EXHIBIT 10.36
OFFICE LEASE
BY AND BETWEEN
KOLL BREN FUND VI, L.P.
("LANDLORD")
AND
TANDY BRANDS ACCESSORIES, INC.
("TENANT")
DATED AS OF
JANUARY 31, 2004
TABLE OF CONTENTS
PAGE
LEASE OF PREMISES....................................................... 1
BASIC LEASE PROVISIONS.................................................. 1
STANDARD LEASE PROVISIONS............................................... 3
1. TERM............................................................ 3
2. BASIC ANNUAL RENT AND SECURITY DEPOSIT.......................... 3
3. ADDITIONAL RENT................................................. 4
4. IMPROVEMENTS AND ALTERATIONS.................................... 8
5. REPAIRS......................................................... 9
6. USE OF PREMISES................................................. 10
7. UTILITIES AND SERVICES.......................................... 12
8. NON-LIABILITY AND INDEMNIFICATION OF LANDLORD; INSURANCE........ 13
9. FIRE OR CASUALTY................................................ 15
10. EMINENT DOMAIN.................................................. 16
11. ASSIGNMENT AND SUBLETTING....................................... 16
12. DEFAULT......................................................... 18
13. ACCESS; CONSTRUCTION............................................ 21
14. BANKRUPTCY...................................................... 22
15. N/A............................................................. 23
16. SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATES................ 23
17. SALE BY LANDLORD; TENANT'S REMEDIES; NONRECOURSE LIABILITY...... 24
18. PARKING; COMMON AREAS........................................... 24
19. MISCELLANEOUS................................................... 25
LIST OF EXHIBITS
Exhibit A-l Floor Plan(s)
Exhibit A-2 Legal Description of the Project
Exhibit A-3 N/A
Exhibit B Work Letter
Schedule One Description of Plans
Exhibit C Utilities and Services
Exhibit D Building Rules and Regulations
Schedule One Schedule of Permitted Uses
Exhibit E Form Estoppel Certificate
Exhibit F Tenant's Initial Certificate
Exhibit G ADA and TABA
Exhibit H Description of Released Space
Exhibit I SNDA
Exhibit J Parking Spaces
Addendum One Two Renewal Options at Market
Addendum Two Expansion Option
Schedule Two Description of Expansion Space
Addendum Three Generator Provisions
Schedule Three Generator Location
Schedule Four Generator Plans
Addendum Four Additional TI Allowance
-i-
OFFICE LEASE
THIS OFFICE LEASE is made between KOLL BREN FUND VI, L.P., a Delaware
limited partnership ("Landlord"), and the Tenant described in Item 1 of the
Basic Lease Provisions.
LEASE OF PREMISES
Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord, subject to all of the terms and conditions set forth herein, those
certain premises (the "Premises") described in Item 3 of the Basic Lease
Provisions and as shown in the drawing attached hereto as Exhibit A-1. The
Premises are located in the Building described in Item 2 of the Basic Lease
Provisions. The Building is located on that certain land (the "Land") more
particularly described on Exhibit A-2 attached hereto, which is also improved
with landscaping, parking facilities and other improvements, fixtures and common
areas and appurtenances now or hereafter placed, constructed or erected on the
Land (sometimes referred to herein as the "Project").
BASIC LEASE PROVISIONS
1. TENANT: TANDY BRANDS ACCESSORIES, INC.,
a Delaware corporation ("Tenant")
2. BUILDING: Enterprise Centre
690 East Lamar Avenue
Arlington, Texas 76011
3. DESCRIPTION OF PREMISES: Suite(s): 115, and 120 (collectively, Suite 115,
and Suite 120 will be known as "First Floor
Suites"), 200, 300, 350, 360 ("Suite 360"),
subject, however, to Paragraphs 19(z) and
19(aa).
RENTABLE AREA: 42,726 square feet (See Paragraph 19(bb))
4. TENANT'S PROPORTIONATE 47.5966% (42,726 rsf / 89,767 rsf)
SHARE OF OPERATING COSTS:
(See Paragraph 3)
5. BASIC ANNUAL RENT: (See Paragraph 2)
Months 1 to 7, inclusive:
Monthly Installment: $0.00 (Basic Annual Rent is abated for the Premises)
Months 8 to 19, inclusive:
Monthly Installment: $ 53,407.50 ($15.00/square foot of Rentable Area/annum)
Annualized: $640,890.00
Months 20 to 31, inclusive:
Monthly Installment: $ 55,187.75 ($15.50/square foot of Rentable
Annualized: Area/annum) $662,253.00
Months 32 to 43, inclusive:
Monthly Installment: $ 56,968.00 ($16.00/square foot of Rentable
Annualized: Area/annum) $683,616.00
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Months 44 to 55, inclusive:
Monthly Installment: $ 60,528.50 ($17.00/square foot of Rentable Area/annum)
Annualized: $726,342.00
Months 56 to 67, inclusive:
Monthly Installment: $ 62,308.75 ($ 17.50/square foot of Rentable Area/annum)
Annualized: $747,705.00
6. INSTALLMENT PAYABLE
UPON EXECUTION: $ 53,407.50 (To be applied to the monthly installment of
Basic Annual Rent for Month 8 of the Initial Term)
7. SECURITY DEPOSIT
PAYABLE UPON EXECUTION: N/A
8. BASE YEAR FOR OPERATING COSTS: 2004 (See Paragraph 3)
9. INITIAL TERM: Sixty-seven (67) months, commencing on the Commencement
Date and ending on the day immediately preceding the sixty-
seventh (67th) month anniversary of the Commencement Date
(See Paragraph 1)
10. COMMENCEMENT DATE: Date of this Lease
11. TERMINATION DATE: The date immediately preceding the sixty-seventh (67th) month
anniversary of the Date of this Lease
12. BROKER(s) (See Paragraph 19(k)):
(a) Landlord's Broker: Transwestern Commercial Services
5001 Spring Valley Road, Suite 600W
Dallas, Texas 75244
(b) Tenant's Broker: Jackson & Cooksey, Ltd.
12750 Merit Drive, Suite 1310
Dallas, Texas 75251
13. NUMBER OF PARKING SPACES: During the Lease Term, Tenant shall have the right to use four
(4) parking spaces for every 1,000 square feet of Rentable
Area in the Premises (15 of which shall be reserved spaces which shall
be located as set forth on Exhibit J attached hereto). As of the
Effective Date, Tenant shall have one hundred seventy (170) parking
spaces of which there will be (i) fifteen (15) reserved parking
spaces at no additional cost to Tenant during the Initial Term of
the Lease, and (ii) one hundred fifty-five (155) unreserved,
uncovered parking spaces at no additional cost to Tenant during the Initial
Term of the Lease (See Paragraph 18)
14. ADDRESSES FOR NOTICES:
TO: TENANT: TO: LANDLORD:
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PRIOR TO OCCUPANCY OF THE PREMISES: PROJECT MANAGEMENT OFFICE:
Tandy Brands Accessories, Inc. Project Management Office
690 East Lamar Avenue, Suite 200 c/o Transwestern Commercial Services
Arlington, Texas 76011 14180 Dallas Parkway, Suite 305
Attn: Stan Ninemire Dallas, Texas 75254
Attn: Property Manager
AFTER OCCUPANCY OF THE PREMISES: WITH A COPY TO:
Tandy Brands Accessories, Inc. Koll Bren Schreiber Realty Advisors, Inc.
690 East Lamar Avenue, Suite 200 4343 Von Karman
Arlington, Texas 76011 Newport Beach, California 92660
Attn: Stan Ninemire Attn: Walter C. Foster, Senior Vice President
15. PLACE OF PAYMENT: All payments payable under this Lease shall be sent to
Landlord at the Project Management Office at the address
specified in Item 14 or to such other address as Landlord may
designate in writing.
16. GUARANTOR: N/A
17. EFFECTIVE DATE: See cover page
18. LANDLORD'S CONSTRUCTION
ALLOWANCE: Up to $518,000 ($ 12.12 per square foot of Rentable Area)
(See Exhibit B)
19. THE "STATE" IS THE STATE OF TEXAS.
This Lease consists of the foregoing introductory paragraphs and Basic Lease
Provisions, the provisions of the Standard Lease Provisions (the "Standard Lease
Provisions") (consisting of Paragraphs 1 through 19 which follow) and Exhibits
A-1 through A-3 and Exhibits B through Exhibit H, and the following Addenda:
Addendum One - Two Renewal Options at Market, Addendum Two - Expansion Option,
Addendum Three - Generator Provisions, and Addendum Four - Additional TI
Allowance, all of which are incorporated herein by this reference. In the event
of any conflict between the provisions of the Basic Lease Provisions and the
provisions of the Standard Lease Provisions, the Standard Lease Provisions shall
control.
STANDARD LEASE PROVISIONS
1. TERM
(a) The Initial Term of this Lease and the Rent (defined below)
shall commence on the Date of this Lease (the "Commencement Date"). Unless
earlier terminated in accordance with the provisions hereof, the Initial Term of
this Lease shall be the period shown in Item 9 of the Basic Lease Provisions. As
used herein, "Lease Term" shall mean the Initial Term referred to in Item 9 of
the Basic Lease Provisions, subject to any extension of the Initial Term hereof
exercised in accordance with the terms and conditions expressly set forth
herein. This Lease shall be a binding contractual obligation effective upon
execution hereof by Landlord and Tenant, notwithstanding the later commencement
of the Initial Term of this Lease.
(b) The Premises (inclusive of the First Floor Suites but
exclusive of Suite 360) will be delivered to Tenant on the Date of this Lease.
2. BASIC ANNUAL RENT AND SECURITY DEPOSIT
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(a) Tenant agrees to pay during each Lease Year (defined below) of
the Lease Term as Basic Annual Rent (" Basic Annual Rent") for the Premises the
sums shown for such periods in Item 5 of the Basic Lease Provisions. For
purposes of this Lease, a "Lease Year" shall be each twelve (12) calendar month
period commencing on the Commencement Date (or anniversary thereof).
(b) Except as expressly provided to the contrary herein, Basic
Annual Rent shall be payable in equal consecutive monthly installments, in
advance, without demand, deduction or offset, commencing on the Commencement
Date and continuing on the first day of each calendar month thereafter until the
expiration of the Lease Term. The first full monthly installment of Basic Annual
Rent shall be payable upon Tenant's execution of this Lease. Except as otherwise
expressly provided herein or by law, the obligation of Tenant to pay Rent and
other sums to Landlord and the obligations of Landlord under this Lease are
independent obligations. If the Commencement Date is a day other than the first
day of a calendar month, or the Lease Term expires on a day other than the last
day of a calendar month, then the Rent for such partial month shall be
calculated on a per diem basis. In the event Landlord delivers possession of the
Premises to Tenant prior to the Commencement Date, Tenant agrees it shall be
bound by and subject to all terms, covenants, conditions and obligations of this
Lease during the period between the date possession is delivered and the
Commencement Date, other than the payment of Basic Annual Rent, in the same
manner as if delivery had occurred on the Commencement Date.
(c) N/A
(d) The parties agree that for all purposes hereunder the Premises
shall be stipulated to contain the number of square feet of Rentable Area
described in Item 3 of the Basic Lease Provisions. Landlord and Tenant
acknowledge and agree that the Rentable Area of the Premises set forth in Item 3
of the Basic Lease Provisions is 42,726 square feet, which constitutes the
square footage of the Premises, effective on and as of the date of Substantial
Completion of that portion of the Tenant Improvements affecting Suite 360, and
includes Suite 360 (which contains 1,781 square feet of Rentable Area) but
excludes of Suite 115 (which contains 1,446 square feet of Rentable Area) and
Suite 120 (which contains 587 square feet of Rentable Area).
3. ADDITIONAL RENT
(a) If Operating Costs (defined below) for the Project for any
calendar year during the Lease Term exceed Base Operating Costs (defined below),
Tenant shall pay to Landlord as additional rent ("Additional Rent") an amount
equal to Tenant's Proportionate Share (defined below) of such excess.
(b) "Tenant's Proportionate Share" is, subject to the provisions
of Paragraph 18, Paragraph 2(c) and Paragraph 19(bb), the percentage number
described in Item 4 of the Basic Lease Provisions. Tenant's Proportionate Share
represents, subject to the provisions of Paragraph 18, a fraction, the numerator
of which is the number of square feet of Rentable Area in the Premises and the
denominator of which is the number of square feet of Rentable Area in the
Project, as reasonably determined by Landlord pursuant to Paragraph 18.
(c) "Base Operating Costs" means all Operating Costs incurred or
payable by Landlord during the calendar year specified as Tenant's Base Year in
Item 8 of the Basic Lease Provisions.
(d) "Operating Costs" means all reasonable costs, expenses and
obligations incurred or payable by Landlord in connection with the operation,
ownership, management, repair or maintenance of the Building and the Project
during or allocable to the Lease Term, including without limitation, the
following:
(i) All real property taxes, license fees, excises,
levies, charges, assessments, both general and special assessments,
provided that the portion of taxes allocable to special assessments
shall be prorated and amortized in accordance with generally accepted
accounting principles, Landlord must elect the longest installment
method of payment, and only the amortized portion thereof may be passed
through in any year, or impositions and other similar governmental ad
valorem or other charges levied on or attributable to the Project or
its ownership or operation, and all taxes, charges, assessments or
similar impositions imposed in lieu of the same (collectively, "Real
Estate Taxes"). Real Estate Taxes shall also include all taxes,
assessments, license fees, excises, levies, charges or similar
impositions imposed by any governmental agency, district, authority or
political subdivision (A) on any interest of Landlord, any
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mortgagee of Landlord or any interest of Tenant in the Project, the
Premises, or on the occupancy or use of space in the Project or the
Premises; (B) for the provision of amenities, services or rights of
use, whether or not exclusive, public, quasi-public or otherwise made
available on a shared use basis, including amenities, services or
rights of use such as fire protection, police protection, street,
sidewalk, lighting, sewer or road maintenance, refuse removal or
janitorial services or for any other service, without regard to whether
such services were formerly provided by governmental or
quasi-governmental agencies to property owners or occupants at no cost
or at minimal cost; and (C) related to any transportation plan, fund or
system instituted within the geographic area of the Project or
otherwise applicable to the Premises, the Project or any portion
thereof. Real Estate Taxes shall not include any estate, inheritance,
successor, transfer, gift, franchise, corporation, income or profit tax
imposed by the State or federal government on Landlord unless such
income, franchise, transfer or profit taxes are in substitution for any
Real Estate Taxes payable hereunder; and
(ii) The cost of utilities (including taxes and other
charges incurred in connection therewith) provided to the Premises, the
Building or the Project, fuel, supplies, equipment, tools, materials,
service contracts, janitorial services, waste and refuse disposal,
gardening and landscaping; insurance, including, but not limited to,
public liability, fire, property damage, flood, rental loss, rent
continuation, boiler machinery, business interruption, contractual
indemnification and All Risk coverage insurance for up to the full
replacement cost of the Project and such other insurance as is
customarily carried by operators of other similar class office
buildings in the city in which the Project is located, to the extent
carried by Landlord in its reasonable discretion, and the deductible
portion of any insured loss otherwise covered by such insurance); the
cost of compensation, including employment, welfare and social security
taxes, paid vacation days, disability, pension, medical and other
fringe benefits of all on-site employees at or below the grade of
Building manager (including independent contractors) who perform
services directly connected with the operation, maintenance, repair or
replacement of the Project provided, that costs associated with such
on-site employees and independent contractors shall be reasonably
allocated to any other projects for which they perform services;
personal property taxes on and maintenance and repair of equipment and
other personal property used in connection with the operation,
maintenance or repair of the Project; repair and replacement of window
coverings provided by Landlord in the premises of tenants in the
Project; such reasonable auditors' fees and legal fees as are incurred
in connection with the operation, maintenance or repair of the Project;
reasonable costs incurred for management of the Project, provided, that
management fees shall not exceed three percent (3%) of gross rentals
during the Lease Term; the maintenance of any easements benefiting the
Project, whether by Landlord or by an independent contractor; a
reasonable allowance for depreciation of personal property used in the
operation, maintenance or repair of the Project; license, permit and
inspection fees; all costs and expenses required by any governmental or
quasi-governmental authority or by applicable law, for any reason,
including capital improvements, whether capitalized or not, and the
cost of any capital improvements made to the Project by Landlord that
improve life-safety systems or reduce operating expenses (such costs to
be amortized over the lesser of (i) fifteen (15) years or (ii) the
useful life of such capital improvement); the cost of air conditioning,
heating, ventilating, plumbing, elevator maintenance, and repair (to
include the replacement of components) and other mechanical and
electrical systems repair and maintenance; sign maintenance; and Common
Areas (defined below) repair, operation and maintenance; and the cost
of providing security services, if any, deemed reasonably appropriate
by Landlord.
The following items shall be excluded from Operating Costs:
(A) leasing commissions, attorneys' fees, costs
and disbursements and other expenses incurred in connection with
leasing, renovating or improving vacant space in the Project for
tenants or prospective tenants of the Project;
(B) costs (including permit, license and
inspection fees) incurred in renovating or otherwise improving or
decorating, painting or redecorating space for tenants, Tenant or
vacant space or space in the Building which would normally be occupied
by tenants;
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(C) Landlord's costs of any services sold to
tenants or Tenant for which Landlord is entitled to be reimbursed by
such tenants as an additional charge or rental over and above the Basic
Annual Rent and Operating Costs payable under the lease with such
tenant or Tenant or other occupant;
(D) any depreciation or amortization of the
Project except as expressly permitted herein;
(E) costs incurred due to a violation of Law
(defined below) by Landlord relating to the Project;
(F) interest on debt or amortization payments on
any mortgages or deeds of trust or any other debt for borrowed money;
(G) all items and services for which Tenant or
other tenants reimburse Landlord outside of Operating Costs;
(H) repairs or other work under Paragraph 10 of
this Lease paid for through condemnation proceeds;
(I) repairs resulting from any defect in the
original design or construction of the Project;
(J) Costs of repairs, replacements, or other
work occasioned by fire, windstorm or other casualty (except any
deductible, not to exceed $50,000, Landlord is required to pay with
respect to any of the foregoing shall be included in Operating Costs);
(K) Leasing commissions and attorneys' fees
incurred in connection with negotiations or disputes with tenants of
the Building;
(L) Landlord's costs of electricity and other
services sold or provided to tenants in the Building and for which
Landlord is reimbursed by such tenants or Tenant as a separate
additional charge and above the base rent or additional rent payments
payable under the lease with such tenant or Tenant;
(M) All items and services for which Tenant or
any other tenant reimburses Landlord for or with respect to which
Landlord provides without reimbursement selectively to one or more
tenants or occupants of the Project other than Tenant as a separate
additional charge and above the base rent or additional rent payments
payable under the lease with such tenant or occupants;
(N) Costs (limited to adjudicated penalties or
fines and associated legal expenses) incurred due to violation by
Landlord of the terms and conditions of any lease or rental arrangement
covering space in the Building;
(0) Payment of principal and/or interest on debt
or amortization payments of any mortgage or mortgages executed by
Landlord covering the Building (or any portion thereof), and rental
payments under any ground or underlying lease or leases;
(P) Landlord's general corporate overhead and
all general administrative overhead expenses for services not
specifically performed for the Building, except to the extent same
result in a reduction of Operating Costs with respect to the Building;
(Q) Advertising and promotional expenditures
except for (i) the Building directory and interior signs identifying
retail use tenants and signage for various equipment room and common
areas, and (ii) costs of signs in, on, or outside the Building
identifying the owner or any tenant of the Building;
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(R) Penalties and interest due to a violation of
law by Landlord relating to the Building (but this provision does not
relieve Tenant of liability for penalties or interest incurred due to
violations of Law by Tenant);
(S) Salaries or other compensation paid to
employees of Landlord above the grade of asset manager, and the salary
and compensation of the asset manager shall be prorated over the
portfolio of buildings in the greater Dallas Metropolitan area being
managed by an asset manager;
(T) The costs incurred in connection with
correcting defects in the initial construction of the Building (except
the conditions resulting from ordinary wear and tear and use shall not
be deemed defects for purposes of this category) to the extent that
such defects are covered by a warranty and occur during the six (6)
months prior to the given year in which the Operating Cost is being
charged; and
(U) Interest and penalties due to late payments
of taxes and utility bills so long as such penalties or interest do not
result from Tenant's breach of this Lease or Tenant's failure to make
timely payment of any sum due under this Lease.
(e) Operating Costs for any calendar year (including the Base
Year) during which actual occupancy of the Project is less than ninety-five
percent (95%) of the Rentable Area of the Project shall be appropriately
adjusted to reflect ninety-five percent (95%) occupancy of the existing Rentable
Area of the Project during such period. In determining Operating Costs, if any
services or utilities are separately charged to tenants of the Project or
others, Operating Costs shall be adjusted by Landlord to reflect the amount of
expense which would have been incurred for such services or utilities on a full
time basis for normal Project operating hours. Operating Costs for the Base Year
(as defined in Item 8 of the Basic Lease Provisions) shall not include Operating
Costs attributable to temporary market-wide labor-rate increases and/or utility
rate increases due to extraordinary circumstances, including, but not limited to
Force Majeure, conservation surcharges, boycotts, embargoes, or other shortages.
In no event shall the components of Operating Costs for any calendar year
related to electrical costs be less than the components of Operating Costs
related to electrical costs in the Base Year. In the event (i) the Commencement
Date shall be a date other than January 1, (ii) the date fixed for the
expiration of the Lease Term shall be a date other than December 31, (iii) of
any early termination of this Lease, or (iv) of any increase or decrease in the
size of the Premises, then in each such event, an appropriate adjustment in the
application of this Paragraph 3 shall, subject to the provisions of this Lease,
be made to reflect such event on a basis reasonably determined by Landlord to be
consistent with the principles underlying the provisions of this Paragraph 3.
(f) Prior to the commencement of each calendar year of the Lease
Term following the Commencement Date, Landlord shall have the right to give to
Tenant a written estimate of Tenant's Proportionate Share of the projected
excess, if any, of the Operating Costs for the Project for the ensuing year over
the Base Operating Costs. Tenant shall pay such estimated amount to Landlord in
equal monthly installments, in advance on the first day of each month. Within a
reasonable period after the end of each calendar year, Landlord shall furnish
Tenant a statement indicating in reasonable detail the excess of Operating Costs
over Base Operating Costs (or vice versa) for such period and the parties shall,
within thirty (30) days thereafter, make any payment or allowance necessary to
adjust Tenant's estimated payments to Tenant's actual share of such excess as
indicated by such annual statement. Any amount due Tenant shall be promptly
credited against installments next becoming due under this Paragraph 3(f) or
refunded to Tenant, if requested by Tenant. If Landlord fails to deliver to
Tenant a statement showing the variance between Operating Costs and Base
Operating Costs within one hundred eighty (180) days after the last day of a
calendar year, Tenant shall have no further obligation to pay any additional
amount in respect of the previous year.
(g) Except as otherwise provided in Section 3(d)(i), all capital
levies or other taxes assessed or imposed on Landlord upon the rents payable to
Landlord under this Lease and any excise, transaction, sales or privilege tax,
assessment, levy or charge measured by or based, in whole or in part, upon such
rents from the Premises and/or the Project or any portion thereof shall be paid
by Tenant to Landlord monthly in estimated installments or upon demand, at the
option of Landlord, as additional rent to be allocated to monthly Operating
Costs.
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(h) Tenant shall pay before delinquency, all taxes and assessments
(i) levied against any personal property or trade fixtures of Tenant in or about
the Premises and (ii) levied against Tenant based upon this Lease or any
document to which Tenant is a party creating or transferring an interest in this
Lease or an estate in all or any portion of the Premises. If any such taxes or
assessments are levied against Landlord or Landlord's property or if the
assessed value of the Project is increased by the inclusion therein of a value
placed upon such personal property or trade fixtures, Tenant shall upon demand
reimburse Landlord for the taxes and assessments so levied against Landlord, or
such taxes, levies and assessments resulting from such increase in assessed
value.
(i) Except as set forth in the last sentence of Paragraph 3(f)
above, any delay or failure of Landlord in (i) delivering any estimate or
statement described in this Paragraphs 3, or (ii) computing or billing Tenant's
Proportionate Share of excess Operating Costs shall not constitute a waiver of
its right to require Tenant to pay Tenant's Proportionate Share of Operating
Costs in excess of Base Operating Costs, or in any way impair, the continuing
obligations of Tenant under this Paragraph 3. In the event of any dispute as to
any Additional Rent due under this Paragraph 3. an officer of Tenant or Tenant's
certified public accountant shall have the right after reasonable notice and at
reasonable times to inspect Landlord's accounting records at Landlord's
accounting office. If after such inspection, Tenant still disputes such
Additional Rent, upon Tenant's written request therefor, a certification as to
the proper amount of Operating Costs and the amount due to or payable by Tenant
shall be made by an independent certified public accountant mutually agreed to
by Landlord and Tenant. The mutually agreed independent certified public
accountant shall certify the proper amount of Tenant's Proportionate Share of
Operating Costs due by Tenant for the period in question; provided, however,
such certified public accountant shall not be the accountant who conducted
Landlord's initial calculation of Operating Costs to which Tenant is now
objecting. Such certification shall be final and conclusive as to all parties.
If the certification reflects that Tenant has overpaid Tenant's Proportionate
Share of Operating Costs for the period in question, then Landlord shall credit
such excess to Tenant's next payment of Operating Costs or, at the request of
Tenant, promptly refund such excess to Tenant and conversely, if Tenant has
underpaid Tenant's Proportionate Share of Operating Costs, Tenant shall promptly
pay such additional Operating Costs to Landlord. Tenant agrees to pay the
reasonable cost of such certification and the investigation with respect thereto
unless it is determined that Landlord's original statement was in error in
Landlord's favor by more than three percent (3%). Tenant waives the right to
dispute any matter relating to the calculation of Operating Costs or Additional
Rent under this Paragraph 3 if any claim or dispute is not asserted in writing
to Landlord within one (1) year after delivery to Tenant of the original billing
statement with respect thereto.
(j) Even though the Lease Term has expired and Tenant has vacated
the Premises, when the final determination is made of Tenant's Proportionate
Share of excess Operating Costs for the year in which this Lease terminates,
Tenant shall pay any increase due over the estimated Operating Costs paid within
ten (10) days after Tenant receives written notice and detailed support thereof,
and conversely, any overpayment made by Tenant shall be promptly refunded to
Tenant by Landlord.
(k) Tenant shall not be obligated to pay for Controllable
Operating Costs in any year following the Base Year to the extent they have
increased by more than six percent (6%) over the actual Controllable Operating
Expenses from the preceding calendar year which were payable by Tenant to
Landlord, taking into account the cap. For purposes of this Lease, Controllable
Operating Costs shall mean all Operating Costs except for Taxes, insurance
premiums and utility costs and all costs and expenses for security for the
Building and the Project. Controllable Operating Costs shall be determined on an
aggregate basis and not on an individual basis, and the cap on Controllable
Operating Costs shall be determined on Operating Costs as they have been
adjusted for vacancy or usage pursuant to the terms of the Lease.
(1) The Basic Annual Rent, as adjusted pursuant to Paragraphs 2,
3, and 7, and other amounts required to be paid by Tenant to Landlord hereunder,
are sometimes collectively referred to as, and shall constitute, "Rent".
4. IMPROVEMENTS AND ALTERATIONS
(a) Landlord's sole initial construction obligation under this
Lease is set forth in the Work Letter attached hereto as Exhibit B.
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(b) Any alterations, additions, or improvements made by or on
behalf of Tenant to the Premises ("Alterations") shall be subject to Landlord's
prior written consent, such consent not to be unreasonably withheld or delayed.
Notwithstanding the foregoing to the contrary, Tenant shall not make (i) any
structural alterations, improvements or additions to the Premises, or (ii) any
alterations, improvements or additions to the Premises which (a) will adversely
impact the Building's mechanical, electrical or heating, ventilation or air
conditioning systems, or (b) will adversely impact the structure of the
Building, or (c) are visible from the exterior of the Premises, or (d) which
will result in the penetration or puncturing of the roof or floor, without, in
each case, first obtaining Landlord's prior written consent or approval to such
Alterations (which consent or approval shall be in the Landlord's sole and
absolute discretion). Notwithstanding anything herein to the contrary, Tenant,
may, without Landlord's prior consent, but with prior written notice to Landlord
and provided that Tenant complies with all Building rules and regulations
affecting Alterations promulgated in accordance with Section 19(t), install
cosmetic, non-structural alterations to the interior of the Premises costing
$25,000.00 or less in any calendar year, provided the same do not affect the
Building systems, including, without limitation, the mechanical, electrical,
plumbing or life-safety systems of the Building. Tenant shall cause, at its
sole cost and expense, all Alterations to comply with insurance requirements and
with Laws and shall construct, at its sole cost and expense, any alteration or
modification required by Laws as a result of any Alterations, unless such
compliance with Laws is otherwise Landlord's obligation under this Lease. All
Alterations shall be constructed at Tenant's sole cost and expense and in a good
and workmanlike manner by contractors reasonably acceptable to Landlord and only
good grades of materials shall be used. If the improvements or Alterations
require the issuance of a building permit, then all plans and specifications for
any Alterations shall be submitted to Landlord for its approval, which approval
will not be unreasonably withheld, delayed or conditioned. If Landlord does not
notify Tenant in writing of any specific obligations thereto within twenty (20)
days after Landlord's receipt of such plans and specifications, Landlord will be
deemed to have approved such plans and specifications as submitted. Landlord may
monitor construction of the Alterations. Landlord's right to review plans and
specifications and to monitor construction shall be solely for its own benefit,
and Landlord shall have no duty to see that such plans and specifications or
construction comply with applicable laws, codes, rules and regulations. Landlord
shall have the right, in its sole discretion, to instruct Tenant to remove those
improvements or Alterations from the Premises which (i) were required to be
consented to by Landlord but were not approved in advance by Landlord, (ii) N/A
or (iii) Landlord specified in writing during its review of plans and
specifications that such Alterations would need to be removed by Tenant upon the
expiration of this Lease. If upon the termination of this Lease Landlord
requires Tenant to remove any or all of such Alterations from the Premises, then
Tenant, at Tenant's sole cost and expense, shall promptly remove such
Alterations and improvements and Tenant shall repair and restore the Premises to
its original condition after completion of the Tenant Improvements and not
including subsequent improvements that Tenant is not required to remove,
reasonable wear and tear, repairs which are the responsibility of Landlord,
repairs which are covered by Landlord's insurance and damage due to fire or
other casualty or condemnation excepted. Any Alterations remaining in the
Premises following the expiration of the Lease Term or following the surrender
of the Premises from Tenant to Landlord, shall become the property of Landlord.
Tenant shall provide Landlord with the identities and mailing addresses of all
persons performing work or supplying materials, prior to beginning such
construction, and Landlord may post on and about the Premises notices of
non-responsibility pursuant to applicable law. Tenant shall assure payment for
the completion of all work free and clear of liens and shall provide
certificates of insurance for worker's compensation and other coverage in
amounts and from an insurance company reasonably satisfactory to Landlord
protecting Landlord against liability for bodily injury or property damage
during construction. Upon completion of any Alterations and upon Landlord's
reasonable request, Tenant shall deliver to Landlord sworn statements setting
forth the names of all contractors and subcontractors who did work on the
Alterations and final lien waivers from all such contractors and subcontractors.
(c) Tenant shall keep the Premises, the Building and the Project
free from any and all liens arising out of any Alterations, work performed,
materials furnished, or obligations incurred by or for Tenant. In the event that
Tenant shall not, within thirty (30) days following written notice from Landlord
of the imposition of any such lien, cause the same to be released of record by
payment or posting of a bond, Landlord shall have the right, but not the
obligation, to cause such lien to be released by such means as it shall
reasonably deem proper (including payment of or defense against the claim giving
rise to such lien); in such case, Tenant shall reimburse Landlord for all
reasonable amounts so paid by Landlord in connection therewith, together with
all of Landlord's reasonable costs and expenses, with interest thereon at the
Default Rate (defined below) and Tenant shall indemnify each and all of the
Landlord Indemnitees (defined below) against any damages, losses or costs
arising out of any such claim.
9
Tenant's indemnification of Landlord contained in this Paragraph shall survive
the expiration or earlier termination of this Lease. Such rights of Landlord
shall be in addition to all other remedies provided herein or by law.
5. REPAIRS
(a) Landlord shall keep the Common Areas of the Building and the
Project in a clean and neat condition and in good condition and repair. Subject
to subparagraph (b) below, Landlord shall make all necessary repairs, to the
exterior walls, exterior doors, exterior locks on exterior doors and windows of
the Building, and to the Common Areas, including, but not limited to, the roof,
foundation and structural elements of the Building, heating, air conditioning
and mechanical, electrical and plumbing systems and life safety systems and to
public corridors and other public areas of the Project not constituting a
portion of any tenant's premises and shall keep all Building standard equipment
used by Tenant in common with other tenants in good condition and repair and to
replace same at the end of such equipment's normal and useful life. Except as
expressly provided in Paragraph 9 of this Lease, there shall be no abatement of
Rent and no liability of Landlord by reason of any injury to or interference
with Tenant's business arising from the making of any reasonable repairs,
alterations or improvements in or to any portion of the Premises, the Building
or the Project, provided the same are diligently prosecuted to completion.
(b) Tenant, at its expense, (i) shall keep the Premises and all
fixtures contained therein in a safe, clean and neat condition, and (ii) shall
bear the cost of maintenance and repair, of all facilities which are not
expressly required to be maintained or repaired by Landlord and which are
located in the Premises, including, without limitation, lavatory, shower,
toilet, wash basin and kitchen facilities, and supplemental heating and air
conditioning systems (including all plumbing connected to said facilities or
systems installed by or on behalf of Tenant or existing in the Premises at the
time of Landlord's delivery of the Premises to Tenant), normal wear and tear,
repairs which are the responsibility of Landlord, repairs which are covered by
Landlord's insurance and damage to fire and other casualty or condemnation
excepted. Tenant shall make all repairs to the Premises not required to be made
by Landlord under subparagraph (a) above with replacements of any materials to
be made by use of materials of equal or better quality. Tenant shall do all
decorating, remodeling, alteration and painting elected by Tenant during the
Lease Term. Tenant shall pay for the cost of any repairs to the Premises, the
Building or the Project made necessary by any gross negligence or willful
misconduct of Tenant or any of its assignees, subtenants, employees or their
respective agents, representatives, contractors, or other persons permitted in
or invited to the Premises or the Project by Tenant to the extent not covered by
Landlord's insurance. If Tenant fails to make such repairs or replacements
within fifteen (15) days after written notice from Landlord, Landlord may at its
option make such repairs or replacements, and Tenant shall upon demand pay
Landlord for the cost thereof.
(c) Notwithstanding the foregoing, in the event there is a
malfunction or breakdown of an elevator in the Building ("Elevator Malfunction")
and if Landlord does not commence to cure such Elevator Malfunction within one
(1) business day following notice to Landlord from Tenant of such Elevator
Malfunction (which can be telephonic notice to the Landlord's property manager)
or complete such work within two (2) business days after such notice, then
Tenant may take reasonable actions to cure such Elevator Malfunction on behalf
of and at the sole cost and expense of Landlord, in which event Landlord shall
reimburse Tenant for its out-of-pocket costs and expenses incurred and paid in
connection therewith within thirty (30) days after Tenant's delivery to Landlord
of an invoice therefor, together with reasonable supporting documentation for
such reasonable costs and expenses ("Self-Help Remedy"). Tenant shall have the
right to contact any qualified third party elevator company to help cure the
Elevator Malfunction. Notwithstanding the foregoing, Tenant's Self-Help Remedy
with regard to an Elevator Malfunction shall be limited to the repair and
maintenance of the elevators in the Building and shall not include any
replacement of parts or components in excess of an aggregate amount of
$10,000.00 without Landlord's prior written approval, such approval not to be
unreasonably withheld or delayed. If Landlord fails to reimburse Tenant for the
reasonable costs, fees and expenses incurred by Tenant in taking curative
actions under its Self-Help Remedy within thirty (30) days after demand
therefore (or fails to reimburse Tenant within thirty (30) days after the
arbitrator's award, as described below), Tenant may offset the portion of any
such costs as to which Landlord does not have a good faith dispute (or the
arbitrator's award, as the case may be) together with interest at a rate of 10%
per annum from the due date therefor against Basic Annual Rent. If Landlord does
not dispute Tenant's request and specifically outline the reasons for its
disapproval of Tenant's request within five (5) business days after Landlord's
receipt of Tenant's request, then Tenant's request shall be deemed granted. In
the event that Landlord, in good faith, disputes any portion of the fees, costs
and expenses incurred by Tenant in connection with the Self-Help Remedy
described above as not being reimbursable pursuant to the terms and provisions
of this Section 5(c), the
10
parties agree to use good faith efforts through negotiation to resolve such
dispute within ten (10) business days. Upon demand of either party, if the
parties have been unable after good faith efforts, to resolve such dispute
within such ten (10) business day period, such dispute shall be settled by
binding arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and any judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction thereof. The
arbitration shall be conducted in Dallas, Texas. The arbitrator shall award to
the prevailing party, if any, as determined by the arbitrator, all of the
reasonable attorneys' fees and costs and expenses incurred by such party in
connection with the arbitration.
(d) Upon the expiration or earlier termination of this Lease,
Tenant shall surrender the Premises in a safe, clean and neat condition, normal
wear and tear, damage by casualty or condemnation and matters which are the
responsibility of Landlord under this Lease excepted. Except as otherwise set
forth in Paragraph 4(b) of this Lease, Tenant shall remove from the Premises all
trade fixtures, furnishings and other personal property of Tenant and all
computer and phone cabling and wiring from the Premises, shall repair all damage
caused by such removal, and shall restore the Premises to its previous
condition, reasonable wear and tear excepted. In addition to all other rights
Landlord may have, in the event Tenant does not so remove any such fixtures,
furnishings or personal property within ten (10) days after Tenant's receipt of
written notice from Landlord, Tenant shall be deemed to have abandoned the same,
in which case Landlord may store the same at Tenant's expense, appropriate the
same for itself, and/or sell the same in its discretion.
6. USE OF PREMISES
(a) Tenant shall use the Premises only for general office uses and
shall not use the Premises or permit the Premises to be used for any other
purpose (the "Permitted Use"). Landlord shall have the right to deny its consent
to any change in the permitted use of the Premises in its sole and absolute
discretion.
(b) Tenant shall not at any time use or occupy the Premises in
violation of any law, statute, ordinance or any governmental rule, regulation or
order (collectively, "Law" or "Laws") and Tenant shall, upon written notice
from Landlord, discontinue any use of the Premises which is declared by any
governmental authority to be a violation of Law. If any Law shall, by reason of
the nature of Tenant's specific use or occupancy of the Premises (as opposed to
general office use), impose any duty upon Tenant or Landlord with respect to (i)
modification or other maintenance of the Premises, the Building or the Project,
or (ii) the use, alteration or occupancy thereof, unless due to the failure of
Landlord to construct the Tenant Improvements in compliance with Laws Tenant
shall comply with such Law at Tenant's sole cost and expense; however, if
compliance with such Laws is required for general office use or if due to
Landlord's failure to construct the Tenant's Improvements in compliance with
Laws, Landlord shall comply with such Laws. If the Building (excluding the
obligations with respect to the Premises that are Tenant's obligations as
described above in this Section 6(b)) or Common Areas are determined by
applicable governmental agencies to not be in compliance with Legal Requirements
applicable to the Project as of the Commencement Date, then Landlord shall be
fully responsible, at its sole cost and expense (which shall not be included in
Operating Costs), for making all alterations and repairs to the Building
(excluding the obligations with respect to the Premises that are Tenant's
obligations as described above in this Section 6(b)) and the Common Areas
required by such governmental agencies so that the Building (excluding the
obligations with respect to the Premises that are Tenant's obligations as
described above in this Section 6(b)) or the Common Areas comply with all such
Legal Requirements. The term "Legal Requirements" shall mean all covenants and
restrictions of record (if any), laws, statutes, building and zoning codes,
ordinances, and governmental orders, conditions of approval, rules and
regulations (including, but not limited to, Title III of the Americans With
Disabilities Act of 1990), as well as the same may be amended and supplemented
from time to time, including, without limitation, all Legal Requirements that
pertain to the Building structure. Notwithstanding the foregoing sentence, if
there is a "new" Legal Requirement (a Legal Requirement first enacted or made
applicable to the Project after the Commencement Date of this Lease) affecting
the Building (excluding the obligations with respect to the Premises that are
Tenant's obligations as described above in this Section 6(b)) or the Common
Areas, and governmental agencies require Landlord to make capital expenditures
or repairs to the Building (excluding the obligations with respect to the
Premises that are Tenant's obligations as described above in this Section 6(b))
or the Common Areas, the invoiced cost and expense of such capital expenditures
or repairs shall be an Operating Cost which shall be reimbursed by the tenants
in the Project over the lesser of (i) the useful life of such capital
expenditures, or (ii) fifteen (15) years. Subject to applicable Legal
Requirements (including any "grandfather" provisions pertaining thereto),
Landlord
11
agrees to maintain the Building (except the Premises, to the extent such
compliance is Tenant's responsibility pursuant to this Section 6(b)) and Common
Areas in compliance with all Legal Requirements.
(c) Tenant shall not at any time use or occupy the Premises in
violation of the certificates of occupancy issued for or restrictive covenants
pertaining to the Building or the Premises, and in the event that any
architectural control committee or department of the State or the city or county
in which the Project is located shall at any time contend or declare that the
Premises are used or occupied in violation of such certificate or certificates
of occupancy or restrictive covenants, Tenant shall, upon five (5) days' notice
from Landlord or any such governmental agency, immediately discontinue such use
of the Premises (and otherwise remedy such violation). The failure by Tenant to
discontinue such use shall be considered a default under this Lease and Landlord
shall have the right to exercise any and all rights and remedies provided herein
or by Law. Any statement in this Lease of the nature of the business to be
conducted by Tenant in the Premises shall not be deemed or construed to
constitute a representation or guaranty by Landlord that such business will
continue to be lawful or permissible under any certificate of occupancy issued
for the Building or the Premises, or otherwise permitted by Law. Notwithstanding
anything herein to the contrary, Landlord hereby represents to Tenant that
Tenant will not be prohibited from using the Premises for general office
purposes because such use of the Premises for general office purposes is in
violation of an applicable Law, certificate of occupancy or a restrictive
covenant affecting the Project.
(d) Tenant shall not do anything which may invalidate or increase
the cost of any fire, All Risk or other insurance policy covering the Building,
the Project and/or property located therein and shall comply with all rules,
orders, regulations and requirements of the appropriate fire codes and
ordinances or any other organization performing a similar function. Landlord
acknowledges and agrees that the permitted use will not invalidate or increase
the cost of any of Landlord's fire, All Risk, or other insurance policies. In
addition to all other remedies of Landlord, Landlord may require Tenant,
promptly upon demand, to reimburse Landlord for the full amount of any
additional premiums charged for such policy or policies by reason of Tenant's
failure to comply with the provisions of this Paragraph 6(d).
(e) Tenant shall not unreasonably interfere with the rights or
quiet enjoyment of other tenants or occupants of the Building or the Project.
Tenant shall not use the Premises for any immoral or unlawful purpose, nor shall
Tenant cause, maintain, or permit any nuisance in, on or about the Premises, the
Building or the Project. Tenant shall not place weight upon any portion of the
Premises exceeding the structural floor load (per square foot of area) which
such area was designated (and is permitted by Law) to carry or otherwise use any
Building system in excess of its capacity or in any other manner which may
damage such system or the Building. Tenant shall not create within the Premises
a working environment with a density of greater than five (5) persons per 1,000
square feet of Rentable Area. Business machines and mechanical equipment shall
be placed and maintained by Tenant, at Tenant's expense, in locations and in
settings sufficient in Landlord's reasonable judgment to absorb and prevent
vibration, noise and annoyance. Tenant shall not commit any waste in, on, upon
or about the Premises, the Building or the Project.
(f) Except for items that are Landlord's responsibility to repair
and maintain pursuant to Section 5(a) above (e.g., doors on the exterior of the
Building, sprinkler system, smoke detectors, alarm system), Tenant shall take
all reasonable steps necessary to adequately secure the Premises from unlawful
intrusion, theft, fire and other hazards, and shall keep and maintain any and
all security devices in or on the Premises in good working order, including, but
not limited to, exterior door locks for the Premises and smoke detectors and
burglar alarms located within the Premises and shall cooperate with Landlord and
other tenants in the Project with respect to access control and other safety
matters. In this regard, Landlord acknowledges that Tenant may turn off elevator
access outside of Business Hours to full floors within the Premises and Landlord
has previously delivered a key to Tenant for this purpose.
(g) As used herein, the term "Hazardous Material" means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State or the United States Government,
including, without limitation, any material or substance which is (A) defined or
listed as a "hazardous waste." "pollutant." "extremely hazardous waste."
"restricted hazardous waste." "hazardous substance" or "hazardous material"
under any applicable federal, state or local Law or administrative code
promulgated thereunder, (B) petroleum, or (C) asbestos.
12
(i) Tenant agrees that all operations or activities upon,
or any use or occupancy of the Premises, or any portion thereof, by
Tenant, its assignees, subtenants, and their respective agents,
servants, employees and representatives (collectively referred to
herein as "Tenant Affiliates"), throughout the Lease Term, shall be in
all respects in compliance with all federal, state and local Laws then
governing or in any way relating to the generation, handling,
manufacturing, treatment, storage, use, transportation, release,
spillage, leakage, dumping, discharge or disposal of any Hazardous
Materials.
(ii) Tenant agrees to indemnify, defend and hold Landlord
and its Affiliates (defined below) harmless for, from and against any
and all claims, actions, administrative proceedings (including informal
proceedings), judgments, damages, penalties, fines, costs, liabilities,
interest or losses, including reasonable attorneys' fees and expenses,
court costs, consultant fees, and expert fees, together with other
reasonable costs and expenses of any kind or nature that arise during
or after the Lease Term directly from or in connection with the
presence or release of any Hazardous Material in or into the air, soil,
surface water or groundwater at, on, about, under or within the
Premises, or any portion thereof caused by Tenant or Tenant Affiliates.
(iii) In the event any investigation or monitoring of site
conditions or any clean-up, containment, restoration, removal or other
remedial work (collectively, the "Remedial Work") is required under any
applicable federal, state or local Law, by any judicial order, or by
any governmental entity as the result of operations or activities upon,
or any use or occupancy of any portion of the Premises by Tenant or
Tenant Affiliates, Landlord shall perform or cause to be performed the
Remedial Work in compliance with such Law or order at Tenant's sole
cost and expense. All Remedial Work shall be performed by one or more
contractors, selected and approved by Landlord, and under the
supervision of a consulting engineer, selected by Tenant and approved
in advance in writing by Landlord. All costs and expenses of such
Remedial Work shall be paid by Tenant, including, without limitation,
the charges of such contractor(s), the consulting engineer, and
Landlord's reasonable attorneys' fees and costs incurred in connection
with monitoring or review of such Remedial Work.
(iv) Each of the covenants and agreements of Tenant set
forth in this Paragraph 6(g) shall survive the expiration or earlier
termination of this Lease.
7. UTILITIES AND SERVICES
(a) Landlord shall furnish, or cause to be furnished to the
Premises, the utilities and services described in Exhibit C attached hereto and
all other services typically provided to tenants in similar projects, subject to
the conditions and in accordance with the standards set forth therein and in
this Lease.
(b) Tenant agrees to cooperate fully at all times with Landlord
and to comply with all regulations and requirements which Landlord may from time
to time reasonably prescribe for the use of the utilities and services described
herein and in Exhibit C. Landlord shall not be liable to Tenant for the failure
of any other tenant, or its assignees, subtenants, employees, or their
respective invitees, licensees, agents or other representatives to comply with
such regulations and requirements. Landlord shall use commercially reasonable
efforts to enforce the rules and regulations in a non-discriminatory manner.
(c) If Tenant requires utilities or services in quantities greater
than or at times other than that generally furnished by Landlord pursuant to
Exhibit C. Tenant shall pay to Landlord within fifteen (15) days after receipt
of a written statement therefor, Landlord's actual cost incurred for such use.
In the event that Tenant shall require additional electric current, water or gas
for use in the Premises and if, in Landlord's reasonable judgment, such excess
requirements cannot be furnished unless additional risers, conduits, feeders,
switchboards and/or appurtenances are installed in the Building, subject to the
conditions stated below, Landlord shall proceed to install the same at the sole
cost of Tenant, payable upon demand in advance. The installation of such
facilities shall be conditioned upon Landlord's consent, and a determination
that the installation and use thereof (i) shall be permitted by applicable Law
and insurance regulations, (ii) shall not cause permanent damage or injury to
the Building or adversely affect the value of the Building or the Project, and
(iii) shall not cause or create a dangerous or hazardous condition or interfere
with or disturb other tenants in the Building. Subject to the foregoing,
Landlord shall, upon reasonable prior notice by Tenant, furnish to the Premises
additional heating, air conditioning and/or cleaning
13
services upon such reasonable terms and conditions as shall be determined by
Landlord, including payment of Landlord's actual cost incurred therefor. In the
case of any additional utilities or services to be provided hereunder, Landlord
may require a switch and metering system to be installed so as to measure the
amount of such additional utilities or services. The cost of installation,
maintenance and repair thereof shall be paid by Tenant upon demand.
(d) Except as otherwise provided in this Lease, Landlord shall not
be liable for, and Tenant shall not be entitled to, any damages, abatement or
reduction of Rent, or other liability by reason of any failure to furnish any
services or utilities described herein or in Exhibit C for any reason (other
than Landlord's negligence or misconduct), including, without limitation, when
caused by accident, breakage, repairs, Alterations or other improvements to the
Project, strikes, lockouts or other labor disturbances or labor disputes of any
character, governmental regulation, moratorium or other governmental action,
inability to obtain electricity, water or fuel, or any other cause beyond
Landlord's control. Landlord shall be entitled to cooperate with the energy
conservation efforts of governmental agencies or utility suppliers. Except as
otherwise provided in this Lease or by Law, no such failure, stoppage or
interruption of any such utility or service shall be construed as an eviction of
Tenant, nor shall the same relieve Tenant from any obligation to perform any
covenant or agreement under this Lease. In the event of any failure, stoppage or
interruption thereof, Landlord shall use reasonable efforts to attempt to
restore all services promptly. No representation is made by Landlord with
respect to the adequacy or fitness of the Building's ventilating, air
conditioning or other systems to maintain temperatures as may be required for
the operation of any data processing or other special equipment of Tenant.
Notwithstanding anything in this Paragraph 7 to the contrary, if an interruption
or cessation of a utility service to the Premises from a cause within the
reasonable control of Landlord results in the Premises being unusable by Tenant
for the conduct of Tenant's business, then Basic Annual Rent shall be abated
commencing on that date which is five (5) business days following the date
Tenant delivers written notice to Landlord of such interruption and continuing
until either such utility service to the Premises is restored or the Premises is
again usable for the conduct of Tenant's business. If, however, Tenant
reoccupies any portion of the Premises during such abatement period, the Basic
Annual Rent allocable to such reoccupied portion, based on the proportion that
the Rentable Area of such reoccupied portion of the Premises bears to the total
Rentable Area of the Premises, shall be payable by Tenant from the date Tenant
reoccupies such portion of the Premises. Except in the event of a constructive
eviction under the Law, such right to abate Basic Annual Rent shall be Tenant's
sole and exclusive remedy at law or in equity in the event of an interruption or
cessation of a utility service to the Premises.
(e) Landlord reserves the right, with prior written notice to
Tenant, from time to time to make reasonable and nondiscriminatory modifications
to the above standards (including, without limitation, those described in
Exhibit C) for utilities and services.
8. NON-LIABILITY AND INDEMNIFICATION OF LANDLORD; INSURANCE
(a) Landlord shall not be liable for any injury, loss or damage
suffered by Tenant or to any person or property occurring or incurred in or
about the Premises, the Building or the Project from any cause, EVEN IF SUCH
LIABILITIES ARE CAUSED IN PART BY THE NEGLIGENCE OF ANY LANDLORD INDEMNITEE
(DEFINED BELOW), BUT NOT TO THE EXTENT SUCH LIABILITIES ARE CAUSED BY THE SOLE
NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY SUCH LANDLORD
INDEMNITEE (DEFINED BELOW). Without limiting the foregoing, except to the extent
provided above, neither Landlord nor any of its partners, officers, trustees,
affiliates, directors, employees, contractors, agents or representatives
(collectively, "Affiliates") shall be liable for and there shall be no abatement
of Rent (except in the event of a casualty loss or a condemnation as set forth
in Paragraphs 9 and 10 of this Lease) for (i) any damage to Tenant's property
stored with or entrusted to Affiliates of Landlord, (ii) loss of or damage to
any property by theft or any other wrongful or illegal act, or (iii) any injury
or damage to persons or property resulting from fire, explosion, falling
plaster, steam, gas, electricity, water or rain which may leak from any part of
the Building or the Project or from the pipes, appliances, appurtenances or
plumbing works therein or from the roof, street or sub-surface or from any other
place or resulting from dampness or any other cause whatsoever or from the acts
or omissions of other tenants, occupants or other visitors to the Building or
the Project or from any other cause whatsoever, (iv) any diminution or shutting
off of light, air or view by any structure which may be erected on lands
adjacent to the Building, whether within or outside of the Project, or (v)
except as otherwise provided in this Lease, any latent or other defect in the
Premises, the Building or the Project. Tenant shall give prompt notice to
Landlord in the event of
14
(i) the occurrence of a fire in the Premises or in the Building, or (ii) the
discovery of a defect therein or in the fixtures or equipment thereof. This
Paragraph 8(a) shall survive the expiration or earlier termination of this
Lease.
(b) N/A
(c) N/A
(d) Insurance.
(i) Tenant at all times during the Lease Term shall, at
its own expense, keep in full force and effect (A) commercial general
liability insurance providing coverage against bodily injury and
disease, including death resulting therefrom, bodily injury and
property damage to a combined single limit of $2,000,000 to one or more
than one person as the result of any one accident or occurrence, which
shall include provision for contractual liability coverage insuring
Tenant for the performance of its indemnity obligations set forth in
this Paragraph 8 and in Paragraph 6(g)(ii) of this Lease, (B) worker's
compensation insurance to the statutory limit, if any, and employer's
liability insurance to the limit of $500,000 per occurrence, (C) All
Risk or special purpose personal property insurance covering full
replacement value of all of Tenant's personal property and trade
fixtures in the Premises and (D) N/A. Landlord and its designated
property management firm shall be named an additional insured on each
of said policies (excluding the worker's compensation policy) and said
policies shall be issued by an insurance company or companies
authorized to do business in Texas and which have policyholder ratings
not lower than "A-" and financial ratings not lower than "VII" in
Best's Insurance Guide (latest edition in effect as of the Effective
Date and subsequently in effect as of the date of renewal of the
required policies). EACH OF SAID POLICIES SHALL ALSO INCLUDE A WAIVER
OF SUBROGATION PROVISION OR ENDORSEMENT IN FAVOR OF LANDLORD, AND AN
ENDORSEMENT PROVIDING THAT LANDLORD SHALL RECEIVE THIRTY (30) DAYS
PRIOR WRITTEN NOTICE OF ANY CANCELLATION OF, NONRENEWAL OF, REDUCTION
OF COVERAGE OR MATERIAL CHANGE IN COVERAGE ON SAID POLICIES. Tenant
hereby waives its right of recovery against any Landlord Indemnitee of
any amounts paid by Tenant or on Tenant's behalf to satisfy applicable
worker's compensation laws. Upon written request by Landlord, copies of
the policies or duly executed certificates showing the material terms
for the same, together with satisfactory evidence of the payment of the
premiums therefor, shall be deposited with Landlord on the date Tenant
first occupies the Premises and upon renewals of such policies not less
than fifteen (15) days prior to the expiration of the term of such
coverage.
(ii) It is expressly understood and agreed that the
coverages required represent Landlord's minimum requirements and such
are not to be construed to void or limit Tenant's obligations contained
in this Lease, including without limitation Tenant's indemnity
obligations hereunder. Neither shall (A) the insolvency, bankruptcy or
failure of any insurance company carrying Tenant, (B) the failure of
any insurance company to pay claims occurring nor (C) any exclusion
from or insufficiency of coverage be held to affect, negate or waive
any of Tenant's indemnity obligations under this Paragraph 8 and
Paragraph 6(g)(ii) or any other provision of this Lease. With respect
to insurance coverages, except worker's compensation, maintained
hereunder by Tenant and insurance coverages separately obtained by
Landlord, all insurance coverages afforded by policies of insurance
maintained by Tenant shall be primary insurance as such coverages apply
to Landlord, and such insurance coverages separately maintained by
Landlord shall be excess, and Tenant shall have its insurance policies
so endorsed. The amount of liability insurance under insurance policies
maintained by Tenant shall not be reduced by the existence of insurance
coverage under policies separately maintained by Landlord. Tenant shall
be solely responsible for any premiums, assessments, penalties,
deductible assumptions, retentions, audits, retrospective adjustments
or any other kind of payment due under its policies.
(iii) Tenant's occupancy of the Premises without delivering
the certificates of insurance shall not constitute a waiver of Tenant's
obligations to provide the required coverages. If Tenant provides to
Landlord a certificate that does not evidence the coverages required
herein, or that is faulty in any respect, such shall not constitute a
waiver of Tenant's obligations to provide the proper insurance.
15
(iv) Throughout the Lease Term, Landlord agrees to
maintain (i) fire and extended coverage insurance on the insurable
portions of Building and the remainder of the Project in an amount not
less than the full replacement value thereof, subject to reasonable
deductibles (ii) boiler and machinery insurance amounts and with
deductibles that would be considered standard for similar class office
building in Dallas, Texas metropolitan area and (iii) commercial
general liability insurance with a combined single limit coverage of at
least $2,000,000.00 per occurrence. All such insurance shall be
obtained from insurers Landlord reasonably believes to be financially
responsible in light of the risks being insured. The premiums for any
such insurance shall be a part of Operating Costs.
(e) Mutual Waivers of Recovery. Notwithstanding anything to the
contrary contained in this Lease, Landlord, Tenant, and all parties claiming
under them, each mutually release and discharge each other from responsibility
for that portion of any loss or damage paid or reimbursed (including the amount
of any deductible in connection therewith) by an insurer of Landlord or Tenant
under any fire, extended coverage or other property insurance policy maintained
by Tenant with respect to its Premises or by Landlord with respect to the
Building or the Project (or which would have been paid had the insurance
required to be maintained hereunder been in full force and effect), no matter
how caused, including negligence, and each waives any right of recovery from the
other including, but not limited to, claims for contribution or indemnity,
which might otherwise exist on account thereof. Any fire, extended coverage or
property insurance policy maintained by Tenant with respect to the Premises, or
Landlord with respect to the Building or the Project, shall contain, in the case
of Tenant's policies, a waiver of subrogation provision or endorsement in favor
of Landlord, and in the case of Landlord's policies, a waiver of subrogation
provision or endorsement in favor of Tenant, or, in the event that such insurers
cannot or shall not include or attach such waiver of subrogation provision or
endorsement, Tenant and Landlord shall obtain the approval and consent of their
respective insurers, in writing, to the terms of this Lease. Each party agrees
to indemnify, protect, defend and hold harmless each other party from and
against any claim, suit or cause of action asserted or brought by such party's
insurers for, on behalf of, or in the name of such party, including, but not
limited to, claims for contribution, indemnity or subrogation, brought in
contravention of this paragraph. The mutual releases, discharges and waivers
contained in this provision shall apply EVEN IF THE LOSS OR DAMAGE TO WHICH THIS
PROVISION APPLIES IS CAUSED SOLELY OR IN PART BY THE NEGLIGENCE OF LANDLORD OR
TENANT.
(f) Business Interruption. Except as otherwise provided in this
Lease or by Law, Landlord shall not be responsible for, and Tenant releases and
discharges Landlord from, and Tenant further waives any right of recovery from
Landlord for, any loss for or from business interruption or loss of use of the
Premises suffered by Tenant in connection with Tenant's use or occupancy of the
Premises, EVEN IF SUCH LOSS IS CAUSED SOLELY OR IN PART BY THE NEGLIGENCE OF
LANDLORD.
(g) Adjustment of Claims. Tenant shall cooperate with Landlord and
Landlord's insurers in the adjustment of any insurance claim pertaining to the
Building or the Project or Landlord's use thereof.
(h) N/A
(i) Failure to Maintain Insurance. In the event of failure by
Tenant to maintain the insurance policies and coverages required by this Lease
or to meet any of the insurance requirements of this Lease within fifteen (15)
days after Tenant's receipt of a written request from Landlord to do so, then,
Landlord, at its option, and without relieving Tenant of its obligations
hereunder, may obtain said insurance policies and coverages or perform any other
insurance obligation of Tenant, but all costs and expenses incurred by Landlord
in obtaining such insurance or performing Tenant's insurance obligations shall
be reimbursed by Tenant to Landlord.
9. FIRE OR CASUALTY
(a) Subject to the provisions of this Paragraph 9. in the event
the Premises, or the parking area of other Common Areas, or access thereto, is
wholly or partially destroyed by fire or other casualty, Landlord shall (to the
extent permitted by Law then applicable to the Project) rebuild, repair or
restore the Premises, Parking Area, other Common Areas and access thereto to
substantially the same condition as existing immediately prior to such
destruction and this Lease shall continue in full force and effect. Landlord
shall give Tenant written notice of the estimated time which will be needed to
repair such damage, as determined by Landlord in its reasonable discretion,
16
and the election (if any) which Landlord has made according to this Paragraph 9.
Such notice shall be given before the forty-fifth (45th) day after the fire or
other casualty. Notwithstanding the foregoing, (i) Landlord's obligation to
rebuild, repair or restore the Premises shall not apply to any personal
property, above-standard tenant improvements or other items installed by Tenant
or contained in the Premises, and (ii) Landlord shall have no obligation
whatsoever to rebuild, repair or restore the Premises with respect to any damage
or destruction occurring during the last twelve(12) months of the Lease Term
(unless Tenant exercises a renewal option); provided, however, that in such
event, if Landlord does not terminate this Lease, then Tenant may terminate this
Lease during the last twelve (12) months of the Lease Term, by written notice to
Landlord within thirty (30) days after receiving Landlord's notice of the time
needed to repair such damage. Notwithstanding the foregoing, Landlord stipulates
and acknowledges that the Tenant Improvements (as said term is defined in
Exhibit B attached hereto) are not above-standard tenant improvements, as
referenced in romanette (i) above and Section 10 below, and, accordingly, shall
be considered a restoration obligation of Landlord pursuant to the terms and
conditions contained in this Section 9(a) and Section 10.
(b) Landlord may elect to terminate this Lease in any of the
following cases of damage or destruction to the Premises, the Building or the
Project: (i) where the cost of rebuilding, repairing and restoring
(collectively, "Restoration") of the Building or the Project, would, regardless
of the lack of damage to the Premises or access thereto, in the reasonable
opinion of Landlord, exceed fifty percent (50%) of the then replacement cost of
the Building or (ii) where, in the case of any damage or destruction to the
Premises or access thereto by uninsured casualty provided that Landlord has kept
in force the required insurance, the cost of Restoration of the Premises or
access thereto, in the reasonable opinion of Landlord, exceeds fifty percent
(50%) of the then replacement cost of the Premises or (iii) N/A. Any such
termination shall be made by thirty (30) days' prior written notice to Tenant
given within forty-five (45) days of the date of such damage or destruction. If,
as the result of any damage or destruction, the Premises, or a portion thereof,
are rendered untenantable, the Basic Annual Rent shall abate reasonably during
the period of Restoration (based upon the extent to which such damage and
Restoration materially interfere with Tenant's business in the Premises).
Notwithstanding anything in this Lease to the contrary, if Landlord fails to
restore the Building, Premises, Parking Area or other Common Areas, to the
condition required herein within two hundred forty (240) days following the fire
or other casualty (subject to a day for day delay due to Force Majeure events
[not to exceed an additional 120 days] or Tenant Delay), Tenant shall be
entitled to terminate this Lease by written notice to Landlord at any time
before such Restoration has been completed. This Lease shall be considered an
express agreement governing any case of damage to or destruction of the
Premises, the Building or the Project.
10. EMINENT DOMAIN
In the event the whole of the Premises, the Building or the Project
shall be taken under the power of eminent domain, or sold to prevent the
exercise thereof (collectively, a 'Taking"), this Lease shall automatically
terminate as of the date of such Taking. In the event a Taking of a portion of
the Project, the Building or the Premises shall, in the reasonable opinion of
Landlord, substantially interfere with Landlord's operation thereof, Landlord
may terminate this Lease upon thirty (30) days' written notice to Tenant given
at any time within sixty (60) days following the date of such Taking provided
that Landlord terminates all other leases in the Building. If more than twenty
percent (20%) of the Premises, Parking Area or Common Areas, is the subject of a
Taking and such Taking materially and adversely affects Tenant's ability to
operate its business in the Premises, Tenant shall be entitled to terminate this
Lease upon written notice to Landlord given within sixty (60) days of the
Taking. For purposes of this Lease, the date of Taking shall be the earlier of
the date of transfer of title resulting from such Taking or the date of transfer
of possession resulting from such Taking. In the event that a portion of the
Premises is so taken and this Lease is not terminated, Landlord shall, with
reasonable diligence, restore (to the extent permitted by Law then applicable to
the Project) the Premises (other than Tenant's personal property and trade
fixtures, and above-standard tenant improvements) to a complete, functioning
unit. In such case, the Rent shall be reduced proportionately based on the
portion of the Premises so taken, or equitably, if a Taking of Parking Area or
other Common Areas. If all or any portion of the Premises is the subject of a
temporary Taking, this Lease shall remain in full force and effect and Tenant
shall continue to perform each of its obligations under this Lease; in such
case, Tenant shall be entitled to receive the entire award allocable to the
temporary Taking of the Premises and the Rent shall be reduced proportionately
based on the portion of the Premises temporarily taken. Except as provided
herein, Tenant shall not assert any claim against Landlord or the condemning
authority for, and hereby assigns to Landlord, any compensation in connection
with any such Taking, and Landlord shall be entitled to receive the entire
amount of
17
any award therefor, without deduction for any estate or interest of Tenant.
Nothing contained in this Paragraph 10 shall be deemed to give Landlord any
interest in, or prevent Tenant from seeking any award against the condemning
authority for the Taking of Tenant's leasehold interest, or the personal
property, fixtures, above standard tenant improvements of Tenant or for
relocation or moving expenses recoverable by Tenant from the condemning
authority. This Paragraph 10 shall be Tenant's sole and exclusive remedy in the
event of a Taking.
11. ASSIGNMENT AND SUBLETTING
(a) Except as otherwise provided herein, Tenant shall not directly
or indirectly, voluntarily or involuntarily, by operation of law or otherwise,
assign, sublet, mortgage, hypothecate or otherwise encumber all or any portion
of its interest in this Lease or in the Premises or grant any license in or
suffer any person other than Tenant or its employees, contractor, invitees or
agents to use or occupy the Premises or any part thereof without obtaining the
prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed. Any such attempted assignment, subletting, license,
mortgage, hypothecation, other encumbrance or other use or occupancy without the
consent of Landlord shall be null and void and of no effect. Any mortgage,
hypothecation or encumbrance of all or any portion of Tenant's interest in this
Lease or in the Premises and any grant of a license or sufferance of any person
other than Tenant or its employees, contractors, invitees or agents to use or
occupy the Premises or any part thereof shall be deemed to be an "assignment" of
this Lease. Tenant may, without Landlord's consent and without otherwise being
subject to or complying with the provisions of this Paragraph 11, permit
occupancy of the Premises by, assign this Lease to, or sublet any portion or all
of the Premises to: (i) an entity into which Tenant is merged or consolidated or
to an entity to which substantially all of Tenant's assets at the Premises are
transferred; or (ii) an entity that controls, is controlled by, or is under
common control with Tenant. A transfer described in Paragraph 11 (a)(i) and 11
(a) (ii) is hereinafter referred to as "Permitted Transfer".
(b) No permitted assignment or subletting shall relieve Tenant of
its obligation to pay the Rent and to perform all of the other obligations to be
performed by Tenant hereunder. The acceptance of Rent by Landlord from any other
person shall not be deemed to be a waiver by Landlord of any provision of this
Lease or to be a consent to any subletting or assignment. Consent by Landlord to
one subletting or assignment shall not be deemed to constitute a consent to any
other or subsequent attempted subletting or assignment. If Landlord's consent is
required and Tenant desires at any time to assign this Lease or to sublet the
Premises or any portion thereof, it shall first notify Landlord of its desire to
do so and shall submit in writing to Landlord all pertinent information relating
to the proposed assignee or sublessee, all pertinent information relating to
the proposed assignment or sublease, and all such financial information as
Landlord may reasonably request concerning the proposed assignee or subtenant,
but at a minimum the financial information shall include the proposed assignee's
profit and loss statements, balance sheets and/or tax returns for the prior two
(2) years. Any approved assignment or sublease shall be expressly subject to the
terms and conditions of this Lease.
(c) N/A
(d) Tenant acknowledges that it shall be reasonable for Landlord
to withhold its consent (except in the event of a Permitted Transfer) to a
proposed assignment or sublease in any of the following instances:
(i) N/A
(ii) The intended use of the Premises by the assignee or
sublessee is not for the uses permitted in Section 6(a) above;
(iii) The intended use of the Premises by the assignee or
sublessee would materially increase the pedestrian or vehicular traffic
to the Premises or the Building;
(iv) Occupancy of the Premises by the assignee or
sublessee would, in the good faith judgment of Landlord, violate any
agreement of record binding upon Landlord, the Building or the Project
with regard to the identity of tenants, usage in the Building, or
similar matters;
(v) The assignee or sublessee is then negotiating with
Landlord or has negotiated with Landlord within the previous six (6)
months for space in the Project, or is a current tenant or subtenant
18
within the Building or Project, unless suitable space is not otherwise
available in the Project for such proposed assignee or sublessee;
(vi) The identity or business reputation of the assignee
or sublessee will, in the good faith judgment of Landlord, tend to
damage the goodwill or reputation of the Building or Project; or
(vii) In the case of a sublease, the subtenant has not
acknowledged that the Lease controls over any inconsistent provision in
the sublease.
The foregoing criteria shall not exclude any other reasonable basis for Landlord
to refuse its consent to such assignment or sublease.
(e) Notwithstanding any assignment or subletting, Tenant and any
guarantor or surety of Tenant's obligations under this Lease shall at all times
during the Lease Term remain fully responsible and liable for the payment of the
rent and for compliance with all of Tenant's other obligations under this Lease.
Except in the event of a Permitted Transfer, in the event that the Rent due and
payable by a sublessee or assignee (or a combination of the rental payable under
such sublease or assignment, plus any bonus or other consideration therefor or
incident thereto) exceeds the Rent payable under this Lease (after deducting
costs of Tenant effecting the sublease or assignment, including reasonably
alteration costs, commissions and legal fees), then Tenant shall be bound and
obligated to pay Landlord, as additional rent hereunder, one-half of such excess
Rent and other excess consideration within ten (10) days following receipt
thereof by Tenant.
(f) If this Lease is assigned or if the Premises is subleased
(whether in whole or in part), or in the event of the mortgage, pledge, or
hypothecation of Tenant's leasehold interest, or grant of any concession or
license within the Premises, or if the Premises are occupied in whole or in part
by anyone other than Tenant, then upon a default by Tenant hereunder Landlord
may collect Rent from the assignee, sublessee, mortgagee, pledgee, party to whom
the leasehold interest was hypothecated, concessionee or licensee or other
occupant and, except to the extent set forth in the preceding paragraph, apply
the amount collected to the next Rent payable hereunder; and all such Rent
collected by Tenant shall be held in deposit for Landlord and immediately
forwarded to Landlord. No such transaction or collection of Rent or application
thereof by Landlord, however, shall be deemed a waiver of these provisions or a
release of Tenant from the further performance by Tenant of its covenants,
duties, or obligations hereunder.
(g) Except in the event of a Permitted Transfer, should Tenant
request of Landlord the right to assign or sublet, Landlord shall charge Tenant
Five Hundred and No/100 Dollars ($500.00) as an administration fee.
(h) Notwithstanding any provision of this Lease to the contrary,
in the event this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, any and all monies or other consideration
payable or otherwise to be delivered in connection with such assignment shall be
paid or delivered to Landlord, shall be and remain the exclusive property of
Landlord and shall not constitute the property of Tenant or Tenant's estate
within the meaning of the Bankruptcy Code. All such money and other
consideration not paid or delivered to Landlord shall be held in trust for the
benefit of Landlord and shall be promptly paid or delivered to Landlord.
12. DEFAULT
(a) Events of Default. The following events shall be deemed to be
events of default (herein so called) by Tenant under this Lease: (i) Tenant
shall fail to pay Rent or any other rental or sums payable by Tenant hereunder
within five (5) days after Landlord notifies Tenant of such nonpayment;
provided, however, Landlord shall only be obligated to provide such written
notice to Tenant one (1) time within any Lease Year and in the event Tenant
fails to timely pay Rent or any other sums for a second time during any Lease
Year, then Tenant shall be in default for such late payment and Landlord shall
have no obligation or duty to provide notice of such non-payment to Tenant prior
to declaring an event of default under this Lease; (ii) Tenant shall fail to
comply with or observe any other provision of this Lease and such failure shall
continue for thirty (30) days after written notice to Tenant; provided, however,
that if the nature of Tenant's obligation is such that more than thirty (30)
days are required for its performance, Tenant shall not be in default if Tenant
commences to cure such default within the thirty (30) day period and thereafter
diligently prosecutes the same to completion; (iii) Tenant or any guarantor of
Tenant's
19
obligations hereunder shall make a general assignment for the benefit of
creditors; (iv) any petition shall be filed by or against Tenant or any
guarantor of Tenant's obligations hereunder under the United States Bankruptcy
Code, as amended, or under any similar law or statute of the United States or
any state thereof, and such petition shall not be dismissed within ninety (90)
days of filing, or Tenant or any guarantor of Tenant's obligations hereunder
shall be adjudged bankrupt or insolvent in proceedings filed thereunder; (v) a
receiver or trustee shall be appointed for all or substantially all of the
assets of Tenant or any guarantor of Tenant's obligations hereunder, and such
appointment shall not be vacated or otherwise terminated, and the action in
which such appointment was ordered dismissed, within ninety (90) days of filing;
(vi) N/A; (vii) the death of any guarantor; or (viii) N/A.
(b) Remedies. Upon the occurrence and during the existence of any
event of default specified in this Lease, Landlord shall have the option to
pursue any (i) one or more of the following remedies without any notice or
demand whatsoever and without releasing Tenant from any obligation under this
Lease; or (ii) other remedy offered Landlord in law or in equity:
(i) Landlord may enter the Premises without terminating
this Lease and perform any covenant or agreement or cure any condition
creating or giving rise to an event of default under this Lease and
Tenant shall pay to Landlord on demand, as additional rent, the amount
expended by Landlord in performing such covenants or agreements or
satisfying or observing such condition. Landlord, or its agents or
employees, shall have the right to enter the Premises, and such entry
and such performance shall not terminate this Lease or constitute an
eviction of Tenant.
(ii) Landlord may terminate this Lease by written notice
to Tenant (and not otherwise) or Landlord may terminate Tenant's right
of possession without terminating this Lease. In either of such events
Tenant shall surrender possession of and vacate the Premises
immediately and deliver possession thereof to Landlord, and Tenant
hereby grants to Landlord full and free license to enter the Premises,
in whole or in part, with or without process of law and to expel or
remove Tenant in accordance with law and any other person, firm or
entity who may be occupying the Premises or any part thereof and,
subject to Section 5(c) above. remove any and all property therefrom,
using such lawful force as may be necessary.
(iii) In the event Landlord elects to re-enter or take
possession of the Premises after Tenant's default, with or without
terminating this Lease, Landlord may change locks or alter security
devices and lock out, expel or remove Tenant and any other person who
may be occupying all or any part of the Premises without being liable
for any claim for damages.
(iv) Notwithstanding anything herein to the contrary, if
Landlord terminates Tenant's right to possession without terminating
this Lease after an event of default, Landlord shall use commercially
reasonable efforts to relet the Premises and mitigate damage as set
forth in Paragraph 12(c) below.
(v) Notwithstanding any prior election by Landlord to not
terminate this Lease, Landlord may at any time, including subsequent to
any re-entry or taking of possession of the Premises as allowed
hereinabove, elect to terminate this Lease. Tenant shall be liable for
and shall immediately pay to Landlord the amount of all Basic Annual
Rent and other sums of money due under this Lease as may have accrued
as of the date of termination. Tenant shall also immediately pay to
Landlord, as agreed and liquidated damages, an amount of money equal to
the Basic Annual Rent and other amounts due for the remaining portion
of the Lease Term (had such term not been terminated by Landlord prior
to the expiration of the Lease Term), less the fair rental value of the
Premises for the residue of the Lease Term, both discounted to their
present value based upon an interest rate of eight percent (8%) per
annum. In determining fair rental value, Landlord shall be entitled to
take into account the time and expenses necessary to obtain a
replacement tenant or tenants, including lost rental revenues and
anticipated expenses hereinafter described relating to recovery,
preparation and reletting of the Premises. If Landlord elects to relet
the Premises, or any portion thereof, before presentation of proof of
such liquidated damages, the amount of rent reserved upon such
reletting shall be deemed prima facie evidence of the fair rental value
of the portion of the Premises so relet.
Landlord and Tenant agree that because of the difficulty or
impossibility of determining Landlord's damages from the loss of
anticipated Additional Rent and other lease charges from the Tenant,
20
there shall be included as a component of Tenant's annual total rent
obligation (for the calculation of Landlord's remedies), an amount
equal to the average monthly Additional Rent paid by Tenant for the
twelve (12) full calendar months immediately preceding the event of
default (or such lesser period of the term if the event of default
occurs prior to the twelfth (12th) full calendar month of the term)
multiplied by the number of months remaining in the Lease Term.
(vi) In addition to any sum provided to be paid above,
Tenant shall also be liable for and shall immediately pay to Landlord
the equitable portion of all reasonable broker's fees incurred by
Landlord in connection with any reletting of the whole or any
reasonable part of the Premises, the costs of removing and storing
Tenant's or any other occupant's property, the equitable portion of the
cost of repairing, altering, remodeling, renovating or otherwise
putting the Premises (except for repairs which are Landlord's
responsibility under this Lease) into a condition acceptable to a new
tenant or tenants, the cost of removal and replacement of Tenant's
signage and all reasonable expenses by Landlord in enforcing Landlord's
remedies, including reasonable attorneys' fees.
(vii) N/A
(c) Mitigation of Damages.
(i) In the event of a default under the Lease, Landlord
and Tenant shall each use commercially reasonable efforts to mitigate
any damages resulting from a default of the other party under this
Lease.
(ii) Tenant's right to seek damages from Landlord as a
result of a default by Landlord under this Lease shall be conditioned
on Tenant taking all actions reasonably required, under the
circumstances, to minimize any loss or damage to Tenant's property or
business, or to any of Tenant's officers, employees, agents, invitees,
or other third parties that may be caused by any such default of
Landlord.
(d) Effect of Suit or Partial Collection. Institution of a
forcible detainer action to re-enter the Premises shall not be construed to be
an election by Landlord to terminate this Lease. Landlord may collect and
receive any Rent due from Tenant and the payment thereof shall not constitute a
waiver of or affect any notice or demand given, suit instituted or judgment
obtained by Landlord, or be held to waive or alter the rights or remedies which
Landlord may have at law or in equity or by virtue of this Lease at the time of
such payment.
(e) Remedies Cumulative. All rights and remedies of Landlord
herein or existing at law or in equity are cumulative and the exercise of one or
more rights or remedies shall not be taken to exclude or waive the right to the
exercise of any other.
(f) Late Payment Charge and Interest Payable. In the event that
Tenant fails to timely make any monetary payment under this Lease within ten
(10) days after Landlord notifies Tenant of such nonpayment; provided, however,
Landlord shall only be obligated to provide such written notice to Tenant two
(2) times within any Lease Year and in the event Tenant fails to timely pay
Basic Annual Rent for a third (3rd) time during any Lease Year, then, Landlord
may without further notice to Tenant, impose a late payment charge equal to four
percent (4%) of any amount due if any amount due under this Lease is not paid
within five (5) days from the date required to be paid hereunder and such
failure shall continue for five (5) days after Tenant's receipt of written
notice from Landlord. In addition, any payment due under this Lease not paid
within thirty (30) days after the date herein specified to be paid shall bear
interest from the date such payment is due to the date of actual payment at the
rate of twelve percent (12%) per annum or the highest lawful rate of interest
permitted by Texas or federal law, whichever rate of interest is lower.
(g) Cashier's Check. If Tenant fails to timely make two (2)
consecutive payments of Basic Annual Rent or any two (2) such payments are
returned for insufficient funds, then, in addition to any other remedy Landlord
may have, Landlord may require that all future payments be made by cashier's
check or money order.
21
13. ACCESS; CONSTRUCTION
Landlord reserves the right to use the roof and exterior walls of the
Premises and the area beneath, adjacent to and above the Premises, together with
the right to install, use, maintain, repair, replace and relocate equipment,
machinery, meters, pipes, ducts, plumbing, conduits and wiring through the
Premises, which serve other portions of the Building or the Project in a manner
and in locations which do not unreasonably interfere with Tenant's use of the
Premises. In addition, Landlord shall have free access to any and all mechanical
installations of Landlord or Tenant, including, without limitation, machine
rooms, telephone rooms and electrical closets. Tenant agrees that there shall be
no construction of partitions or other obstructions which materially interfere
with or which threaten to materially interfere with Landlord's free access
thereto, or materially interfere with the moving of Landlord's equipment to or
from the enclosures containing said installations. Upon at least twenty-four
(24) hours' prior notice (except in the event of an emergency, when no notice
shall be necessary, but Landlord shall give such notice as is reasonably
practical), Landlord reserves and shall at any time and all times have the right
to enter the Premises to inspect the same, to supply janitorial service and any
other service to be provided by Landlord to Tenant hereunder, to exhibit the
Premises to prospective purchasers, lenders or tenants (during the last six (6)
months of the Lease Term only), to post notices of non-responsibility, to alter,
improve, restore, rebuild or repair any portion of the Building (excluding the
Premises), or to do any other act permitted or contemplated to be done by
Landlord hereunder, all without being deemed guilty of an eviction of Tenant and
without liability for abatement of Rent or otherwise. For such purposes,
Landlord may also erect scaffolding and other necessary structures where
reasonably required by the character of the work to be performed provided that
Landlord shall use commercially reasonable efforts to not interfere with
Tenant's access to or use of the Premises. Landlord shall conduct all such
inspections and/or improvements, alterations and repairs so as to minimize, to
the extent reasonably practical, any interruption of or interference with the
business of Tenant. Tenant hereby waives any claim for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss occasioned thereby. For
each of such purposes, Landlord shall at all times have and retain a key with
which to unlock all of the doors in, upon and about the Premises (excluding
Tenant's vaults and safes, access to which shall be provided by Tenant upon
Landlord's reasonable request). Landlord shall have the right to use any and all
means in accordance with the terms hereof which Landlord may deem proper in an
emergency in order to obtain entry to the Premises or any portion thereof, and
Landlord shall have the right, at any time during the Lease Term, to provide
whatever access control measures it deems reasonably necessary to the Project,
without any interruption or abatement in the payment of Rent by Tenant. Any
entry into the Premises obtained by Landlord by any of such means shall not
under any circumstances be construed to be a forcible or unlawful entry into, or
a detainer of, the Premises, or any eviction of Tenant from the Premises or any
portion thereof. No provision of this Section 13 shall be construed as
obligating Landlord to perform any repairs, Alterations or decorations to the
Premises or the Project; provided, however, that Landlord shall be responsible
for any and all damage arising in connection with an entry by Landlord and any
repairs or other obligations expressly agreed to be performed by Landlord
pursuant to the provisions of this Lease.
14. BANKRUPTCY
(a) If at any time on or before the Commencement Date there shall
be filed by or against Tenant in any court, tribunal, administrative agency or
any other forum having jurisdiction, pursuant to any applicable law, either of
the United States or of any state, a petition in bankruptcy or insolvency or for
reorganization or for the appointment of a receiver, trustee or conservator of
all or a portion of Tenant's property, or if Tenant makes an assignment for the
benefit of creditors, this Lease shall ipso facto be canceled and terminated and
in such event neither Tenant nor any person claiming through or under Tenant or
by virtue of any applicable law or by an order of any court, tribunal,
administrative agency or any other forum having jurisdiction, shall be entitled
to possession of the Premises and Landlord, in addition to the other rights and
remedies given by Paragraph 12 hereof or by virtue of any other provision
contained in this Lease or by virtue of any applicable law, may retain as
damages any Rent, Security Deposit or moneys received by it from Tenant or
others on behalf of Tenant.
(b) If, after the Commencement Date, or if at any time during the
term of this Lease, there shall be filed against Tenant in any court, tribunal,
administrative agency or any other forum having jurisdiction, pursuant to any
applicable law, either of the United States or of any state, a petition in
bankruptcy or insolvency or for reorganization or for the appointment of a
receiver, trustee or conservator of all or a portion of Tenant's property, and
the same is not dismissed after sixty (60) calendar days, or if Tenant makes an
assignment for the benefit of
22
creditors, this Lease, at the option of Landlord exercised within a reasonable
time after notice of the happening of any one or more of such events, may be
canceled and terminated and in such event neither Tenant nor any person claiming
through or under Tenant or by virtue of any statute or of an order of any court
shall be entitled to possession or to remain in possession of the Premises, but
shall forthwith quit and surrender the Premises, and Landlord, in addition to
the other rights and remedies granted by Paragraph 12 hereof or by virtue of any
other provision contained in this Lease or by virtue of any applicable law, may
retain as damages any Rent, Security Deposit or moneys received by it from
Tenant or others on behalf of Tenant.
(c) In the event of the occurrence of any of those events
specified in this Paragraph 14, if Landlord shall not choose to exercise, or by
applicable law, shall not be able to exercise, its rights hereunder to terminate
this Lease upon the occurrence of such events, then, in addition to any other
rights of Landlord hereunder or by virtue of applicable law, (i) Landlord shall
not be obligated to provide Tenant with any of the utilities or services
specified in Paragraph 7, unless Landlord has received compensation in advance
for such utilities or services, and the parties agree that Landlord's reasonable
estimate of the compensation required with respect to such services shall
control, and (ii) neither Tenant, as debtor-in-possession, nor any trustee or
other person (hereinafter collectively referred to as the "Assuming Tenant")
shall be entitled to assume this Lease unless on or before the date of such
assumption, the Assuming Tenant (x) cures, or provides adequate assurance that
the latter will promptly cure, any existing default under this Lease, (y)
compensates, or provides adequate assurance that the Assuming Tenant will
promptly compensate Landlord for any pecuniary loss (including, without
limitation, attorneys' fees and disbursements) resulting from such default, and
(z) provides adequate assurance of future performance under this Lease, it being
covenanted and agreed by the parties that, for such purposes, any cure or
compensation shall be effected by the immediate payment of any monetary default
or any required compensation, or the immediate correction or bonding of any
nonmonetary default. For purposes of this Lease, (i) any "adequate assurance" of
such cure or compensation shall be effected by the establishment of an escrow
fund for the amount at issue or by the issuance of a bond, and (ii) "adequate
assurance" of future performance shall be effected by the establishment of an
escrow fund for the amount at issue or by the issuance of a bond.
15. N/A
16. SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATES
(a) Tenant agrees that this Lease and the rights of Tenant
hereunder shall be subject and subordinate to any and all deeds of trust,
security interests, mortgages, master leases, ground leases or other security
documents and any and all modifications, renewals, extensions, consolidations
and replacements thereof (collectively, "Security Documents") which now or,
subject to Tenant's receipt of a subordination, non-disturbance and attornment
agreement from the holders) of any such Security Documents in a form reasonably
acceptable to Tenant, hereafter constitute a lien upon or affect the Project,
the Building or the Premises. With respect to any Security Documents which
constitute a lien upon the Project as of the Date of this Lease, Landlord agrees
that, as a condition precedent to Tenant's obligations under this Lease, it
shall secure and deliver to Tenant, on or before the Date of this Lease, a
subordination, non-disturbance and attornment agreement in a form reasonably
acceptable to Tenant from the holder(s) of such Security Documents. In addition,
Landlord shall have the right to subordinate or cause to be subordinated any
such Security Documents to this Lease and in such case, in the event of the
termination or transfer of Landlord's estate or interest in the Project by
reason of any termination or foreclosure of any such Security Documents, Tenant
shall, notwithstanding such subordination, attorn to and become the Tenant of
the successor in interest to Landlord. Furthermore, Tenant shall within twenty
(20) days of written demand therefor execute any commercially reasonable
instruments or other documents which may be required by Landlord or the holder
of any Security Document and specifically shall execute, acknowledge and deliver
within twenty (20) days of written demand therefor a subordination of lease or
subordination of deed of trust, in the form reasonably required by the holder of
the Security Document requesting the document; provided, however, the new
landlord or the holder of any Security Document shall agree that Tenant's quiet
enjoyment of the Premises shall not be disturbed under the terms of this Lease
so long as Tenant is not in default under this Lease after the expiration of
applicable notice and cure periods. The mortgagee of the Project is Pacific Life
Insurance Company ("Mortgagee") and the Mortgagee's standard form of
Non-Disturbance and Attornment Agreement is attached hereto as Exhibit I.
Landlord covenants and agrees that Mortgagee shall execute the form of
Non-Disturbance and Attornment Agreement attached hereto as Exhibit I within
fifteen (15) days following the date Landlord executes this Lease.
23
(b) If any proceeding is brought for default under any ground or
master lease to which this Lease is subject or in the event of foreclosure or
the exercise of the power of sale under any mortgage, deed of trust or other
Security Document made by Landlord covering the Premises, Tenant shall attorn to
and recognize the same as Landlord under this Lease, and such successor shall be
bound to all obligations by the terms of this Lease, as modified by any
subordination, non-disturbance and attornment agreement entered into by Tenant,
and if so requested, Tenant shall enter into a new lease with that successor on
the same terms and conditions as are contained in this Lease (for the unexpired
term of this Lease then remaining).
(c) Notwithstanding any provision in this Lease to the contrary,
Landlord shall not have and hereby expressly waives any and all constitutional,
statutory and contractual lien against Tenant's leasehold interest and the
assets or property of Tenant, and Tenant may remove such items at any time and
from time to time. Landlord agrees to execute and deliver to Tenant within
thirty (30) days following receipt of a request therefore, such documents as may
be requested by Tenant to evidence and confirm such waiver.
(d) Tenant and Landlord shall, upon not less than twenty (20)
days' prior notice by the other party, execute, acknowledge and deliver to the
requesting party a statement in writing certifying to those facts for which
certification has been requested by such other party or any current or
prospective purchaser, holder of any Security Document, ground lessor or master
lessor, assignee or sublessee, including, but without limitation, that (i) this
Lease is unmodified and in full force and effect (or if there have been
modifications, that the same is in full force and effect as modified and stating
the modifications), (ii) the dates to which the Basic Annual Rent, Additional
Rent and other charges hereunder have been paid, if any, and (iii) whether or
not to the best knowledge of Tenant and/or Landlord, the other party is in
default in the performance of any covenant, agreement or condition contained in
this Lease and, if so, specifying each such default of which such party may have
knowledge. The form of the statement attached hereto as Exhibit E is hereby
approved by Tenant and Landlord or use pursuant to this subparagraph (d);
however, at Landlord's or Tenant's option, such party shall have the right to
use other commercially reasonable forms for such purpose. Tenant's and/or
Landlord's failure to execute and deliver such statement within such time shall
be conclusive upon Tenant and/or Landlord that this Lease is in full force and
effect without modification except as may be represented by Landlord and/or
Tenant in any such certificate prepared by Landlord and/or Tenant and delivered
to such other party for execution. Any statement delivered pursuant to this
Paragraph 16 may be relied upon by any prospective purchaser of the fee of the
Building or the Project or any mortgagee, ground lessor or other like
encumbrancer thereof or any assignee of any such encumbrance upon the Building
or the Project or assignee or sublessee of Tenant.
17. SALE BY LANDLORD; TENANT'S REMEDIES; NONRECOURSE LIABILITY
(a) In the event of a sale or conveyance by Landlord of the
Building or the Project, provided that the transferee expressly assumes all of
Landlord's obligations hereunder, Landlord shall be released from any and all
liability under this Lease. If the Security Deposit has been made by Tenant
prior to such sale or conveyance, Landlord shall transfer the Security Deposit
to the purchaser, and upon delivery to Tenant of notice thereof, Landlord shall
be discharged from any further liability in reference thereto.
(b) Landlord shall not be in default of any obligation of Landlord
hereunder unless Landlord fails to perform any of its obligations under this
Lease within thirty (30) days after receipt of written notice of such failure
from Tenant; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are required for its performance, Landlord
shall not be in default if Landlord commences to cure such default within the
thirty (30) day period and thereafter diligently prosecutes the same to
completion. All obligations of landlord under this Lease will be binding upon
Landlord only during the period of its ownership of the Premises and not
thereafter. All obligations of Landlord hereunder shall be construed as
covenants, not conditions; and, except as may be otherwise expressly provided in
this Lease or by law, Tenant may not terminate this Lease for breach of
Landlord's obligations hereunder. Notwithstanding anything herein to the
contrary, Tenant has a limited Self-Help Remedy as set forth in Paragraph 5(c)
of this Lease.
(c) Any liability of Landlord for a default by Landlord under this
Lease, or a breach by Landlord of any of its obligations under the Lease, shall
be limited solely to its interest in the Project and the proceeds, rents, income
and rights under any insurance policies therefrom or payable in connection
therewith, condemnation awards, or claims with respect thereto, and in no event
shall any personal liability be asserted against Landlord in connection
24
with this Lease nor shall any recourse be had to any other property or assets of
Landlord. Tenant's sole and exclusive remedy for a default or breach of this
Lease by Landlord shall be either (i) an action for damages, and/or (ii) an
action for injunctive relief; Tenant hereby waiving and agreeing that Tenant
shall have no offset rights or right to terminate this Lease, except as
otherwise expressly set forth herein or by law, on account of any breach or
default by Landlord under this Lease.
(d) N/A.
18. PARKING; COMMON AREAS
(a) During the Lease Term, Tenant shall have the right to the
nonexclusive (except for reserved spaces, which shall be exclusive) use of the
number of parking spaces located in the parking areas of the Project specified
in Item 13 of the Basic Lease Provisions for the parking of operational motor
vehicles used by Tenant, its officers, employees, contractors and
representatives. Landlord reserves the right, at any time upon written notice to
Tenant, to designate the location of Tenant's parking spaces as determined by
Landlord in its reasonable discretion, but not to relocate the reserved spaces
except for temporary repairs, maintenance and in the event of a casualty or
condemnation. The use of such spaces shall be subject to the reasonable rules
and regulations adopted by Landlord from time to time for the use of the parking
areas. Provided there is no material adverse effect on Tenant, Landlord further
reserves the right to make such changes to the parking system as Landlord may
deem necessary or reasonable from time to time; i.e., Landlord may provide for
one or a combination of parking systems, including, without limitation,
self-parking, single or double stall parking spaces, and valet assisted parking.
Tenant agrees that Tenant, its officers and employees shall not be entitled to
park in any reserved or specially assigned areas in excess of the reserved
spaces specified in Item 13 of the Basic Lease Provisions, designated by
Landlord from time to time in the Project's parking areas. Landlord may require
execution of an agreement with respect to the use of such parking areas by
Tenant and/or its officers and employees in form consistent with the Lease and
reasonably satisfactory to Landlord and Tenant as a condition of any such use by
Tenant, its officers and employees. Tenant shall not permit or allow any
vehicles that belong to or are controlled by Tenant or Tenant's officers and
employees, and shall use reasonable efforts not to permit or allow vehicles that
belong to Tenant's suppliers, shippers, customers or invitees to be loaded,
unloaded or parked in areas other than those designated by Landlord for such
activities. If Tenant permits or allows any of the prohibited activities
described in this Paragraph following ten (10) days after Tenant's receipt of
written notice from Landlord of such violation, then Landlord shall have the
right, without additional notice, in addition to such other rights and remedies
that it may have, to remove or tow away the vehicle involved and charge the cost
to Tenant, which cost shall be immediately payable upon demand by Landlord.
Landlord acknowledges and agrees that Landlord will not grant parking rights in
an amount greater than the number of parking spaces at the Project.
(b) Subject to subparagraph (c) Tel below and the remaining
provisions of this Lease, Tenant shall have the nonexclusive right, in common
with others, to the use of such entrances, lobbies, restrooms, elevators, ramps,
drives, stairs, and similar access ways and service ways and other common areas
and facilities in and adjacent to the Building and the Project as are designated
from time to time by Landlord for the general nonexclusive use of Landlord,
Tenant and the other tenants of the Project and their respective employees,
agents, representatives, licensees and invitees ("Common Areas"). The use of
such Common Areas shall be subject to the rules and regulations contained herein
and, subject to Section 19(i) of this Lease, the provisions of any covenants,
conditions and restrictions affecting the Building or the Project. Tenant shall
keep all of the Common Areas free and clear of any obstructions created by
Tenant or resulting from Tenant's operations, and shall use the Common Areas
only for normal activities, parking and ingress and egress by Tenant and its
employees, agents, representatives, licensees and invitees to and from the
Premises, the Building or the Project. If, in the reasonable opinion of
Landlord, unauthorized persons are using the Common Areas by reason of the
presence of Tenant in the Premises, Tenant, upon written demand of Landlord,
shall use reasonable efforts (with respect to third parties) to correct such
situation by appropriate action or proceedings against all such unauthorized
persons. Nothing herein shall affect the rights of Landlord at any time to
remove any such unauthorized persons from said areas or to prevent the use of
any of said areas by unauthorized persons. Landlord reserves the right to make
such changes, alterations, additions, deletions, improvements, repairs or
replacements in or to the Building, the Project and the Common Areas as Landlord
may reasonably deem necessary or desirable, including, without limitation,
constructing new buildings and making changes in the location, size, shape and
number of driveways, entrances, parking spaces, parking areas, loading areas,
landscaped areas and walkways; provided, however, that there shall be no
unreasonable obstruction of access
25
to or interference with the use of the Premises or other rights of Tenant under
this Lease resulting therefrom. In the event that the Project is not completed
on the date of execution of this Lease, Landlord shall have the sole judgment
and discretion to determine the architecture, design, appearance, construction,
workmanship, materials and equipment with respect to construction of the
Project. Notwithstanding any provision of this Lease to the contrary, the Common
Areas shall not in any event be deemed to be a portion of or included within the
Premises leased to Tenant and the Premises shall not be deemed to be a portion
of the Common Areas.
(c) Notwithstanding any provision of this Lease to the contrary,
Landlord specifically reserves the right to redefine the term "Project" for
purposes of allocating and calculating Operating Costs so as to include or
exclude areas as Landlord shall from time to time reasonably determine or
specify (and any such determination or specification shall be without prejudice
to Landlord's right to revise thereafter such determination or specification).
In addition, Landlord shall have the right to contract or otherwise arrange for
amenities, services or utilities (the. cost of which is included within
Operating Costs) to be on a common or shared basis to both the Project (i.e.,
the area with respect to which Operating Costs are determined) and adjacent
areas not included within the Project, so long as the basis on which the cost of
such amenities, services or utilities is allocated to the Project is determined
on an arms-length basis or some other basis reasonably determined by Landlord.
In the case where the definition of the Project is revised for purposes of the
allocation or determination of Operating Costs, Tenant's Proportionate Share
shall be appropriately revised to equal the percentage share of all Rentable
Area contained within the Project (as then defined) represented by the Premises.
Notwithstanding the foregoing, Landlord agrees that in no event shall Tenant's
Proportionate Share of Operating Costs in excess of Basic Operating Costs
increase due to Landlord redefining the term "Project." Landlord shall have the
sole right to determine which portions of the Project and other areas, if any,
shall be served by common management, operation, maintenance and repair. Subject
to the above provisions of this Section 18(c). Landlord shall also have the
right, in its reasonable discretion, to reasonably allocate and prorate any
portion or portions of the Operating Costs on a building-by-building basis, on
an aggregate basis of all buildings in the Project, or any other reasonable
manner, and if allocated on a building-by-building basis, then Tenant's
Proportionate Share shall, as to the portion of the Operating Costs so
allocated, be based on the ratio of the Rentable Area of the Premises to the
Rentable Area of the Building.
19. MISCELLANEOUS
(a) Attorneys' Fees. In the event of any legal action or
proceeding brought by either party against the other arising out of this Lease,
the prevailing party shall be entitled to recover reasonable attorneys' fees and
costs (including, without limitation, court costs and expert witness fees)
incurred in such action. Such amounts shall be included in any judgment rendered
in any such action or proceeding.
(b) Waiver. No waiver by Landlord of any provision of this Lease
or of any breach by Tenant hereunder shall be deemed to be a waiver of any other
provision hereof, or of any subsequent breach by Tenant. Landlord's consent to
or approval of any act by Tenant requiring Landlord's consent or approval under
this Lease shall not be deemed to render unnecessary the obtaining of Landlord's
consent to or approval of any subsequent act of Tenant. No act or thing done by
Landlord or Landlord's agents during the term of this Lease shall be deemed an
acceptance of a surrender of the Premises, unless in writing signed by Landlord.
The delivery of the keys to any employee or agent of Landlord shall not operate
as a termination of the Lease or a surrender of the Premises. The acceptance of
any Rent by Landlord following a breach of this Lease by Tenant shall not
constitute a waiver by Landlord of such breach or any other breach unless such
waiver is expressly stated in a writing signed by Landlord.
(c) Notices. Any notice, demand, request, consent, approval,
disapproval or certificate ("Notice") required or desired to be given under this
Lease shall be in wiring and given by certified mail, return receipt requested,
by personal delivery or by Federal Express or a similar nationwide overnight
delivery service providing a receipt for delivery. Notices may not be given by
facsimile. The date of giving any Notice shall be deemed to be the date upon
which delivery is actually made by one of the methods described in this Section
19(c) (or attempted if said delivery is refused or rejected). If a Notice is
received on a Saturday, Sunday or legal holiday, it shall be deemed received on
the next business day. All notices, demands, requests, consents, approvals,
disapprovals, or certificates shall be addressed at the address specified in
Item 14 of the Basic Lease Provisions or to such other addresses as may be
specified by written notice from Landlord to Tenant and if to Tenant, at the
Premises. Either party may change its address by giving reasonable advance
written Notice of its new address in accordance with the
26
methods described in this Paragraph; provided, however, no notice of either
party's change of address shall be effective until fifteen (15) days after the
addressee's actual receipt thereof.
(d) Access Control. Landlord shall be the sole determinant of the
type and amount of any access control or courtesy guard services to be provided
to the Project, if any. IN ALL EVENTS, LANDLORD SHALL NOT BE LIABLE TO TENANT,
AND TENANT HEREBY WAIVES ANY CLAIM AGAINST LANDLORD, FOR (I) ANY UNAUTHORIZED OR
CRIMINAL ENTRY OF THIRD PARTIES INTO THE PREMISES, THE BUILDING OR THE PROJECT,
(II) ANY DAMAGE TO PERSONS, OR (III) ANY LOSS OF PROPERTY IN AND ABOUT THE
PREMISES, THE BUILDING OR THE PROJECT, BY OR FROM ANY UNAUTHORIZED OR CRIMINAL
ACTS OF THIRD PARTIES, REGARDLESS OF ANY ACTION, INACTION, FAILURE, BREAKDOWN,
MALFUNCTION AND/OR INSUFFICIENCY OF THE ACCESS CONTROL OR COURTESY GUARD
SERVICES PROVIDED BY LANDLORD.
(e) N/A
(f) Holding Over. If Tenant retains possession of the Premises
after the termination of the Lease Term, unless otherwise agreed in writing,
such possession shall be subject to immediate termination by Landlord at any
time, and all of the other terms and provisions of this Lease (excluding any
expansion or renewal option or other similar right or option) shall be
applicable during such holdover period, except that Tenant shall pay Landlord
from time to time, upon demand, as Basic Annual Rent for the holdover period, an
amount equal to one hundred fifty percent (150%) of the Basic Annual Rent in
effect on the termination date, computed on a monthly basis for each month or
part thereof during such holding over. All other payments shall continue under
the terms of this Lease. In addition, Tenant shall be liable for all damages
incurred by Landlord as a result of such holding over. No holding over by
Tenant, whether with or without consent of Landlord, shall operate to extend
this Lease except as otherwise expressly provided, and this Paragraph shall not
be construed as consent for Tenant to retain possession of the Premises.
(g) Condition of Premises. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN THIS LEASE, LANDLORD HEREBY DISCLAIMS ANY EXPRESS OR IMPLIED REPRESENTATION
OR WARRANTY THAT THE PREMISES ARE SUITABLE FOR TENANT'S INTENDED PURPOSE OR USE,
WHICH DISCLAIMER IS HEREBY ACKNOWLEDGED BY TENANT AND THE TAKING OF POSSESSION
BY TENANT SHALL BE CONCLUSIVE EVIDENCE THAT TENANT:
(i) SUBJECT TO LANDLORD'S OBLIGATIONS UNDER THIS LEASE,
ACCEPTS THE PREMISES, THE BUILDING AND LEASEHOLD IMPROVEMENTS AS
SUITABLE FOR THE PURPOSES FOR WHICH THE PREMISES WERE LEASED;
(ii) SUBJECT TO LANDLORD'S OBLIGATIONS UNDER THIS LEASE,
ACCEPTS THE PREMISES AND PROJECT AS BEING IN GOOD AND SATISFACTORY
CONDITION; AND
(iii) SUBJECT TO LANDLORD'S OBLIGATIONS UNDER THIS LEASE,
WAIVES ANY DEFECTS IN THE PREMISES AND ITS APPURTENANCES EXISTING NOW
OR IN THE FUTURE, EXCEPT THAT TENANT'S TAKING OF POSSESSION SHALL NOT
BE DEEMED TO WAIVE LANDLORD'S COMPLETION OF MINOR FINISH WORK ITEMS
THAT DO NOT INTERFERE WITH TENANT'S OCCUPANCY OF THE PREMISES OR
LANDLORD'S MAINTENANCE OBLIGATIONS; AND
(iv) WAIVES ALL CLAIMS BASED ON ANY IMPLIED WARRANTY OF
SUITABILITY OR HABITABILITY.
(h) Quiet Possession. Upon Tenant's paying the Rent reserved
hereunder and observing and performing all of the covenants, conditions and
provisions on Tenant's part to be observed and performed hereunder, Tenant shall
have quiet possession of the Premises for the term hereof without hindrance or
ejection by any person lawfully claiming under Landlord, subject to the
provisions of this Lease.
27
(i) Matters of Record. Except as otherwise provided herein, this
Lease and Tenant's rights hereunder are subject and subordinate to all matters
affecting Landlord's title to the Project recorded in the Real Property Records
of the County in which the Project is located, prior to and subsequent to the
date hereof, including, without limitation, all covenants, conditions and
restrictions; provided, however that such matters do not materially interfere
with the access to and use of the Premises by Tenant or any other rights of
Tenant under this Lease. Landlord reserves the right, from time to time, to
grant such easements, rights and dedications as Landlord deems necessary or
desirable, and to cause the recordation of parcel maps and covenants, conditions
and restrictions affecting the Premises, the Building or the Project, as long as
such easements, rights, dedications, maps, and covenants, conditions and
restrictions do not materially interfere with the access to and use of the
Premises by Tenant or any other rights of Tenant under this Lease.
(j) Successors and Assigns. Except as otherwise provided in this
Lease, all of the covenants, conditions and provisions of this Lease shall, be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, personal representatives, successors and assigns. Tenant shall
attorn to each purchaser, successor or assignee of Landlord.
(k) Brokers. Landlord and Tenant respectively warrant that neither
has had any dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the brokers named in Item 12 of the
Basic Lease Provisions and that neither knows of any other real estate broker or
agent who is or might be entitled to a commission in connection with this Lease
and each of them hereby agrees to indemnify, defend and hold the other harmless
for, from and against all claims for any brokerage commissions, finders' fees or
similar payments by any persons other than those listed in Item 12 of the Basic
Lease Provisions claiming by, through or under such party, and all costs,
expenses and liabilities incurred in connection with such claims, including
reasonable attorneys' fees and costs. Notwithstanding the foregoing, Landlord
agrees to pay any fees or commission due to the brokers named in Item 12 of the
Basic Lease Provisions.
(l) Name. Landlord shall have the exclusive right at all times
during the Lease Term to change, modify, add to or otherwise alter the name,
number, or designation of the Building and/or the Project, and Landlord shall
not be liable for claims or damages of any kind which may be attributed thereto
or result therefrom.
(m) Examination of Lease. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or
option for lease, and it is not effective as a lease or otherwise until
execution by and delivery to both Landlord and Tenant.
(n) Time. Time is of the essence of this Lease and each and all of
its provisions.
(o) Defined Terms and Marginal Headings. The words "Landlord" and
"Tenant" as used herein shall include the plural as well as the singular. If
more than one person is named as Tenant the obligations of such persons are
joint and several. The marginal headings and titles to the articles of this
Lease are not a part of this Lease and shall have no effect upon the
construction or interpretation of any part hereof.
(p) Conflict of Laws; Prior Agreements; Separability. This Lease
shall be governed by and construed pursuant to the laws of the State of Texas.
Except as provided in Section 19(cc) below, this Lease contains all of the
agreements of the parties hereto with respect to any matter covered or mentioned
in this Lease and no prior agreement, understanding or representation pertaining
to any such matter shall be effective for any purpose. No provision of this
Lease may be amended or added to except by an agreement in writing signed by the
parties hereto or their respective successors in interest. The illegality,
invalidity or unenforceability of any provision of this Lease shall in no way
impair or invalidate any other provision of this Lease, and such remaining
provisions shall remain in full force and effect.
(q) Authority. If Tenant is a corporation, Tenant hereby covenants
and warrants that Tenant is a duly authorized and existing corporation, that
Tenant has and is qualified to do business in the State, that the corporation
has full right and authority to enter into this Lease, and that each person
signing on behalf of the corporation is authorized to do so. If Tenant is a
partnership or trust, Tenant hereby covenants and warrants that he is duly
authorized to execute and deliver this Lease on behalf of Tenant in accordance
with the terms of such entity's partnership or trust agreement. Tenant shall
provide Landlord on written demand with such evidence of such
28
authority as Landlord shall reasonably request, including, without limitation,
resolutions, certificates and opinions of counsel. Landlord is a duly organized
Delaware limited partnership and Landlord's duly appointed agent, Koll Bren
Schreiber Realty Advisors, Inc., is a duly authorized and existing Delaware
corporation. Landlord, acting by and through its duly appointed agent, hereby
covenants and warrants that it is authorized to execute and enter into this
Lease. Landlord shall provide Tenant on written demand with such evidence of
such authority as Tenant shall reasonably request.
(r) Joint and Several Liability. If two or more individuals,
corporations, partnerships or other business associations (or any combination of
two or more thereof) shall sign this Lease as Tenant, the liability of each such
individual, corporation, partnership or other business association to pay Rent
and perform all other obligations hereunder shall be deemed to be joint and
several, and all notices, payments and agreements given or made by, with or to
any one of such individuals, corporations, partnerships or other business
associations shall be deemed to have been given or made by, with or to all of
them. In like manner, if Tenant shall be a partnership or other business
association, the members of which are, by virtue of statute or federal law,
subject to personal liability, then the liability of each such member shall be
joint and several.
(s) Rental Allocation. For purposes of Section 467 of the Internal
Revenue Code of 1986, as amended from time to time, Landlord and Tenant hereby
agree to allocate all Rent to the period in which payment is due, or if later,
the period in which Rent is paid.
(t) Rules and Regulations. Tenant agrees to comply with all
reasonable rules and regulations of the Building and the Project imposed by
Landlord as set forth on Exhibit D attached hereto, as the same may be changed
from time to time upon reasonable written notice to Tenant. Landlord shall not
be liable to Tenant for the failure of any other tenant or any of its assignees,
subtenants, or their respective agents, employees, representatives, invitees or
licensees to conform to such rules and regulations. Landlord shall use
commercially reasonable efforts to enforce the rules and regulations of the
Building and Project in a non-discriminatory manner.
(u) Joint Product. This Agreement is the result of arms -length
negotiations between Landlord and Tenant and their respective attorneys.
Accordingly, neither party shall be deemed to be the author of this Lease and
this Lease shall not be construed against either party.
(v) N/A
(w) Force Majeure. Any prevention, delay or stoppage due to
strikes, lockouts, labor disputes, acts of God, acts of war, terrorism,
terrorist activities, inability to obtain services, labor, or materials or
reasonable substitutes therefore, governmental actions, civil commotions, fire,
flood, earthquake or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease and except as to Tenant's obligations under Article 6 and
Article 8 of this Lease and Section 19(f) of this Lease and any extension of the
Construction Termination Date as set forth in Paragraph (d) of Exhibit B to this
Lease (collectively, a 'Force Majeure"), notwithstanding anything to the
contrary contained in this Lease, shall excuse the performance of such party for
a period equal to any such prevention, delay or stoppage and, therefore, if this
Lease specifies a time period for performance of an obligation of either party,
that time period shall be extended by the period of any delay in such party's
performance caused by a Force Majeure.
(x) Counterparts. This Lease may be executed in several
counterparts, each of which shall be deemed an original, and all of which shall
constitute but one and the same instrument.
(y) Restroom Modifications. Landlord and Tenant acknowledge and
agree that as part of the Tenant Improvements set forth on Exhibit B hereto,
Landlord shall refurbish the rest rooms on the second (2nd) and third (3rd)
floors of the Premises.
(a) Suite 360 Space. Landlord is currently in the process of
relocating another tenant in the Building, Cornerstone Staffing, Inc.
("Cornerstone Staffing"), from its existing premises in Suite 360 to other space
in the Building. It is understood and agreed that the inclusion of Suite 360 in
the Premises (and the concurrent termination of this Lease with respect to the
First Floor Suites (Suites 115 and 120)) is conditioned upon and subject to
Landlord
29
effectively relocating the premises leased by Cornerstone Staffing from Suite
360 to other space in the Building. After such a relocation has been
accomplished, Landlord will perform that portion of the Tenant Improvements (as
defined in Exhibit B attached hereto) affecting Suite 360 and, upon Substantial
Completion (as defined in Exhibit B attached hereto) of that portion of the
Tenant Improvements affecting Suite 360, Landlord will deliver Suite 360 to
Tenant, at which time Suite 360 shall automatically become a part of the
Premises, and at the same time this Lease shall automatically terminate with
respect to the First Floor Suites, as provided in Paragraph 19(aa) below. Upon
Substantial Completion of all of the Tenant Improvements (including, without
limitation, those affecting Suite 360), Landlord shall prepare and deliver to
Tenant, Tenant's Initial Certificate in the form of Exhibit F attached hereto
(the "Certificate") which Tenant shall acknowledge by executing a copy and
returning it to Landlord. If Tenant fails to sign and return or object in
writing to the Certificate to Landlord within ten (10) days of its receipt from
Landlord, the Certificate as sent by Landlord shall be deemed to have correctly
set forth the matters addressed in the Certificate. Additionally, Tenant shall
have the right to terminate this Lease by written notice to Landlord in the
event that Landlord fails to relocate Cornerstone Staffing from Suite 360 on or
before the Relocation Date, and this Lease shall terminate on the date Tenant
sets forth for such termination in such termination notice, which date may be up
to one (1) year after the date of such termination notice at which time Landlord
shall return any prepaid rent to Tenant. The term "Relocation Date" shall mean
June 1, 2004; provided, however, the Relocation Date shall be postponed one (1)
day for each day of Tenant Delay.
(z) First Floor Suites. Effective on and as of Substantial
Completion of that portion of the Tenant Improvements affecting Suite 360, this
Lease shall automatically terminate with respect to, and Tenant agrees to
surrender within fifteen (15) days after Landlord's written notice to Tenant of
Substantial Completion of the Tenant Improvements affecting Suite 360, the First
Floor Suites consisting of, in the aggregate, 2,033 square feet of Rentable Area
located on the first (1st) floor of the Building, as more particularly described
in the attached Exhibit H (the "Released Space"), in a "broom clean" condition
and with all personal property of Tenant removed therefrom, and Tenant hereby
acknowledges and agrees that it shall have no further rights to said Released
Space from and after the above described time period. In the event Tenant fails
to vacate the Released Space within fifteen (15) days after Landlord's written
notice to Tenant of Substantial Completion of the Tenant Improvements affecting
Suite 360, (i) Tenant shall be deemed to be holding over in said space, without
the consent of Landlord, and as a tenant at sufferance, with such possession
subject to immediate termination by Landlord at any time, (ii) Tenant shall pay
Basic Annual Rent for such holdover, on a per diem basis during the holdover
period, based on a per annum Basic Annual Rent rate of $22.50 per square foot of
Rentable Area, and (iii) Tenant shall be liable for all damages incurred by
Landlord as a result of such holding over.
(aa) Signage. Notwithstanding anything herein to the contrary,
provided that (i) Tenant has not reduced the size of the Premises from at least
42,726 square feet of Rentable Area in the Building, (ii) N/A and (iii) no
material event of default has occurred and is continuing, Tenant, at Tenant's
sole cost and expense, shall maintain, repair, and replace (i) Tenant's sign on
the Building and (ii) Tenant's sign panel on the monument sign of the Building
facing Lamar Avenue (collectively, "Tenant's Existing Sign"). Additionally to
the extent allowed by Laws, during the first year of the Initial Term Tenant
shall have the right to install a single tenant monument sign along Lamar
Avenue, in a location acceptable to Landlord, that identifies the Building as
the "Enterprise Centre", lists the address of the Building, and contains
Tenant's sign panel ("Tenant's New Sign"). Tenant's Existing Sign and Tenant's
New Sign shall hereinafter collectively be known as the "Tenant's Signs".
Notwithstanding the foregoing sentence, Tenant's Signs shall be subject to and
in compliance with all Laws, applicable conditions, and covenants and
restrictions affecting the Building. As of the Effective Date, Landlord
acknowledges and agrees that Tenant's existing current sign at the Building
complies with all Laws, applicable conditions and covenants and restrictions
affecting the Building. Tenant shall be solely responsible for the cost and
expense of obtaining and maintaining any necessary permits for Tenant's Signs
and any sign licenses related thereto, and for the cost and expense of
maintenance and utilities for Tenant's Signs (including all metered electrical
usage). Additionally, Tenant shall maintain Tenant's Signs in a first class
manner. Tenant's Signs shall be installed in accordance with all applicable
Laws, codes, ordinances, covenants, conditions and restrictions relating to the
Building. The style, type, color, size, and design of Tenant's Signs and with
respect to the Tenant's Sign on the Building, the means and method of attachment
of such Tenant's Sign to the retaining wall of the Building, shall be subject to
Landlord's prior written approval, which approval shall not be unreasonably
withheld or delayed. All rights and remedies of Landlord under the Lease
(including, without limitation, Landlord's self-help remedies) shall apply in
the event Tenant fails to maintain Tenant's Signs as herein required. Upon the
expiration or earlier termination of the Lease, Tenant shall remove and shall
pay all costs associated with the removal of Tenant's Sign from the Building
only and
30
the restoration of the exterior of the Building where Tenant's Sign is located
to as near its original condition as may then be reasonably required by
Landlord. The other Tenant's Signs shall be the property of the Landlord;
provided, however, if requested by Landlord, Tenant, at Tenant's sole cost and
expense, shall remove its sign panels from such monument signs. The terms and
provisions of this subparagraph shall survive the expiration or earlier
termination of this Lease.
(bb) Other Leases. Effective on and as of the Commencement Date of
this Lease, any prior leases, as heretofore amended, executed by and between
Landlord and Tenant ("Prior Leases") shall terminate and hereby be null and
void, and all rights and obligations of Landlord and Tenant with respect to the
Premises arising or performable from and after the date of this Lease shall be
governed by this Lease; provided, however, notwithstanding and of the foregoing
to the contrary, all matters that are expressly provided to survive any
termination of the Prior Leases shall survive such termination. Furthermore,
upon execution of this Lease by Landlord, Landlord agrees to promptly return to
Tenant the existing security deposit held by Landlord under the Prior Leases in
the amount of $4,225.54 (and Tenant acknowledges and agrees that Tenant has not
deposited any monies as a security deposit with Landlord under any Prior Leases
in excess of said $4,225.54 amount).
[SIGNATURE PAGE TO FOLLOW]
31
OFFICE LEASE BY AND BETWEEN
KOLL BREN FUND VI, L.P., AS LANDLORD, AND
TANDY BRANDS ACCESSORIES, INC., AS TENANT
IN WITNESS WHEREOF, the parties have executed this Lease to be effective as of
the Date of this Lease.
"LANDLORD" "TENANT"
---------- --------
KOLL BREN FUND VI, L.P., TANDY BRANDS ACCESSORIES, INC.,
a Delaware limited partnership a Delaware corporation
By: Koll Bren Schreiber Realty Advisors, Inc.,
a Delaware corporation, as agent
By: /s/ WALTER C. FOSTER By: /s/ Stan Ninemire
--------------------------------------- ---------------------------
Walter C. Foster, Senior Vice President Name: Stan Ninemire
Title: Executive Vice President
32
EXHIBIT A-1
FLOOR PLAN OF THE PREMISES
[FLOOR PLAN]
A-1
[FLOOR PLAN]
ENTERPRISE CENTRE
690 E. Lamar Arlington, TX DATE : 12/21/03 [ENTOS DESIGN LOGO]
[FLOOR PLAN]
ENTERPRISE CENTRE FLOOR: 3rd
690 E. Lamar Arlington, TX DATE: 12/21/03 [ENTOS DESIGN LOGO]
EXHIBIT A-2
LEGAL DESCRIPTION OF THE PROJECT
This Exhibit is attached to and a part of that certain Lease Agreement dated as
of January 31, 2004, executed by and between KOLL BREN FUND VI, L.P. and Tandy
Brands Accessories, Inc. (the "Lease"). Any capitalized terms not defined herein
shall have the meaning assigned to it in the provisions of the Lease identified
as the Basic Lease Provisions or Supplemental Lease Provisions, as applicable.
Landlord and Tenant mutually agree that the following legal description is the
legal description of the Land:
Parkway Central Addition
Lot 2 Block E
EXHIBIT A-3
N/A
A-3
EXHIBIT B
WORK LETTER
THIS WORK LETTER is attached as Exhibit B to the Office Lease between
KOLL BREN FUND VI, L.P, a Delaware limited partnership, as Landlord, and TANDY
BRANDS ACCESSORIES, INC., a Delaware corporation, as Tenant, and constitutes the
further agreement between Landlord and Tenant as follows:
(a) Tenant Improvements. Landlord, at Tenant's sole cost
and expense, agrees to furnish or perform those items of construction
and those improvements (the 'Tenant Improvements") specified in the
Final Plans to be agreed to by Landlord and Tenant as set forth in
Paragraph (b) below; provided, however, Landlord shall pay for the cost
of such Tenant Improvements up to the extent of Landlord's Construction
Allowance as set forth in Paragraph (e) below, and if properly
requested by Tenant in accordance with the terms and provisions of
Addendum Four hereto, the Additional TI Allowance.
(b) Space Planner. Landlord has retained a space planner
(the "Space Planner") to prepare certain plans, drawings and
specifications (the "Temporary Plans") for the construction of Tenant
Improvements to be installed in the Premises by a general contractor
selected by Landlord pursuant to this Work Letter, which Temporary
Plans shall also include a proposed phased schedule of construction.
Tenant shall deliver to Space Planner within twenty (20) days after the
execution of this Lease all necessary information required by the Space
Planner to complete the Temporary Plans. Tenant shall have ten (10)
business days after its receipt of the proposed Temporary Plans to
review the same and notify Landlord in writing of any comments or
required changes, or to otherwise give its approval or disapproval of
such proposed Temporary Plans. If Tenant fails to give written comments
to or approve the Temporary Plans within such ten (10) business day
period, then Tenant shall be deemed to have approved the Temporary
Plans as submitted. Landlord shall have five (5) business days
following its receipt of Tenant's comments and objections to redraw the
proposed Temporary Plans in compliance with Tenant's request and to
resubmit the same for Tenant's final review and approval or comment
within five (5) business days of Tenant's receipt of such revised
plans. Such process shall be repeated twice and if at such time final
approval by Tenant of the proposed Temporary Plans has not been
obtained, then Landlord shall complete such Temporary Plans, at
Tenant's sole cost and expense, and it shall be deemed that Tenant has
approved the Temporary Plans. Once Tenant has approved or has been
deemed to have approved the Temporary Plans, then the approved (or
deemed approved) Temporary Plans shall be thereafter known as the
"Final Plans". The Final Plans shall include the complete and final
layout, plans and specifications for the Premises showing all doors,
light fixtures, electrical outlets, telephone outlets, wall coverings,
plumbing improvements (if any), data systems wiring, floor coverings,
wall coverings, painting, any other improvements to the Premises beyond
the shell and core improvements provided by Landlord, any demolition of
existing improvements in the Premises and the final phased schedule of
construction mutually agreed to by Landlord and Tenant. The
improvements shown in the Final Plans shall (i) utilize Landlord's
building standard materials and methods of construction, (ii) be
compatible with the shell and core improvements and the design,
construction and equipment of the Premises, and (iii) comply with all
applicable laws, rules, regulations, codes and ordinances.
(c) Bids. As soon as practicable following the approval
of the Final Plans, Landlord shall (i) obtain a minimum of four (4)
written non-binding itemized estimates of the costs of all Tenant
Improvements shown in the Final Plans as prepared by (1) at a minimum
the following four (4) general contractors: (A) Madison Construction,
(B) Tri-Tex Construction, (C) Dallas Interiors, and (D) Westec
Constructors, and (2) such other general contractor as is selected by
Landlord in Landlord's discretion (collectively, the "General
Contractors"), and (ii) if required by applicable law, codes or
ordinances, submit the Final Plans to the appropriate governmental
agency for the issuance of a building permit or other required
governmental approvals prerequisite to commencement of construction of
such Tenant Improvements ("Permits "). Tenant acknowledges that any
cost estimates are prepared by the General Contractors and Landlord
shall not be liable to Tenant for any inaccuracy in any such estimates.
Within five (5) business days after receipt of the written non-binding
cost estimate prepared by the General Contractors, Tenant shall either
(A) give its written approval and authorization to proceed with
construction to either (y) the lowest general contractor bid or (z)
such other general contractor bid as is agreeable to
1
Landlord, or (B) immediately request the Space Planner to modify or
revise the Plans in any manner desired by Tenant to decrease the cost
of the Tenant Improvements. If Tenant is silent during such five (5)
business day period, then Tenant shall be deemed to have approved the
lowest general contractor bid as set forth in Clause (A) above. If the
Final Plans are revised pursuant to Clause (B) above, then Landlord
shall request that the General Contractors provide revised cost
estimates to Tenant based upon the revisions to the Final Plans. Such
modifications and revisions shall be subject to Landlord's reasonable
approval and shall be in accordance with the standards set forth in
Paragraph (b) of this Work Letter. Within ten (10) business days after
receipt of the General Contractors' original written cost estimates and
the description, if any, of any Tenant Delay, Tenant shall give its
final approval of the Final Plans to Landlord which shall constitute
authorization to commence the construction of the Tenant Improvements
in accordance with the Final Plans, as modified or revised. Tenant
shall signify its final approval by signing a copy of each sheet or
page of the Final Plans and delivering such signed copy to Landlord.
(d) Construction. Landlord shall authorize either (y) the
general contractor with the lowest qualified bid or (z) such other
general contractor as is mutually agreed to by Landlord and Tenant, to
commence construction of the Tenant Improvements on the earlier of (i)
the Beginning Date, or (ii) within ten (10) days following the later of
(i) the approval of the Final Plans, or (ii) Landlord's receipt of any
necessary Permits, and shall be Substantially Completed no later than
the Completion Date (defined below). Landlord shall proceed with and
complete the construction of the Tenant Improvements in accordance with
the Plans, in a good and workmanlike manner, and in compliance with all
applicable laws ordinances and governmental regulations, including the
Americans with Disabilities Act, and shall obtain all temporary
certificates of occupancy from the applicable governmental authority.
As soon as such improvements have been Substantially Completed,
Landlord shall notify Tenant in writing of the date that the Tenant
Improvements were Substantially Completed. The Tenant Improvements
shall be deemed substantially completed ("Substantially Completed")
when, in the reasonable opinion of the Landlord's architect (whether an
employee or agent of Landlord or a third party architect)
("Architect"), the Premises are substantially completed except for
punch list items which do not prevent in any material way the use of
the Premises for the purposes for which they were intended and a
temporary certificate of occupancy has been issued. In the event
Tenant, its employees, agents, or contractors cause construction of
such Tenant Improvements to be delayed, the date of Substantial
Completion shall be deemed to be the date that, in the opinion of the
Architect, Substantial Completion would have occurred if such delays
had not taken place. Without limiting the foregoing, Tenant shall be
solely responsible for delays caused by Tenant's request for any
changes in the plans, Tenant's request for long lead items or Tenant's
interference with the construction of the Tenant Improvements (each of
the foregoing, a "Tenant Delay"), In the event of any dispute as to the
Tenant Improvements, including the Commencement Date, the certificate
of the Architect shall be conclusive absent manifest error.
Notwithstanding anything in this to the contrary, Landlord's
Construction Allowance, as specified in Item 18 of the Basic Lease
Provisions, and the Additional TI Allowance (if properly requested by
Tenant in accordance with the terms and provisions of Addendum Four
hereto) shall be used only for the construction of the Tenant
Improvements, and if construction of the Tenant Improvements is not
completed within sixteen (16) months following the Date of this Lease,
as set forth in Item 17 of the Basic Lease Provisions, ("Construction
Termination Date"). then Landlord's obligation to provide the
Landlord's Construction Allowance, as specified in Item 18 of the Basic
Lease Provisions, and the Additional TI Allowance (as set forth in the
Additional TI Allowance) shall terminate and become null and void, and
Tenant shall be deemed to have waived its rights in and to said
Landlord's Construction Allowance and the Additional TI Allowance.
(e) Construction Allowance. Subject to the terms and
provisions of this Work Letter, Landlord shall pay the cost of the
Tenant Improvements ("Work") up to the amount the Landlord's
Construction Allowance, and subject to the terms of Addendum if
properly requested by Tenant, the Additional TI Allowance. If the
amount of the lowest qualified bid to perform the Work exceeds the
Landlord's Construction Allowance and the Additional TI Allowance (if
so requested by Tenant in accordance with the terms of Addendum Four),
Tenant shall bear the cost of such excess and shall pay the estimated
cost of such excess to Landlord prior to commencement of construction
of such Tenant Improvements and a final adjusting payment based upon
the actual costs of the Tenant Improvements shall be made when the
Tenant Improvements are completed. If the cost of the Work is less than
such amount,
2
then Tenant shall not receive any credit whatsoever for the difference
between the actual cost of the Work and Landlord's Construction
Allowance. All remaining amounts due to Landlord shall be paid upon the
earlier of Substantial Completion of the Tenant Improvements or
presentation of a written statement of the sums due, which statement
may be an estimate of the cost of any component of the Work. The cost
of the permits, hard construction costs, fees, permits and general
contract overhead shall be payable out of the Landlord's Construction
Allowance and shall be included in the cost of the Work. The cost of
the asbestos testing, architecture, and engineering fees shall be paid
for by Landlord, and shall not be included in the cost of the Work. The
cost of the Work shall not include any other fees payable to Landlord.
(f) Change Order. If Tenant shall desire any changes to
the Final Plans, Tenant shall so advise Landlord in writing and
Landlord shall determine whether such changes can be made in a
reasonable and feasible manner. Any and all costs of reviewing any
requested changes, and any and all costs of making any changes to the
Tenant Improvements which Tenant may request and which Landlord may
agree to shall be at Tenant's sole cost and expense and shall be paid
to Landlord upon demand and before execution of the change order. In no
event shall Landlord be obligated to perform any Tenant Improvements
which would extend the construction period past the Construction
Termination Date, unless such extension was mutually agreed to in
writing by Landlord and Tenant prior to the commencement of said
construction. If Landlord approves Tenant's requested change, addition,
or alteration, the Space Planner, at Tenant's sole cost and expense,
shall complete all working drawings necessary to show the change,
addition or alteration being requested by Tenant.
(g) Substantial Completion. "Substantial Completion" of
construction of the Tenant Improvements shall be defined as the date
upon which the Space Planner or other consultant engaged by Landlord
determines that the Tenant Improvements have been substantially
completed in accordance with the Final Plans except for Punch List
items (defined below), unless the completion of such improvements was
delayed due to any Tenant Delay (defined below), in which case the date
of Substantial Completion shall be the date such improvements would
have been completed, but for the Tenant Delays. The term "Punch List"
items shall mean items that constitute minor defects or adjustments
which can be completed after occupancy without causing any material
interference with Tenant's use of the Premises. After the completion of
the Tenant Improvements, Tenant shall, upon demand, execute and deliver
to Landlord a letter of acceptance of improvements performed on the
Premises. The term "Tenant Delay" shall include, without limitation,
any delay in the completion of construction of Tenant Improvements
resulting from (i) Tenant's failure to comply with the provisions of
this Work Letter, (ii) delay in work caused by submission by Tenant of
a request for any change order (defined below) following Tenant's
approval of the Final Plans, or for the implementation of any change
order, or (iii) any delay by Tenant in timely submitting comments or
approvals to the Temporary Plans or Final Plans. Upon the occurrence of
a Tenant Delay, Landlord shall notify Tenant in writing of such Tenant
Delay. The failure of Tenant to take possession of or to occupy the
Premises shall not serve to relieve Tenant of obligations arising on
the Commencement Date or delay the payment of Rent by Tenant.
(h) Landlord hereby agrees to use good faith diligent
efforts to Substantially Complete the Tenant Improvements on or before
the Completion Date (defined below). If Landlord does not Substantially
Complete the Tenant Improvements by the Completion Date, then Tenant,
as Tenant's sole and exclusive remedy (except as otherwise set forth
below or in Section 19(z) of the Lease regarding the Suite 360 Space),
shall be to receive from Landlord a rent credit equal to one (1) day of
free Basic Annual Rent for every one (1) day that the Tenant
Improvements are not Substantially Completed, The term "Completion
Date" shall mean one hundred eighty (180) days following the Beginning
Date; provided, however, the Completion Date shall be postponed one (1)
day for each day of Tenant Delay and one (1) day for each day that one
or more Force Majeure Delays occur if Landlord gives Tenant notice of
such Force Majeure Delay within five (5) business days of such event.
The term "Beginning Date" shall mean the earlier of (i) June 1, 2004,
or (ii) the date that Cornerstone Staffing has been relocated from
Suite 360; provided, however, the Beginning Date shall be postponed one
(1) day for each day of Tenant Delay and one (1) day for each day that
one or more Force Majeure Delays occur if Landlord gives Tenant notice
of such Force Majeure Delay within five (5) business days of such
event. In no event shall the relocation of
3
Cornerstone Staffing from Suite 360 be a Force Majeure Delay, and in no
event shall the Beginning Date or Completion Date be postponed by more
than 60 days for Force Majeure Delays. Additionally, Tenant shall have
the right to terminate this Lease by notice to Landlord in the event
that Landlord fails to commence the Tenant Improvements within 120 days
following the Beginning Date or Substantially Complete the Tenant
Improvements within 120 days of the Completion Date and this Lease
shall terminate on the date Tenant sets forth for such termination in
such termination notice, which date may be up to one (1) year after the
date of such termination notice at which time Landlord shall refund any
prepaid rent to Tenant
(i) Notwithstanding anything herein to the contrary,
Landlord covenants to Tenant that Landlord shall use commercially
reasonable efforts to perform all construction within the Premises
outside of normal business hours (8:00 a.m. through 5:00 p.m. Monday
through Friday). Additionally, Landlord shall use commercially
reasonable efforts to minimize any disruption to Tenant's business
operations while constructing the Tenant Improvements. Landlord and
Tenant shall use good faith efforts to mutually agree on an acceptable
construction schedule with respect to the construction of the Tenant
Improvements and the time periods of when such work shall be performed.
4
SCHEDULE ONE
DESCRIPTION OF PLANS
EXHIBIT C
STANDARDS FOR UTILITIES AND SERVICES
The following are the Project Standards for Utilities and Services.
Landlord reserves the right to adopt such reasonable, nondiscriminatory
modifications and additions hereto as it deems appropriate.
2. Landlord shall, subject to the limitations and provisions
hereinafter set forth in this Exhibit C:
(a) Provide automatic elevator facilities on Monday
through Friday from 7:00 A.M. to 6:00 P.M. and Saturday from 7:00 A.M.
to 1:00 P.M., excepting state and federal holidays (hereinafter
referred to as "Business Hours"), and provide one (1) automatic
elevator at all other times.
(b) Provide to the Premises, during Business Hours (and
at other times for an additional charge not in excess of the actual
cost incurred by Landlord), heating, ventilation, and air conditioning
(HVAC), when and to the extent, in the reasonable judgment of Landlord,
any of such services may be required for the comfortable occupancy of
the Premises for general office purposes. Landlord shall not be
responsible for room temperatures and conditions in the Premises if the
lighting and receptacle load for Tenant's equipment and fixtures exceed
those listed in paragraph (c) hereof, if the Premises are used for
other than general office purposes or if the Building standard blinds
or curtains in the Premises are not closed so as to screen the sun's
rays.
(c) Furnish to the Premises electric current for routine
lighting and the operation of general office machines such as
computers, copiers, typewriters, dictating equipment, desk model adding
machines, and the like, not to exceed the reasonable capacity of
Building standard office lighting and receptacles, and not in excess of
limits imposed by governmental authority.
(d) Provide janitorial services to the Premises Monday
through Friday (except state and federal holidays), provided the same
are used exclusively for the uses permitted under the foregoing Lease,
and are kept reasonably in order by Tenant. Tenant shall pay to
Landlord the cost of removal of any of Tenant's refuse and rubbish, to
the extent that the same exceeds the refuse and rubbish which generally
would be produced by the use of the Premises for general office
purposes.
(e) Provide hot and cold water for lavatory and drinking
purposes to the Premises.
(f) Periodically provide a maintenance person at the
Building at such times as are necessary to provide the services and
perform the Landlord's obligations under this Lease in a reasonable
manner and Landlord shall at all times provide Tenant with telephone
numbers for such maintenance person so that Tenant can directly and
timely contact such maintenance person.
3. No data processing equipment, other special electrical
equipment (excluding personal computers utilizing 110 volt electric power), air
conditioning or heating units, or plumbing additions shall be installed, nor
shall any changes to the Building HVAC, electrical or plumbing systems be made
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld; provided, however, that Tenant shall be allowed to
install and operate a Liebert or similar unit in the Premises. In the case of
any such change, Landlord reserves the right to designate and/or approve the
contractor to be used. Any permitted installations shall be made under
Landlord's supervision.
4. Landlord shall not provide reception outlets or television or
radio antennas for television or radio broadcast reception, and Tenant shall not
install any such equipment without prior written approval from Landlord.
5. Tenant will not, without the prior written consent of
Landlord, use any apparatus, machine or device in the Premises using current in
excess of the reasonable capacity of Building standard receptacles, which will
materially increase the amount of electricity or water usually furnished or
supplied for use of the Premises as general office space, nor connect with
electric current, except through existing electrical outlets in the Premises,
any
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apparatus or device for the purpose of using electric current in excess of that
usually furnished or supplied for use of the Premises as general office space.
6. Tenant agrees to cooperate fully at all times with Landlord,
and to abide by all reasonable regulations and requirements which Landlord may
prescribe for the proper functioning and protection of the Building HVAC,
electrical, plumbing and other systems. Tenant shall comply with all laws,
statutes, ordinances and governmental rules and regulations now in force or
which may hereafter be enacted or promulgated in connection with Building
services furnished to the Premises, including, without limitation, any
governmental rule or regulation relating to the heating and cooling of the
Building.
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EXHIBIT D
BUILDING RULES AND REGULATIONS
1. The sidewalks, entrances, passages, courts, elevators,
vestibules, stairways and corridors of halls shall not be obstructed or used for
any purpose other than ingress and egress. The halls, passages, entrances,
elevators, stairways, balconies and roof are not for the use of the general
public, and the Landlord shall in all cases retain the right to control and
prevent access thereto of all persons whose presence, in the judgment of the
Landlord, shall be prejudicial to the safety, character, reputation and
interests of the Building and its tenants, provided that nothing herein
contained shall be construed to prevent such access to persons with whom the
Tenant normally deals only for the purpose of conducting its business in the
Premises (such as clients, customers, office suppliers and equipment vendors,
and the like) unless such persons are engaged in illegal activities. No tenant
and no employees of any tenant shall go upon the roof of the Building without
the written consent of Landlord.
2. No awnings or other projections shall be attached to the
outside walls of the Building. No curtains, blinds, shades or screens shall be
attached to or hung in, or used in connection with, any window or door of the
Premises other than Landlord standard window coverings. All electrical ceiling
fixtures hung in offices or spaces along the perimeter of the Building must be
fluorescent, of a quality, type, design and bulb color approved by Landlord.
Neither the interior nor the exterior of any windows shall be coated or
otherwise sunscreened without the written consent of Landlord. At any time
during the Lease Term, upon thirty (30) days prior written notice to the tenants
of the Building, Landlord can designate the Building as a "no smoking building",
and enforce a no smoking rule within the Building and Project.
3. Except as otherwise provided in the Lease, no sign,
advertisement, notice or handbill shall be exhibited, distributed, painted or
affixed by any tenant on, about or from any part of the Premises, the Building
or the Project without the prior written consent of the Landlord. If the
Landlord shall have given such consent at the time, whether before or after the
execution of this Lease, such consent shall in no way operate as a waiver or
release of any of the provisions hereof or of this Lease, and shall be deemed to
relate only to the particular sign, advertisement or notice so consented to by
the Landlord and shall not be construed as dispensing with the necessity of
obtaining the specific written consent of the Landlord with respect to each and
every such sign, advertisement or notice other than the particular sign,
advertisement or notice, as the case may be, so consented to by the Landlord. In
the event of the violation of the foregoing by any tenant, Landlord may remove
or stop same without any liability, and may charge the expense incurred in such
removal or stopping to such tenant. Interior signs on doors and the directory
tablet shall be inscribed, painted or affixed for each tenant by the Landlord at
the expense of such tenant, and shall be of a size, color and style acceptable
to the Landlord. The directory tablet will be provided exclusively for the
display of the name and location of tenants only and Landlord reserves the right
to exclude any other names therefrom. Nothing may be placed on the exterior of
corridor walls or corridor doors other than Landlord's standard lettering.
4. The sashes, sash doors, skylights, windows, and doors that
reflect or admit light and air into halls, passageways or other public places in
the Building shall not be covered or obstructed by any tenant, nor shall any
bottles, parcels or other articles be placed on the window sills. Tenant shall
see that the windows, transoms and doors of the Premises are dosed and securely
locked before leaving the Building and must observe strict care not to leave
windows open when it rains. Tenant shall exercise reasonable care and caution
that all water faucets or water apparatus are entirely shut off before Tenant or
Tenant's employees leave the Building, and that all electricity, gas or air
shall likewise be carefully shut off, so as to prevent waste or damage. Tenant
shall cooperate with Landlord in obtaining maximum effectiveness of the cooling
system by closing window coverings when the sun's rays fall directly on the
windows of the Premises. Tenant shall not tamper with or change the setting of
any thermostats or temperature control valves provided that Landlord will modify
settings upon Tenant's request.
5. The toilet rooms, water and wash closets and other plumbing
fixtures shall not be used for any purpose other than those for which they were
considered, and no sweepings, rubbish, rags or other substances shall be thrown
therein. All damages resulting from any misuse of the fixtures shall be borne by
the tenant who, or whose subtenants, assignees or any of their servants,
employees, agents, visitors or licensees shall have caused the same.
1
6. No tenant shall mark, paint, drill into, or in any way deface
any part of the Premises, the Building or the Project. No boring, cutting or
stringing of wires or laying of linoleum or other similar floor coverings shall
be permitted, except with the prior written consent of the Landlord and as the
Landlord may direct.
7. No bicycles, vehicles, birds or animals of any kind shall be
brought into or kept in or about the Premises, and no cooking shall be done or
permitted by any tenant on the Premises, except that the preparation of coffee,
tea, hot chocolate and similar items (including those suitable for microwave
heating) for tenants and their employees shall be permitted, provided that the
power required therefor shall not exceed that amount which can be provided by a
30 amp circuit. No tenant shall cause or permit any unusual or objectionable
odors to be produced or permeate the Premises. Smoking or carrying lighted
cigars, cigarettes or pipes in the Building is prohibited.
8. The Premises shall not be used for manufacturing or for the
storage of merchandise except as such storage may be incidental to the permitted
use of the Premises. No tenant shall occupy or permit any portion of the
Premises to be occupied as an office for a public stenographer or typist, or for
the manufacture or sale of liquor, narcotics, or tobacco (except by a cigarette
vending machine for use by Tenant's employees) in any form, or as a medical
office, or as a barber or manicure shop, or as an employment bureau, without the
express written consent of Landlord. No tenant shall engage or pay any employees
on the Premises except those actually working for such tenant on the Premises
nor advertise for laborers giving an address at the Premises. The Premises shall
not be used for lodging or sleeping or for any immoral or illegal purposes.
9. No tenant shall make, or permit to be made any unseemly or
disturbing noises or disturb or interfere with occupants of this or neighboring
buildings or premises or those having business with them, whether by the use of
any musical instrument, radio, phonograph, unusual noise, or in any other way.
No tenant shall throw anything out of doors, windows or skylights or down the
passageways.
10. No tenant, subtenant or assignee nor any of their servants,
employees, agents, visitors or licensees shall at any time bring or keep upon
the Premises any inflammable, combustible or explosive fluid, chemical or
substance.
11. No additional locks or bolts of any kind shall be placed upon
any of the doors or windows by any tenant, nor shall any changes be made in
existing locks or the mechanisms thereof. Each tenant must, upon the termination
of his tenancy, restore to Landlord all keys of stores, offices, and toilet
rooms, either furnished to, or otherwise procured by, such tenant and in the
event of the loss of keys so furnished, such tenant shall pay to Landlord the
cost of replacing the same or of changing the lock or locks opened by such lost
key if Landlord shall deem it necessary to make such changes.
12. All removals, or the carrying in or out of any safes, freight,
furniture, or bulky matter of any description must take place during the hours
which Landlord shall reasonably determine from time to time, without the express
written consent of Landlord. The moving of safes or other fixtures or bulky
matter of any kind must be done upon previous notice to the Project Management
Office and under its supervision, and the persons employed by any tenant for
such work must be reasonably acceptable to the Landlord. Landlord reserves the
right to inspect all safes, freight or other bulky articles to be brought into
the Building and to exclude from the Building all safes, freight or other bulky
articles which violate any of these Rules and Regulations or the Lease of which
these Rules and Regulations are a part. Landlord reserves the right to prescribe
the weight and position of all safes, which must be placed upon supports
approved by Landlord to distribute the weight.
13. No tenant shall purchase ice, towel, janitorial maintenance or
other similar services from any person or persons not approved by Landlord.
14. Landlord shall have the right to prohibit any advertising by
any tenant which, in Landlord's reasonable opinion, tends to impair the
reputation of the Building or the Project or its desirability as an office
location, and upon written notice from Landlord, any tenant shall refrain from
or discontinue such advertising.
15. Landlord reserves the right to exclude from the Building
between the hours of 6:00 P.M. and 7:00 A.M. and at all hours on Saturday,
Sunday and legal holidays all persons who do not present a pass or card key
2
to the Building approved by the Landlord. Each tenant shall be responsible for
all persons who enter the Building with or at the invitation of such tenant and
shall be liable to Landlord for all acts of such persons to the extent so
provided in the Lease. Landlord shall in no case be liable for damages for any
error with regard to the admission to or exclusion from the Building of any
person. In case of an invasion, mob riot, public excitement or other
circumstances rendering such action advisable in Landlord's reasonable opinion,
Landlord reserves the right, without abatement of Rent, to require all persons
to vacate the Building and to prevent access to the Building during the
continuance of the same for the safety of the tenants, the protection of the
Building, and the property in the Building.
16. Any persons employed by any tenant to do janitorial work
shall, while in the Building and outside of the Premises, be subject to and
under the control and direction of the Project Management Office (but not as an
agent or servant of said Office or of the Landlord), and such tenant shall be
responsible for all acts of such persons.
17. All doors opening onto public corridors shall be kept closed,
except when in use for ingress and egress.
18. The requirements of Tenant will be attended to only upon
application to the Project Management Office.
19. Canvassing, soliciting and peddling in the Building are
prohibited and each tenant shall report and otherwise cooperate to prevent the
same.
20. All office equipment of any electrical or mechanical nature
shall be placed by Tenant in the Premises in settings reasonably approved by
Landlord, to absorb or prevent any vibration, noise or annoyance.
21. No air conditioning unit or other similar apparatus shall be
installed or used by any tenant without the written consent of Landlord.
22. There shall not be used in any space, or in the public halls
of the Building, either by any tenant or others, any hand trucks, except those
equipped with rubber tires and rubber side guards.
23. No vending machine or machines of any description shall be
installed, maintained or operated upon the Premises without the written consent
of Landlord, which will not be unreasonably withheld.
24. The scheduling of tenant move-ins shall be subject to the
reasonable discretion of Landlord.
25. If the Tenant desires telephone or telegraph connections, the
Landlord will direct electricians as to where and how the wires are to be
introduced. No boring or cutting for wires or otherwise shall be made without
direction from the Landlord.
26. The term "personal goods or services vendors" as used herein
means persons who periodically enter the Building of which the Premises are a
part for the purpose of selling goods or services to a tenant, other than goods
or services which are used by the Tenant only for the purpose of conducting its
business in the Premises. "Personal goods or services" include, but are not
limited to, drinking water and other beverages, food, barbering services and
shoe shining services. Landlord reserves the right to prohibit personal goods
and services vendors from access to the Building except upon Landlord's prior
written consent and upon such reasonable terms and conditions, including, but
not limited to, the payment of a reasonable fee and provision for insurance
coverage, as are related to the safety, care and cleanliness of the Building,
the preservation of good order thereon, and the relief of any financial or other
burden on Landlord or other tenants occasioned by the presence of such vendors
or the sale by them of personal goods or services to the Tenant or its
employees. If necessary for the accomplishment of these purposes, Landlord may
exclude a particular vendor entirely or limit the number of vendors who may be
present at any one time in the Building.
3
EXHIBIT E
FORM ESTOPPEL CERTIFICATE
The undersigned, ______________________ ("Tenant"), the tenant under
that certain Office Lease dated______________________, between Tenant
and___________________, a____________ as landlord ("Landlord") hereby certifies
as follows:
1. The Premises (the "Premises") under the Lease is
Suite___, _________________________.
2. The Lease is in full force and effect and has not been
modified or amended in any respect except by amendments
dated_______________________ (copies of which are attached).
3. The Lease has not been assigned, encumbered, subleased or
transferred in any manner other than:
________________________________________________________________________________
_______________________________________________________________________.
4. The Commencement Date of the Lease is _______________________
and the expiration date of the Lease is_______. There are no options to extend
the term of the Lease beyond such expiration date other than___________________.
5. The present monthly rental under the Lease is $______. The sum
of $__________, representing__month's Rent has been paid in advance.
6. The security deposit held by Landlord under the Lease is
$_______.
7. Rent under the Lease has been paid through the month
of_______. Tenant's estimated share of Operating Costs payments have been paid
through_____________.
8. The Premises are presently occupied by Tenant.
9. Tenant has accepted the Premises without condition or
qualification under the Lease and Landlord has completed and complied with all
conditions of such acceptance, except:________.
10. To the best knowledge of Tenant, neither it nor the Landlord
is in default (or will be in default following the delivery of notice, the
passage of time, or both) or claims a default by the other under the Lease, or
has any claims, defenses, or rights of offset against payment of Rent under the
Lease, except as follows:
11. Tenant acknowledges that Landlord has the right to assign the
Lease and the Rent thereunder and to sell, assign, transfer, mortgage or
otherwise encumber the Project without the consent of Tenant.
12. Tenant makes this statement for the benefit and protection of
_______________ with the understanding that_______________intends to rely on
this statement in connection with________.
E-1
IN WITNESS WHEREOF, this certificate has been executed and delivered by
the authorized officers or representatives of the undersigned as
of_______________.
"TENANT"
______________________________________,
a_____________________________________
By:___________________________________
Name:_________________________________
Title:________________________________
E-2
EXHIBIT F
TENANT'S INITIAL CERTIFICATE
To: _________________________("Landlord")
Date: _________________________
Tenant's Initial Certificate
_________________________
_________________________
The undersigned, as the Tenant under that certain Lease (the "Lease")
dated________________, made and entered into between _________________,
a___________________ as Landlord, and the undersigned, as Tenant, hereby
certifies that:
1. The undersigned has accepted possession and entered into
occupancy of the Premises (inclusive of Suite 360 and
exclusive of the First Floor Suites).
2. The Tenant Improvements affecting Suite 360 were Substantially
Completed on _________________.
3. The Lease is in full force and effect and has not been
modified or amended.
4. Landlord has performed all of its obligations to improve the
Premises for occupancy by the undersigned, including all
Tenant Improvements to be constructed pursuant to Exhibit B,
except: ____________________.
Very truly yours,
_____________________________________________
a ___________________________________________
By: ______________________________________
Name: ______________________________________
Title: ______________________________________
F-1
EXHIBIT G
N/A
G-1
EXHIBIT H
DESCRIPTION OF RELEASED SPACE
Suites 115 & 120
Approximately 2,033 rsf
"Released Space"
[FLOOR PLAN]
ENTERPRISE CENTRE FLOOR: 1st [ENTOS DESIGN LOGO]
690 E. Lamar Arlington, TX DATE: 12/17/03
H-1
EXHIBIT I
SUBORDINATION AND NON-DISTURBANCE AGREEMENT
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, CA 92660
Attn: V.P. Closing
Real Estate Division
Loan No._______________
________________________________________________________________________________
Space Above This Line for Recorder's Use
SUBORDINATION, NON-DISTURBANCE, AND
ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE, AND ATTORNMENT AGREEMENT (this
"Agreement") is made as of this________day of _____________, 200_, by and among
[insert full name of securitization trust] (together with its successors and
assigns, "Lender"),__________, a_____________("Tenant"), and ___________,
a__________("Landlord").
RECITALS
A. Landlord is the owner of those certain premises commonly known
as_____________, more particularly described in Exhibit A attached hereto (the
"Real Estate");
B. ____________________("Original Lender") made a loan (the
"Loan") to Landlord evidenced by a Note (the "Note") and secured by a
[mortgage/deed of trust] (the "Security Instrument"); recorded in the Official
Records of________County, on__________as Instrument No._______;
C. Original Lender assigned its interest in and under the
Security Instrument to Lender pursuant to that certain Pooling and Servicing
Agreement dated as of _____________;
D. The Security Instrument constitutes a first lien upon, among
other things, the Real Estate and the current and future improvements (the
"Improvements") situated thereon (collectively, the "Property"); and
E. Under the terms of that certain Lease (the "Lease") dated
_____________, 200____, Landlord leased to Tenant the Real Estate and the
Improvements, or a portion thereof, as more particularly described in the Lease.
NOW THEREFORE, to confirm the legal effect of the Security Instrument
and the Lease and, in consideration of the covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows
AGREEMENTS
1. Subordination. The Lease is and at all times shall be
subordinate to the lien and charge of the Security Instrument and to all
substitutions, renewals, modifications and amendments to the Security Instrument
(including, without limitation, any of the foregoing which increase the
indebtedness secured thereby). Without
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limiting the generality of the foregoing, Tenant acknowledges that Lender has a
claim superior to Tenant's claim to Landlord's insurance proceeds, if any,
received with respect to the Improvements or the Property.
2. Non-Disturbance. In the event of foreclosure of the Security
Instrument (by judicial process, power of sale or otherwise) or conveyance in
lieu of foreclosure, which foreclosure, power of sale, or conveyance occurs
prior to the expiration date of the Lease, including any extensions and renewals
of the Lease now provided thereunder, and so long as Tenant is not in default
under any of the material terms, covenants and conditions of the Lease beyond
any applicable grace or cure period, Lender agrees on behalf of itself, its
successors and assigns, and on behalf of any purchaser at such foreclosure or
conveyance in lieu thereof ("Purchaser") that Tenant shall not be disturbed in
the quiet and peaceful possession of the premises demised under the Lease,
subject to the terms and conditions of the Lease.
3. Attornment. In the event of foreclosure of or other execution
on the Security Instrument or conveyance in lieu of foreclosure, which
foreclosure, execution or conveyance occurs prior to the expiration date of the
Lease (the purchaser therein being referred to herein as "Purchaser"), including
any extensions and renewals of the Lease now provided thereunder, it is agreed
that notwithstanding the subordination of the Lease provided for herein above
Tenant shall attorn to Lender or Purchaser and recognize Lender or Purchaser as
Tenant's landlord under the Lease, and so long as Tenant is not in default under
any of the material terms, covenants and conditions of the Lease beyond any
applicable grace or cure period, Lender or Purchaser shall recognize and accept
Tenant as its tenant thereunder, whereupon the Lease shall continue, without
further agreement, in full force and effect as a direct lease between Lender or
Purchaser and Tenant for the remaining term thereof, together with all
extensions and renewals now provided thereunder, upon the same terms, covenants
and conditions as therein provided, and Lender or Purchaser shall thereafter
assume and perform all of Landlord's obligations, as landlord under the Lease,
and Tenant shall thereafter make all rent payments directly to either Lender or
Purchaser, as the case may be, subject to the limitations contained in Section 4
and Section 8 below. Such attornment as provided herein shall be self-operative
without further aid or execution of further instruments by parties to the
Agreement immediately upon Lender or Purchaser succeeding to the interest of
Landlord under the Lease.
4. Limitation of Liability. Notwithstanding anything to the
contrary contained herein or in the Lease, in the event of foreclosure of or
other execution on the Security Instrument (by judicial process, power of sale
or otherwise) or conveyance in lieu of foreclosure, which foreclosure, power of
sale or conveyance occurs prior to the expiration date of the Lease, including
any extensions and renewals of the Lease now provided thereunder, the liability
of Lender or Purchaser, as the case may be, shall be limited as set forth below
in Section 8: provided, however, that Lender or Purchaser, as the case may be,
shall in no event or to any extent:
(a) be liable to Tenant for any act, omission or default
on the part of the original or any other landlord under the Lease (except
for defaults of a continuing nature) and Tenant shall have no right to
assert the same or any damages arising therefrom as an offset (except as
expressly provided in the Lease), claim, defense or deficiency against
Lender, Purchaser, or the successors or assigns of any of them;
(b) other than the installment of Basic Annual Rental
payment pursuant to Section 6 of the Basic Lease Provisions, be liable to
Tenant for any payment of rent more than thirty (30) days in advance or any
deposit, rental security or any other sums deposited with the original or
any other landlord under the Lease and not delivered to Lender;
(c) be bound by any cancellation (except for the express
termination rights of Tenant contained in the Lease), surrender, amendment
or modification of the Lease not consented to in writing by Lender which
consent shall not be unreasonably withheld, conditioned or delayed;
(d) be bound by any representation or warranty of
Landlord relating to work performed by Landlord under the Lease;
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(e) except as set forth in the Lease, be liable to Tenant
for construction, restoration or repair, or delays in construction,
restoration or repair, of the Improvements or the portion thereof leased to
Tenant; or
(f) be bound by any purchase option or right of first
refusal granted to Tenant under the Lease.
5. Further Documents. The foregoing provisions shall be
self-operative and effective without the execution of any further instruments on
the part of any party hereto. Tenant agrees, however, to execute and deliver to
Lender or to any person to whom Tenant herein agrees to attorn such other
instruments as either shall reasonably request in order to confirm said
provisions.
6. Notice and Cure. Tenant agrees that if there occurs a default
by Landlord under the Lease:
(a) A copy of each notice given to Landlord pursuant to
the Lease shall also be given to Lender, and no such notice shall be
effective for any purpose under the Lease unless so given to Lender; and
(b) If Landlord shall fail to cure any default within the
time prescribed by the Lease (or within a reasonable time if no such time
period is provided), Tenant shall give further notice of such default to
Lender. Lender shall have an additional thirty (30) days after the
expiration of Landlord's cure period (or after the giving of such notice to
Lender if no Landlord cure is provided) within which to cure such default
(if curable by Lender) or, if such default cannot reasonably be cured
within that time, then such additional time as may be necessary if, within
the initial thirty (30) day cure period, Lender shall have commenced and
shall be diligently pursuing the remedies necessary to cure such default
including, without limitation, commencement of foreclosure proceedings or
otherwise acquiring title to the Improvements, if necessary to effect such
cure. If any default by Landlord is not susceptible of cure by Lender, then
the Lease shall remain in full force and effect and Tenant shall have no
right to terminate the same so long as Lender performs all of the
Landlord's other obligations under the Lease. The foregoing rights to cure
a Landlord default shall be exercisable in the sole discretion of Lender,
and, Lender shall have no obligation to cure any default by Landlord.
7. Notices. All notices, demands and requests given or required
to be given hereunder shall be in writing and shall be deemed to have been
properly given when personally served or if sent by U.S. registered or certified
mail, postage prepaid, addressed as follows when received (or upon refusal of
delivery):
Lender: c/o Pacific Life Insurance Company
700 Newport Center Drive
Newport Beach, California 92660
Attn: Vice President Portfolio Management
Real Estate Investments
Tenant: ___________________________________________
___________________________________________
___________________________________________
Attention: ________________________________
Landlord: ___________________________________________
___________________________________________
___________________________________________
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Attention: __________________________
Any party may change its address for notices hereunder upon ten (10)
days prior written notice to the other parties hereunder in the manner provided
above.
8. Limitation of Personal Liability. Notwithstanding anything to
the contrary herein or in the Lease, if Lender or any Purchaser acquires title
to the Property, Lender or Purchaser shall have no obligation, nor incur any
liability, beyond the interest, if any, of Lender or Purchaser in the Property
and upon any subsequent sale or transfer of the Property by Lender or any
Purchaser, Lender and such Purchaser shall be released of and from any and all
further duties, liabilities or obligations to Tenant, its successors or assigns
arising or accruing under the Lease from and after the date of such sale or
transfer. As regards Lender or Purchaser, Tenant shall look solely to the estate
or interest owned by Lender or Purchaser in the Property for the payment and
discharge of any obligations imposed upon Lender or Purchaser hereunder or under
the Lease, and Tenant will not collect or attempt to collect any such judgment
out of any other assets of Lender or Purchaser. By executing this Agreement,
Landlord specifically acknowledges and agrees that nothing contained in this
Section 8 shall impair, limit, affect, lessen, abrogate or otherwise modify the
obligations of Landlord to Tenant under the Lease.
9. Payment of Rent. Tenant hereby acknowledges that the Lease and
the rents and all other sums due thereunder have been assigned to Lender as
security for the Loan evidenced by the Note and secured by the Security
Instrument. If Lender notifies Tenant of the occurrence of a default under the
Note, Security Instrument or any other document, instrument or agreement
evidencing or securing the indebtedness and/or demands that Tenant pay rents and
all other sums due or to be become due under the Lease directly to Lender,
Tenant shall pay rent and all other sums due under the Lease directly to Lender
or as otherwise directed in writing by Lender without the need on the part of
Lender to document or otherwise establish any default. Landlord hereby
irrevocably authorizes and directs Tenant to make the foregoing payments to
Lender upon such notice and demand without the need to inquire of Landlord as to
the validity of such notice or any contrary notice or direction from Landlord
and Landlord acknowledges that Tenant's payment of such amounts as so directed
by Lender shall fully satisfy Tenant's obligation to make such payments under
the Lease.
10. Binding Effect. The terms, covenants and conditions hereof
shall inure to the benefit of and be binding upon the parties hereto, and their
respective heirs, executors, administrators, successors and assigns.
11. Modification. This Agreement may not be modified orally or in
a manner other than by an agreement signed by the parties hereto or their
respective successors in interest.
12. Choice of Law. This Agreement shall be governed by the
internal law (and not the law of conflicts) of the State in which the Property
is located.
13. Counterparts. This Agreement may be executed in two or more
counterparts which, when taken together, shall constitute one and the same
original.
[Signatures commence on the following page]
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WITNESS the due execution of this instrument by the parties hereto the
day and year first above written.
LENDER:
By: Pacific Life Insurance Company,
a California corporation
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
[Signatures continue on the following page]
-5-
TENANT:
_________________ , a____________
By: ____________________________
Name: ____________________________
Title: ____________________________
[Signatures continue on the following page]
-6-
LANDLORD:
_______________________ , a ____________
By: _____________________
By: ____________________________
Name: ____________________________
Title: ____________________________
[INSERT STATE SPECIFIC ACKNOWLEDGEMENTS]
-7-
EXHIBIT J
Parking Spaces
[MAP]
-1-
ADDENDUM ONE
TWO RENEWAL OPTIONS AT MARKET
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
BY AND BETWEEN
KOLL BREN FUND VI, L.P.
and
TANDY BRANDS ACCESSORIES, INC.
(a) Provided that as of the time of the giving of the First
Extension Notice and the Commencement Date of the First Extension Term, (i) N/A,
(ii) N/A, and (iii) no material event of default exists beyond the expiration of
applicable notice and cure periods; then Tenant shall have the right to extend
the Lease Term for an additional term of five (5) years (such additional term is
hereinafter called the "First Extension Term") commencing on the day following
the expiration of the Initial Term (hereinafter referred to as the "Commencement
Date of the First Extension Term"). Tenant shall give Landlord written notice
(hereinafter called the "First Extension Notice") of its election to extend the
term of the Lease Term at least six (6) months, but not more than nine (9)
months, prior to the scheduled expiration date of the Initial Term.
(b) Provided that as of the time of the giving of the Second
Extension Notice and the Commencement Date of the Second Extension Term, (i)
N/A, (ii) N/A, (iii) no material event of default exists beyond the expiration
of applicable notice and cure periods; and (iv) Tenant has exercised its option
for the First Extension Term; then Tenant shall have the right to extend the
Lease Term for an additional term of five (5) years (such additional term is
hereinafter called the "Second Extension Term") commencing on the day following
the expiration of he First Extension Term (hereinafter referred to as the
"Commencement Date of the Second Extension Term"). Tenant shall give Landlord
written notice (hereinafter called the "Second Extension Notice") of its
election to extend the term of the Lease Term at least six(6) months, but not
more than nine (9) months, prior to the scheduled expiration date of the First
Extension Term.
(c) The Basic Annual Rent payable by Tenant to Landlord for the
first year of the First Extension Term ("First Extension Initial Basic Annual
Rent") and for subsequent years during the First Extension Term ("First
Extension Subsequent Years Basic Annual Rent") (such rent to increase over the
term of the First Extension Term as provided below shall be the then Fair Market
Rent as defined in Paragraphs (e) and (f) below. Within fifteen (15) days
following Tenant's delivery of the First Extension Notice to Landlord, Landlord
shall deliver to Tenant in writing Landlord's opinion as to the Fair Market
Rent, the First Extension Initial Basic Annual Rent and the First Extension
Subsequent Years Basic Annual Rent for the Premises for the First Extension Term
(" Landlord's First Extension Offer") and Tenant shall have fifteen (15) days
following receipt of Landlord's First Extension Offer to either accept or reject
such offer ("First Extension Fifteen Day Period"). If Tenant accepts Landlord's
First Extension Offer, then Tenant shall notify Landlord in writing of such and
the parties shall promptly execute an amendment to Lease evidencing the Fair
Market Rent, the First Extension Initial Basic Annual Rent, and the First
Extension Subsequent Years Basic Annual Rent for the First Extension Term and
any other material terms relating to such First Extension Term. If Tenant
rejects the Landlord's First Extension Offer and Tenant is not able to obtain
Landlord's consent on an alternative determination of Fair Market Rent, the
First Extension Initial Basic Annual Rent and the First Extension Subsequent
Years Basic Annual Rent for the Premises for the First Extension Term within the
First Extension Fifteen Day Period, then the parties shall promptly commence the
selection of a Representative as set forth in Paragraph (f) below.
(d) The Basic Annual Rent payable by Tenant to Landlord for the
first year of the Second Extension Term (" Second Extension Initial Basic Annual
Rent") and for subsequent years during the Second Extension Term ("Second
Extension Subsequent Years Basic Annual Rent") (such rent to increase over the
term of the Second
1
Extension Term as provided below) shall be the then Fair Market Rent as defined
in Paragraphs (e) and (f) below. Within fifteen (15) days following Tenant's
delivery of the Second Extension Notice to Landlord, Landlord shall deliver to
Tenant in writing Landlord's opinion as to the Fair Market Rent, the Second
Extension Initial Basic Annual Rent and the Second Extension Subsequent Years
Basic Annual Rent for the Premises for the Second Extension Term ("Landlord's
Second Extension Offer") and Tenant shall have fifteen (15) days following
receipt of Landlord's Second Extension Offer to either accept or reject such
offer ("Second Extension Fifteen Day Period"). If Tenant accepts Landlord's
Second Extension Offer, then Tenant shall notify Landlord in writing of such and
the parties shall promptly execute an amendment to Lease evidencing the Fair
Market Rent, the Second Extension Initial Basic Annual Rent, and the Second
Extension Subsequent Years Basic Annual Rent for the Second Extension Term and
any other material terms relating to such Second Extension Term. If Tenant
rejects the Landlord's Second Extension Offer and Tenant is not able to obtain
Landlord's consent on an alternative determination of Fair Market Rent, the
Second Extension Initial Basic Annual Rent and the Second Extension Subsequent
Years Basic Annual Rent for the Premises for the Second Extension Term within
the Second Extension Fifteen Day Period, then the parties shall promptly
commence the selection of a Representative as set forth in Paragraph (f) below.
(e) The term "Fair Market Rent" shall mean, as applicable, (i) the
First Extension Initial Basic Annual Rent and the First Extension Subsequent
Years Basic Annual Rent, expressed as an annual rent per square foot of Rentable
Area, which Landlord would have received from leasing the Premises for the First
Extension Term to any person or entity unaffiliated with Tenant, and taking into
account the prevailing market rate for comparable space in the Building and
comparable buildings in the vicinity of the Building (as evidenced by recent
lease transactions in the past six (6) months), taking into account the size of
the Lease, the length of the renewal term, annual market base rent escalations,
annual operating expense escalations tenant improvement allowances, free rental
periods and the credit of Tenant, or (ii) the Second Extension Initial Basic
Annual Rent and the Second Extension Subsequent Years Basic Annual Rent,
expressed as an annual rent per square foot of Rentable Area, which Landlord
would have received from leasing the Premises for the Second Extension Term to
any person or entity unaffiliated with Tenant, and taking into account the
prevailing market rate for comparable space in the Building and comparable
buildings in the vicinity of the Building (as evidenced by recent lease
transactions in the past six (6) months), taking into account the size of the
Lease, the length of the renewal term, annual market base rent escalations,
annual operating expense escalations, tenant improvement allowances, free rental
periods and the credit of Tenant. The Fair Market Rent, the First Extension
Initial Basic Annual Rent, the First Extension Subsequent Years Basic Annual
Rent, Second Extension Initial Basic Annual Rent and Second Extension Subsequent
Years Basic Annual Rent shall not be reduced by reason of any costs or expenses
saved by Landlord by reason of Landlord not having to find a new tenant for such
premises (including, without limitation, brokerage commissions, costs of
improvements, rent concessions or lost rental income during any vacancy period).
The determination of Fair Market Rent as described below shall not affect or
otherwise reduce or modify the Tenant's obligation to pay or reimburse Landlord
for Operating Costs and other reimbursable items during the First Extension Term
or Second Extension Term. In any event, the Base Year for Operating Costs when
determining Fair Market Rent, the First Extension Initial Basic Annual Rent, the
First Extension Subsequent Years Basic Annual Rent, Second Extension Initial
Basic Annual Rent and Second Extension Subsequent Years Basic Annual Rent shall
be the calendar year of the Commencement Date of the First Extension Term or
Commencement Date of the Second Extension Term, as applicable.
(f) If, Landlord and Tenant do not (i) teach an agreement during
the First Extension Fifteen Day Period on the First Extension Initial Basic
Annual Rent and the First Extension Subsequent Years Basic Annual Rent for the
Premises during the First Extension Term, or (ii) reach an agreement during the
Second Extension Fifteen Day Period on the Second Extension Initial Basic Annual
Rent and the Second Extension Subsequent Years Basic Annual Rent for the
Premises during the Second Extension Term, then Landlord and Tenant shall each,
within fifteen (15) days following the First Extension Fifteen Day Period or
Second Extension Fifteen Day Period, as applicable, appoint an independent third
party representative who shall (i) be an MAI real estate appraiser licensed in
the State of Texas, and (ii)have at least ten (10) years experience in the
appraisal of commercial office space (including at least two (2) years
experience in the Dallas, Texas metropolitan area), with each such independent
third party representative being herein referred to as a 'Representative." In
the event either party fails to appoint a Representative within the ten (10) day
period provided above, then the one appointed Representative shall determine the
First Extension Initial Basic Annual Rent and the First Extension Subsequent
Years Basic Annual Rent, or the Second Extension Initial Basic Annual Rent and
Second Extension Subsequent Years Basic Annual Rent, as applicable, for the
Premises during the First Extension Term or Second Extension Term, as
applicable. The
2
appointed Representatives shall, within thirty (30) days after their
appointment, each advise Landlord and Tenant in writing as to their
determination of the First Extension Initial Basic Annual Rent and the First
Extension Subsequent Years Basic Annual Rent, or the Second Extension Initial
Basic Annual Rent and Second Extension Subsequent Years Basic Annual Rent, as
applicable, for the Premises during the First Extension Term or Second Extension
Term, as applicable. In the event the lower of the two (2) determinations of the
First Extension Initial Basic Annual Rent and the First Extension Subsequent
Years Basic Annual Rent, or the Second Extension Initial Basic Annual Rent and
Second Extension Subsequent Years Basic Annual Rent, as applicable, established
by the Representatives is equal to or less than five percent (5%) lower than the
determination of the First Extension Initial Basic Annual Rent and the First
Extension Subsequent Years Basic Annual Rent, or the Second Extension Initial
Basic Annual Rent and Second Extension Subsequent Years Basic Annual Rent, as
applicable, established by the other Representative, the two (2) determinations
of the First Extension Initial Basic Annual Rent and the First Extension
Subsequent Years Basic Annual Rent, or the Second Extension Initial Basic Annual
Rent and Second Extension Subsequent Years Basic Annual Rent, as applicable,
shall be averaged, and the average of such two (2) determinations shall
constitute the First Extension Initial Basic Annual Rent and the First Extension
Subsequent Years Basic Annual Rent, or the Second Extension Initial Basic Annual
Rent and Second Extension Subsequent Years Basic Annual Rent, as applicable, for
the Premises during the First Extension Term or Second Extension Term, as
applicable. In the event the lower of the two (2) determinations of the First
Extension Initial Basic Annual Rent and the First Extension Subsequent Years
Basic Annual Rent, or the Second Extension Initial Basic Annual Rent and Second
Extension Subsequent Years Basic Annual Rent, as applicable, established by the
Representatives is more than five percent (5%) lower than the determination of
the First Extension Initial Basic Annual Rent and the First Extension Subsequent
Years Basic Annual Rent, or the Second Extension Initial Basic Annual Rent and
Second Extension Subsequent Years Basic Annual Rent, as applicable, established
by the other Representative, the appointed Representatives shall, within fifteen
(15) days, mutually select an independent third party real estate appraiser who
(i) has at least ten (10) years of experience in commercial real estate
appraisal and valuation in the Dallas, Texas metropolitan area, and (ii) is a
member of the Appraisal Institute and is in good standing in the State of Texas
as a licensed real estate appraiser (with such third party appraiser being
hereinafter referred to as the "Appraiser"). If the Representatives are unable
to agree, in writing and within said fifteen (15) day period, on an Appraiser,
the Appraiser shall be selected by the North Texas Chapter of the Appraisal
Institute, or if such organization no longer exists, its successor organization.
Within thirty (30) days after the selection of the Appraiser, the Appraiser
shall make a determination as to the First Extension Initial Basic Annual Rent
and the First Extension Subsequent Years Basic Annual Rent, or the Second
Extension Initial Basic Annual Rent and Second Extension Subsequent Years Basic
Annual Rent, as applicable, (which determination shall neither be lower than the
lowest of the two (2) determinations of the First Extension Initial Basic Annual
Rent and the First Extension Subsequent Years Basic Annual Rent, or the Second
Extension Initial Basic Annual Rent and Second Extension Subsequent Years Basic
Annual Rent, as applicable, established by the Representatives, nor higher than
the highest of the two (2) determinations of the First Extension Initial Basic
Annual Rent and the First Extension Subsequent Years Basic Annual Rent, or the
Second Extension Initial Basic Annual Rent and Second Extension Subsequent Years
Basic Annual Rent, as applicable, established by the Representatives), and such
determination of the First Extension Initial Basic Annual Rent and the First
Extension Subsequent Years Basic Annual Rent, or the Second Extension Initial
Basic Annual Rent and Second Extension Subsequent Years Basic Annual Rent, as
applicable, shall constitute the First Extension Initial Basic Annual Rent and
the First Extension Subsequent Years Basic Annual Rent, or the Second Extension
Initial Basic Annual Rent and Second Extension Subsequent Years Basic Annual
Rent, as applicable, for the Premises during the First Extension Term or Second
Extension Term, as applicable. Landlord and Tenant shall each pay all costs and
expenses associated with the Representative each selected and one-half (1/2) of
any costs and expenses associated with the Appraiser.
(g) Notwithstanding anything herein to the contrary, the rent
determination procedure in this Addendum must be completed at least three (3)
months prior to the commencement of the First Extension Term or Second Extension
Term, as applicable.
(h) Except for the First Extension Initial Basic Annual Rent and
the First Extension Subsequent Years Basic Annual Rent, as determined above,
Tenant's occupancy of the Premises during the First Extension Term shall be on
the same terms and conditions as are in effect immediately prior to the
expiration of the Initial Term. Except for the Second Extension Initial Basic
Annual Rent and the Second Extension Subsequent Years Basic Annual Rent,
3
as determined above, Tenant's occupancy of the Premises during the Second
Extension Term shall be on the same terms and conditions as are in effect
immediately prior to the expiration of the First Extension Term.
(i) If Tenant does not give the First Extension Notice within the
period set forth in Paragraph (a) above, Tenant's right to extend the Lease Term
for the First Extension Term and Second Extension Term shall automatically
terminate. Time is of the essence as to the giving of the First Extension
Notice. If Tenant does not give the Second Extension Notice within the period
set forth in Paragraph (b) above, Tenant's right to extend the Lease Term shall
automatically terminate. Time is of the essence as to the giving of the Second
Extension Notice.
(j) If the Lease is extended for either the First Extension Term
or Second Extension Term, then Landlord shall prepare and Tenant shall execute
an amendment to the Lease confirming the extension of the Lease Term and the
First Extension Initial Basic Annual Rent and the First Extension Subsequent
Years Basic Annual Rent, or the Second Extension Initial Basic Annual Rent and
Second Extension Subsequent Years Basic Annual Rent, as applicable, as
determined above (the "Amendment").
(k) If Tenant exercises its right to extend the term of the Lease
for either the First Extension Term or Second Extension Term pursuant to this
Addendum, the term "Lease Term" as used in the Lease, shall be construed to
include, when practicable, the First Extension Term and Second Extension Term,
as applicable.
4
ADDENDUM TWO
EXPANSION OPTION
ATTACHED TO OFFICE LEASE AGREEMENT
BY AND BETWEEN
KOLL BREN FUND VI, L.P.
AND
TANDY BRANDS ACCESSORIES, INC.
(a) "Expansion Space" shall mean Suites 115 and 120 containing
2,033 square feet of Rentable Area on the first (1st) floor of the Building as
shown on Schedule Two hereto.
(b) Provided that as of the date of the giving of the Expansion
Notice (defined below), (i) N/A, and (ii) no material event of default has
occurred and is continuing, beyond applicable notice and cure periods, subject
to the further terms and provisions of this Addendum Two, Tenant shall have the
right during the first twelve (12) months of the Initial Term to lease all (but
not a part) of the Expansion Space upon the delivery of an Expansion Notice to
Landlord as set forth below. If Tenant is interested in leasing all or any
portion of the Expansion Space, then Tenant shall so notify Landlord in writing
("Expansion Notice") that Tenant desires to lease all or a portion of the
Expansion Space upon substantially the same terms and conditions of this Lease,
except that the description and plans of the Tenant Improvements to be
constructed by Landlord for the Expansion Space shall be reasonably agreed to by
Landlord and Tenant. Receipt of an Expansion Notice by Landlord from Tenant
shall be final and conclusive and deemed acceptance by Landlord of the expansion
offer by Tenant contained in the Expansion Notice and Tenant shall not have the
right to withdraw at a later date such Expansion Notice. The Basic Annual Rent
schedule, as specified in Item 5 of the Basic Lease Provisions, shall be the
same for the Expansion Space, and Tenant shall receive a tenant improvement
allowance of $ 10.00 per square foot of Rentable Area for the Expansion Space.
(c) Upon receipt of Tenant's Expansion Notice, then the parties
hereto agree to enter into a lease amendment for the Expansion Space in
accordance with the terms of this Addendum Two.
(d) Notwithstanding anything in this Addendum Two to the contrary,
the expansion right granted in this Addendum must be exercised by Tenant prior
to the first year anniversary of the Commencement Date, and effective as of the
first year anniversary of the Commencement Date, this Addendum shall terminate
and become null and void.
1
SCHEDULE TWO
DESCRIPTION OF EXPANSION SPACE
Suites 115 & 120
Approximately 2,033 rsf
"Expansion Space"
[FLOOR PLAN]
ENTERPRISE CENTRE FLOOR: 1st [ENTOS DESIGN LOGO]
690 E. Lamar Arlington, TX DATE: 12/17/03
1
ADDENDUM THREE
GENERATOR PROVISIONS
ATTACHED TO OFFICE LEASE AGREEMENT
BY AND BETWEEN
KOLL BREN FUND VI, L.P.
AND
TANDY BRANDS ACCESSORIES, INC.
This Addendum Three is attached to the Office Lease between KOLL BREN
FUND VI, L.P., a Delaware limited partnership, as Landlord, and TANDY BRANDS
ACCESSORIES, INC., a Delaware corporation, as Tenant, and constitutes the
further agreement between Landlord and Tenant as follows:
(a) Notwithstanding anything to the contrary contained in the
Lease, and subject to the conditions listed below, Landlord hereby grants Tenant
the right to install and maintain, at Tenant's sole cost and expense, a Kohler
40kw 120/208 volt 3 phase emergency generator ("Generator") to provide an
emergency power supply to the Premises on a 24 hour, 7-day per week basis. The
Generator has heretofore been installed in the location shown on Schedule Three
attached hereto and currently complies with the provisions of this Addendum
Three. The placement and installation of the Generator shall be and remain
subject to the following terms and conditions:
(i) The Generator shall meet all plans, specifications
and conditions reasonably required by Landlord and
shall be installed in accordance with the criteria
required by Landlord in its reasonable discretion and
in accordance with Schedule Four hereto ("Generator
Plans").
(ii) Tenant shall not make any additions or modifications
to the Generator or the Generator Plans without the
prior written approval of Landlord, which will not be
unreasonably withheld.
(iii) The Generator shall be installed by Landlord, in
accordance with the Generator Plans, using a
contractor approved by Landlord, in Landlord's sole
discretion.
(iv) Tenant, at its sole cost and expense, shall maintain,
repair, replace and operate the Generator in good
working condition and in a first class manner.
(v) Tenant must obtain (and provide Landlord with copies
of) all necessary approvals, permits and licenses
from all governmental authorities having jurisdiction
over the Generator prior to the installation of the
Generator. Tenant shall use, operate, maintain and
repair the Generator throughout the Term of the Lease
in accordance with all applicable local, state and
federal laws, rules and regulations (including any
environmental laws, rules or regulations).
(vi) Tenant's maintenance of the Generator shall be
performed, to the extent practical, during the
Building's non-business hours and in a manner so as
not to create a disturbance to other tenants located
in the Building.
(b) The Generator shall be operated in a manner so as not to cause
any noise, odor or vibration or any other disturbance which may unreasonably
interfere with the operations of other tenants in the Building. Tenant shall, at
Tenant's sole cost and expense, screen the Generator from view in a manner
reasonably acceptable to Landlord in its sole discretion. In the event that the
Generator causes soil, oil, fumes or other debris to accumulate on the
Building's brick or glass, Tenant shall promptly clean such debris at its sole
cost and expense upon receipt of
1
notice from Landlord, or, at Landlord's option, Landlord may clean the debris
and Tenant shall promptly reimburse Landlord for the reasonable costs of such
cleaning upon receipt of notice from Landlord.
(c) Landlord may install, at Landlord's sole cost and expense, in
compliance with the Generator Plans, a submeter or lapse time meter or similar
device to measure the electrical consumption of the Generator. Tenant shall pay
to Landlord the actual cost of such electrical service provided in connection
with the Generator. Tenant agrees that the Generator shall be maintained,
repaired, replaced and removed in such a manner so as not to unreasonably
interfere with the operation of any of the building systems located in the
Building.
(d) N/A
(e) Notwithstanding anything to the contrary in the Lease, Tenant
hereby agrees to indemnify, protect, defend and hold harmless Landlord for, from
and against all liabilities, claims, fines, penalties, costs, damages or
injuries to persons, damages to property, losses, liens, causes of action,
suits, judgments and expenses (including court costs, attorneys' fees and costs
of investigation), of any nature, kind or description of any person or entity,
directly or indirectly arising out of, caused by, or resulting from (in whole or
part) (1) Tenant's use, occupancy or enjoyment of the Generator, (2) any
activity, work or other things done, permitted or suffered by Tenant and its
agents and employees with respect to the Generator, or (3) any damage to
Tenant's property, or the property of Tenant's agents, employees, contractors,
business invitees or licensees relating to the installation, use, operation,
repair, maintenance or replacement of the Generator (collectively,
"Liabilities"); EVEN IF SUCH LIABILITIES ARE CAUSED IN PART BY THE NEGLIGENCE
(BUT EXCLUDING SOLE NEGLIGENCE) OF LANDLORD, BUT NOT TO THE EXTENT SUCH
LIABILITIES ARE CAUSED BY THE SOLE NEGLIGENCE, GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF LANDLORD.
(f) Upon, Landlord's written request, Tenant shall disconnect and
remove the Generator at the termination or expiration of this Lease and restore
the Premises, the Building and all other areas (including greenery and
landscaping) in or about the Building where any portion of the Generator is
installed to its original condition as of the date the Generator was originally
installed prior to the Date of this Lease, reasonable wear and tear excepted and
to repair any damage covered by such disconnection and/or removal.
(g) The terms and provisions of this Addendum Four shall survive
the termination or earlier expiration of this Lease.
2
SCHEDULE THREE
DESCRIPTION OF GENERATOR LOCATION
[GENERATOR LOCATION MAP]
1
SCHEDULE FOUR
DESCRIPTION OF GENERATOR PLANS
ELECTRICAL CONTRACTOR [ELECTRIC COMPANY LOGO] 7188 Envoy Court-Dallas Texas
75247-[214] 905-3851-Fax [214] 631 0886
EXHIBIT 1
PROPOSAL
DATE: November 13, 2001
TO: Danny Horan - Transwestern
FROM: Terry Murdock
REF: Enterprise Center - Tandy Generator
ESTIMATED COST: $33,016.25
REFERENCE PRICE TO INCLUDE THE FOLLOWING:
Furnish and install 1 - Kohler 40 kw 120/208 volt 3 phase emergency generator
Furnish and install 1 - concrete pad for generator
Furnish and install new 30-circuit sub-panel in computer room
Transfer circuits from existing panel to new panel
Relocate existing circuit for A/C to new generator panel
Relocate circuit in electrical room for hub to new generator panel
Relocate 2 - circuits for phone equipment on 2nd floor to new generator panel $ 30,500.00
Tax 2,516.25
-----------
$ 33,016.25
ADDENDUM FOUR
ADDITIONAL TENANT IMPROVEMENT ALLOWANCE
ATTACHED TO OFFICE LEASE AGREEMENT
BY AND BETWEEN
KOLL BREN FUND VI, L.P.
AND
TANDY BRANDS ACCESSORIES, INC
Provided that the costs to construct the Tenant Improvements exceed
Landlord's Construction Allowance, then, upon the written request of Tenant
prior to the Commencement Date, Landlord agrees to provide Tenant, at Tenant's
option, with an additional allowance (the "Additional TI Allowance") of up to
One Hundred Fifty Thousand Dollars ($150,000) to be used by Tenant solely
towards paying for that portion of the cost of constructing the Tenant
Improvements in excess of Landlord's Construction Allowance and Tenant may only
use the Additional TI Allowance for the payment of the cost of the Work which is
payable out of the Landlord's Construction Allowance. In the event Tenant
desires to utilize any portion of the Additional TI Allowance, then Tenant shall
make a one-time request on or before the Commencement Date, indicating in such
request the amount of such Additional TI Allowance Tenant desires that Landlord
disburse. Landlord and Tenant hereby agree that in the event Tenant notifies
Landlord in writing that Tenant desires any portion of the Additional TI
Allowance, such portion requested by Tenant shall be amortized (at a rate of
interest equal to ten percent (10%) per annum) over the sixty-seven (67) month
Initial Term of the Lease, and the monthly installments of Basic Annual Rent
payable by Tenant hereunder shall be increased by the monthly amount necessary
to so amortize such Additional TI Allowance so disbursed by Landlord. Tenant
agrees to execute promptly an amendment to the Lease reflecting the increase in
the Basic Annual Rent as described above. Any obligation of Landlord to provide
any portion of the Additional TI Allowance shall be subject to the terms of the
Work Letter attached as Exhibit B to this Lease.