reasonable expenses, including fees and
disbursements of attorneys, tax consultants, arbitrators, appraisers, experts
and other witnesses, incurred by Landlord in contesting any taxes or the
assessed valuation of all or any part of the Project. If at any time during the
Term there shall be levied, assessed, or imposed on Landlord or all or any part
of the Project by any governmental entity any general or special ad valorem or
other charge or tax directly upon rents received under leases, or if any fee,
tax, assessment, or other charge is imposed which is measured by or based, in
whole or in part, upon such rents, or if any charge or tax is made based
directly or indirectly upon the transactions represented by leases or the
occupancy or use of the Project or any portion thereof, such taxes, fees,
assessments or other charges shall be deemed to be Taxes; provided, however,
that any (i) franchise, corporation, income or net profits tax, unless
substituted for real estate taxes or imposed as additional charges in connection
with the ownership of the Project, which may be assessed against Landlord or the
Project or both, (ii) transfer taxes assessed against Landlord or the Project or
both, (iii) penalties or interest on any late payments of Landlord, and (iv)
personal property taxes of Tenant or other tenants in the Project shall be
excluded from Taxes. If any or all of the Taxes paid hereunder are by law
permitted to be paid in installments, notwithstanding how Landlord pays the
same, then, for purposes of calculating Operating Costs, such Taxes shall be
deemed to have been divided and paid in the maximum number of installments
permitted by law, and there shall be included in Operating Costs for each year
only such installments as are required by law to be paid within such year,
together with interest thereon and on future such installments as provided by
law.
(f) Legal and accounting costs incurred by Landlord or paid by Landlord to
third parties (exclusive of legal fees with respect to disputes with individual
tenants, negotiations of tenant leases, or with respect to the ownership rather
than the operation of the Project), appraisal fees, consulting fees, all other
professional fees and disbursements and all association dues.
(g) Cost of non-capitalized repairs and general maintenance of the Project
(excluding repairs and general maintenance paid by proceeds of insurance or by
Tenant, other tenants of the Project or other third parties).
(h) Amortization of the cost of improvements or equipment which are
capital in nature and which (i) are for the purpose of reducing Operating Costs
of the Project, up to the amount saved as a result of the installation thereof,
as reasonably estimated by Landlord, or (ii) enhance the Project for the general
benefit of tenants or occupants thereof, or (iii) are required by any
governmental authority, other than year 2000 compliance, and requirements
necessary to comply with applicable law in effect at the execution date of this
Lease, including without limitation the Americans with Disabilities Act of 1990,
or (iv) replace any building equipment needed to operate the Project at the same
quality levels as prior to the replacement. All such costs, including interest,
shall be amortized on a straight-line basis over the useful life of the capital
investment items, as reasonably determined by Landlord, but in no event beyond
the reasonable useful life of the Project as a first class office project.
(i) The portion of Project management office rent or rental value
allocable to the Project.
(j) A management fee (whether or not Landlord engages a manager for the
Project) and all items reimbursable to the Project manager, if any, pursuant to
any management contract for the Project. Landlord currently pays a management
fee equal to three percent (3%) of the gross receipts from the Project and all
items reimbursable to the Project manager pursuant to its management contract
Landlord agrees that any future increase in the management fee payable by
Landlord shall not exceed management fees customarily paid at the time by other
landlords of first class office buildings in the Austin suburban area.
(k) Amounts payable pursuant to the protective covenants, if any, as
amended from time to time.
"Operating Costs" shall not include (i) specific costs for any
capital repairs, replacements or improvements, except as provided above; (ii)
expenses for which Landlord is reimbursed or indemnified (either by an insurer,
condemnor, tenant, warrantor or otherwise); (iii) expenses incurred in leasing
or procuring tenants (including lease commissions, advertising expenses and
expenses of renovating space for tenants); (iv) payments for rented equipment,
the cost of which would constitute a capital expenditure not permitted pursuant
to the foregoing if the equipment were purchased; (v) interest or amortization
payments on any mortgages; (vi) net basic rents under ground leases; (vii) costs
representing an amount paid to an affiliate of Landlord which is in excess of
the amount which would have been paid in the absence of such relationship;
(viii) wages, salaries or other compensation paid for clerks or attendants in
concessions or news stands operated in the Project; (ix) the cost of installing,
maintaining and operating any specialty service such as an observatory,
broadcasting facility, luncheon club or an athletic or recreational club (except
for
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showers and locker areas); or (x) costs specially billed to or billable to any
specific tenants. There shall be no duplication of costs or reimbursement.
Landlord agrees to use commercially reasonable efforts to maintain
the Operating Costs, the Taxes and the Landlord's insurance at the lowest
possible level, using commercially reasonable efforts to reduce or eliminate
Operating Costs, reduce Taxes and reduce insurance costs, and under all
circumstances to maintain the Operating Costs, the Taxes and the insurance at no
more than the substantially equivalent costs for other first class buildings in
suburban Austin, Travis County, Texas. Notwithstanding anything contained in
this Section 5.02 to the contrary or elsewhere in the Lease, for purposes of
calculating Tenant's Operating Costs Payment for the period beginning on January
1, 2001, and for each year thereafter during the Term of this Lease, the
components of Operating Costs set forth in Sections 5.02 (a), (b) (excluding
janitorial services), (f), (g), (h), (i), and (j) (collectively the
"Controllable Operating Costs") shall not be annually increased by more than six
percent (6%) per annum over the actual 2000 "grossed up" Controllable Operating
Costs. For purposes of this paragraph, the cap on the Controllable Operating
Costs for years 2002 and thereafter shall be determined on a compounded and
cumulative basis from 2001.
Section 5.03. If the Building is not 95% occupied (meaning ninety-five
percent (95%) of the Net Rentable Area of the Building) during any full or
fractional year of the Term, the actual Operating Costs shall be adjusted for
such year to an amount which Landlord estimates would have been incurred in
Landlord's reasonable judgment had the Building been 95% occupied.
Section 5.04. If during the Term any change occurs in either the number of
square feet of the Net Rentable Area of the Premises or of the Net Rentable Area
of the Building, Tenant's Share of Operating Costs shall be adjusted, effective
as of the date of any such change. On and after the date of any such change,
Tenant's Operating Costs Payment pursuant to Section 5.01 shall be adjusted
effective as of the date of such change.
Section 5.05. Tenant shall have the right to inspect Landlord's records
relating to Operating Costs for one year after Tenant's receipt of the statement
of actual Operating Costs (the "Operating Cost Audit"). Tenant may elect to
contract with a qualified lease audit firm or certified public accountant to
perform the Operating Cost Audit. If the Operating Cost Audit reveals an
overstatement of Tenant's pro-rata share of Operating Costs by more than ten
percent (10%) as substantiated, at Landlord's option and expense, by an
independent certified public accountant, then, in addition to a credit for the
amount of the Operating Cost overstatement, Tenant shall receive a credit for
Tenant's reasonable actual out-of-pocket costs of the Operating Cost Audit.
ARTICLE 6
PARKING
Section 6.01. Landlord hereby grants to Tenant a license to use in common
with other tenants and with the public, parking spaces in the Parking
Facilities. Each such Tenant shall be entitled to the number of parking spaces
in the Parking Facilities as set forth in Section 1.01. The number of Parking
Permits to be issued to Tenant and the initial monthly Permit Fee for each
Parking Permit is set forth in Section 1.01. Landlord shall not be obligated to
provide Tenant with any additional Parking Permits. If an employee, licensee or
invitee of Tenant fails to observe the Rules and Regulations with respect to the
Parking Facilities, then Landlord, at its option, shall have the right following
two (3) Business Days notice and opportunity to cure to terminate the Tenant
Parking Permit for such employee, without legal process, and following
reasonable prior written notice to remove the offending employee, licensee or
invitee from the Parking Facilities.
ARTICLE 7
SERVICES OF LANDLORD
Section 7.01. A. During the Term, Landlord shall furnish Tenant with the
following services: (a) hot and cold water in Building Standard bathrooms and
chilled water in Building Standard drinking fountains; (b) electrical power
sufficient for lighting the Premises and for the operation therein of
typewriters, voicewriters, calculating machines, word processing equipment,
photographic reproduction equipment, copying machines, personal computers,
facsimile machines, and similar items of business equipment which consume, in
the aggregate, less than six (6) watts per square foot of Net Rentable Area of
the Premises and require a voltage of 120 volts single phase or less, (c)
heating, ventilating or air-conditioning, as appropriate, during Business Hours.
Landlord shall cause the HVAC for the Premises to be built in substantial
accordance with the design criteria for HVAC set forth in Attachment 3 to
Exhibit C; (d) electric lighting for the Common Areas of the Project; (e)
passenger elevator service, in common with others, for access to and from the
Premises twenty-four (24) hours per day, seven (7) day per week; provided,
however, that Landlord shall have the right to limit the number of (but not
cease to operate all) elevators to be operated for repairs and after Business
Hours and on Saturdays, Sundays and Holidays; (f) janitorial cleaning services
in accordance with Rider No. 3 attached hereto; (g) facilities for Tenant's
loading, unloading, delivery and pick-up activities, including access thereto
during Business Hours, subject to the Rules and Regulations; (h) on site
security in accordance with other first class office buildings in surbuban
Travis County, Texas; and (i) replacement, as necessary, of all Building
Standard lamps and ballasts in Building Standard light fixtures within the
Premises. All services referred to in this Section 7.01A shall be provided by
Landlord and paid for by Tenant as part of Rent.
B. If Tenant requires air-conditioning, heating or other services,
including cleaning services, for hours or days in addition to the hours and days
specified in Section 7.01A, Landlord shall provide such additional service after
reasonable prior written request therefor from Tenant, and Tenant shall
reimburse Landlord for the cost of such
7
additional service. Landlord shall have no obligation to provide any additional
service to Tenant at any time Tenant is in default under this Lease unless
Tenant pays to Landlord, in advance, the cost of such additional service. Tenant
shall have the right to provide security services for its employees.
C. Tenant shall not install any machinery or equipment, which generates
abnormal heat or otherwise creates unusual demands on the air-conditioning or
heating system serving the Premises. Tenant shall not install any electrical
equipment requiring special wiring unless approved in advance by Landlord. At no
time shall use of electricity in the Premises exceed the capacity of existing
feeders and risers to or wiring in the Premises. Nothing herein shall prevent
Tenant from installing a computer room and systems, which Landlord acknowledges
will generate additional heat. The Premises design by Tenant will address the
computer room requirements specifically.
D. If Tenant's requirements for or consumption of electricity exceed the
capacities specified in Section 7.01A(b) hereof; Landlord shall, at Tenant's
sole cost and expense, bill Tenant periodically for such additional service. The
degree of such additional consumption by Tenant shall be determined at
Landlord's election, by either or both (a) a survey of standard or average
tenant usage of electricity in the Building performed by a reputable consultant
selected by Landlord and paid for by Tenant, and (b) a separate meter in the
Premises to be installed, maintained, and read by Landlord, all at Tenant's sole
cost and expense.
Section 7.02. Landlord's obligation to furnish electrical and other
utility services shall be subject to the rules and regulations of the supplier
of such electricity of other utility services and the rules and regulations of
any municipal or other governmental authority regulating the business of
providing electricity and other utility services.
Section 7.03. No failure to furnish, or any stoppage of, the services
referred to in this Article 7 resulting from any cause other than the gross
negligence or willful misconduct of Landlord, shall make Landlord liable in any
respect for damages to any person, property or business, or be construed as an
eviction of Tenant, or entitle Tenant to any abatement of Rent or other relief
from any of Tenant's obligations under this Lease. Should any malfunction of any
systems or facilities occur within the Project or should maintenance or
alterations of such systems or facilities become necessary, Landlord shall
repair the same promptly and with reasonable diligence, and Tenant shall have no
claim for rebate, abatement of Rent, or damages because of malfunctions or any
such interruptions in service.
ARTICLE 8
ASSIGNMENT AND SUBLETTING
Section 8.01. Neither Tenant nor its legal representatives or successors
in interest shall, by operation of law or otherwise, assign, mortgage, pledge,
encumber or otherwise transfer this Lease or any part hereof, or the interest of
Tenant under this Lease, or in any sublease or the rent thereunder without first
obtaining Landlord's prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. The Premises or any part thereof
shall not be sublet, occupied or used for any purpose by anyone other than
Tenant, without Tenant's obtaining in each instance the prior written consent of
Landlord in the manner hereinafter provided. Tenant shall not modify, extend, or
amend a sublease previously consented to by Landlord without obtaining
Landlord's prior written consent thereto.
Section 8.02. An assignment of this Lease shall be deemed to have occurred
(a) if in a single transaction or in a series of transactions more than 50% in
interest in Tenant, any guarantor of this Lease, or any subtenant (whether
stock, partnership, interest or otherwise) is transferred, diluted, reduced, or
otherwise affected with the result that the present holder or owners of Tenant,
such guarantor, or such subtenant have less than a 50% interest in Tenant, such
guarantor or such subtenant, or (b) if Tenant's obligations under this Lease are
taken over or assumed in consideration of Tenant leasing space in another office
building. The transfer of the outstanding capital stock of any corporate Tenant,
guarantor or subtenant through the "over-the-counter" market or any recognized
national securities exchange (other than by persons owning 5% or more of the
voting calculation of such 50% interest of clause 8.02(a) above) shall not be
included in the calculation of such 50% interest in clause (a) above.
Section 8.03. Notwithstanding anything to the contrary in Section 8.01,
Tenant shall have the right, upon ten (10) days' prior written notice to
Landlord, to (a) sublet all or part of the Premises to any corporation or other
entity which controls Tenant, is controlled by Tenant or is under common control
with Tenant; or (b) assign this Lease to a successor corporation into which or
with which Tenant is merged or consolidated or which acquired substantially all
of Tenant's assets and property; provided that (i) such successor corporation
assumes substantially all of the obligations and liabilities of Tenant and shall
have assets, capitalization and net worth at least equal to the assets,
capitalization and net worth of Tenant as of the date of this Lease as
determined by generally accepted accounting principles, and (ii) Tenant shall
provide in its notice to Landlord the information required in Section 8.04. For
the purpose hereof "control" shall mean ownership of not less than 50% of all
the voting stock or legal and equitable interest in such corporation or entity.
Section 8.04. If Tenant should desire to assign this Lease or sublet the
Premises (or any part thereof), which requires the consent of Landlord, Tenant
shall give Landlord written notice no later than twenty (20) days in advance of
the proposed effective date of any other proposed assignment or sublease,
specifying (a) the name, current address, and business of the proposed assignee
or sublessee, (b) the amount and location of the space within the Premises
proposed to be so subleased, (c) the proposed effective date and duration of the
assignment or subletting, (d) the proposed rent or consideration to be paid to
Tenant by such assignee or sublessee, and (e) financial statements and other
information as Landlord may reasonably request to evaluate the proposed
assignment or sublease. For assignments and sublettings other than those
permitted by Section 8.03, Landlord shall have twenty (20) days following
receipt of such notice and other information requested by Landlord within which
to notify Tenant in writing that
8
Landlord elects to permit Tenant to assign or sublet such space or reject such
assignment or sublease and the reasonable grounds therefore. If the rent rate
agreed upon between Tenant and its proposed subtenant is greater than the rent
rate that Tenant must pay Landlord hereunder for that portion of the Premises,
or if any consideration shall be promised to or received by Tenant in connection
with such proposed assignment or sublease (in addition to rent), then fifty
percent (50%) of such excess rent and other consideration shall be considered
Additional Rent owed by Tenant to Landlord (less brokerage commissions,
attorneys' fees and other disbursements reasonably incurred by Tenant for such
assignment and subletting). Tenant agrees to reimburse Landlord for reasonable
legal fees and any other reasonable costs incurred by Landlord in connection
with any permitted assignment or subletting. Tenant shall deliver to Landlord
copies of all documents executed in connection with any permitted assignment or
subletting, which documents shall be in form and substance reasonably
satisfactory to Landlord and which shall require any assignee to assume
performance of all terms of this Lease to be performed by Tenant or any
subtenant to comply with all the terms of this Lease to be performed by Tenant.
No acceptance by Landlord of any Rent or any other sum of money from any
assignee, sublessee or other category of transferee shall be deemed to
constitute Landlord's consent to any assignment, sublease, or transfer.
Section 8.05. Any attempted assignment or sublease by Tenant in violation
of the terms and provisions of this Article 8 shall be void and shall constitute
a material breach of this Lease. In no event, shall any assignment, subletting
or transfer, whether or not with Landlord's consent, relieve Tenant of its
primary liability under this Lease for the entire Term, and Tenant shall in no
way be released from the full and complete performance of all the terms hereof.
If Landlord takes possession of the Premises before the expiration of the Term
of this Lease, Landlord shall have the right, at its option, to terminate all
subleases, or to take over any sublease of the Premises or any portion thereof
and such subtenant shall attorn to Landlord, as its landlord, under all the
terms and obligations of such sublease occurring from and after such date, but
excluding previous acts, omissions, negligence or defaults of Tenant and any
repair or obligation in excess of available net insurance proceeds or
condemnation award.
Section 8.06. The term "Landlord," as used in this Lease, so far as
covenants or obligations on the part of Landlord are concerned, shall be limited
to mean and include only the owner or owners, at the time in question, of the
fee title to, or a lessee's interest in a ground lease of, the Land or the
Building. In the event of any transfer, assignment or other conveyance or
transfers of any such title or interest, Landlord herein named, and in case of
any subsequent transfers, the then grantor shall be automatically freed and
relieved from and after the date of such transfer, assignment or conveyance of
all liability as respects the performance of any covenants or obligations on the
part of Landlord contained in this Lease thereafter to be performed and, without
further agreement, the transferee of such title or interest shall be deemed to
have assumed and agreed to observe and perform any and all obligations of
Landlord hereunder, during its ownership of the Project. Landlord may transfer
its interest in the Project without the consent of Tenant and such transfer or
subsequent transfer shall not be deemed a violation on Landlord's part of any of
the terms of this Lease.
ARTICLE 9
REPAIRS
Section 9.01. Except for ordinary wear and tear and except as otherwise
provided in Section 9.02, Landlord shall perform all maintenance and make all
repairs and replacements to the Premises (including the Leasehold Improvements).
Tenant shall pay to Landlord the actual cost (including a fee equal to fifteen
percent (15%) of actual costs to cover a fee for Landlord's agent or manager)
for (a) all maintenance, repairs and replacements within the Premises (including
the Leasehold Improvements), other than maintenance, repairs and replacements to
any Building system or component within the Building core serving the tenants in
the Building ("Central Systems") located within the Premises; or (b) all repairs
and replacements necessitated by damage to the Project (including the Building
structure and the Central Systems) caused by the negligence or willful
misconduct of Tenant or its agents, contractors, invitees and licensees. Amounts
payable by Tenant pursuant to this Section 9.01 shall be payable on demand after
receipt of an invoice therefor from Landlord. Landlord has no obligation and has
made no promise to maintain, alter, remodel, improve, repair, decorate, or paint
the Premises or any part thereof, except as specifically set forth in this
Lease. In no event shall Landlord have any obligation to maintain, repair or
replace any furniture, furnishings, fixtures or personal property of Tenant.
Section 9.02. Tenant shall keep the Premises in good order and in a safe,
neat and clean condition. No representations respecting the condition of the
Premises or the Building or the other portions of the Project have been made by
Landlord to Tenant except as specifically set forth in this Lease. Except as
provided in Section 10.01 or specifically consented to by Landlord, Tenant shall
not perform any maintenance or repair work or make any replacement in or to the
Premises (including the Leasehold Improvements), and any branch of a Central
System serving the Premises ("Branch System"), but rather shall promptly notify
Landlord of the need for such maintenance, repair or replacement so that
Landlord may proceed to perform the same. In the event Landlord specifically
consents to the performance of any maintenance or the making of any repairs or
replacements by Tenant and Tenant fails to promptly commence and diligently
pursue the performance of such maintenance or the making of such repairs or
replacements, then Landlord, at its option, may perform such maintenance or make
such repairs and Tenant shall reimburse Landlord, on demand after Tenant
receives an invoice therefor, the cost thereof plus fifteen percent (15%) of the
actual costs to cover a fee for Landlord's agent or manager.
Section 9.03. All repairs made by Tenant pursuant to Section 9.02 shall be
performed in a good and workmanlike manner by contractors or other repair
personnel selected by Tenant and approved by Landlord; provided, however, that
neither Tenant nor its contractors or repair personnel shall be permitted to do
any work affecting the Central Systems of the Building.
9
Section 9.04. Subject to the other provisions of this Lease imposing
obligations regarding repair upon Tenant, Landlord shall repair all machinery
and equipment necessary to provide the services of Landlord described in Article
7 and for repair of all portions of the Project which do not comprise a part of
the Premises and are not leased to others.
ARTICLE 10
ALTERATIONS
Section 10.01. Tenant shall have the right to install an uninterrupted
power source, satellite and dish antennae and other such improvements, provided
that such satellite and dish antennae do not affect the appearance of the
Building and, if mounted on the roof, do not extend above the parapet wall.
Tenant shall prepare the plans and specifications for such alterations and each
shall be subject to the approval of Landlord, which shall not be unreasonably
withheld or delayed. Tenant shall have the right to make non-structural
improvements and alterations as long as such alterations do not impact any
branch of a Central System or affect the appearance of the Building. A completed
set of plans and specifications of any such alterations shall be provided to
Landlord upon completion and Tenant shall remove any such improvements upon the
end of the Term, if so requested by Landlord. Tenant shall not at any time
during the Term make any other alterations to the Premises without first
obtaining Landlord's written consent thereto, which consent Landlord shall not
unreasonably withhold or delay but which consent may be conditioned upon
Tenant's agreement to remove the alterations at the end of the Term. Should
Tenant desire to make any alterations to the Premises, Tenant shall submit all
plans and specifications for such proposed alterations to Landlord for
Landlord's review and approval before Tenant allows any such work to commence.
Tenant shall select and use only contractors approved by Landlord, which
approval shall not be unreasonably withheld or delayed. Upon Tenant's receipt of
written approval from Landlord and upon Tenant's payment of any third party
review costs reasonably incurred by Landlord, Tenant shall have the right to
proceed with the construction of all approved alterations, in compliance with
the approved plans and specifications. All alterations shall be made at Tenant's
sole cost and expense, by Tenant's contractors. Tenant shall pay a fee equal to
10% of the cost of such alterations to Landlord for Landlord's agent or manager
supervising and coordinating such work. Provided, however, such 10% fee shall
not be applied to the cost of Tenant's trade fixtures installed as part of such
alterations, or for alterations performed by Tenant or its contractors with a
value of less than $25,000.00. In no event, however, shall anyone other than
Landlord or Landlord's employees or representatives perform work to be done
which affects the Central Systems of the Building.
Section 10.02. All construction, alterations and repair work done by or
for Tenant shall (a) be performed in such a manner as to maintain harmonious
labor relations; (b) not adversely affect the safety of the Project, the
Building or the Premises or the systems thereof and not affect the Central
Systems of the Building; (c) comply with all building, safety, fire, plumbing,
electrical, and other codes and governmental and insurance requirements; (d) not
result in any usage in excess of Building Standard of water, electricity, gas,
or other utilities or of heating, ventilating or air-conditioning (either during
or after such work); (e) be completed promptly and in a good and workmanlike
manner and in compliance with, and subject to, all of the provisions of the
Lease; and (f) not disturb Landlord or other tenants in the Building. After
completion of any alterations to the Premises, Tenant will deliver to Landlord a
copy of reproducible "as built" plans and specifications depicting and
describing such alterations.
Section 10.03. All leasehold improvements, alterations and other physical
additions made to or installed by or for Tenant in the Premises shall be and
remain Landlord's property (except for Tenant's furniture, personal property and
movable trade fixtures). Tenant agrees to remove, at its sole cost and expense,
all of Tenant's furniture, personal property and movable trade fixtures from the
Premises, on or before the Expiration Date or any earlier date of termination of
this Lease. Tenant shall repair, or promptly reimburse Landlord for the cost of
repairing, all damage done to the Premises or the Building by such removal. If
Tenant fails to remove any of Tenant's furniture, personal property or movable
trade fixtures by the Expiration Date or any sooner date of termination of the
Lease or, if Tenant fails to remove any leasehold improvements, alterations and
other physical additions made by Tenant to the Premises which Landlord advised
Tenant at the time of installation were to be removed at the end of the Term,
Landlord shall have the right, on the fifth (5th) day after Landlord's delivery
of written notice to Tenant, to deem such property abandoned by Tenant and to
remove and store such items and on the thirtieth (30th) day following such
notice, to sell, discard or otherwise deal with or dispose of such abandoned
property in a commercially reasonable manner. Tenant shall be liable for all
costs of such disposition of Tenant's abandoned property, and Landlord shall
have no liability to Tenant in any respect regarding such property of Tenant.
The provisions of this Section 10.03 shall survive the expiration or any earlier
termination of this Lease.
ARTICLE 11
LIENS
Section 11.01. Tenant shall keep the Project, the Building and the
Premises and Landlord's interest therein from any liens arising from any work
performed, materials furnished, or obligations incurred by, or on behalf of
Tenant. Notice is hereby given that neither Landlord nor any mortgagee or lessor
of Landlord shall be liable for any labor or materials furnished to Tenant,
except as furnished to Tenant by Landlord pursuant to Exhibit C. If any lien is
filed for such work or materials, such lien shall encumber only Tenant's
interest in leasehold improvements on the Premises. Within thirty (30) days
after Tenant learns of the filing of any such lien, Tenant shall either
discharge and cancel such lien of record, or if Tenant disputes such lien, post
a bond, or provide other security or evidence of ability to pay satisfactory to
Landlord or sufficient under the laws of the State of Texas to cover the amount
of the lien claim plus
10
any penalties, interest, attorneys' fees, court costs, and other legal expenses
in connection with such lien. If Tenant fails to so discharge or bond such lien
within thirty (30) calendar days after written demand from Landlord, Landlord
shall have the right, at Landlord's option, to pay the full amount of such lien
without inquiry into the validity thereof, and Landlord shall be promptly
reimbursed by Tenant, as Additional Rent, for all amounts so paid by Landlord,
including expenses, interest, and attorneys' fees.
ARTICLE 12
USE AND COMPLIANCE WITH LAWS
Section 12.01. The Premises shall be used only for executive and
administrative offices for the conduct of Tenant's business limited to the uses
specifically set forth in Section 1.01U and for no other purposes whatsoever.
Tenant shall use and maintain the Premises in a clean and lawful manner and
shall not allow within the Premises, any offensive noise, odor, conduct or
private or public nuisance or permit Tenant's employees, agents, licensees or
invitees to create a public or private nuisance or act in a disorderly manner
within the Building or in the Project. Landlord represents that any certificate
of occupancy issued with respect to the Premises shall allow use for executive
and administrative offices.
Section 12.02. Tenant shall, at Tenant's sole expense, (a) comply with all
laws, orders, ordinances, and regulations of federal, state, county, and
municipal authorities having jurisdiction over the Premises, (b) comply with any
directive, order or citation made pursuant to law by any public officer
requiring abatement of any nuisance or which imposes upon Landlord or Tenant any
duty or obligation arising from Tenant's occupancy or use of the Premises or
from conditions which have been created by or at the request or insistence of
Tenant, or required by reason of a breach of any of Tenant's obligations
hereunder or by or through other fault of Tenant, (c) comply with all insurance
requirements applicable to the Premises and (d) indemnify and hold Landlord
harmless from any loss, cost, claim or expense which Landlord incurs or suffers
by reason of Tenant's failure to comply with its obligations under clauses (a),
(b) or (c) above. If Tenant receives notice of any such directive, order
citation or of any violation of any law, order, ordinance, regulation or any
insurance requirement, Tenant shall promptly notify Landlord in writing of such
alleged violation and furnish Landlord with a copy of such notice.
ARTICLE 13
DEFAULT AND REMEDIES
Section 13.01. The occurrence of any one or more of the following events
shall constitute an Event of Default (herein so called) of Tenant under this
Lease: (a) if Tenant fails to pay any Rent hereunder as and when such Rent
becomes due and such failure shall continue for more than ten (10) days after
Landlord gives Tenant written notice of past due Rent; (b) if Tenant fails to
pay Rent on time more than twice in any period of twelve (12) months; (c) if
Tenant dissolves its business, other than in connection with a merger or
consolidation where a survivor entity assumes the obligations of Tenant; (d) if
any petition is filed by or against Tenant or any guarantor of this Lease under
any present or future section or chapter of the Bankruptcy Code, or under any
similar law or statute of the United States or any state thereof (which, in the
case of an involuntary proceeding, is not permanently discharged, dismissed,
stayed, or vacated, as the case may be, within ninety (90) days of
commencement), or if any order for relief shall be entered against Tenant or any
guarantor of this Lease in any such proceedings; (e) if Tenant or any guarantor
of this Lease becomes insolvent or makes a transfer in fraud of creditors or
makes an assignment for the benefit of creditors; (f) if a receiver, custodian,
or trustee is appointed for the Premises or for all or substantially all of the
assets of Tenant or of any guarantor of this Lease, which appointment is not
vacated within ninety (90) days following the date of such appointment; or (g)
if Tenant fails to perform or observe any other terms of this Lease and such
failure shall continue for more than thirty (30) days after Landlord gives
Tenant notice of such failure, or, if such failure cannot be corrected within
such thirty (30) day period, if Tenant does not commence to correct such default
within said thirty (30) day period and thereafter diligently prosecute the
correction of same to completion within a reasonable time.
Section 13.02. Upon the occurrence of any Event of Default, Landlord shall
have the right, at Landlord's option, to elect to do any one or more of the
following without further notice or demand to Tenant:
(a) terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord, and, if Tenant fails to so surrender,
Landlord shall have the right to enter upon and take possession of the
Premises and to expel or remove Tenant and its effects without being
liable for prosecution or any claim for damages therefor; and Tenant
shall, and hereby agrees to, indemnify Landlord for all loss and damage
which Landlord suffers by reason of such termination, including damages in
an amount equal to the total of (1) the costs of recovering the Premises
and all other expenses incurred by Landlord in connection with Tenant's
default; (2) the unpaid Rent earned as of the date of termination, plus
interest at the Interest Rate; (3) the total Rent which Landlord would
have received under this Lease for the remainder of the Term, but
discounted to the then present value at a rate of eight percent (8%) per
annum, minus the fair market rental value for the balance of the Term,
determined as of the time of such default, discounted to the then present
value at a rate of eight percent (8%) per annum; and (4) all other sums of
money and damages owing by Tenant to Landlord; or
(b) enter upon and take possession of the Premises without
terminating this Lease and without being liable to prosecution or any
claim for damages therefor, and, if Landlord elects, relet the Premises on
such terms as Landlord deems advisable, in which event Tenant shall pay to
Landlord on demand the cost of repossession renovating ,repairing and
altering the Premises for a new tenant or tenants and any deficiency
between the Rent payable hereunder and the rent paid under such reletting;
provided, however, that Tenant
11
shall not be entitled to any excess payments received by Landlord from
such reletting. Landlord's failure to relet the Premises shall not release
or affect Tenant's liability for Rent or for damages; or
(c) enter the Premises without terminating this Lease and without
being liable for prosecution or any claim for damages therefor and
maintain the Premises and repair or replace any damage thereto or do
anything for which Tenant is responsible hereunder. Tenant shall reimburse
Landlord immediately upon demand for any expenses, which Landlord incurs
in thus effecting Tenant's compliance under this Lease, and Landlord shall
not be liable to Tenant for any damages with respect thereto.
Section 13.03. No agreement to accept a surrender of the Premises and no
act or omission by Landlord or Landlord's agents during the Term shall
constitute an acceptance or surrender of the Premises unless made in writing and
signed by Landlord. No re-entry or taking possession of the Premises by Landlord
shall constitute an election by Landlord to terminate this Lease unless a
written notice of such intention is given to Tenant. No provision of this Lease
shall be construed as an obligation upon Landlord to mitigate Landlord's damages
under the Lease.
Section 13.04. No provision of this Lease shall be deemed to have been
waived by Landlord unless such waiver is in writing and signed by Landlord.
Landlord's acceptance of Rent following an Event of Default hereunder shall not
be construed as a waiver of such Event of Default. No custom or practice which
may grow up between the parties in connection with the terms of this Lease shall
be construed to waive or lessen Landlord's right to insist upon strict
performance of the terms of this Lease, without a written notice thereof to
Tenant from Landlord.
Section 13.05. The rights granted to Landlord in this Article 13 shall be
cumulative of every other right or remedy provided in this Lease or which
Landlord may otherwise have at law or in equity or by statute, and the exercise
of one or more rights or remedies shall not prejudice or impair the concurrent
or subsequent exercise of other rights or remedies or constitute a forfeiture or
waiver of Rent or damages accruing to Landlord by reason of any Event of Default
under this Lease.
ARTICLE 14
INSURANCE
Section 14.01. A. Tenant, at its sole expense, shall obtain and keep in
force during the Term the following insurance: (a) "All Risk" insurance insuring
all property located in the Premises, including furniture, equipment, fittings,
installations, fixtures, supplies and any other personal property ("Tenant's
Property"), in an amount equal to the full replacement value; (b) Comprehensive
general public liability insurance including personal injury, bodily injury,
broad form property damage, operations hazard, owner's protective coverage,
contractual liability, with a a severability of interests clause to cover
Tenant's indemnities set forth herein, and products and completed operations
liability, in limits not less than $1,000,000.00 inclusive per occurrence; (c)
Worker's Compensation and Employer's Liability insurance, with a waiver of
subrogation endorsement, in form and amount as required by applicable law; and
(d) In the event Tenant performs any repairs or alterations in the Premises,
Builder's Risk insurance on an "All Risk" basis (including collapse) on a
completed value (non-reporting) form for full replacement value covering all
work incorporated in the Building and all materials and equipment in or about
the Premises; and (e) Improvements and Betterments coverage.
B. Tenant shall have the right to include the insurance required by
Section 14.01A under Tenant's policies of "blanket insurance." All certificates
of insurance evidencing such coverage shall name Tenant as named insured
thereunder and shall name Landlord and all mortgagees and lessors of Landlord of
which Tenant has been notified, additional insureds, all as their respective
interest may appear. All such certificates shall be issued by insurers
acceptable to Landlord and in form satisfactory to Landlord. Tenant shall
deliver to Landlord certificates by the Commencement Date and, with respect to
renewals of such policies, not later than fifteen (15) days prior to the end of
the expiring term of coverage. All policies of insurance shall be primary and
non-contributing. All such policies and certificates shall contain an agreement
by the insurers to notify Landlord and any mortgagee or lessor of Landlord in
writing, by Registered U.S. mail, return receipt requested, not less than thirty
(30) days before any material change, reduction in coverage, cancellation,
including cancellation for nonpayment of premium.
Section 14.02. Landlord shall insure the Building against damage with
casualty and comprehensive general public liability insurance, all in such
amounts and with such deductible as Landlord reasonably deems appropriate.
Notwithstanding any contribution by Tenant to the cost of insurance premiums, as
provided hereinabove, Landlord shall not be required to carry insurance of any
kind on Tenant's Property, and Tenant hereby agrees that Tenant shall have no
right to receive any proceeds from any insurance policies carried by Landlord.
Section 14.03. Tenant shall not knowingly conduct or permit to be
conducted in the Premises any activity, or place any equipment in or about the
Premises or the Building, which will invalidate the insurance coverage in effect
or increase the rate of fire insurance or other insurance on the Premises or the
Building, and Tenant shall comply with all requirements and regulations of
Landlord's casualty and liability insurer. In no event shall Tenant introduce or
permit to be kept on the Premises or brought into the Building any dangerous,
noxious, radioactive or explosive substance.
Section 14.04. Landlord and Tenant each hereby waive any right of
subrogation and right of recovery or cause of action for injury or loss to the
extent that such injury or loss is covered by fire, extended coverage, "All
Risk" or similar policies covering real property or personal property (or which
would have been covered if Tenant
12
or Landlord, as the case may be, was carrying the insurance required by this
Lease). Said waivers shall be in addition to, and not in limitation or
derogation of, any other waiver or release contained in this Lease.
ARTICLE 15
DAMAGE BY FIRE OR OTHER CAUSE
Section 15.01. If the Building or any portion thereof is damaged or
destroyed by any casualty to the extent that, in Landlord's reasonable judgment,
(a) repair of such damage or destruction would not be economically feasible, or
(b) the damage or destruction to the Building cannot be repaired within two
hundred seventy (270) days after the date of such damage or destruction, or if
proceeds from Landlord's insurance remaining after any required payment to any
mortgagee or lessor Landlord are insufficient to repair such damage or
destruction, Landlord shall have the right, at Landlord's option, to terminate
this Lease by giving notice of such termination, within sixty (60) days after
the date of such damage or destruction. If such damage or destruction shall
occur in the final year of this Lease, Landlord shall have the right to
terminate this Lease by giving written notice of such termination, within sixty
(60) days after the date of such damage or destruction.
Section 15.02. If the Premises or any portion thereof is damaged or
destroyed by any casualty and such damage materially impairs the operation of
the business of Tenant, or if the Premises are so impaired that it is materially
impairs the operation of the business of Tenant and if, in Landlord's reasonable
opinion, the Premises cannot be rebuilt or made fit for Tenant's purposes within
one hundred fifty (150) after the date of such damage or destruction, then
either Landlord or Tenant shall have the right, at the option of either party,
to terminate this Lease by giving the other written notice, within sixty (60)
days after such damage or destruction. If the Premises or any portion thereof is
damaged or destroyed by any casualty and, in Landlord's reasonable judgement,
the proceeds from Landlord's insurance remaining after any required payment to
any mortgagee or lessor of Landlord are insufficient to repair such damage or
destruction, Landlord shall have the right, at Landlord's option, to terminate
this Lease by giving Tenant written notice of termination, within sixty (60)
days after such damage or destruction.
Section 15.03. In the event of partial destruction or damage to the
Building or the Premises which is not subject to Section 15.01 or 15.02, but
which renders the Premises partially but not wholly untenantable, this Lease
shall not terminate and Rent shall be abated in proportion to the area of the
Premises which, in Landlord's reasonable opinion, cannot be used or occupied by
Tenant as a result of such casualty. Landlord shall in such event, within a
reasonable time after the date of such destruction or damage, subject to tenant
delay and to the extent and availability of insurance proceeds, restore the
Premises to as near the same condition as existed prior to such partial damage
or destruction. In no event shall Rent abate or shall any termination occur if
damage to or destruction of the Premises is the result of the negligence or
willful misconduct of Tenant, or Tenant's agents, employees, representatives,
contractors or successors.
Section 15.04. If the Building or the Premises or any portion greater than
20% thereof is destroyed by fire or other causes at any time during the last two
years of the Term, then either Landlord or Tenant shall have the right, at the
option of either party, to terminate this Lease by giving written notice to the
other within sixty (60) days after the date of such destruction.
Section 15.05. Landlord shall have no liability to Tenant for
inconvenience, loss of business, or annoyance arising from any repair of any
portion of the Premises or the Building. If Landlord is required by this Lease
or by any mortgagee or lessor of Landlord to repair, or if Landlord undertakes
to repair, Landlord shall use reasonable efforts to have such repairs made
promptly and in a manner which will not unnecessarily interfere with Tenant's
occupancy.
Section 15.06. In the event of termination of this Lease pursuant to
Sections 15.01, 15.02, or 15.04, then all Rent shall be apportioned and paid to
the date on which possession is relinquished or the date of such damage,
whichever last occurs, and Tenant shall immediately vacate the Premises
according to such notice of termination; provided, however, that those
provisions of this Lease which are designated to cover matters of termination
and the period thereafter shall survive the termination hereof.
ARTICLE 16
CONDEMNATION
Section 16.01. In the event any portion of the Building, the Premises or
the Project are taken or condemned by eminent domain or by any conveyance in
lieu thereof (such taking, condemnation or conveyance in lieu thereof being
hereinafter referred to as "condemnation"), which taking, in Landlord's
judgment, is such that the Building or the Premises cannot be restored in an
economically feasible manner for use substantially as originally designed, then
either Landlord or Tenant shall have the right to terminate this Lease, by
giving written notice of termination within sixty (60) days of notice of the
proposed taking and Rent shall be apportioned as of the date of such
termination.
Section 16.02. In the event any portion of the Parking Facilities shall be
taken by condemnation, which taking in Landlord's judgment is such that the
Parking Facilities cannot be restored in an economically feasible
13
manner for use substantially as originally designed, including in such
consideration the possible use of additional parking facilities in the vicinity
of the Building, then Landlord shall have the right, at Landlord's option, to
terminate this Lease, effective as of the date specified by Landlord in a
written notice of termination from Landlord to Tenant.
Section 16.03. In the event that a portion of the Premises shall be taken
by condemnation, and this Lease is not terminated pursuant to Section 16.01,
then this Lease shall be terminated as of the date of such condemnation as to
the portion of the Premises so taken, and this Lease shall remain in full force
and effect as to the remainder of the Premises.
Section 16.04. All compensation awarded or paid upon a condemnation of any
portion of the Project shall belong to and be the property of Landlord without
participation by Tenant. Nothing herein shall be construed, however, to preclude
Tenant from prosecuting any claim directly against the condemning authority for
loss of business, loss of good will, moving expenses, damage to, and cost of
removal of, trade fixtures, furniture and other personal property belonging to
Tenant; provided, however, that Tenant shall make no claim which shall diminish
or adversely affect any award claimed or received by Landlord.
Section 16.05. If any portion of the Project other than the Building or
the Parking Facilities is taken by condemnation, or if the temporary use or
occupancy of all or any part of the Premises shall be taken by condemnation
during the Term, this Lease shall be and remain unaffected by such condemnation,
and Tenant shall continue to pay in full the Rent payable hereunder.
ARTICLE 17
INDEMNIFICATION
Section 17.01. Tenant shall and hereby agrees to, indemnify and hold
Landlord harmless from any damages in connection with loss of life, bodily or
personal injury, or property damages arising from an occurrence in the Premises,
when not solely the result of the gross negligence or willful misconduct of
Landlord, its agents, employees, representatives, contractors, licensees and
invitees. Tenant and its agents, employees, representatives, contractors,
licensees and invitees, hereby waive all claims against Landlord for damage to
any property or injury to, or death of, any person in, upon, or about the
Project, including the Premises, arising at any time and from any cause other
than solely by reason of the gross negligence or willful misconduct of Landlord,
its agents, employees, representatives, or contractors. Without limiting the
generality of the foregoing, Landlord shall not be liable for any injury or
damage to persons or property resulting from the condition or design of, or any
defect in the Building or its mechanical systems or equipment which may exist or
occur or from any fire, explosion, falling plaster, steam, gas, electricity,
water, rain, flood, snow, or leaks from any part of the Premises or from the
pipes, appliances, plumbing works, roof, or subsurface of any floor or ceiling,
or from the street or any other place, or by dampness or by any other similar
cause unless the same is caused solely by the gross negligence or willful
misconduct of Landlord, its agents, employees, representatives or contractors.
Landlord shall not be liable for any such damage caused by other tenants or
persons in the Building or by occupants of adjacent property thereto, or by the
public, or caused by construction (unless caused solely by the gross negligence
or willful misconduct of Landlord) or by any private, public or quasi-public
work. The provisions of this Article 17 shall survive the expiration or
termination of this Lease with respect to any damage, injury, or death occurring
before such expiration or termination.
Section 17.02. Landlord shall, and hereby agrees to, indemnify and hold
Tenant harmless from any damages in connection with loss of life, bodily or
personal injury or property damage arising from any occurrence in the Common
Areas of the Project when not solely the result of the gross negligence or
willful misconduct of Tenant, and its agents, employees, representatives,
contractors, licensees, and invitees.
ARTICLE 18
SUBORDINATION AND ESTOPPEL CERTIFICATES
Section 18.01. This Lease and all rights of Tenant hereunder are subject
and subordinate to all underlying leases now or hereafter in existence, and to
any supplements, amendments, modifications, and extensions of such leases
heretofore or hereafter made and to any deeds to secure debt, mortgages, or
other security instruments which now or hereafter cover all or any portion of
the Project or any interest of Landlord therein, and to any advances made on the
security thereof, and to any increases, renewals, modifications, consolidations,
replacements, and extensions of any of such mortgages. This provision is
declared by Landlord and Tenant to be self-operative and no further instrument
shall be required to effect such subordination of this Lease. Upon demand,
Tenant shall execute, acknowledge, and deliver to Landlord any further
instruments and certificates evidencing such subordination as Landlord, and any
mortgagee or lessor of Landlord shall reasonably require. Tenant shall not
unreasonably withhold, delay, or defer its written consent reasonable
modifications in this Lease which are a condition of any financing for the
Project or any reciprocal easement agreement with facilities in the vicinity of
the Building, provided that such modifications do not increase the obligations
of Tenant hereunder or materially and adversely affect Tenant's use and
enjoyment of the Premises.
Section 18.02. Notwithstanding the generality of the foregoing provisions
of Section 18.01, any mortgagee or lessor of Landlord shall have the right at
any time to subordinate any such mortgage or underlying lease to this Lease, or
to any of the provisions hereof, on such terms and subject to such conditions as
such mortgagee or lessor of Landlord may consider appropriate in its discretion.
At any time, before or after the institution of any proceedings for the
foreclosure of any such mortgage, or the sale of the Building under any such
mortgage, or the termination of any
14
underlying lease, Tenant shall, upon request of such mortgagee or any person or
entities succeeding to the interest of such mortgagee or the purchaser at any
foreclosure sale ("Successor Landlord"), automatically become the Tenant (or if
the Premises has been validly subleased, the subtenant) of the Successor
Landlord, without change in the terms or other provisions of this Lease (or, in
the case of a permitted sublease, without change in this Lease or in the
instrument setting forth the terms of such sublease); provided, however, that
the Successor Landlord, if Tenant shall have had prior written notice of the
mortgage of the Project, shall not be (i) bound by any payment made by Tenant of
Rent or Additional Rent for more than one (1) month in advance, except for a
Security Deposit previously paid to Landlord, (ii) bound by any termination,
modification, amendment or surrender of the Lease done without the Successor
Landlord's consent after Tenant has been notified of the Successor Landlord's
interest in the Project, (iii) liable for any damages or subject to any offset
or defense by Tenant to the payment of Rent by reason of any act or omission of
any prior landlord (including Landlord), unless written notice thereof shall
have been provided to Successor Landlord, or (iv) personally or corporately
liable, in any event, beyond the limitations on landlord liability set forth in
Section 25.05 of this Lease. This agreement of Tenant to attorn to a Successor
Landlord shall survive any such foreclosure sale, trustee's sale conveyance in
lieu thereof or termination of any underlying lease. Tenant shall upon demand at
any time, before or after any such foreclosure or termination execute,
acknowledge, and deliver to the Successor Landlord any written instruments and
certificates evidencing such attornment as such Successor Landlord may
reasonably require.
Section 18.03. Tenant shall, from time to time, within ten (10) days after
request from Landlord, or from any mortgagee or lessor of Landlord, execute,
acknowledge and deliver in recordable form a certificate certifying, to the
extent true, that this Lease, as the Lease may have been amended, is in full
force and effect; that the Term has commenced and the full amount of the Rent
then accruing hereunder; the dates to which the Rent has been paid; that Tenant
has accepted possession of the Premises and that any improvements required by
the terms of this Lease to be made by Landlord have been completed to the
satisfaction of Tenant; the amount, if any, that Tenant has paid to Landlord as
a Security Deposit; that no Rent under this Lease has been paid more than thirty
(30) days in advance of its due date; that the address for notices to be sent to
Tenant is as set forth in this Lease, or has been changed as set forth in the
certificate; that Tenant has no charge, lien, or claim of offset under this
Lease or otherwise against Rent or other charges due or to become due hereunder;
that, to the knowledge of Tenant, Landlord is not then in default under this
Lease; and such other matters as may be reasonably requested by Landlord or any
mortgagee or lessor of Landlord. Any such certificate may be relied upon by
Landlord, any Successor Landlord, or any mortgagee or lessor of Landlord.
Landlord agrees periodically to furnish, when reasonably requested in writing by
Tenant, certificates signed by Landlord containing information similar to the
foregoing information.
Section 18.04. No act or failure to act on the part of Landlord which
would entitle Tenant under the terms of this Lease, or by law, to be relieved of
Tenant's obligations hereunder or to terminate this Lease, shall result in a
release of such obligations or a termination of this Lease unless (a) Tenant has
given notice by registered or certified mail to any mortgagee or lessor of
Landlord whose address shall have been furnished to Tenant, and (b) Tenant
offers such mortgagee or lessor of Landlord a reasonable opportunity to cure the
default, including time to obtain possession of the Premises by power of sale or
judicial foreclosure, if such should prove necessary to effect a cure.
ARTICLE 19
SURRENDER OF THE PREMISES
Section 19.01. By no later than 11:59 p.m. of the Expiration Date or the
date of earlier termination of this Lease, or upon any re-entry of the Premises
by Landlord without terminating this Lease pursuant to Section 13.02(b), Tenant,
at Tenant's sole cost and expense, shall peacefully vacate and surrender the
Premises to Landlord in good order, broom clean and in the same condition as at
the beginning of the Term or as the Premises may thereafter have been improved,
reasonable use and wear thereof and repairs which are Landlord's obligations
under Articles 9, 15 and 16 only excepted, and Tenant shall remove all of
Tenant's Property and turn over all keys for the Premises to Landlord.
Section 19.02. Should Tenant continue to hold the Premises after the
expiration or earlier termination of this Lease, such holding over, unless
otherwise agreed to by Landlord in writing, shall constitute and be construed as
a tenancy at sufferance at monthly installments of Rent equal to one hundred
fifty percent (150%) of the monthly portion of Base Rent in effect as of the
date of expiration or earlier termination, plus Tenant's Operating Costs
Payment, and subject to all of the other terms, charges and expenses set forth
herein except any right to renew this Lease or to expand the Premises or any
right to additional services. The provisions of this Article 19 shall survive
the expiration or earlier termination of this Lease. Notwithstanding anything to
the contrary, in the event Landlord and Tenant are involved in negotiations for
an extension at the expiration of the second renewal term set forth in Article
28 below, the holdover rent shall not go into effect until the earlier of (i)
the termination of such negotiations, other than upon execution of a lease or
renewal, or (ii) the expiration of thirty (30) days.
ARTICLE 20
LANDLORD'S RIGHT TO INSPECT
Section 20.01. Landlord shall retain duplicate keys to all doors of the
Premises. Tenant shall provide Landlord with new keys should Tenant receive
Landlord's consent to change the locks. Landlord shall have the right to enter
the Premises at reasonable hours upon reasonable notice (or, in the event of an
emergency, at any hour); provided, however, Landlord shall use reasonable
efforts to minimize interference with Tenant's business. Landlord shall not be
liable to Tenant for the exercise of Landlord's rights under this Article 20 and
Tenant hereby waives any
15
claims for damages for any injury, inconvenience or interference with Tenant's
business, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss occasioned thereby.
ARTICLE 21
SECURITY DEPOSIT
Section 21.01 A. On the date Landlord delivers the Premises to Tenant in
Tenant Finish Ready Condition, Tenant shall deposit $1,850,000.00 in cash (the
"Security Deposit") to be held in escrow by Frost National Bank or other bank
selected by Tenant and satisfactory to Landlord, which shall not be unreasonably
withheld (the "Escrow Agent"). Prior to the occurrence of a monetary Event of
Default or, if applicable, the date Tenant has net working capital below the
Working Capital Minimum (as defined below) determined as provided below,
interest may be periodically distributed to Tenant. After the occurrence of a
monetary Event of Default or Tenant's falling below the Working Capital Minimum,
if applicable, all undistributed accrued interest shall become part of the
Security Deposit. Tenant shall not assign or in any way encumber the Security
Deposit.
B. Upon the occurrence of any monetary Event of Default by Tenant,
Landlord shall have the right, without prejudice to any other remedy, to submit
a sworn affidavit executed by Landlord stating that Tenant is in default under
the Lease and that the cure period for such default has expired (specifically
setting forth the Event of Default) and the monetary amount necessary to cure
such default. A copy of such notice shall be sent to Tenant. Unless within five
(5) Business Days from such notice, Tenant shall have filed suit to enjoin such
payment and served a copy thereof on Landlord and Escrow Agent, Escrow Agent
shall on the sixth (6th ) Business Day pay to Landlord out of the Security
Deposit the amount set forth in the notice from Landlord without any approval
needed from Tenant. If the entire Security Deposit is paid to Landlord as set
forth in this Section, Landlord shall be entitled to the undistributed accrued
interest on the Security Deposit to the extent necessary to cure monetary Events
of Default.
C. If there have been no monetary Events of Default by Tenant as of the
first anniversary of the Commencement Date, the Security Deposit shall be
reduced to $1,100,000.00 and the Escrow Agent shall return $750,000.00 to
Tenant. If there have been no monetary Events of Default by Tenant as of the
second (2nd) anniversary of the Commencement Date (the "Security Deposit
Termination Date"), the Security Deposit and all undistributed accrued interest
thereon shall be returned to Tenant. Provided, however, if during such two year
period there is a monetary Event of Default by Tenant, the Security Deposit
Termination Date shall be extended until Tenant has not had a monetary Event of
Default for at least two consecutive years and notwithstanding anything
contained in this paragraph to the contrary, Escrow Agent shall hold the
Security Deposit (in the amount then held by Escrow Agent) until the Security
Deposit Termination Date. Provided, further, in the event that Billing Concepts
Corp., a Delaware corporation has been released (the "Guaranty Release Date")
from its obligations to unconditionally guarantee Tenant's performance under
this Lease as set forth in that certain Guaranty executed by Billing Concepts
Corp. contemporaneously with this Lease, if at any time prior to the Security
Deposit Termination Date, Tenant has net working capital of less than
$30,000,000.00 ("Working Capital Minimum"), the Security Deposit shall be held
by Escrow Agent until Tenant has had net working capital in excess of the
Working Capital Minimum for two consecutive fiscal quarters of Tenant. For the
purposes hereof, "net working capital" shall be defined as current assets
(consisting of cash and accounts receivable) minus current liabilities
(including without limitation accounts payable and the current portion of long
term debt) all determined pursuant to generally accepted accounting principles,
consistently applied. Following the Guaranty Release Date, but prior to the
Security Deposit Termination Date, and thereafter if the same shall be extended,
Tenant shall quarterly submit to Landlord a statement of Net Working Capital
certified to be correct by Tenant's outside certified public accountants; such
statement to be delivered to Landlord within 60 days of the end of each of
Tenant's fiscal quarters. If Landlord receives from Tenant a statement
indicating that Tenant is below the Working Capital Minimum, Landlord will
promptly forward a copy of such financial report to Escrow Agent. On the
Security Deposit Termination Date, the Security Deposit shall be released and
delivered to Tenant upon submission by Tenant to Escrow Agent of a sworn
affidavit stating that all conditions to the release the Security Deposit have
been satisfied. A copy of such notice shall be sent to Landlord. Unless within
five (5) Business Days following such notice from Tenant, Landlord shall have
filed suit to enjoin the release of the Security Deposit and served a copy
thereof on Escrow Agent or Tenant, Escrow Agent shall on the sixth (6th)
Business Day following such notice from Tenant release the Security Deposit to
Tenant, without any approval needed from Landlord.
ARTICLE 22
BROKERAGE
Section 22.01. Landlord shall pay to Tenant's exclusive broker, Mark A.
Vickery, Mark A. Vickery Interests, Inc., a commission pursuant to a separate
written agreement. Tenant and Landlord each represent and warrant to the other
that it has not entered into any agreement with, or otherwise had any dealings
with, any broker or agent in connection with the negotiation or execution of
this Lease which could form the basis of any claim by any such broker or agent
for a brokerage fee or commission, finder's fee, or any other compensation of
any kind or nature in connection herewith, other than with Broker, and each
party shall, and hereby agrees to, indemnify and hold the other harmless from
all costs (including court costs, investigation costs, and attorneys' fees),
expenses, or liability for commissions or other compensation claimed by any
broker or agent with respect to this Lease which arise out of any agreement or
dealings, or alleged agreement or dealings, between the indemnifying party and
any such agent or broker, other than with Broker. This provision shall survive
the expiration or earlier termination of this Lease.
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ARTICLE 23
OBSERVANCE OF RULES AND REGULATIONS
Section 23.01. Tenant and Tenant's servants, employees, agents, visitors,
and licensees shall observe faithfully and comply strictly with all Rules and
Regulations (herein so called) attached to this Lease as such Rules and
Regulations may be changed from time to time. Landlord shall at all times have
the right to make reasonable changes in and additions to such Rules and
Regulations; provided Landlord gives Tenant prior notice of such changes and
provided that such new rules and regulations or changes in existing rules and
regulations do not conflict with this Lease, and do not materially interfere
with the lawful conduct of Tenant's business in the Premises. Landlord shall not
be liable to Tenant for the failure or refusal by any other tenant, guest,
invitee, visitor, or occupant of the Building to comply with any of the Rules
and Regulations.
ARTICLE 24
NOTICES
Section 24.01. All notices, consents, demands, requests, documents, or
other communications (other than payment of Rent) required or permitted
hereunder (collectively, "notices") shall be deemed given, whether actually
received or not, when dispatched for hand delivery or delivery by air express
courier (with signed receipts) to the other party, or on the second Business Day
after deposit in the United States mail, postage prepaid, certified, return
receipt requested, except for notice of change of address which shall be deemed
given only upon actual receipt, or on the same Business Day if sent by
telecopier prior to 5:00 p.m., local Austin, Texas time, and the sending
telecopier generates a written confirmation of sending and the providing party
follows up with a hard copy of such notice being sent the same Business Day via
another approved method for notice as provided in this Section 24.01. The
addresses of the parties for notices are set forth in Article 1, or any such
other addresses subsequently specified by each party in notices given pursuant
to this Section 24.01.
ARTICLE 25
MISCELLANEOUS
Section 25.01. PROFESSIONAL FEES. In any action or proceeding brought by
either party against the other under this Lease, the prevailing party shall be
entitled to recover from the other party its professional fees for attorneys,
appraisers and accountants, its investigation costs, and any other legal
expenses and court costs incurred by the prevailing party in such action or
proceeding.
Section 25.02. REIMBURSEMENTS. Wherever the Lease requires Tenant to
reimburse Landlord for the cost of any item, such costs will be the reasonable
and customary charge periodically established by Landlord for such item,
including a fee for Landlord's manager's supervision in connection with
providing such item.
Section 25.03. SEVERABILITY. Every agreement contained in this Lease is,
and shall be construed as, a separate and independent agreement. If any term of
this Lease or the application thereof to any person or circumstances shall be
invalid or unenforceable, the remaining agreements contained in this Lease shall
not be affected.
Section 25.04. NON-MERGER. There shall be no merger of this Lease with any
ground leasehold interest or the fee estate in the Project or any part thereof
by reason of the fact that the same person may acquire or hold, directly or
indirectly, this Lease or any interest in this Lease as well as any ground
leasehold interest or fee estate in the Project or any interest in such fee
estate.
Section 25.05. LANDLORD'S LIABILITY. Anything contained in this Lease to
the contrary notwithstanding, Tenant agrees that Tenant shall look solely to the
estate and property of Landlord in the Project for the collection of any
judgment or other judicial process requiring the payment of money by Landlord
for any default or breach by Landlord under this Lease, subject, however, to the
prior rights of any mortgagee or lessor of the Project. No other assets of
Landlord or any partners, shareholders, or other principals of Landlord shall be
subject to levy, execution or other judicial process for the satisfaction of
Tenant's claim.
Section 25.06. FORCE MAJEURE. Whenever the period of time is herein
prescribed for action to be taken by Landlord or Tenant, Landlord or Tenant
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 force majeure, which
term shall include strikes, riots, acts of God, shortages of labor or materials,
war, governmental approvals, laws, regulations, or restrictions, or any other
cause of any kind whatsoever which is beyond the reasonable control of Landlord
or Tenant. Force Majeure shall not excuse or delay Tenant's obligation to Rent
or any other amount due under this Lease.
Section 25.07. HEADINGS. The article headings contained in this Lease are
for convenience only and shall not enlarge or limit the scope or meaning of the
various and several articles hereof. Words in the singular number shall be held
to include the plural, unless the context otherwise requires. All agreements and
covenants herein contained shall be binding upon the respective heirs, personal
representatives, and successors and assigns of the parties thereto.
Section 25.08. SUCCESSORS AND ASSIGNS. All agreements and covenants herein
contained shall be binding upon the respective heirs, personal representatives,
successors and assigns or the parties hereto. If there be more
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than one Tenant, the obligations hereunder imposed upon Tenant shall be joint
and several. If there is a guarantor of Tenant's obligations hereunder, Tenant's
obligations shall be joint and several obligations of Tenant and such guarantor,
and Landlord need not first proceed against Tenant hereunder before proceeding
against such guarantor, and any such guarantor shall not be released from its
guarantee for any reason, including any amendment of this Lease, any forbearance
by Landlord or waiver of any of Landlord's rights, the failure to give Tenant or
such guarantor any notices, or the release of any party liable for the payment
or performance of Tenant's obligations hereunder. Notwithstanding the foregoing,
nothing contained in this Section 25.08 shall be deemed to override Article 8.
Section 25.09. LANDLORD'S REPRESENTATIONS. Neither Landlord nor Landlord's
agents or brokers have made any representations or promises with respect to the
Premises, the Building, the Parking Facilities, the Land, or any other portions
of the Project except as herein expressly set forth and all reliance with
respect to any representations or promises is based solely on those contained
herein. No rights, easements, or licenses are acquired by Tenant under this
Lease by implication or otherwise except as, and unless, expressly set forth in
this Lease.
Section 25.10. ENTIRE AGREEMENT; AMENDMENTS. This Lease and the Exhibits
and Riders attached hereto set forth the entire agreement between the parties
and cancel all prior negotiations, arrangements, brochures, agreements, and
understandings, if any, between Landlord and Tenant regarding the subject matter
of this Lease. No amendment or modification of this Lease shall be binding or
valid unless expressed in writing executed by both parties hereto.
Section 25.11. TENANT'S AUTHORITY. If Tenant signs as a corporation,
execution hereof shall constitute a representation and warranty by Tenant that
Tenant is a duly organized and existing corporation, that Tenant has been and is
qualified to do business in the State of Texas and in good standing with the
State of 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 action. If Tenant signs as a
partnership, trust, or other legal entity, execution hereof shall constitute a
representation and warranty by Tenant that Tenant has complied with all
applicable laws, rules, and governmental regulations relative to Tenant's right
to do business in the State of Texas, that such entity has the full right and
authority to enter into this Lease, and that all persons signing on behalf of
Tenant were authorized to do so by any and all necessary or appropriate
partnership, trust, or other actions.
Section 25.12. GOVERNING LAW. This Lease shall be governed by and
construed under the laws of the State of Texas. Any action brought to enforce or
interpret this Lease shall be brought in the court of appropriate jurisdiction
in Travis County, Texas. Should any provision of this Lease require judicial
interpretation, Landlord and Tenant hereby agree and stipulate that the court
interpreting or considering same shall not apply the presumption that the terms
hereof shall be more strictly construed against a party by reason of any rule or
conclusion that a document should be construed more strictly against the party
who itself or through its agents prepared the same, it being agreed that all
parties hereto have participated in the preparation of this Lease and that each
party had full opportunity to consult legal counsel of its choice before the
execution of this Lease.
Section 25.13. TENANT'S USE OF NAME OF THE BUILDING. Tenant shall not,
without the prior written consent of Landlord, use the name of the Building for
any purpose other than as the address of the business to be conducted by Tenant
in the Premises, and Tenant shall not do or permit the doing of anything in
connection with Tenant's business or advertising (including brokers' flyers
promoting sublease space) which in the reasonable judgment of Landlord may
reflect unfavorably on Landlord or the Building or confuse or mislead the public
as to any apparent connection or relationship between Tenant and Landlord, the
Building, or the Land.
Section 25.14. ANCIENT LIGHTS. Any elimination or shutting off of light,
air, or view by any structure which may be erected on lands adjacent to the
Building shall in no way affect this Lease and Landlord shall have no liability
to Tenant with respect thereto. Provided, however, notwithstanding the
foregoing, Landlord shall not construct any improvements on its adjacent
project, One Barton Skyway, or on the Project (other than improvements built in
substantial accordance with the Building Plans defined in Exhibit C attached
hereto) that would block Tenant's view of the Austin Central Business District
that Tenant may have as of the Commencement Date.
Section 25.15. CHANGES TO PROJECT BY LANDLORD. Landlord shall have the
unrestricted right to make changes to all portions of the Project in Landlord's
reasonable discretion for the purpose of improving access or security to the
Project or the flow of pedestrian and vehicular traffic therein. Landlord shall
have the right at any time, without the same constituting an actual or
constructive eviction and without incurring any liability to Tenant therefor, to
change the arrangement or location of entrances or passageways, doors and
doorways, corridors, elevators, stairs, bathrooms, or any other Common Areas so
long as reasonable access to the Premises remains available. Landlord shall also
have the right to (a) rearrange, change, expand or contract portions of the
Project constituting Common Areas (b) to use Common Areas while engaged in
making improvements, repairs or alterations to the Project, or any portion
thereof, and (c) to do and perform such other acts and make such other changes
in to or with respect to the Project, or any portion thereof, as Landlord may,
in the exercise of sound business judgment, deem to be appropriate. Landlord
shall be entitled to change the name or address of the Building or the Project.
Landlord shall have the right to close, from time to time, the Common Areas and
other portions of the Project for such temporary periods as Landlord deems
legally sufficient to evidence Landlord's ownership and control thereof and to
prevent any claim of adverse possession by, or any implied or actual dedication
to, the public or any party other than Landlord.
Section 25.16. TIME OF ESSENCE. Time is of the essence of
this Lease.
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Section 25.17. LANDLORD'S ACCEPTANCE OF LEASE. The submission of this
Lease to Tenant shall not be construed as an offer and Tenant shall not have any
rights with respect thereto unless Landlord executes a copy of this Lease and
delivers the same to Tenant.
Section 25.18. FINANCIAL STATEMENTS. So long as Tenant is a privately held
company, upon written request, not more often than annually, Tenant shall
provide Landlord with a current financial statement and financial statements of
the two (2) years prior to the current financial statement year. If Tenant is a
publicly held company, Tenant shall provide Landlord with a copy of any publicly
available financial statement of Tenant. Such statement shall be prepared in
accordance with generally accepted accounting principles and, if such is the
normal practice of Tenant, shall be audited by an independent certified public
accountant.
Section 25.19. SIGNAGE. Tenant shall have the right to install and display
a monument sign and the right to install and display not more than one building
mounted sign or identity on the facade of the Building (including Tenant's name
and corporate logo). The costs of installation, operation, maintenance and
removal of such signage shall be borne by Tenant. Such signage may include
signage on the "D" Wing or the central area of the Building, Tenant having first
choice of location. The location, size, quality, material and lighting for such
signage shall be approved and selected jointly by Tenant and Landlord, which
approval shall not be unreasonably withheld or delayed. Such signage shall be
subject to approval of the City of Austin. Landlord shall not allow there to be
more than two tenant identification signs mounted on the Building. Landlord
shall provide Tenant with Building standard signage for the Building directory
and the exterior of Tenant's main entrance to the Premises. Notwithstanding
anything in this Lease to the contrary, in the event that Tenant vacates,
deserts or abandons more than 50% of the Premises, then Landlord may remove
Tenant's building mounted sign at Tenant's expense.
Section 25.20. FIBER OPTICS/CONNECTION RIGHTS. Prior to completion of Base
Building Condition, Landlord shall select a telecommunications provider for the
Building, which provider shall make its service available to all tenants,
including Tenant, in the Building. Landlord grants Tenant the right to use
existing, or construct new conduits entering into and through the Building and
the right to install cables, equipment and other related telecommunications
facilities required for Tenant's network into and through the Building, subject
to Landlord's prior approval of plans for such conduits, cables, equipment and
other related telecommunications facilities.
ARTICLE 26
SUBSTITUTION SPACE
This Article is intentionally omitted.
ARTICLE 27
OTHER DEFINITIONS
When used in this Lease, the terms set forth hereinbelow shall have the
following meanings: (a) "Business Days" shall mean Monday through Friday (except
for Holidays); "Business Hours" shall mean 7 a.m. to 7 p.m. on Monday through
Friday and 9 a.m. to 3 p.m. on Saturdays (except for Holidays); and "Holidays"
shall mean those holidays designated by Landlord, which holidays shall be
consistent with those holidays designated by landlords of other first-class
office buildings in the Austin, Texas suburban area. (b) "Common Areas" shall
mean those certain areas and facilities of the Building and the Parking
Facilities and those certain improvements to the Land which are from time to
time provided by Landlord for the use of tenants of the Building and their
employees, clients, customers, licensees and invitees or for use by the public,
which facilities and improvements include any and all corridors, elevator
foyers, vending areas, bathrooms, electrical and telephone rooms, mechanical
rooms, janitorial areas and other similar facilities of the Building and of the
Parking Facilities and any and all grounds, parks, landscaped areas, outside
sitting areas, sidewalks, walkways, and generally all other improvements located
on the Land, or which connect the Land to other buildings. (c) The words "day"
or "days" shall refer to calendar days, except where "Business Days" are
specified. (d) "Net Rentable Area" shall mean (1) in the case of a single
tenancy floor, all floor area measured from the inside surface of the outer
glass of the Building, excluding only the areas ("Service Areas") within the
outside wall used for the Building's stairs, fire towers, elevator shafts,
vertical penetrations of the Building's central atrium, flues, vents, stacks,
pipe shafts, and vertical ducts (which areas shall be measured from the
mid-point of walls enclosing such areas, but including any Service Areas which
are for the specific use of the particular tenant, such as special stairs or
elevators, plus an allocation of the square footage of the Building's central
areas for providing telephone, electrical, mechanical, janitorial, security and
mail services, as well as, the central entry lobby, ground level elevator lobby
and service elevator lobby, central fire exit corridors, service exit corridor
and central loading dock (the "Central Areas") consistent with current BOMA/
American National Standard Institute single tenant standards, governed by BOMA
Southwest-Dallas, Texas, and (2) in the case of a floor to be occupied by more
than one tenant, all floor areas within the inside surface (with respect to the
Premises) of the glass and to the midpoint of the walls separating areas leased
by or held for lease to other tenants or from the Common Areas, but including a
proportionate part of the Common Areas located on such floor based upon the
ratio which Tenant's Net Rentable Area (excluding Common Areas) on such floor
bears to the aggregate Net Rentable Area (excluding Common Areas) on such floor,
plus an allocation of the square footage of the Building's Central Areas
consistent with current BOMA/ American National Standard Institute multiple
tenant standards, governed by BOMA Southwest-Dallas, Texas. In the case of both
single and multiple tenant floors, telephone, electrical, mechanical,
maintenance, janitorial or security rooms not included in the Building's Central
Areas but which serve more than one floor shall be considered Common Areas and
shall be allocated among all tenants whose premises are served thereby,
regardless of whether such premises are located on the same floor as the rooms
in question. Such allocation
19
shall be made in accordance with the proportion of the Net Rentable Area so
served. No deductions from Net Rentable Area shall be made for columns or
projections necessary to the Building. (e) The "terms of this Lease" shall be
deemed to include all terms, covenants, conditions, provisions, obligations,
limitations, restrictions, reservations and agreements contained in this Lease.
(f) A "year" shall mean a calendar year.
ARTICLE 28
RENEWAL OPTIONS
Section 28.01 Tenant shall have the right to extend the Term of this
Lease, with respect to the Premises then subject to this Lease, for the
respective Extension Term(s) (herein so called) upon and subject to the
following terms and conditions:
(a) Tenant may extend this Lease for up to two (2) successive Extension
Terms of five (5) years each by Tenant's giving written notice thereof to
Landlord not earlier than fifteen (15) months, nor later than twelve (12) months
prior to the expiration of the original Term or the then Extension Term, as
applicable. Landlord shall advise Tenant of Landlord's estimate of the Fair
Market Rental Rate (as hereinafter defined) within thirty (30) days of
Landlord's receipt of Tenant's notice of its exercise of an option to extend the
term of this Lease Agreement Landlord and Tenant shall endeavor to agree upon
the Fair Market Rental Rate. If, Landlord and Tenant are not able to agree upon
the then Fair Market Rental Rate within twenty (20) days following Landlord's
notice to Tenant of Landlord's estimate of the Fair Market Rental Rate and
Tenant does not withdraw its notice to extend the term of this Lease Agreement
prior to the end of such 20 day period, then the then Fair Market Rental Rate
will be determined as set out below. Landlord and Tenant will provide written
notice to one another of their respective estimate of the then Fair Market
Rental Rate. Landlord and Tenant will agree on an appraiser. Using his or her
professional expertise and experience, the appraiser, within 10 days, shall
determine which of the two parties' opinion of Fair Market Rental Rate is
correct or most closely reflects the appraiser's opinion of Fair Market Rental
Rate. The appraiser must choose one of the party's opinion of Fair Market Rental
Rate and can not substitute his or her opinion of the Fair Market Rental Rate
and such determination will be binding on Landlord and Tenant. If Landlord and
Tenant are not able to agree upon an appraiser, then Landlord will provide
Tenant with a list of three (3) appraisers. Tenant will select one (1) appraiser
from the list and the appraiser selected will determine the then Fair Market
Rental Rate as set forth above, and such determination will be binding on
Landlord and Tenant, and the rental will be adjusted as set out above.
(b). Any appraiser will be a state licensed commercial real estate
appraiser, have achieved the designation "MAI" and have been an appraiser of
commercial real property in Travis County, Texas for not less than five (5)
years. The cost of any appraiser will be borne by the party whose estimate of
the then Fair Market Rental Rate set forth in the notice to the other party is
the furthest from the then Fair Market Rental Rate determined by the appraiser.
If the estimates are equally wrong or right, then the cost will be shared.
(c). Each such Extension Terms shall commence immediately upon the
expiration of the original Term or immediately preceding the Extension Term, as
the case may be, and upon exercise of any such extension option the "Expiration
Date" of the Term shall automatically become the last day of the Extension Term
in question. If Tenant does not extend this Lease in a timely manner for any
particular Extension Term, then Tenant's rights with respect to all later
Extension Terms shall expire and be of no force or effect. Tenant's right to
extend the Term for an Extension Term shall be of no force or effect, at the
election of Landlord, if either at the time Tenant exercises its extension
option, or at the time of the commencement of the Extension Term, in question, a
monetary Event of Default then exists.
(d). The exercise by Tenant of any extension option set forth herein must
be made, if at all, by written notice executed by Tenant and delivered to
Landlord on or before the exercise dates set forth hereinabove. Once Tenant
shall exercise any extension option, Tenant may not thereafter revoke such
exercise, subject to subsection (a) above. Tenant shall not have the right to
exercise an extension option at a time when an Event of default is continuing
under this Lease. Tenant's failure to exercise timely an extension option for
any reason whatsoever shall conclusively be deemed a waiver of such option.
(e). For purposes hereof the "Fair Market Rental Rate" means the fair
market rental rate per square foot of the Net Rentable Area of the premises,
calculated as of the first day of the Extension Term in question (taking into
account all relevant factors, including, but not limited to the location,
quality and age of the Building, floor level, extent and status of the existing
Leasehold Improvements, rent concessions, inducements, refurbishment allowances,
treatment of operating costs, moving expenses, rental abatements and lease
takeovers, assumption and other concessions, term of lease, extent of service to
be provided, the cost of tenant parking in the Austin, Texas suburban area,
distinction between "gross" and "net" lease, base year or the amount allowed for
escalation purposes (expense stop, if any), and the time the particular rental
rate becomes or is to become effective) for a comparable lease term to
comparable tenants for space at a comparable floor location of comparable size
in comparable buildings in the market area surrounding the Building, as the case
may be.
(f). Tenant shall take the Premises "as is" for each Extension Term and
Landlord shall have no obligation to make any improvements or alterations to the
Premises. This provision is not intended to exclude consideration of a
refurbishment allowance as part of the calculation of Fair Market Rental Rate
described in subsection (e) above.
(g). Except as set forth in this Article, the leasing of the Premises for
each Extension Term shall be
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upon the same terms and conditions as are applicable for the original Term, and
shall be upon and subject to all of the provisions of the Lease.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, Landlord and Tenant have set their hands hereunto and
have caused this Lease to be executed by duly authorized officials thereof, as
of the day and year set forth on the cover page hereof.
LANDLORD:
Prentiss Properties Acquisition Partners, L.P.,
a Delaware limited partnership,
By: Prentiss Properties I, Inc.,
a Delaware corporation,
general partner
By:
Name:
Title:
By:
Name:
Title:
TENANT:
APTIS, INC., dba
APTIS SOFTWARE
a Delaware corporation
By:
Name:
Title:
22
EXHIBIT A
FLOOR PLAN OF THE PREMISES
EXHIBIT B
THE LAND
Lot 2B, Replat of Lot 2, WALLINGWOOD SECTION II, a subdivision in Travis County,
Texas, according to the map or plat recorded in Book 100, Pages 95-96 of the
Plat Records of Travis County, Texas.
EXHIBIT C
LEASEHOLD IMPROVEMENTS
ARTICLE 1
DEFINITIONS
The terms defined in Article 1 of this Exhibit C, for all purposes of this
Exhibit C, shall have the meanings herein specified, and in addition to the
terms defined herein, the definitions in the Basic Lease Information and
otherwise in this Lease shall also apply to this Exhibit C.
1.01. "Base Premises Condition" shall mean completion of the Premises by
Landlord, at Landlord's sole cost as set forth in Attachment 1 to Exhibit "C."
1.02. "Building Standard" means the quality of materials, finishes, and
workmanship from time to time specified by Landlord for the Building.
1.03. "Non-Building Standard" means all materials, finishes, and
workmanship used in connection with the construction and installation of the
Leasehold Improvements which deviate from Building Standard in terms of quality.
1.04. "Tenant's Work" means the work which is supplied, installed, and
finished by Tenant's Contractor, at Tenant's cost, to complete any Leasehold
Improvements to the Premises.
1.05. "Leasehold Improvements" shall mean the leasehold
improvements to be completed in the Premises.
1.06. "Tenant's Contractor" means the person or firm from time to time
selected, and paid, by Tenant to construct and install the Leasehold
Improvements in the Premises.
1.07. "Landlord's Manager" shall be the manager of the Building.
1.08. "Tenant Expenditure Authorization" means an authorization by Tenant,
prior to the commencement of any Tenant's Work for Landlord's Manager to
contract to expend funds on behalf of Tenant.
ARTICLE 2
COMPLETION OF PREMISES
2.01. Landlord, at Landlord" expense, has provided to Tenant plans and
specifications for the Building, the Project and the Parking Facilities (the
"Building Plans"). Landlord agrees to construct the Building, the Project and
the Parking Facilities in substantial accordance with the Building Plans. The
current Building Plans allow for for access flooring of up to 12 inches in the
Premises and a space for back up electrical generation equipment for Tenant, in
a location approved by Landlord and Tenant, which approval will not be
unreasonably withheld. Notwithstanding the foregoing, Landlord shall not be
responsible for any changes to the structural design of the Building necessary
to accommodate Tenant's access flooring. As soon as practicable after the
execution of this Lease, but in any event not later than ninety (90) days prior
to the Substantial Completion Date, Tenant, at Tenant's expense, shall provide
to Landlord a complete space plan, the architectural construction plan to
include specifications and finish schedules specifications (collectively "Plans
and Specifications") for the Leasehold Improvements. Such Plans and
Specifications shall be prepared by a space planner selected by Tenant. Within
ten (10) Business Days after Tenant's delivery of such Plans and Specifications,
Landlord shall notify Tenant in writing as to whether Landlord approves or
disapproves such Plans and Specifications. Landlord's approval of the Plans and
Specifications, and any changes thereto, for Tenant's Work shall impose no
responsibility or liability on Landlord for their completeness, design
sufficiency, or compliance with all applicable laws, rules and regulations of
governmental agencies or authorities. If Landlord fails to expressly disapprove
such Plans and Specifications, within this ten (10) day period, then Tenant
shall be authorized to proceed thereon.
2.02. Unless otherwise agreed to in writing by Landlord and Tenant, all
Tenant's Work involved in the construction and installation of the Leasehold
Improvements shall be carried out by Tenant's Contractor under the sole
direction of Tenant. Landlord and Tenant shall cooperate to promote the
efficient and expeditious completion of such Tenant's Work. Landlord agrees to
allow Tenant and Tenant's Contractor access to the Premises as soon as
reasonably practicable. . Tenant agrees to pay the cost of all Tenant's Work and
submit to Landlord promptly upon being billed therefor, copies of all statements
evidencing charges for labor and materials for the construction of the Leasehold
Improvements, along with lien waivers from each contractor, subcontractor and
material supplier contingent only on receipt of payment and a written
confirmation from Tenant that the portion of Tenant's Work represented by the
statements and lien waivers has been installed to Tenant's satisfaction.
Landlord shall pay to Tenant monthly, within thirty (30) days after receipt of
such statements, the costs thereof, up to but not exceeding the amount of the
Tenant Allowance herein defined. Tenant shall be liable for and shall pay all
costs in excess of the Tenant Allowance. Tenant agrees that in the event of
default of payment thereof, Landlord (in addition to all other remedies) shall
have the same rights as in the event of default of payment of Rent under this
Lease.
2.03. If there are any changes in the Leasehold Improvements caused by
Tenant from the work as reflected in the final Plans and Specifications, each
such change must receive the prior written approval of the Landlord, and, in
the event of any such approved change in the Plans and Specifications, drawings,
Tenant shall, upon completion of the Tenant's Work, furnish Landlord with an
accurate, reproducible "as-built" plan of the Tenant's Work as constructed,
which plans shall be incorporated in to this Exhibit C by this reference for all
intents and purposes when said plans are fully completed.
2.04. All design, construction and installation shall conform to the
requirements of applicable building, plumbing and electrical codes, requirements
of governmental laws, including the Americans with Disabilities Act, and the
requirements of any authority having jurisdiction over, or with respect to, such
work.
2.05. Tenant acknowledges that the Premises are being delivered to Tenant
in Tenant Finish Ready Condition, and Tenant accepts the Premises in Tenant
Finish Ready Condition, except to the extent that Tenant contracts with
Landlord's Manager to supervise the construction of additional Leasehold
Improvements to the Premises.
ARTICLE 3
TENANT'S ALLOWANCE
3.01. Landlord hereby grants Tenant an allowance equal to $25.00 per
square foot of Net Rentable Area of the Premises ("Tenant's Allowance") to be
used towards the cost of Tenant's Work for the Premises. In the event that the
full amount of Tenant's Allowance is not expended on Tenant's Work, Tenant may
apply any remaining monies against Base Rent to be due under the Lease.
ARTICLE 4
COMMENCEMENT OF RENT
4.01 Tenant's obligation for the payment of the Rent under this Lease for
the Premises shall commence in accordance with Section 3.02 of the Lease.
EXHIBIT D
FORM OF COMMENCEMENT NOTICE
This Commencement Notice is delivered this day of ________ , 19___, by
Prentiss Properties Acquisition Partners, L.P., a Delaware limited partnership
("Landlord"), to ("Tenant"), pursuant to the provisions of Section 3.03 of that
certain Lease Agreement (the "Lease") dated ___ , 19 ____, by and between
Landlord and Tenant covering certain space in the Building known as
___________________ . All terms used herein with their initial letter
capitalized shall have the meaning assigned to such terms in the Lease.
W I T N E S S E T H:
1. The Building, the Premises, the Parking Facilities, and all other
improvements required to be constructed and furnished by Landlord in accordance
with the terms of the Lease have been satisfactorily completed by the Landlord
and accepted by the Tenant.
2. The Premises have been delivered to, and accepted by, the Tenant,
subject to the completion of "punch list" items.
3. The Commencement Date of the Lease is the 1st day of ______________ ,
19__, and the Expiration Date is the day of ______________ , 19__ .
4. The Premises consist of ___ square feet of Net Rentable Area on the
floor of the Building.
5. The Base Rent, including Base Year Operating Costs, is $ ___________
per annum and Tenant's Operating Costs Payment is $__________ per annum, payable
in monthly installments of $___________ , subject, however, to the provisions of
the Lease relating to adjustments of Tenant's Operating Costs Payment beginning
on January 1, 19 ____________ .
6. Remittance of the foregoing payments shall be made on the first day of
each month in accordance with the terms and conditions of the Lease at the
following address:
Prentiss Properties Acquisition Partners, L.P.
3890 W. Northwest Highway, Suite 400
Dallas, Texas 75220
IN WITNESS WHEREOF, this instrument has been duly executed by Landlord as
of the date first written above.
LANDLORD:
Prentiss Properties Acquisition Partners, L.P.,
a Delaware limited partnership,
By: Prentiss Properties I, Inc.,
an Delaware corporation,
general partner
By:
Name:
Title:
By:
Name:
Title:
RIDER NO. 1
RULES AND REGULATIONS
1. Sidewalks, doorways, vestibules, halls, stairways and similar areas
shall not be obstructed by tenants or their officers, agents, servants, and
employees, or used for any purpose other than ingress and egress to and from the
Premises and for going from one part of the Building to another part of the
Building.
2. Plumbing fixtures and appliances shall be used only for the purpose for
which constructed, and no sweepings, rubbish, rags, or other unsuitable material
shall be thrown or placed therein. The cost of repairing any stoppage or damage
resulting to any such fixtures or appliances from misuse on the part of a tenant
or such tenant's officers, agents, servants, and employees shall be paid by such
tenant.
3. No signs, posters, advertisements, or notices shall be painted or
affixed on any of the windows or doors, or other part of the Building, except of
such color, size, and style, and in such places, as shall be first approved in
writing by the building manager. No nails, hooks, or screws shall be driven into
or inserted in any part of the Building, except by Building maintenance
personnel.
4. Directories will be placed by Landlord, at Landlord's own expense, in
the lobby of the Building. No other directories shall be permitted.
5. The Premises shall not be used for conducting any barter, trade, or
exchange of goods or sale through promotional give-away gimmicks or any business
involving the sale of second-hand goods, insurance salvage stock, or fire sale
stock, and shall not be used for any auction or pawnshop business, any fire
sale, bankruptcy sale, going-out-of- business sale, moving sale, bulk sale, or
any other business which, because of merchandising methods or otherwise, would
tend to lower the first-class character of the Building.
6. Tenants shall not do anything, or permit anything to be done, in or
about the Building, or bring or keep anything therein, that will in any way
increase the possibility of fire or other casualty or obstruct or interfere with
the rights of, or otherwise injure or annoy, other tenants, or do anything in
conflict with the valid pertinent laws, rules, or regulations of any
governmental authority.
7. Tenant shall not place a load upon any floor of the Premises, which
exceeds to floor load per square foot which such floor was designed to carry or
which is allowed by applicable building code. Landlord may prescribe the weight
and position of all safes and heavy installations which Tenant desires to place
in the premises so as properly to distribute the weight thereof. All damage done
to the Building by the improper placing of heavy items, which overstress the
floor, will be repaired at the sole expense of the Tenant.
8. A tenant shall notify the building manager when safes or other heavy
equipment are to be taken into or out of the Building. Moving of such items
shall be done under the supervision of the building manager, after receiving
written permission from him/her.
9. Corridor doors, when not in use, shall be kept closed.
10. All deliveries must be made via the service entrance and service
elevators during normal business hours or as otherwise directed or scheduled by
Landlord. Prior approval must be obtained from Landlord for any deliveries that
must be received after normal business hours.
11. Each tenant shall cooperate with building employees in keeping the
premises neat and clean.
12. Nothing shall be swept or thrown into the corridors, halls, elevator
shafts, or stairways. No birds, animals, or reptiles, or any other creatures,
shall be brought into or kept in or about the building.
13. Should a tenant require telegraphic, telephonic, annunciator, or any
other communication service, Landlord will direct the electricians and
installers where and how the wires are to be introduced and placed, and none
shall be introduced or placed except, as Landlord shall direct.
14. Tenants shall not make or permit any improper noises in the Building,
or otherwise interfere in any way with other tenants or persons having business
with them.
15. No equipment of any kind shall be operated on the premises that could
in any way annoy any other tenant in the Building without written consent of
Landlord.
16. Business machines and mechanical equipment belonging to Tenant which
cause noise and/or vibration that may be transmitted to the structure of the
Building or to any leased space so as to be objectionable to Landlord or any
tenants in the Building shall be placed and maintained by Tenant, at Tenant's
expense, in setting of cork, rubber, or spring type noise and/or vibration
eliminators sufficient to eliminate vibration and/or noise.
17. Tenants shall not use or keep in the Building any inflammable or
explosive fluid or substance, or any illuminating material, unless it is battery
powered, UL approved.
18. Tenants employees or agents, or anyone else who desires to enter the
Building after normal business hours, may be required to provide appropriate
identification and sign in upon entry, and sign out upon leaving, giving the
location during such person's stay and such person's time of arrival and
departure, and shall otherwise comply with any reasonable access control
procedures as Landlord may from time to time institute.
19. Landlord has the right to evacuate the Building in event of emergency
or catastrophe.
20. If any governmental license or permit shall be required for the proper
and lawful conduct of Tenant's business, Tenant, before occupying the Premises,
shall procure and maintain such license or permit and submit it for Landlord's
inspection. Tenant shall at all times comply with the terms of any such license
or permit.
21. Landlord shall have the right, exercisable without notice and without
liability to any tenant, to change the name and street address of the Building.
22. Neither Tenant, nor any other person visiting the Building shall be
permitted to use tobacco products in the Building, Premises, or the Common
Areas.
23. Landlord reserves the right to rescind any of these Rules and
Regulations and make such other and further rules and regulations or
modifications to these rules and regulations.
RIDER NO. 2
SCHEDULE OF JANITORIAL SERVICES
DESCRIPTION OF SERVICES AND CLEANING SPECIFICATIONS
DETAILED SPECIFICATIONS - NIGHTLY CLEANING
(a) It is the intent of these specifications that Contractor will
maintain the Premises at an optimum level of cleanliness at all
times. These specifications, therefore, shall be a guide for,
rather than a limitation to the Services required to effectively
maintain the Premises in accordance with this Agreement. If the
Property Manager considers the level of cleanliness at any time
to be unacceptable, then Contractor shall be required to effect
prompt action to overcome such unacceptable condition(s) and any
additional cost resulting from such action shall be borne solely
by Contractor.
(b) It is understood that the words "adequate," "necessary," "needed,"
or "required" as indicated herein shall be construed herein to mean
"as determined by Manager, Owner or Property Manager. "
ENTIRE COMPLEX - with regard to the entire Premises, Contractor, through
the Staff, shall nightly as required by Article II above:
(a) Secure all lighting as soon as possible and illuminate only the
immediate work area as required.
(b) Dust mop using a treated mop to remove all loose dirt or sweep
all hard surface floors, including tenant spaces, entrance foyers
and vestibules, and all public areas, including building
corridors; sweep all stone, ceramic tile, marble, terrazzo,
asphalt, tile, linoleum, rubber, vinyl and other types of
flooring, to ensure dust-free floors, with special attention
given to hard-to-reach areas such as edges, niches, and areas
behind doors. The floor when dry, will be even in appearance and
show no streaking from cleaning efforts. If rain mats are in use
because of inclement weather, they will be vacuumed and spot
cleaned as necessary.
(c) Wash all ceramic tile, marble, terrazzo, or all hard surface
flooring in the entrance foyers of the Building.
(d) Vacuum all carpeted areas and rugs, moving light furniture other
than desks and file cabinets. Spot-clean carpets and rugs as
necessary. Shampoo carpets as necessary to maintain spot-free
appearance. Particular attention shall be given to vacuuming under
desks.
(e) Sweep stairways and landings and wash as necessary; vacuum carpeted
stairways, and dust all handrails, balustrades, and stringers as
necessary.
(f) If carpeted, vacuum carpets of all public corridors nightly.
(g) If resilient tile, clean and spray buff wax floors of all public
corridors and tenant areas so as to maintain a highly polished
surface.
(h) Mop up and wash floors for spills, smears and foot tracks
throughout, including tenant space as needed, and wash floors in
general as required.
(i) Clean and sanitize, utilizing a non-abrasive cleaner, all water
fountains and water coolers, emptying waste water as needed.
(j) Remove from all wastebaskets, trash barrels, ashtrays or other trash
receptacles all trash from the Premises and deposit it in the
designated area for trash. Recycling containers will be removed to
the designated collection areas as required. Trash liners will be
replaced nightly.
(k) Clean all wastepaper baskets and disposal receptacles, and wash all
ashtrays, paper towel waste cans, and any other trash receptacles
(damp dusting as necessary).
(l) All doors, jambs, walls and window mullions and glass partitions
will be spot- cleaned using only clean water or mild cleansing
solution to remove streaks, smudges, finger-marks and spills. If a
cleaning solution is used, the wall will be rinsed with clear water.
No abrasive cleaners of any kind or cleaning solutions containing
bleach will be used without first obtaining written permission from
the Property Manager.
(m) Police all interior planters, remove debris and spot clean exterior
surfaces as necessary.
(n) Brush/vacuum all upholstered furniture as necessary.
(o) Replace all furniture and/or accessories to their original positions
if moved to accommodate cleaning.
(p) Clean all cigarette urns and replace sand or water in ashtrays as
necessary.
(q) Dust and wipe clean all furniture, fixtures, shelving, desk
equipment, telephones, cabinets and map boards, and clean all glass
tables and desk tops with impregnated cloths as needed. Dust only
those areas which are clear of papers and files. Contractor will be
responsible to clean the underside of removable glass tops for
conference tables and other miscellaneous furniture.
(r) Clean and sanitize all telephone receivers.
(s) Wash and remove with a non-abrasive cleaner all finger marks,
smudges, scuff marks, ink stains, gum or foreign matter from
glass desk tops, glass table tops, glass entrances, areas around
light switches, private entrances to offices and elevator doors,
glass directory boards, metal partitions, and other marks on
walls, window sills, and other similar surfaces, and glass table
cabinets, as required. All items are to be left in a bright
condition free of streaks and dust.
(t) Wipe clean, polish, as needed, all brass, stainless steel, and
bright work, using a non-acid polish to a bright condition free of
dust and streaks.
(u) Clean all chalkboards/message boards and/or trays except where
written text has not been erased by tenants of the Building.
LAVATORIES AND REST ROOMS - with regard to the lavatories and restrooms,
Contractor, through the Staff, shall nightly as required by Article II
above:
(a) Sweep, rinse, scrub and/or wash and dry all flooring with approved
germicidal detergent solution, containing no deodorants, to remove
all spills, smears, scuff marks and foot tracks.
(b) Wash and polish all mirrors, powder shelves, bright work, and enamel
surfaces, including flushometers, piping, toilet seat hinges, and
all metal. Contractor shall use only non-abrasive and non-acidic
material to avoid damage and deterioration to metal fixtures.
(c) Scour, wash and disinfect all basins, bowls and urinals with
approved germicidal detergent solution free of any deodorants,
including tile walls near urinals. Remove stains as necessary and
clean underside of urinals and bowls. Special care must be taken to
inspect and clean areas of difficult access such as the underside of
toilet bowls and urinals to prevent build up of calcium and iron
oxide deposits.
(d) Wash both sides of all toilet seats with approved germicidal
detergent solutions and wipe dry.
(e) Disinfect, damp-wipe and wash all partitions, enamel surfaces, tile
walls, dispensers, doors and receptacles.
(f) Damp-wipe with germicidal solution free of any deodorants urinal
modesty screens. Surfaces are to dry with a uniform appearance free
of any streaks or smudges.
(g) All rest room doors will be damp-wiped to remove any hand marks from
door and door hardware.
(h) Scour, wash and disinfect all private basins in all tenant suites
throughout the Building.
(i) Empty and sanitize paper towel and sanitary napkin disposal
receptacles.
(j) Remove wastepaper and refuse, including soiled sanitary napkins, to
designated area in the building, and dispose of same. All wastepaper
receptacles to be thoroughly cleaned, sanitized and new liners
installed.
(k) If applicable, wash and wax all resilient tile floors in
toilet/powder rooms, or vacuum if carpeted.
(l) Fill and maintain mechanical operation of all toilet tissue holders,
and dispensers, towel dispensers, and sanitary napkin vending
dispensers. The filling of such receptacles to be in such quantity
as to last the entire business day wherever possible. Care should be
taken to inspect dispensing fixtures to insure they are working
properly. Any deficiencies shall be reported to the Property Manager
immediately.
(m) Keep lavatories thoroughly clean and do not use a disinfectant to
mask odors. If disinfectant is necessary, a odorless disinfectant
shall be used only upon prior approval by the Property Manager.
(n) Report to the night supervisor as designated by the Property Manager
any broken, damaged or improper functioning of any mechanical or
plumbing device, including burned-out bulbs and fluorescent tubes.
(o) Use only non-abrasive cleaners to avoid removing the finish of
ceramic or metal fixtures.
OFFICE FLOORS, ENTRANCE LOBBIES, ELEVATOR LOBBIES, AND OUTDOOR Corridors -
with regard to office floors, entrance lobbies, elevator lobbies and
outdoor corridors Contractor, through the Staff, shall nightly as required
by Article II above:
(a) Keep entrance ways, lobbies, and outside corridors properly
maintained and clean and presentable at all times, in keeping with
the standards of a first-class office building.
(b) Sweep and wash flooring and vacuum carpeting, if applicable.
(c) Clean all cigarette urns and replace sand or water as necessary;
such materials to be furnished by Contractor.
(d) Wash flooring, including mats, where applicable.
(e) Pick up and put out rain mats when necessary, making sure that they
are clean at all times.
(f) Clean entrance door glass.
(g) Clean telephone booths and storage rooms.
(h) Clean mail depository and lobby directories, including glass, if
applicable.
(i) Dust and polish all surfaces, using methods that will retain and
protect original finishes.
ELEVATORS - With regard to the Elevators, Contractor, through the Staff,
shall nightly as required by Article II above:
(a) Remove all marks, streams and smudges from all interior and exterior
surfaces, including ceiling lenses, walls, handrails, doors, jambs
and call plates by wiping with a clean water-dampened cloth and
wiping with a clean dry cloth. Contractor will be held responsible
for any damage to existing metal sealant due to unauthorized
treatment.
(b) Dust and rub down elevator doors, walls, metal work and saddles in
elevator cabs; vacuum elevator saddles and door tracks using a
vacuum crevice attachment.
(c) Dust bulbs, fixtures and diffusers as required to meet the
requirements of this Agreement.
(d) Maintain metal work throughout, including elevator cabs, by cleaning
and polishing as necessary. It is also understood that Property
Manager, at Owner's expense, will schedule a program to maintain
metal.
(e) Thoroughly clean/polish all interior and exterior surfaces. Steel
wool clean all thresholds, including the area beyond the door edges
and thoroughly clean all step treads, combs and cover plates at
landings.
(f) At least monthly, wipe clean entire cab ceiling, including lamps and
fixtures. Shampoo cab carpeting, machine scrub and refinish as
appropriate, any hard surface flooring.
(g) Treat and polish all wood and synthetic paneling in the elevator
cabs as necessary.
(h) Maintain floors in elevator cabs as needed and clean thoroughly.
Special care is to be taken to clean corners, crevices and along
edges. If carpeted, remove soluble spots which safely respond to
standard spot removal procedure without risk of injury to color of
fabric. Cabs to be vacuumed nightly. Remove all chewing gum on
floors, walls and rails.
ENTRANCE LOBBIES AND PUBLIC AREAS - with regard to entrance lobbies and
public areas, Contractor, through the staff, shall nightly as required by
Article II above:
(a) Sweep and wash floors and vacuum carpeting, if applicable.
(b) Sweep, vacuum, and spot clean all rubber mats, shampooing as needed.
(c) Clean all cigarette urns and replace sand or water as necessary.
(d) Pick up and put out rain mats as necessary, making sure that they
are kept clean at all times during storage. Area for storage to be
designated by the Property Manager. Mats are to be stored
horizontally.
(e) Clean all entrance door glass, including building directory glass,
inside and outside.
(f) Clean all public telephone areas thoroughly.
SIDEWALKS AND PLAZA - Contractor shall, through the Staff, police
(including minor sweeping as necessary) all sidewalks and plaza areas in
complex.
DETAILED SPECIFICATIONS - PERIODIC CLEANING
ENTIRE COMPLEX - with regard to the entire Premises, Contractor shall,
through the Staff, shall:
(a) Wash, wax and/or spray buff weekly all floors as required and apply
appropriate approved coating or sealant to maintain luster.
(b) Strip and wax floors as needed.
(c) Clean lights, globes, diffusers and fixtures as required.
(d) Dust down and damp wipe lobby and exit stairway walls as required,
but no less than once per month.
(e) Rub down metal and other high-level bright work as required.
(f) High dusting - See Article VI below.
(g) Floor maintenance - See Article VII below.
LAVATORIES AND REST ROOMS - with regard to the lavatories and restrooms,
Contractor, through the Staff, shall:
(a) Scrub, wash and polish all partitions, tile walls and enamel
surfaces from ceiling to floor as required, but not less than once
each week using the proper germicidal detergent solution.
(b) Wash all lighting fixtures as required. Do all high dusting weekly.
(c) Clean and disinfect all equipment drains as required. No acids shall
be permitted unless instructed by Owner.
(d) Machine scrub flooring as required with approved germicidal
detergent solution.
ENTRANCE LOBBIES AND PUBLIC AREAS - with regard to the entrance lobbies
and public areas, Contractor through the Staff shall:
(a) Wash all floors on a weekly basis and seal and wax, as needed.
(b) Clean light fixtures (including globes), diffusers and other
fixtures as required to maintain a first-class appearance.
(c) Remove hand marks from lobby and stairway walls as required.
(d) Daily sweep and mop entire building trash area with a germicidal
detergent solution as required.
(e) Machine scrub entire trash area and thoroughly rinse at least
weekly.
(f) Clean and polish metal and other miscellaneous high-level bright
work as required.
MISCELLANEOUS PERIODIC CLEANING
The following Miscellaneous periodic cleaning shall be performed by
Contractor, through Staff, as required unless otherwise specified, but not
less than once each week or as hereinafter provided:
OFFICE AREAS AND CORRIDORS
(a) Sweep all building stairways and dust rails and fire equipment. Mop
as required.
(b) Wipe clean and polish all aluminum, chrome, stainless steel, brass
and other metal work, including trim and hardware, as required,
using non-acid polish.
(c) Check elevators, stairways, office and utility doors on all floors
for general cleanliness as required, removing fingerprints, smudges,
and other marks. Clean exterior of all elevator doors of the
Building as required.
(d) If carpeted, remove spots and thoroughly clean all carpets in public
corridors as required.
(e) Clean and sweep all vacant areas of the Premises at least once per
week.
(f) Clean all glass entrance doors as required.
(g) Once per week, dust and wash all door louvers and other ventilating
louvers within reach.
(h) Wash and remove all finger marks, ink stains, smudges, scuff marks
and other marks from metal partitions, sills, and all vertical
surfaces, as required.
(i) All granite and/or travertine walls, elevator, stairway, office and
utility doors to be washed as required, using water or approved
cleanser.
(j) Dust and clean all baseboards, and any other fixtures or fittings in
public corridors, as required, but not less than once each week.
HIGH DUSTING
Contractor shall perform, through the Staff, all high dusting weekly
unless otherwise specified, including without limitation the following:
OFFICE AREAS
(a) Vacuum and dust all pictures, frames, charts, graphs and similar
wall hangings not reached in nightly cleaning. Damp dust as
required.
(b) Vacuum and dust all vertical surfaces such as walls, partitions,
doors, bucks and ventilating louvers, grilles, high moldings, and
other surfaces not reached in nightly cleaning.
(c) Dust monthly all overhead pipes, sprinklers, ventilating and air
conditioning louvers, ducts, high moldings and other high areas not
reached in nightly cleaning.
(d) Dust all venetian blinds and window frames, including those behind
furniture.
(e) Dust exteriors of lighting fixtures.
(f) Vacuum and dust ceiling tiles around ventilators and clean air
conditioning diffusers weekly.
PUBLIC AREAS
(a) Thoroughly dust transoms and ledges high and low.
FLOOR MAINTENANCE - TENANT AREAS
(a) All tenant resilient tile flooring will be waxed as necessary, but
not less than monthly so as to maintain a highly polished surface,
and strip wax build-up and buff as needed. Spray-buff lobbies,
corridors and hallways in tenant areas nightly. If needed,
Contractor shall remove all ground-in heel marks and similar type
scuffs and stains using a low alkaline, non-injurious detergent for
floor waxing operations.
(b) All carpeted floor areas will be vacuumed as necessary with portable
vacuums in areas which are not accessible with standard floor
vacuums but are easily visible to occupants (e.g. desk well, areas
around planters and spaces between furniture).
(c) All carpeted floors will be vacuumed bi-monthly using a pile lifter
to remove embedded dirt and to restore pile to uniform upright
condition. Heavy traffic areas may require pile lifting more often,
to maintain a presentable carpet condition. All carpet edges will be
vacuumed with an edging attachment
(d) Complete floor maintenance and initial waxing shall be provided
prior to move-in of all new tenants.
(e) A non-staining polymer floor finish that provided a high degree of
slip prevention shall be used in all floor maintenance work.
(f) All wax spills and splashes will be removed from baseboards, door
jambs and walls.
BUILDING METAL AND MASONRY
(a) Interior and exterior metal work, granite, masonry, store fronts (if
required to be maintained by Owner), and building foyer entrances
(including floor), if applicable, will be kept in clean condition.
Such poultice cleaning of masonry, as needed, will be performed by
Contractor.
(b) Clean all exterior metal required to be maintained by Owner, whether
store or otherwise.
(c) Inspect nightly the building's facade and other areas of the
exterior facade for graffiti, spills, smudges, and, if found, clean
with appropriate materials. Any spill, smudge or graffiti that
cannot be cleaned thoroughly should be reported to the Property
Manager.
(d) Inspections of sidewalks and related areas will be made daily and
any spills will be cleaned with a sponge and appropriate cleaning
material.
ATTACHMENT I
TO EXHIBIT C
BASE PREMISES CONDITION
"Base Premises Condition" shall mean the condition of the Building, the
Project and the Premises competed with the following improvements, all of which
shall be completed by Landlord, at Landlord's sole cost and expense, in the
Premises prior to the Substantial Condition Date of the Lease:
1. Outside walls, core walls, and ground elevator lobby areas of Building on
each floor on which the Premises are located completed to Building
Standard condition for public areas.
2. Broom clean unfinished concrete floors throughout the Premises, completed
to a tolerance of 1/4 inch per 10 feet.
3. Building Standard ceiling grid system and 2 foot by 4 foot ceiling tile
stacked on the floor.
4. Building Standard 110 Volt 20 Amp power supplied to the Building core, at
panels in the electrical closet.
5. Men's and women's restroom facilities with Building Standard finishes
located on each floor on which the Premises are located, completed in
accordance with applicable code.
6. Exterior main heating, ventilating, and air-conditioning ducts
completed to the mixing boxes
7. Sprinkler risers and main loop on each floor with sprinkler heads turned
up at a ratio of 1 per 225 square feet.
8. Building Standard smoke detectors in accordance with applicable shell
codes.
9. Building Standard lights, stacked on the floor, at a ratio of 1 per 100
usable square feet.
10. Exit lights and fire alarms. All code required multi-tenant, public
corridor doors installed.
11. Sound insulation at core.
12. Full height door butts and jambs on all doors.
13. Building Standard stairwells between all floors completed.
14. Building Standard metal elevator doors painted and elevator frames and
jambs installed and painted.
15. Building Standard passenger elevators sufficient to provided passenger and
freight service to the Premises.
16. Access at core to domestic cold water, waste and vent systems.
17. Two (2) Building Standard drinking fountains per floor of Building on each
floor on which the Premises are located.
18. Building Standard telephone closets and telephone boards installed one (1)
per each floor and finished in sheetrock.
19. All core walls taped and bedded.
20. Building certified as occupiable by the City of Austin.
21. Parking Lot and all extension flat work complete and Parking Facility no
more than one hundred (100) days from completion.
TO EXHIBIT C
TENANT FINISH READY CONDITION
"Tenant Finish Ready Condition" shall mean the condition of the Building,
the Project and the Premises completed with the following improvements, all of
which shall be completed by Landlord, at Landlord's sole cost and expense:
1. Premises shall be dried in and weather tight.
2. Outside walls, core walls, columns on each floor on which the Premises
are located completed to Building Standard condition for public areas.
3. Broom clean unfinished concrete floors throughout the Premises,
completed to a tolerance of 1/4 inch per 10 feet.
4. Building Standard ceiling grid system and 2 foot by 4 foot ceiling tile
stacked on the floor.
5. 110 Volt 20 Amp power supplied to the Building core, at panels in the
electrical closet.
6. Exterior main heating, ventilating, and air conditioning ducts completed to
the mixing boxes.
7. Sprinkler risers and main loop on each floor with sprinkler heads turned up
at a ratio of 1 per 225 square feet.
8. Building Standard smoke detectors in accordance with applicable shell
building codes.
9. Building Standard lights, stacked on the floor, at a ratio of 1 per 100
usable square feet.
10. Shell building, exit lights and fire alarms.
11. Sound insulation at core.
12. Access at core to domestic cold water, waste and vent systems.
13. Building Standard telephone closets and telephone boards installed one
(1) per each floor and finished in sheetrock.
14. All core walls taped and bedded.
ATTACHMENT 3
TO EXHIBIT C
HVAC DESIGN CRITERIA
The HVAC system is capable of cooling all occupancy areas of the Premises to an
inside temperature of 75(degree) Fahrenheit and 50% maximum relative humidity
with an outside air temperature of 100(degree) Fahrenheit. The system shall be
capable of heating all occupancy areas of the Premises to an inside temperature
of 75(degree) Fahrenheit and no minimum relative humidity with an outside air
temperature of 18(degree) Fahrenheit.
The HVAC interior loads design basis is:
o One (1) person per 150 square feet, plus
o Heat dissipation from Building Standard lighting, plus
o Two (2) watts per square foot for Tenant miscellaneous power heat dissipation.