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Exhibit 10.23
LEASE AGREEMENT
PROJECT: CARDINAL TECHNOLOGY CENTER
1. DEFINITIONS AND BASIC PROVISIONS.
A. Date of Lease: March 20, 1998
B. "Landlord": Cardinal Collins Tech Center, Inc., a Texas
corporation
C. Address: c/o Kennedy Associates Real Estate Counsel, Inc.
1215 4th Avenue, Suite 2400
Seattle, Washington 98161
D. "Tenant": HighwayMaster Corporation, Inc.
E. Address: 1155 E. Kas, Suite 100
Richardson, Texas 75081
F. "Building": The structure commonly known as Building Five --
1155 E. Kas, Richardson, Texas and which is located on the tract of land (the
"Land") described by on EXHIBIT "B" attached hereto and made a part hereof for
all purposes.
G. "Premises": That certain 65,000 square feet of rentable
area contained within the Building (the "Rentable Area in the Premises"),
subject to final determination at completion of plans and specifications for
the Premises, and as outlined and hatched on the plan attached hereto as
EXHIBIT "A" and made a part hereof for all purposes and to be mutually approved
by Landlord and Tenant. Prior to Commencement Date, Landlord and Tenant agree
to execute an amendment hereto setting forth the rentable square footage of the
Premises and the Project (as hereinafter defined) and the location thereof in
the Building.
H. "Project": The Building, the parking facilities, and other
structures, improvements, landscaping, fixtures, appurtenances and other common
areas now or hereafter, constructed or erected on the Land.
I. "Rentable Area in the Project" shall be 90,800 square feet
of rentable area.
J. "Tenant's Proportionate Share" shall be seventy-two percent
(72 %), which is the ratio between the Rentable Area in the Premises and the
Rentable Area in the Project. If the Rentable Area in the Premises and/or the
Rentable Area in the Project changes, Tenant's Proportionate Share shall be
adjusted effective as of the date of such change.
K. "Commencement Date": July 1, 1998(subject to the provisions of
the "EXHIBIT D" attached hereto). Upon request of either party hereto, Landlord
and Tenant agree to execute and deliver a written declaration in recordable
form expressing the Commencement Date hereof.
L. "Term": Commencing on the Commencement Date and ending
one-hundred twenty (120) months after the Commencement Date, plus any partial
calendar month following the Commencement Date, unless sooner terminated as
provided herein.
M. "Base Rental": $69,062.50 per month for the first sixty (60)
months of the Term of this Lease; then $79,895.83 per month for the remainder
of the Term of this Lease; each such monthly installment shall be due and
payable on the first day of each calendar month, in advance, without demand,
deduction or setoff whatsoever.
N. "Prepaid Rental": $69,092.50, to be applied to the first
accruing monthly installments of rental.
O. "Security Deposit": $0.00
P. "Permitted Use": The Premises shall be used only for any
lawful purpose in connection with Tenant's business operation including, but
not limited to, general office, warehouse, provision of enhanced
telecommunications services, and research, development, testing, light
assembly, manufacturing, repair, installation, marketing and sales of mobile
communications and information systems.
Q. "Common Area": That part of the Project designated by
Landlord from time to time for the common use of all tenants, including among
other facilities, sidewalks, curbs, truckways, loading areas, private streets
and alleys, lighting facilities, delivery passages, parking areas, decks and
other parking facilities, landscaping and other common facilities.
R. "Broker". The Staubach Company
S. "Operating Expense Stop" shall mean $1.75 per square foot
multiplied by the Rentable Area in the Premises.
Each of the foregoing definitions and basic provisions shall be
construed in conjunction with the references thereto contained in the other
provisions of this Lease and shall be limited by such other provisions. Each
reference in this Lease to any of the foregoing definitions and basic
provisions shall be construed to incorporate each term set forth above under
such definition or provision.
2. GRANTING CLAUSE. In consideration of the obligations of
Tenant to pay rent as herein provided and in consideration of the other terms,
covenants and conditions hereof, Landlord hereby demises and leases to Tenant,
and Tenant hereby leases from Landlord, the Premises as described above, to
have and to hold such premises for the Term of the Lease, all upon the terms
and conditions set forth in this Lease.
3. BASE RENTAL. As rental for the lease and use of the Premises,
Tenant will pay Landlord or Landlord's assigns, without demand and without
deduction, abatement or setoff (except as otherwise expressly provided for
herein in Paragraph 17 hereof and Paragraph 19 hereof), the Base Rental in the
manner specified in Paragraph l.M hereof, in lawful money of the United States.
If the Term of this Lease does not commence on the first day of a calendar
month, Tenant shall pay to Landlord in advance a pro rata part of such sum as
rental for such first partial month. Tenant shall not pay any installment of
rental more than one (1) month in advance. All past due installments of rental
or other payment specified in this Lease shall bear interest at the highest
lawful rate per annum from the date due until paid. In addition, Tenant shall
pay Landlord upon demand a late charge in an amount of $250.00 if not paid
within five (5) days of the date when due and payable.
If Tenant fails to timely pay three (3) consecutive installments of
Base Rental, or other payment specified herein, or any combination thereof,
within ten (10) days of the due date specified herein, Landlord may require
Tenant to pay (in addition to any interest) Base Rental and other payments
specified herein (as estimated by Landlord, if necessary) quarterly in advance,
and, in such event, all future payments shall be made on or before the due date
in cash or by cashier's check or money order, and the delivery of Tenant's
personal or corporate check shall no longer constitute payment thereof. Any
acceptance of Tenant's personal or corporate check thereafter by Landlord shall
not be construed as a waiver of the requirement that such payments be made in
cash or by cashier's check or money
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order. Any amount so estimated by Landlord and paid by Tenant shall be adjusted
promptly after actual figures become available and paid or credited to Landlord
or Tenant, as the case may be.
4. ADDITIONAL RENTAL AND OPERATING EXPENSES.
4.1 The term "Operating Expenses" shall mean all
reasonable and necessary expenses, costs and disbursements of every kind and
nature which Landlord shall pay or become obligated to pay because of or in
connection with the ownership, operation, maintenance, repair, replacement,
protection and security of the Project, determined on an accrual basis or cash
method (at Landlord's option), including, without limitation the following:
(a) Salaries and wages of all employees engaged
in the operation, maintenance and security of the Project, including taxes,
insurance and benefits (including pension, retirement and fringe benefits)
relating thereto;
(b) Cost of supplies and materials used in the
operation, maintenance and security of the Project;
(c) Cost of all utility service (including water,
power and sewage service) supplied to the Project, with the sole exception of
utility services supplied to tenants of the Project at their respective
premises and directly paid for by such tenants;
(d) Cost of all maintenance, repair and
replacement of, and any service agreements for the Project and the equipment
therein, including, without limitation, any of the following (if provided):
parking facilities, landscaping, fire protection, sprinklers, trash removal,
window cleaning, and elevator maintenance;
(e) Cost of all insurance relating to the
Project, including the cost of casualty, rental and liability insurance
applicable to the Project and Landlord's personal property used in connection
therewith;
(f) All taxes, assessments and governmental
charges (foreseen or unforeseen, general or special, ordinary or extraordinary)
whether federal, state, county or municipal and whether they be levied by
taxing districts or authorities presently taxing the Project or by others
subsequently created or otherwise, and any other taxes and assessments
attributable to the Project or its operation, and all taxes of whatsoever
nature that are imposed in substitution for or in lieu of any of the taxes,
assessments or other charges herein defined (collectively, the "Taxes");
provided, however, that Operating Expenses shall not include taxes paid by
tenants of the Project as a separate charge on the value of their leasehold
improvements, death taxes, excess profits taxes, franchise taxes and state and
federal income taxes;
(g) Cost of repairs and general maintenance and
reasonable depreciation charges applicable to all equipment used in repairing
and maintaining the Project, but specifically excluding repairs and general
maintenance paid by proceeds of insurance or by Tenant or by other third
parties;
(h) Cost of improvement items, including
installation thereof, which are acquired primarily for the purpose of reducing
Operating Expenses and/or complying with laws, ordinances or regulations of
governmental authorities or agencies having jurisdiction over the Project;
(i) Cost of repair and maintenance of the
landscape and parking areas and periodic painting of the building exterior; and
(j) Reasonable management fees paid by Landlord
to third parties or to management companies owned by, or management divisions
of, Landlord.
To the extent that any Operating Expenses are attributable to
the Project and other projects of Landlord, a fair and reasonable allocation of
such Operating Expenses shall be made between the Project and such other
projects
Notwithstanding anything seemingly to the contrary contained
herein, Operating Expenses shall not include the following:
(i) Depreciation;
(ii) Interest and principal payments on
mortgage and other non-operating
debts of Landlord;
(iii) Allowances or other costs (including
the cost of plans, permits and
licenses) incurred with respect to
the installation of tenant
improvements made for other tenants
in the Project or in renovating or
otherwise improving, decorating,
painting or redecorating vacant
space for tenants or other occupants
of the Project;
(iv) Real estate commissions, legal fees,
tenant incentives, marketing and
advertising expenses and other costs
incurred by Landlord in leasing or
attempting to lease the Project; and
(v) Executive salaries or the salaries
of non-management employees, except
as specifically provided in 4.1(a)
for such non-management employees.
4.2 For purposes hereof, "Tenant's Share of Operating
Expenses" shall mean Tenant's Proportionate Share of Operating Expenses minus
the Operating Expense Stop. Landlord shall have the right to estimate the
amount of Tenant's Share of Operating Expenses which will be incurred with
respect to each calendar year during the Term of this Lease, Tenant shall pay
to Landlord monthly on the first day of each calendar month during such
calendar year in question, as additional rental, an amount equal to one-twelfth
(1/12th) of the estimated amount of Tenant's Share of Operating Expenses. Until
such time as an estimate of Operating Expenses with respect to any particular
calendar year is delivered to Tenant, Tenant shall pay to Landlord, on the
first day of January and the first day of each calendar month thereafter during
such calendar year in question the amount of such additional rental which shall
have been payable by Tenant under this paragraph with respect to the month of
December immediately preceding such calendar year. Thereafter, at such time as
the estimate of Operating Expenses with respect to such calendar year is
delivered to Tenant, Tenant shall pay to Landlord within ten (10) days
following receipt of such estimate the amount by which (i) the product of
one-twelfth (1/12th) of the amount of such estimate multiplied by the number of
calendar months in such calendar year which shall have wholly or partially
expired exceeds (ii) the amount of such additional rental which shall have been
theretofore paid under this paragraph with respect to such calendar months.
Landlord agrees to provide to Tenant a statement of the Operating Expenses
incurred with respect to each calendar year on or about ninety (90) days (or as
soon thereafter as reasonably possible) following the end of such respective
calendar year. If Tenant's Share of Operating Expenses actually incurred with
respect to any calendar year exceeds the estimate of Tenant's Share of
Operating Expenses theretofore paid by Tenant for such calendar year, then
Tenant shall pay to Landlord the amount of such excess within ten (10) days
following receipt of notice from Landlord setting forth Tenant's Share of
Operating Expenses for the calendar year in question. If Tenant's Share of
Operating Expenses with respect to any calendar year is less than the estimate
of Tenant's Share of Operating Expenses theretofore paid by Tenant for such
calendar year, then Landlord shall credit the difference to Tenant against the
next due installments of the estimated amount of Tenant's Share of Operating
Expenses. In no event shall Tenant ever be entitled to a credit with respect to
any calendar year in excess of the additional rental payments made under this
paragraph with respect to such calendar year. If the Commencement Date of this
Lease is not the first day of a calendar year or the expiration or termination
date of this Lease is not the last day of a calendar year, then Tenant's Share
of Operating Expenses with respect to such calendar year shall be prorated.
The provisions of this paragraph shall survive the expiration or earlier
termination of this Lease.
4.3 Notwithstanding any other provision herein to the
contrary, it is agreed that if the Project is not fully occupied during any
calendar year, then an adjustment shall be made in computing the Operating
Expenses for such calendar year so that the Operating Expenses are computed as
though the Project had been fully occupied during such calendar year.
4.4 Landlord agrees to keep books and records reflecting
the Operating Expenses. Tenant, at its expense, shall have the right, within
six (6) months after receiving Landlord's statement of Operating Expenses for a
particular calendar year, to audit Landlord's books and records respectively
relating to Operating Expenses for such calendar year; or, at Landlord's sole
option, Landlord may provide such audit prepared by a certified public
accountant selected by Landlord. If within such six (6) month period Tenant
does not give Landlord
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written notice stating in reasonable detail any objection to the statement of
Operating Expenses, Tenant shall be deemed to have approved such statement in
all respects.
4.5 Should Tenant desire any additional services beyond
those which Landlord is expressly obligated to provide pursuant to this Lease
or should Tenant desire rendition of any of such services outside the normal
times of Landlord for providing such service, Landlord may (at Landlord's
option), upon reasonable advance notice from Tenant to Landlord, furnish such
services, and Tenant agrees to pay Landlord such charges as may be agreed on
between Landlord and Tenant, but in no event at a charge less than Landlord's
actual cost plus overhead for the additional services provided.
5. TAXES.
5.1 Tenant shall be liable for the timely payment of all
taxes levied or assessed against personal property, furniture or fixtures or
equipment placed by Tenant in the Premises. If any such taxes for which Tenant
is liable are levied or assessed against Landlord or Landlord's property and if
Landlord elects to pay the same, or if the assessed value of Landlord's
property is increased by inclusion of personal property, furniture or fixtures
or equipment placed by Tenant in the Premises, and Landlord elects to pay the
taxes based on such increase, Tenant shall pay to Landlord upon demand that
part of such taxes for which Tenant is liable hereunder.
5.2 If at any time during the Term of this Lease, a tax
or excise on rental, a sales tax or other tax however described (except any
inheritance, estate, gift, income or excess profit tax imposed upon Landlord)
is levied or assessed against Landlord by any taxing authority having
jurisdiction on account of Landlord's interest in this Lease, or the rentals or
other charges payable hereunder, as a substitute in whole or in part for, or in
addition to, the taxes described elsewhere in this paragraph, Tenant shall pay
to Landlord as additional rental upon demand the amount of such tax or excise.
In the event that any such tax or excise is levied or assessed directly against
Tenant, Tenant shall pay the same at such times and in such manner as such
taxing authority shall require.
6. PREPAID RENTAL AND SECURITY DEPOSIT. Landlord acknowledges
receipt from Tenant of the sum stated in Paragraph l.N hereof to be applied to
the first accruing monthly installments of rental.
7. ACCEPTANCE OF PREMISES. Taking possession of the Premises by
Tenant shall be conclusive evidence that Tenant: (a) accepts the Premises as
suitable for the purposes for which they are leased; (b) accepts the Building
and every part and appurtenance thereof as being in a good and satisfactory
condition; and (c) waives any defects (other than latent defects in equipment
servicing or directly affecting the occupancy of the Premises, except such
equipment which is installed by Tenant or by others at Tenant's direction or
request) in the Premises or the Building, except for the completion of those
items, if any, on Landlord's punch list. By taking possession of the Premises,
Tenant, to the full extent permitted by law, waives any and all warranties,
express or implied, currently existing or hereinafter created, relating to the
condition of the Premises, including, without limitation, any warranty of
suitability or fitness for a particular purpose. Landlord shall not be liable,
except for gross negligence or willful misconduct, to Tenant or any of its
agents, employees, licensees, servants, or invitees for any injury or damage to
person or property due to the condition or design of or any defect in the
Project or its mechanical system and equipment which may exist or occur, and
Tenant, for itself and its agents, employees, licensees, servants, and
invitees, expressly assumes all risks of injury or damage to person or
property, either proximate or remote, resulting from the condition of the
Premises or the Project.
8. USE OF PREMISES. The Premises shall be used and occupied only
for the Permitted Use stated in Paragraph l.P hereof and not otherwise.
Notwithstanding the foregoing, without Landlord's prior written consent, Tenant
shall not receive, store or otherwise handle any product, material or
merchandise which is explosive, or highly inflammable or hazardous. Tenant will
conduct its business and control its agents in such a manner that such use of
the Premises will not create any nuisance or interfere with, annoy or disturb
other tenants of the Project, if any there are. Tenant shall, at its own
expense, obtain any and all governmental licenses and permits necessary for its
use.
9. REPAIR AND MAINTENANCE.
9.1 Landlord shall, at it sole cost and expense, maintain
and make necessary repairs of damage to the roof, foundation, and the
structural soundness of the exterior walls (excluding all windows, window
glass, plate glass, and all doors). Subject to the provisions of Paragraph 4 of
the Lease, Landlord shall further maintain the Common Areas. Tenant shall give
immediate written notice to Landlord of the need for maintenance, repairs or
corrections. Landlord shall not be required to make any improvements,
replacements or repairs of any kind or character to the Premises except as
expressly set forth in this section. In addition to the provisions of Paragraph
4 above, it is expressly understood that Tenant shall pay for any damage to the
roof, foundation or to the structural soundness of exterior walls, which is
caused by the act of Tenant, or of Tenant's employees, agents or invitees, or
which is caused by Tenant's default hereunder.
9.2 Tenant shall, at its own risk and expense, maintain
all other parts of the Premises in good repair and condition (including all
necessary replacements), including, but not limited to, all fixtures installed
by Tenant, walls, carpeting and other floor covering, plumbing, windows, window
glass, plate glass, doors, heating, ventilation and air conditioning systems
(the "HVAC Systems"), fire protection sprinkler system, downspouts, dock
bumpers and other electrical, mechanical, and electromotive installation,
equipment, and fixtures and also including trash removal, all utility repairs
in ducts, conduits, pipes and wiring, and any sewer stoppage located in, under,
and above the Premises. Tenant shall take good care of all leasehold
improvements and its fixtures, and suffer no waste. Tenant shall be
responsible for all pest control and extermination. Should Tenant neglect to
keep and maintain the Premises, then Landlord shall have the right, but not the
obligation, to have the work done and any reasonable costs therefor shall be
charged to Tenant as additional rental and shall become payable by Tenant with
the payment of the rental next due and shall bear interest thereon at the
maximum rate allowable from the date of demand until paid. At the termination
of this Lease, Tenant shall deliver the Premises "broom clean" in the same good
order and condition as existed at the Commencement Date ordinary wear and tear
excepted.
Throughout the Term of the Lease, Tenant shall contract with a
qualified and properly insured contractor to service and maintain the HVAC
Systems on a regularly scheduled basis, but not less than once every three (3)
months. Such service shall include, but not be limited to, cleaning of the coil
and condenser units on each unit; checking the electrical connections, the oil
and refrigerant for leaks, the safety device, the blower belt for wear, tension
and alignment, the expansion valve, coil temperature, and condensate drain; and
maintaining the lubrication and addition of Freon. Tenant shall secure, at its
sole cost and expense, and shall provide Landlord with a copy of the service
contract, providing for the maintenance as described in above, within sixty
(60) days following the Commencement Date of this Lease, and thereafter, Tenant
shall renew such service contract to Landlord prior to expiration of the then
existing service contract. Landlord acknowledges that Tenant may use its
maintenance staff to perform the services required herein, provided that a
verifiable record of such service is kept by Tenant.
9.3 Tenant agrees it shall not locate or install or cause
to be located or installed in the Common Area any bike racks, newspaper holder
stands, vending machines of any kind, mailboxes, telephone booths, mobile
homes, fences, or any other device of a similar nature which would impede or
obstruct the Common Area. Tenant further agrees to keep said sidewalk and
service area swept and free from trash, rubbish, garbage and other refuse, and
additionally to maintain in a neat and clean condition that area to the rear of
the Premises designated as the garbage or refuse collection area for the use of
Tenant.
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10. ALTERATIONS, ADDITIONS, AND IMPROVEMENTS.
10.1 Tenant shall not create any openings in the roof or
exterior walls, or make any alterations, additions, or improvements to the
Premises or install any structures or equipment on the roof of the Building or
any portion of the Common Area without the prior written consent of Landlord.
Tenant expressly agrees to indemnify Landlord for any and all damages resulting
from or caused by Tenant penetrating the roof or exterior walls of the
Premises. Tenant shall have the right to erect or install shelves, bins and
machinery, provided that Tenant complies with all applicable governmental laws,
ordinances, and regulations. Tenant shall have the right to remove at the
termination of this Lease, such items so installed by Tenant, provided Tenant
is not then in default; however, Tenant shall, prior to the termination of this
Lease, repair any damage caused by such removal and, if requested by Landlord,
offer Landlord (prior to such removal) sufficient security to insure Landlord
that the proper repairs will be made.
All alterations, additions or improvements made by Tenant
(including, without limitation, HVAC Systems, offices and improvements in and
pertaining to such offices, partitions, floor coverings, etc.), together with
such other property as Tenant leaves in or on the Premises at the termination
of this Lease, shall become the property of Landlord at the termination of this
Lease; however, Tenant shall required to remove any or all alterations,
additions, and improvements consented to by Landlord provided Landlord notifies
Tenant in writing that such improvements will require future removal at the
time of Landlord's reasonable approval of such alterations and improvements,
and any other property placed in the Premises by Tenant, and Tenant shall
repair any damage caused by such removal. Furthermore, no improvements
contemplated by EXHIBIT "D" will reasonably require removal. The provisions of
this paragraph shall survive the expiration or earlier termination of this
Lease.
10.3 Landlord retains the exclusive right to make
additions, changes or improvements, whether structural or otherwise, in and
about the Building, or any part thereof, and for such purposes to enter upon
the Premises, and, during the continuance of any of said work, to temporarily
close doors, entryways, public space and corridors in the Building, to
interrupt or temporarily suspend Building services and facilities, and to
change the arrangement and location of entrances or passageways, doors and
doorways, corridors, elevators, stairs, toilets, or other public parts of the
Building, all without abatement of rent or affecting any of Tenant's
obligations hereunder, so long as the Premises are reasonably accessible.
11. SIGNS. Tenant shall not, without Landlord's prior written
consent (a) install, alter or replace any exterior lighting, decorations,
paintings, awnings, canopies or the like, or (b) erect, install, alter or
replace any signs, window or door lettering, placards, decorations or
advertising media of any type which can be viewed from the exterior of the
Premises. All signs, lettering, placards, decorations and advertising media
shall conform in all respects to the sign criteria established by Landlord for
the Project from time to time in the exercise of its sole discretion, and shall
be subject to the prior written approval of Landlord as to construction, method
of attachment, size, shape, height, lighting, color and general appearance.
Tenant shall be solely responsible for all costs associated with the
installation and maintenance of such signs. All signs are subject to applicable
laws and deed restrictions and shall conform to any national, local or
municipal ordinance or regulation. All signs shall be kept in good condition
and in proper operating order at all times. At Landlord's option and request,
Tenant shall remove all signs at the termination of this Lease, and shall
repair any damage and close any holes caused by such removal, with such repairs
to be made in good workmanlike manner. Tenant shall not erect any signs on the
roof or paint or otherwise deface the exterior walls of the Building.
Notwithstanding anything contained herein to the contrary, Tenant may install,
at it sole cost and expense, such building mounted signage and monument signage
to be in reasonable accordance with the specifications as described in the
attached EXHIBIT "E", as may be modified upon the reasonable consent of
Landlord, and provided such signage shall conform to any national, local or
municipal ordinance or regulation.
12. INSURANCE.
12.1 Tenant shall not permit the Premises to be used in
any way which would, in the opinion of Landlord, be extra hazardous (on account
of fire or otherwise) or in any way increase the cost of or render void any
insurance coverage in place with respect to the Building or any contents in the
Building belonging to other tenants in the Building. Tenant warrants to
Landlord that the Permitted Use as defined in Paragraph 1.P herein accurately
reflects Tenant's original intended use of the Premises, and that the minimum
insurance coverage shall be obtained by Tenant and in force as of the
Commencement Date. If, at any time during the Term of this Lease, the State
Board of Insurance or other insurance authority, or any insurer disallows any
of Landlord's sprinkler credits or imposes an additional penalty or surcharge
in Landlord's sprinkler credits or imposes an additional penalty or surcharge
in Landlord's insurance premiums because of Tenant's original or subsequent
placement or use of storage racks or bins, method of storage or nature of
Tenant's inventory or any other act of Tenant, Tenant agrees to pay as
additional rental the increase in Landlord's insurance premiums. If an increase
in the fire and extended coverage premium paid by Landlord for the Building is
caused by Tenant's use or occupancy of the Premises, or if Tenant wrongfully
vacates the Premises and causes an increase, then Tenant shall pay as
additional rental the amount of such increase to Landlord.
12.2 Landlord shall maintain fire and extended coverage
insurance on the Building and the Premises in such amounts as Landlord's
mortgagees shall require. Payments for losses thereunder shall be made solely
to Landlord or the mortgagees of Landlord as their respective interests shall
appear. Tenant shall maintain at its expense, in an amount equal to full
replacement cost, fire and extended coverage insurance, issued by and binding
upon a company approved by Landlord, on all of its personal property, including
removable trade fixtures, located within the Premises. Tenant shall provide
Landlord with current certificates of insurance evidencing Tenant's compliance
with this Subsection 12.2 and Subsection 12.3, and Tenant shall obtain the
agreement of Tenant's insurers to notify Landlord of any change in coverage or
that a policy is due to expire at least thirty (30) days prior to such
expiration.
12.3 Tenant shall maintain, at its expense, a policy or
policies of commercial general liability insurance with respect to the
respective activities of each in the Building with the premiums thereon fully
paid on or before the due date, issued by and binding upon an insurance company
approved by Landlord, and providing minimum protection of not less than
$1,000,000 combined single limit coverage of bodily injury, property damage or
combination thereof. Tenant's liability insurance shall name Landlord as an
additional insured. Landlord shall not be required to maintain insurance
against thefts within the Premises, Building or Project.
12.4 Except as otherwise provided herein, any insurance
which may be carried by Landlord or Tenant against any loss or damage to the
Building and other improvements situated on the Project or in the Premises
shall be for the sole benefit of the party carrying such insurance and under
its sole control.
13. WAIVER OF SUBROGATION. Notwithstanding any provision in this
Lease to the contrary, Landlord and Tenant each hereby waives any and all
rights of recovery, claim, action, or cause of action, against the other, its
agents, officers, or employees, for any loss or damage that may occur to the
Premises, or any improvements thereto, or the Building of which the Premises
are a part, or any improvements thereto, or any personal property of such party
therein, by reason of fire, the elements, or any other cause which is or would
be insured against under the terms of the property insurance policies carried
or required to be carried under the terms of this Lease by the respective
parties hereto, regardless of cause or origin, including negligence of the
other party hereto, its agents, officers, or employees, and Landlord and Tenant
each covenants that no insurer shall hold any right of subrogation against such
other party (and all such insurance policies shall be amended or endorsed to
reflect such waiver of subrogation). This waiver of subrogation provision shall
be effective to the full extent, but only to the extent, that it does not
impair the effectiveness of insurance policies of Landlord and Tenant.
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14. LANDLORD'S RIGHT OF ENTRY.
14.1 Landlord and its authorized agents shall have the
right to enter the Premises during normal working hours for the following
purposes: (a) inspecting the general condition and state of repair of the
Premises, (b) making of repairs required or authorized herein, (c) showing the
Premises to any current or prospective purchaser, tenant, mortgagee or any
other party, (d) or for any other reasonable purpose. During the final 180-day
period of the Term of this Lease, Landlord and its authorized agents shall have
the right to erect on or about the Premises a customary sign advertising the
property for lease or for sale. Furthermore, in the event of any emergency
(defined to be any situation in which Landlord reasonably perceives imminent
danger or injury to person and/or damage or loss of property), Landlord and its
authorized agents shall have the right to enter the Premises at any time
without notice.
14.2 In any circumstance where Landlord is permitted to
enter upon the Premises, whether for the purpose of curing any default of
Tenant, repairing damage resulting from fire or other casualty or an eminent
domain taking or is otherwise permitted hereunder or by law to go upon the
Premises, no such entry shall constitute an eviction or disturbance of Tenant's
use and possession of the Premises or a breach by Landlord of any of Landlord's
obligations hereunder or render Landlord liable for damages for loss of
business or otherwise or entitle Tenant to be relieved from any of Tenant's
obligations hereunder or grant Tenant any right of setoff or recoupment or
other remedy; and in connection with any such entry incident to performance of
repairs, replacements, maintenance or construction; all of the aforesaid
provisions shall be applicable notwithstanding that Landlord may elect to take
building materials in, to or upon the Premises that may be required or utilized
in connection with such entry by Landlord.
15. UTILITY SERVICES.
15.1 Landlord shall provide, at the beginning of this
Lease, the normal and customary utility connections into the Premises. Tenant
shall pay the cost of all initial utility connection charges and all utility
usage charges for utilities that are separately metered with respect to the
Premises, including, but not limited to, all charges for telephone, gas, water
and electricity used on the Premises. Tenant shall also pay for replacement of
all electric light lamps, bulbs or tubes. Landlord shall have the right at any
time and from time to time during the Term of this Lease to install equipment
within the Premises for the purpose of measuring Tenant's electrical usage
therein.
15.2 No interruption or malfunction of any of such
services shall constitute an eviction or disturbance of Tenant's use and
possession of the Premises or the Building or a breach by Landlord of any of
Landlord's obligations hereunder or render Landlord liable for damages or
entitle Tenant to be relieved from any of Tenant's obligations hereunder
(including the obligation to pay rental) or grant Tenant any right of setoff or
recoupment. In the event of any such interruption, however, Landlord shall use
reasonable diligence during normal business hours to restore such service or
cause same to be restored in any circumstances in which such restoration is
within the reasonable control of Landlord and the interruption was not caused
in whole or in part by Tenant's fault. Tenant expressly agrees to notify any
utility service requesting or requiring such notice of Tenant's intention to
vacate the Premises. This notice requirement shall be in addition to any other
notice requirement specified herein.
16. ASSIGNMENT AND SUBLEASING. Tenant may not, without the prior
written consent of the Landlord which shall not be unreasonably withheld,
assign this Lease (or permit any assignment of this Lease by operation of law)
or sublet the Premises or any portion thereof or mortgage, pledge or
hypothecate its leasehold interest or grant any license within the Premises,
and any attempt to do any of the foregoing without the prior written consent of
Landlord shall be void and no effect. In any case where Landlord consents to an
assignment, sublease, mortgage, pledge or hypothecation of the leasehold, the
undersigned Tenant will nevertheless remain directly and primarily liable for
the performance of all covenants, duties and obligations of Tenant and Landlord
shall be permitted to enforce the provisions of this Lease against the
undersigned Tenant and/or any assignee, subtenant or other transferee without
demand upon or proceeding in any way against any other person. The acceptance of
an assignment or subletting of the Premises by any assignee or subtenant shall
be construed as a promise on the part of such assignee or subtenant to be bound
by and perform all of the terms, conditions and covenants by which Tenant
herein is bound. Landlord shall have the option, upon receipt from Tenant of
written request for Landlord's consent to subletting or assignment, to cancel
this Lease as to the portion of the Premises in question as of the date the
requested subletting or assignment is to be effective. The option shall be
exercised, if at all, within fifteen (15) days following Landlord's receipt of
written notice by delivery to Tenant of written notice of Landlord's intention
to exercise the option. No such assignment or subletting shall be construed to
constitute a novation or to waive the requirement for obtaining consent to any
subsequent assignment or subletting. In the event of default by Tenant after
this Lease has been assigned or while the Premises are sublet, Landlord, in
addition to any other remedies provided herein (or provided by law), may at
Landlord's option, collect directly from such assignee or subtenant all rents
becoming due to Tenant under such assignment or subletting, and Landlord may
apply such rent against any sums due to Landlord by Tenant hereunder. No direct
collection by Landlord from any such assignee or subtenant shall release Tenant
from Tenant's primary responsibility under the Lease (as aforesaid) and from
the further performance of Tenant's obligations hereunder. If Landlord consents
to any subletting or assignment by Tenant as hereinabove provided, and
subsequently any rental or other sums received by Tenant under any such
sublease are in excess of the rent and other sums payable by Tenant under this
Lease, or any additional consideration is paid to Tenant by the assignee under
any such assignment, then Landlord may, at its sole option, either (1) declare
such excess rental under any sublease or such additional consideration for an
assignment to be due and payable by Tenant to Landlord as additional rent
hereunder.
Landlord shall have the right to transfer, assign, mortgage, convey
and sublease all or any part of the Premises and this Lease, and nothing
contained in this Lease shall be construed as a restriction upon Landlord's
right to do any of the foregoing. If Landlord transfers this Lease, either
specifically or by virtue of a transfer of all or any part of the Premises,
then Landlord shall thereby be released from all obligations arising hereunder
after such transfer, and Tenant agrees to look solely to such assignee for
performance of such obligations.
17. FIRE AND CASUALTY DAMAGE.
17.1 Tenant shall immediately give written notice to
Landlord (the "Casualty Notice") if the Building or the Premises are damaged or
destroyed. Within twenty (20) days after Landlord's receipt of the Casualty
Notice, Landlord shall provide written notice to Tenant (the "Landlord's
Notice") as to whether, in the Landlord's estimation, rebuilding or repairs to
the Premises or any portion of the Building which has been totally damaged or
destroyed by an insured peril cannot be completed within one hundred eighty
(180) days of the date that the Landlord received the Casualty Notice.
17.2 If the Premises or any portion of the Building shall
be totally damaged or destroyed by an insured peril and in Landlord's
estimation, rebuilding or repairs cannot be completed within one hundred eighty
(180) days after Landlord's receipt of the Casualty Notice, then either
Landlord or Tenant (provided Tenant or its employees, agents or invitees did
not cause such damage) may terminate this Lease by delivering to the other
written notice thereof within ten (10) days after Tenant's receipt of
Landlord's Notice, in which case, the rent shall be abated during the unexpired
portion of this Lease, effective upon the date Landlord received the Casualty
Notice. Time is of the essence with respect to the delivery of such notices.
17.3 If this Lease is not terminated as provided under
Paragraph 17.2, then Landlord shall repair and reconstruct the Premises and/or
the Building to substantially the same condition in which they existed
immediately prior to such damage or destruction, except that Landlord shall not
be required to rebuild, repair or replace any part of the partitions, fixtures
and other improvements or personal property which may have been installed by
Tenant or is required to be covered by Tenant's insurance pursuant to Paragraph
12 of this Lease.
6
17.4 If the Premises are untenantable, in whole or in
part, during the period beginning on the date of Landlord's receipt of the
Casualty Notice and ending on the date of substantial completion of Landlord's
repair or restoration work (the "Repair Period"), then the rent for such period
shall be reduced to such extent as may be fair and reasonable under the
circumstances and the Term shall be extended by the number of days in the
Repair Period and this Lease shall continue in full force and effect. Any
insurance which may be carried by Landlord or Tenant against loss or damage to
the Building or to the Premises shall be for the sole benefit of the party
carrying such insurance under its control, and it is understood that Landlord
shall in no event be obligated to carry insurance on Tenant's contents.
18. HOLD HARMLESS. Landlord shall not be liable to Tenant or
Tenant's employees, agents or invitees or to any other person whomsoever, for
any injury to person or damage to property on or about the Building and/or
Premises caused by the negligence or misconduct of Tenant, its employees,
invitees, licensees or agents and Tenant agrees to defend and indemnify
Landlord and hold Landlord harmless from any loss, expense or claims arising
out of any such damage or injury, including but not limited to, court costs and
reasonable attorneys' fees. Landlord shall not be liable or responsible for any
injury or damage which may be caused by the Building or the Premises becoming
out of repair unless caused by Landlord's gross negligence or willful
misconduct. The provisions of this paragraph shall survive the expiration or
earlier termination of this Lease.
19. CONDEMNATION.
19.1 If, during the Term of this Lease or any extension or
renewal thereof, all or substantially all of the Premises should be taken for
any public or quasi-public use under any governmental law, ordinance or
regulation or by right of eminent domain, or should be sold to the condemning
authority under threat of condemnation (the "Taking"), this Lease shall
terminate and the rent shall be abated during the unexpired term of this Lease,
effective as of the date of such Taking.
19.2 If less than substantially all of the Premises shall
be subject to the Taking, this Lease shall not terminate but Landlord may, at
Landlord's sole option and at its sole cost and expense, repair or modify the
Building and the Premises and the rent payable hereunder during the unexpired
portion of the Term shall be adjusted to such extent as may be fair and
reasonable under the circumstances. In the event that Landlord chooses not to
make such repairs or modifications, this Lease shall terminate, the rent shall
be abated for the unexpired term of this Lease and all rights and obligations
relating to the unexpired term of this Lease shall cease. Tenant shall have no
claim to any portion of the condemnation award.
20. HOLDING OVER. If Tenant should remain in possession of the
Premises after the expiration of the Term of this Lease, without the execution
by Landlord and Tenant of a new lease or an extension of this Lease, then
Tenant shall be deemed to be occupying the Premises as a tenant-at-sufferance,
subject to all the covenants and obligations of this Lease and at a daily
rental of one hundred twenty five percent (125%) of the per day rental provided
for the last month of the Term of this Lease, computed on the basis of a thirty
(30) day month. The inclusion of the preceding sentence shall not be construed
as Landlord's consent for Tenant to hold over. If any property not belonging
to Landlord remains at the Premises after the expiration of the Term of this
Lease, Tenant hereby authorizes Landlord to make such disposition of such
property as Landlord may desire without liability for compensation or damages
to Tenant in the event that such property is the property of Tenant; and in the
event that such property is the property of someone other than Tenant. Tenant
agrees to indemnify and hold Landlord harmless from all suits, actions,
liability, loss, damages and expenses in connection with or incident to any
removal, exercise or dominion over and/or disposition of such property by
Landlord.
21. DEFAULTS.
21.1 Each of the following acts or omissions of Tenant or
occurrences shall constitute an "Event of Default":
(a) Failure or refusal by Tenant to timely pay
rental or other payments hereunder and such failure shall continue for a period
of ten (10) days following written notice to Tenant of such failure.
(b) Failure to perform or observe any covenant or
condition of this Lease by Tenant to be performed or observed, other than the
payment of rental or other payments hereunder, and Tenant shall not cure such
failure within thirty (30) days following written notice to Tenant of such
failure provided, however, that if the default cannot reasonably be cured
within such thirty (30) day period, Tenant shall not be in default hereunder if
Tenant has begun and pursued with reasonable diligence to cure such default
within such thirty (30) day period.
(c) {INTENTIONALLY OMITTED}
(d) The filing or execution or occurrence of any
one of the following: (i) a petition in bankruptcy or other insolvency
proceeding by or against Tenant, (ii) petition or answer seeking relief under
any provision of the Bankruptcy Act, (iii) an assignment for the benefit of
creditors or composition, (iv) a petition or other proceeding by or against
Tenant for the appointment of a trustee, receiver or liquidator of Tenant or
any of Tenant's property, or (v) a proceeding by any governmental authority for
the dissolution or liquidation of Tenant.
21.2 This Lease and the Term and estate hereby granted and
the demise hereby made are subject to the limitation that if and whenever any
Event of Default shall occur, Landlord may, at Landlord's option, in addition
to all other rights and remedies given hereunder or by law or equity, do any
one (1) or more of the following:
(a) Terminate this Lease, in which event Tenant
shall immediately surrender possession of the Premises to Landlord.
(b) Enter upon and take possession of the
Premises and expel or remove Tenant and any other occupant therefrom, with or
without having terminated the Lease.
(c) Alter locks and other security devices at the
Premises.
21.3 Exercise by Landlord of any one (1) or more remedies hereunder
granted or otherwise available shall not be deemed to be an acceptance of
surrender of the Premises by Tenant, whether by agreement or by operation of
law, it being understood that such surrender can be effected only by the
written agreement of Landlord and Tenant. No such alteration of security
devices and no removal or other exercise of dominion by Landlord over the
property of Tenant or others at the Premises shall be deemed unauthorized or
constitute a conversion, Tenant hereby consenting, after any Event of Default,
to the aforesaid exercise of dominion over Tenant's property within the
Building. All claims for damages by reason of such reentry and/or possession
and/or alteration of locks or other security devices are hereby waived, as are
all claims for damages by reason of any distress warrant, forcible detainer
proceedings, sequestration proceedings or other legal process. Tenant agrees
that any reentry by Landlord may be pursuant to judgment obtained in forcible
detainer proceedings or other legal proceedings or without the necessity for
any legal proceedings, as Landlord may elect, and Landlord shall not be liable
in trespass or otherwise.
21.4 In the event that Landlord elects to terminate this Lease by
reason of an Event of Default, then, notwithstanding such termination, Tenant
shall be liable for and shall pay to Landlord the sum of all rental and other
indebtedness accrued to the date of such termination, plus, as damages, an
amount equal to the then present value of the rental reserved hereunder for the
remaining portion of the Term of this Lease (had such Term not been terminated
by Landlord prior to the expiration of the Term of this Lease), less the then
present value of the fair rental value of the Premises for such period, the
undersigned parties hereby stipulating that such fair rental value shall in no
event be deemed to exceed sixty percent (60%) of the then present value of the
rental reserved for such period.
7
In the event that Landlord elects to terminate the Lease by
reason of an Event of Default, in lieu of exercising the rights of Landlord
under the preceding paragraph of this Paragraph 21.4, Landlord may instead hold
Tenant liable for all rental and other indebtedness accrued to the date of such
termination, plus such rental and other indebtedness as would otherwise have
been required to be paid by Tenant to Landlord during the period following
termination of the Term of this Lease measured from the date of such
termination by Landlord until the expiration of the Term of this Lease (had
Landlord not elected to terminate the Lease on account of such Event of
Default) diminished by any net sums thereafter received by Landlord through
reletting the Premises during said period (after deducting expenses incurred by
Landlord as provided in Paragraph 21.6 hereof). Actions to collect amounts due
by Tenant provided for in this paragraph of this Paragraph 21.4 may be brought
from time to time by Landlord during the aforesaid period, on one (1) or more
occasions, without the necessity of Landlord's waiting until the expiration of
such period, and in no event shall Tenant be entitled to any excess of rental
(or rental plus other sums) obtained by reletting over and above the rental
provided for in this Lease.
21.5 In the event that Landlord elects to repossess the
Premises without terminating this Lease, then Tenant shall be liable for and
shall pay to Landlord all rental and other indebtedness accrued to the date of
such repossession, plus rental required to be paid by Tenant to Landlord during
the remainder of the Term of this Lease until the expiration of the Term of
this Lease, diminished by any net sums thereafter received by Landlord through
reletting the Premises during said period (after deducting expenses incurred by
Landlord as provided in Paragraph 21.6 hereof). In no event shall Tenant be
entitled to any excess of any rental obtained by reletting over and above the
rental herein reserved. Actions to collect amounts due by Tenant as provided in
this Paragraph 21.5 may be brought from time to time, on one (1) or more
occasions, without the necessity of Landlord's waiting until the expiration of
the Term of this Lease.
21.6 In case of an Event of Default, Tenant shall also be
liable for and shall pay to Landlord in addition to any sum provided to be paid
above: (i) broker's fees incurred by Landlord in connection with reletting the
whole or in part of the Premises, (ii) the cost of removing and storing
Tenant's or other occupant's property, (iii) the cost of repairing, altering,
remodeling or otherwise putting the Premises into condition acceptable to a new
tenant or tenants, and (iv) all reasonable expenses incurred by Landlord in
enforcing Landlord's remedies, including reasonable attorneys' fees. Past due
rental and other past due payments shall bear interest from maturity at the
highest lawful rate per annum until paid.
21.7 In the event of termination or repossession of the
Premises for an Event of Default, Landlord shall not have any obligation to
relet or attempt to relet the Premises, or any portion thereof, or to collect
rental after reletting; but Landlord shall have the option to relet or attempt
to relet; and in the event of reletting, Landlord may relet the whole or any
portion of the Premises for any period to any tenant and for any use and
purpose.
21.8 If Tenant should fail to make any payment or cure any
default hereunder within the time herein permitted, Landlord, without being
under any obligation to do so and without thereby waiving such default, may make
such payment and/or remedy such other default for the account of Tenant (and
enter the Premises for such purpose), and thereupon Tenant shall be obligated
to, and hereby agrees to, pay Landlord, upon demand, all costs, expenses and
disbursements (including reasonable attorneys' fees) incurred by Landlord in
taking such remedial action.
21.9 In the event of any default by Landlord, Tenant's
exclusive remedy shall be an action for damages (Tenant hereby waiving the
benefit of any laws granting Tenant a lien upon the property of Landlord and/or
upon rental due Landlord), but prior to any such action Tenant will give
Landlord written notice specifying such default with particularity, and
Landlord shall thereupon have thirty (30) days (plus such additional reasonable
period as may be required in the exercise by Landlord of due diligence) in
which to cure any such default. Unless and until Landlord fails to so cure any
default after Tenant shall not have any remedy or cause of action by reason
thereof. All obligations of Landlord hereunder will be construed as covenants,
not conditions; and all such obligations will be binding upon Landlord only
during the period of Landlord's possession of the Building and not thereafter.
Under no circumstances whatsoever shall Landlord ever be liable hereunder for
consequential damages or special damages.
21.10 The liability of Landlord to Tenant for any default
by Landlord under the terms of this Lease shall be limited to the proceeds of
sale on execution of the interest of Landlord in the Building and in the Land,
and neither Landlord, nor any party comprising Landlord, shall be personally
liable for any deficiency. This clause shall not be deemed to limit or deny any
remedies which Tenant may have in the event of default by Landlord hereunder
which do not involve the personal liability of Landlord.
21.11 No waiver by the parties hereto of any default or
breach of any term, condition, or covenant of this Lease shall be deemed to be
a waiver of any subsequent default or breach of the same or of any other term
condition, or covenant contained herein. No receipt of money by Landlord from
Tenant after the expiration of the Term of this Lease, or after the service of
any notice, or after the commencement of any suit, or after final judgment for
possession of the Premises, shall reinstate, continue or extend the Term of
this Lease or affect any such notice, demand or suit or imply consent for any
action for which Landlord's consent is required.
21.12 The term "Landlord" shall mean only the owner, for
the time being, of the Building, and in the event of the transfer by such owner
of its interest in the Building, such owner shall thereupon be released and
discharged from all covenants and obligations of the Landlord thereafter
accruing, but such covenants and obligations shall be binding during the Term
of this Lease upon each new owner for the duration of such owner's ownership.
22. LANDLORD'S LIEN. In addition to the statutory landlord's
lien, Landlord shall have at all times a valid security interest to secure
payment of all rentals and other sums of money becoming due hereunder from
Tenant, and to secure payment of any damages or loss which Landlord may suffer
by reason of the breach by Tenant of any covenant, agreement or condition
contained herein, upon all goods, wares, equipment, fixtures, furniture,
improvements and other personal property of Tenant presently, or which may
hereafter be, situated in the Premises, and all proceeds therefrom, and such
property shall not be removed therefrom without the consent of Landlord until
all arrearages in rental as well as any and all other sums of money then due to
Landlord hereunder shall first have been paid and discharged and all the
covenants, agreements and conditions hereof have been fully complied with and
performed by Tenant. Upon the occurrence of an Event of Default as set forth
in Paragraph 21 hereof by Tenant, Landlord may, to the extent permitted by law
and in addition to any other remedies provided herein, enter upon the Premises
and take possession of any and all goods, wares, equipment, fixtures,
furniture, improvements and other personal property of Tenant situated in the
Premises, without liability for trespass or conversion, and sell the same as
public or private sale, with or without having such property at the sale, after
giving Tenant reasonable notice of the time and place of any public sale or of
the time after which any private sale is to be made, at which sale Landlord or
Landlord's assigns may purchase unless otherwise prohibited by law. Unless
otherwise provided by law, and without intending to exclude any other manner of
giving Tenant reasonable notice, the requirement of reasonable notice shall be
met if such notice is given in the manner prescribed in this Lease at least ten
(10) days before the time of sale. Any sale made pursuant to the provisions of
this Paragraph 22 shall be deemed to have been a public sale conducted in a
commercially reasonable manner if held in the Premises or where the property is
located after the time, place and method of sale and a general description of
the types of property to be sold have been advertised in a daily newspaper
published in the county in which the Building is located, for five (5)
consecutive days before the date of the sale. The proceeds from any such
disposition, less any and all expenses connected with the taking of possession,
holding and selling of the property (including reasonable attorneys' fees)
shall be applied as a credit against the indebtedness secured by the security
interest granted in this Paragraph 22. Any surplus shall be paid to Tenant or
as otherwise required by law; Tenant shall pay any deficiencies forthwith.
Upon request of Landlord, Tenant agrees to execute Uniform Commercial Code
financing statements relating to the aforesaid security interest, or Landlord
may file this Lease or a copy of this Lease as a financing statement.
8
23. SUBORDINATION. Tenant accepts this Lease subject and
subordinate to any ground lease, mortgage, deed of trust or other lien
presently existing or hereafter placed upon the Premises or upon the Building
or any part thereof, and to any renewals, modifications, extensions and
refinancing thereof, which might now or hereafter constitute a lien upon the
Building or any part thereof, and to zoning ordinances and other building and
fire ordinances and governmental regulations relating to the use of the
Premises; but Tenant agrees that any such ground lessor, mortgagee and/or
beneficiary of any deed of trust or other lien ("Landlord's Mortgagee") and/or
Landlord shall have the right at any time to subordinate such ground lease,
mortgage, deed of trust or other lien to this Lease on such terms and subject
to such conditions as such Landlord's Mortgagee may deem appropriate in its
discretion. Upon demand, Tenant agrees to execute such further instruments
subordinating this Lease, as Landlord may request, and such nondisturbance and
attornment agreements, as any such Landlord's Mortgagee shall request, in form
reasonably satisfactory to Landlord's Mortgagee. Upon foreclosure of the
Building or upon acceptance of a deed in lieu of such foreclosure, Tenant
hereby agrees to attorn to the new owner of such property after such
foreclosure or acceptance of a deed in lieu of foreclosure, if so requested by
such new owner of the Building.
24. COMPLIANCE WITH LAWS, RULES AND REGULATIONS.
24.1 Tenant, at Tenant's own expense, (a) shall comply with
all federal, state, municipal, fire underwriting and other laws, ordinances,
orders, rules and regulations applicable to the Premises and the business
conducted therein by Tenant, (b) shall not engage in any activity which would
cause Landlord's fire and extended coverage insurance to be cancelled or the
rate therefor to be increased (or, at Landlord's option, Tenant shall pay any
such increase to Landlord immediately upon demand as additional rental in the
event of such rate increase by reason of such activity), (c) shall not commit,
and shall cause Tenant's agents, employees and invitees not to commit, any act
which is a nuisance or annoyance to Landlord or to other tenants, or which
might, in the reasonable judgment of Landlord, damage Landlord's goodwill or
reputation, or tend to injure or depreciate the Building, (d) shall not commit
or permit waste in the Premises or the Building, (e) shall not paint, erect or
display any sign, advertisement, placard or lettering which is visible in the
corridors or lobby of the Building or from the exterior of the Building without
Landlord's prior written approval, and (f) shall not occupy or use, or permit
any portion of the Premises to be occupied or used, for any business or purpose
other than the Permitted Use specified in Paragraph l.P. hereof. If a
controversy arises concerning Tenant's compliance with any federal, state,
municipal or other laws, ordinances, orders, rules or regulations applicable to
the Premises and the business conducted therein by Tenant, Landlord may retain
consultants of recognized standing to investigate Tenant's compliance. If it is
determined that Tenant has not complied as required, Tenant shall reimburse
Landlord on demand for all reasonable and necessary expenses and fees incurred
by Landlord in conducting such investigation.
24.2 Tenant, and Tenant's agents, employees and invitees
shall comply fully with all requirements of the rules and regulations of the
Building which are attached hereto as EXHIBIT "C" and made a part hereof.
Landlord shall at all times have the right to change such rules and regulations
or to amend or supplement them in such manner as may be deemed advisable for
the safety, care and cleanliness of the Premises and the Building and for
preservation of good order therein, all of which rules and regulations, changes
and amendments shall be forwarded to Tenant and shall be carried out and
observed by Tenant. Tenant shall further be responsible for the compliance with
such rules and regulations by the employees, agents and invitees of Tenant.
Landlord hereby reserves the right to designate, or otherwise control the
allocation of, parking spaces for the Premises. All changes and amendments in
the rules and regulations of the Building will be sent by Landlord to Tenant in
writing and shall thereafter be carried out and observed by Tenant. No outside
storage or accumulation of supplies, inventory, building materials or debris
shall be permitted without prior written consent from the Landlord. Tenant
expressly agrees to comply with and conform to all restrictive covenants of
record or subsequently filed of record affecting the Premises.
25. NOTICES. Any notice which may or shall be given under the terms
of this Lease shall be in writing and shall be either delivered by hand
(including commercially recognized messenger and express mail service) or sent
by United States Mail, registered or certified, return receipt requested,
postage prepaid, addressed to the parties herein at their respective addresses
set out below, or at such other addresses as either party may have theretofore
specified by written notice delivered in accordance herewith. Such address may
be changed from time to time by either party by giving notice as provided
herein.
LANDLORD: Cardinal Collins Tech Center, Inc.
c/o Kennedy Associates Real Estate Counsel, Inc.
1215 4th Avenue, 2400 Financial Center
Seattle, Washington 98161
ATTN: Vice President of Asset Management
WITH COPIES TO: Haynes & Boone, LLP
901 Main Street, Suite 3100
Dallas, Texas 75202
ATTN: Mr. Richard K. Martin
TENANT: HighwayMaster Corporation, Inc.
1155 E. Kas, Suite 100
Richardson, Texas 75081
ATTN: General Counsel
Notice shall be deemed given when delivered (if delivered by hand) or,
whether actually received or not, when postmarked (if sent by mail). If the
term "Tenant" as used in this Lease refers to more than one (1) person and/or
entity, any notice given as aforesaid to any one of such persons and/or
entities shall be deemed to have been duly given to Tenant.
26. FINANCIAL STATEMENTS. Tenant shall, upon request by Landlord
(but not more often than once per annum), provide current certified financial
statements to Landlord during the Term of this Lease. Such financial statements
shall be compiled using generally accepted accounting principles.
27. SPRINKLERS. If there now is or shall be installed in the
Building a sprinkler system, and such system or any of its components shall be
damaged or injured or not in proper working order by reason of any act or
omission of Tenant, Tenant's agents servants, employees, licensees or visitors,
Tenant shall forthwith restore the same to good working condition at Tenant's
own expense; and if the Board of Fire Underwriters or any bureau, department or
official of the state or local government require or recommend that any
changes, modifications, alterations or additional sprinkler heads or other
equipment be made or supplied by reason of Tenant's business, or the location
of partitions, trade fixtures or other contents of the Premises, or for any
other reason as might be determined by such parties, or if any such changes,
modifications alterations, additional sprinkler heads or other equipment become
necessary to prevent the imposition of a penalty or charge against the full
allowance for a sprinkler system in the fire insurance rate as fixed by the
Board of Fire Underwriters, or by any fire insurance company, Tenant shall, at
Tenant's expense, promptly make and supply such changes, modifications,
alterations, additional sprinkler heads or other equipment.
28. RELOCATION OF PREMISES. [INTENTIONALLY OMITTED]
9
29. COMMON AREA. The Common Area, as defined in Paragraph l.Q
hereof, shall be subject to Landlord's sole management and control and shall be
operated and maintained in such manner as Landlord in Landlord's discretion
shall determine. Landlord reserves the right to change from time to time the
dimensions and location of the Common Areas and to place, construct or erect
other improvements on any part of the Land without the consent of Tenant.
Tenant, and Tenant's employees and invitees shall have the nonexclusive right
to use the Common Area as constituted from time to time, such use to be in
common with Landlord, other tenants of the Building and other persons entitled
to use the same, and subject to such reasonable and non-discriminatory rules
and regulations governing use as Landlord may from time to time prescribe.
Tenant shall not solicit business or display merchandise within the Common
Area, or distribute handbills therein, or take any action which would interfere
with the rights of other persons to use the Common Area. Landlord may
temporarily close any part of the Common Area for such periods of time as may
be necessary to prevent the public from obtaining prescriptive rights or to
make repairs or alterations.
30. BROKERAGE. Tenant represents and warrants that it has dealt
with no other broker, agent or other person in connection with this transaction
and that no broker, agent or other person brought about this transaction, other
than Broker specified in Paragraph 1.R hereof, and Tenant agrees to indemnify
and hold Landlord harmless from and against any claims by any other broker,
agent or other person claiming a commission or other form of compensation by
virtue of having dealt with Tenant with regard to this leasing transaction.
The provisions of this Paragraph 30 shall survive the termination of this
Lease.
31. HAZARDOUS WASTE.
31.1 The term "Hazardous Substances," as used in this
Lease shall mean pollutants, contaminants, toxic or hazardous wastes, or any
other substances, the use and/or the removal of which is required or the use of
which is restricted, prohibited or penalized by any "Environmental Law," which
term shall mean any federal, state or local law, ordinance or other statute of
a governmental or quasi-governmental authority relating to pollution or
protection of the environment.
31.2 Tenant hereby agrees that (i) no activity will be
conducted on the Premises that will produce any Hazardous Substance; (ii) the
Premises will not be used in any manner for the storage of any Hazardous
Substances; (iii) no portion of the Premises will be used as a landfill or a
dump; (iv) Tenant will not install any underground tanks of any type; (v)
Tenant will not allow any surface or subsurface conditions to exist or come
into existence that constitute, or with the passage of time may constitute a
public or private nuisance; (vi) Tenant will not permit any Hazardous
Substances to be brought onto the Premises, and if so brought thereon, then the
same shall be immediately removed with proper disposal, and all required
cleanup procedures shall be diligently undertaken pursuant to all Environmental
Laws.
31.3 If Tenant so contaminates the Premises, then Tenant
shall diligently institute proper and thorough cleanup procedures at Tenant's
sole cost, and Tenant agrees to indemnify and hold Landlord harmless from all
claims, demands, actions, liabilities, costs, expenses, damages and obligations
of any nature arising from or as a result of Tenant's failure to comply with
this Paragraph 31 and/or the presence of Hazardous Substances in or on the
Premises. The foregoing indemnification and the responsibilities of Tenant
shall survive the termination or expiration of this Lease.
31.4 Landlord or Landlord's representative shall have the
right but not the obligation to enter the Premises for the purpose of
determining whether there exists on the Premises any Hazardous Substances or
ensuring compliance with all Environmental Laws. The right granted to Landlord
herein to perform inspections shall not create a duty on Landlord's part to
inspect the Premises, or liability on the part of Landlord for Tenant's use,
storage or disposal of Hazardous Substances, it being understood that Tenant
shall be solely responsible for all liability in connection therewith.
32. THEFT OR BURGLARY. Landlord shall not be liable to Tenant for
losses to Tenant's property or personal injury caused by criminal acts or entry
by unauthorized persons into the Premises, the Building or the Common Area.
33. ESTOPPEL CERTIFICATE. Tenant agrees that Tenant shall from
time to time upon request by Landlord execute and deliver to Landlord a
statement in recordable form certifying (i) that the 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 so modified), (ii) the dates to which rental and
other charges payable under this Lease have been paid, and (iii) that Landlord
is not in default hereunder (or, if Landlord is in default, specifying the
nature of such default). Tenant further agrees that Tenant shall from time to
time upon request by Landlord execute and deliver to Landlord an instrument in
recordable form acknowledging Tenant's receipt of any notice of assignment of
this Lease by Landlord.
34. BANKRUPTCY AND INSOLVENCY.
34.1 In the event that Tenant shall become a debtor in a
case filed under Chapter 7 of the Bankruptcy Code and Tenant's trustee or
Tenant shall elect to assume this Lease for the purpose of assigning the same
or, otherwise, such election and assignment may be made only if the provisions
of paragraph 34.2 and 34.4 are satisfied as if the election to assume were made
in a case filed under Chapter 11 of the Bankruptcy Code. If Tenant or Tenant's
trustee shall fail to elect to assume this Lease within ninety (90) days after
the filing of such petition or such additional time as provided by the court
within such 90-day period, this Lease shall be deemed to have been rejected.
Immediately thereupon, Landlord shall be entitled to possession of the Premises
without further obligation to Tenant or Tenant's trustee and this Lease upon
the election of Landlord shall terminate, but Landlord's right to be
compensated for damages (including, without limitation, liquidated damages
pursuant to any provision hereof) or the exercise of any other remedies in any
such proceeding shall survive, whether or not this Lease shall be terminated.
34.2 In the event that Tenant shall become a debtor in a
case filed under Chapter 11 of the Bankruptcy Code, or in a case filed under
Chapter 7 of the Bankruptcy Code which is transferred to Chapter 11, Tenant's
trustee or Tenant, as debtor-in-possession, must elect to assume this Lease in
whole within one hundred twenty (120) days from the date of the filing of the
petition under Chapter 11 or the transfer thereto or Tenant's trustee or the
debtor-in-possession shall be deemed to have rejected this Lease. In the event
that Tenant, Tenant's trustee or the debtor-in-possession has failed to perform
all of Tenant's obligations under this Lease within the time periods (excluding
grace periods) required for such performance, no election by Tenant's trustee
or the debtor-in-possession to assume this Lease, whether under Chapter 7 or
Chapter 11, shall be permitted or effective unless each of the following
conditions have been satisfied:
(a) Tenant's trustee or the debtor-in-possession
has cured all defaults under this lease, or has provided Landlord with
Assurance (as defined below) that it will cure all defaults susceptible of
being cured by the payment of money within ten (10) days from the date of such
assumption and that it will cure all other defaults under this Lease which are
susceptible of being cured by the performance of any act promptly after the
date of such assumption.
(b) Tenant's trustee or the debtor-in-possession
has compensated Landlord, or has provided Landlord with Assurance that within
ten (10) days from the date of such assumption, it will compensate Landlord for
any actual pecuniary loss incurred by Landlord arising from the default of
Tenant, Tenant's trustee, or the debtor-in- possession as indicated in any
statement of actual pecuniary loss sent by Landlord to Tenant's trustee or the
debtor-in- possession.
(c) Tenant's trustee or the debtor-in-possession
has provided Landlord with Assurance of the future performance of each of the
obligations of Tenant, Tenant's trustee or the debtor-in-possession under this
Lease, and, Tenant's trustee or the debtor-in-possession
10
shall also (i) deposit with Landlord, as security for the timely payment of
rent hereunder, an amount equal to three (3) installments of Base Rental (at
the rate then payable) which shall be applied to installments of Base Rental in
the inverse order in which such installments shall become due, provided all the
terms and provisions of this Lease shall have been complied with, and (ii) pay
in advance to Landlord on the date each installment of Base Rental is payable a
pro rata share of Tenant's annual obligations for additional rent and other
sums pursuant to this Lease, such that Landlord shall hold funds sufficient to
satisfy all such obligations as they become due. The obligations imposed upon
Tenant's trustee or the debtor-in-possession by this paragraph shall continue
with respect to Tenant or any assignee of this Lease after completion of
bankruptcy proceedings.
(d) The assumption of this Lease will not breach
or cause a default under any provision of any other lease, mortgage, financing
arrangement or other agreement by which Landlord is bound.
For purposes of this Paragraph 34, Landlord and Tenant
acknowledge that "Assurance" shall mean no less than: Tenant's trustee or the
debtor-in-possession has and will continue to have sufficient unencumbered
assets after the payment of all secured obligations and administrative expenses
to assure Landlord that sufficient funds will be available to fulfill the
obligations of Tenant under this Lease and (x) there shall have been deposited
with Landlord, or the Bankruptcy Court shall have entered an order segregating,
sufficient cash payable to Landlord, and/or (y) Tenant's trustee or the
debtor-in-possession shall have granted a valid and perfected first lien and
security interest in, and/or mortgage on, the property of Tenant, Tenant's
trustee or the debtor-in-possession, acceptable as to value and kind to
Landlord, to secure to Landlord the obligation of Tenant, Tenant's trustee or
the debtor-in-possession to cure the defaults under this Lease, monetary and/or
nonmonetary, within the time periods set forth above.
34.3 In the event that this Lease is assumed in accordance
with paragraph 34.2 and thereafter Tenant is liquidated or files or has filed
against it a subsequent petition under Chapter 7 or Chapter 11 of the
Bankruptcy Code, Landlord may, at its option, terminate this Lease and all
rights of Tenant hereunder by giving Tenant notice of election to so terminate
within thirty (30) days after the occurrence of any such event.
34.4 If Tenant's trustee or the debtor-in-possession has
assumed this Lease pursuant to the terms and provisions of paragraphs 34.1 or
34.2 for the purpose of assigning (or elects to assign) this Lease, this Lease
may be so assigned only if the proposed assignee (the "Assignee") has provided
adequate assurance of future performance of all of the terms, covenants and
conditions of this Lease to be performed by Tenant. Landlord shall be entitled
to receive all cash proceeds of such assignment. As used herein "adequate
assurance of future performance" shall mean no less than that each of the
following conditions has been satisfied:
(a) The Assignee has furnished Landlord with
either (i)(A) a copy of a credit rating of Assignee which Landlord reasonably
determines to be sufficient to assure the future performance by Assignee of
Tenant's obligations under this Lease, and (B) a current financial statement of
Assignee audited by a certified public accountant indicating a net worth and
working capital in amounts which Landlord reasonably determines to be
sufficient to assure the future performance by Assignee of Tenant's obligations
under this Lease, or (ii) a guarantee or guarantees, in form and substance
satisfactory to Landlord, from one or more persons with a credit rating and net
worth which Landlord reasonably determines to be sufficient to assure the
future performance by Assignee of Tenant's obligations under this Lease.
(b) Landlord has obtained all consents or waivers
from others required under any lease, mortgage, financing arrangement or other
agreement by which Landlord is bound to permit Landlord to consent to such
assignment.
(c) The proposed assignment will not release or
impair any guaranty of the obligations of Tenant (including the Assignee) under
this Lease.
34.5 When, pursuant to the Bankruptcy Code, Tenant's
trustee or the debtor-in-possession shall be obligated to pay reasonably use
and occupancy charges for the use of the Premises, such charges shall not be
less than the Base Rental, additional rent and other sums payable by Tenant
under this Lease.
34.6 Neither the whole nor any portion of Tenant's
interest in this Lease or its estate in the Premises shall pass to any Trustee,
receiver, assignee for the benefit creditors, or any other person or entity, by
operation of law or otherwise under the laws of any state having jurisdiction
of the person or property of Tenant unless Landlord shall have consented to
such transfer. No acceptance by Landlord of rent or any other payments from any
such trustee, receiver, assignee, person or other entity shall be deemed to
constitute such consent by Landlord nor shall it be deemed a waiver of
Landlord's right to terminate this Lease for any transfer of Tenant's interest
under this Lease without such consent.
34.7 Tenant expressly waives any right it might have to
offset rentals or to terminate this Lease upon the bankruptcy of Landlord.
35. RENEWAL OPTION. If, at the end of the Term of the Lease, or
as renewed as herein provided, Tenant is not then in default of any of the
terms, conditions, or covenants of the Lease, Tenant, but not any assignee,
transferee or subtenant of Tenant, is hereby granted two (2) options to renew
this Lease for an additional term of five (5) years initially (the "First
Renewal Term"), succeeded by an additional term of five (5) years (the "Second
Renewal Term"), each upon the same terms and conditions contained in this Lease
with the following exceptions:
(a) Tenant shall have no right to renew the Term
of this Lease following the expiration of the renewal terms detailed herein;
and
(b) Base Rental for the First Renewal Term and
the Second Renewal Term shall be an amount equal to the then prevailing market
base rental rate (giving appropriate consideration to the lease term, credit
standing of the tenant, tenant's use of the Premises, building standard
workletter and/or tenant improvement allowances, if any, or space in the same
improved condition as the Premises, and abatement provision) for comparable
space in comparable properties of equivalent quality, size, utility and
location as designated by Landlord.
Tenant shall exercise its right of renewal as herein provided
by delivering to Landlord written notice ("Tenant's Notice") of Tenant's desire
to renew no later than nine (9) months prior to the expiration date of the Term
of the Lease for the First Renewal Term and no later than nine (9) months prior
to the expiration date of the First Renewal Term for the Second Renewal Term.
Within fifteen (15) days following delivery of Tenant's Notice, Landlord shall
deliver to Tenant a written notice ("Landlord's Notice") specifying the Base
Rental rate per square foot per annum for the Renewal Term in question. Tenant
shall have forty five (45) days following delivery of Landlord's Notice to
notify Landlord in writing of Tenant's exercise of its rights to renew such
Lease term hereof. Failure to notify Landlord within any of the time periods
provided herein shall automatically extinguish Tenant's rights to renew.
36. RIGHT OF FIRST REFUSAL. If Tenant be not then in default of
any of the terms, conditions or covenants of the Lease, Tenant, but not any
assignee, transferee or subtenant of Tenant, shall have a right of first
refusal (the "Right of First Refusal") to lease that certain 25.800 square feet
of contiguous available space located within the Building (the "Refusal Space")
as depicted in the site plan attached hereto as EXHIBIT "A", upon the following
terms and conditions:
(a) If Landlord receives a bona fide offer to
lease all or a portion of such Refusal Space and Landlord desires to lease such
space on such terms and conditions, Landlord shall give written notice to
Tenant of all of the material terms of such proposal. Tenant shall
11
have five (5) business days from Tenant's receipt of such notice from Landlord
in which to exercise the Right of First Refusal upon all the same terms and
conditions as contained in Landlord's notice.
(b) If Tenant (i) fails to accept such offer
within said period or thereafter (ii) fails to proceed with reasonable
diligence to enter into a lease agreement with Landlord, or (iii) becomes in
default of this Lease, Landlord may lease such Refusal Space to such third
party on terms not more favorable than contained in Landlord's notice.
(c) The occurrence of the event described in
Subparagraph (b) above shall automatically terminate the Tenant's Right of
First Refusal as of the date of such occurrence, provided, however, that in the
event Landlord fails to enter into such third party lease within one hundred
eighty (180) days from the date of Tenant's receipt of Landlord's notice as
provided in 36(a) above or should any such third party lease or leases expire
prior to the expiration of the term of this Lease and shall not renew their
lease or leases, then Tenant's Right of First Refusal shall continue to be
available to Tenant on the same conditions as set forth herein.
(d) Tenant's Right of First Refusal shall be at
all times subordinate to any existing right's of first refusal pertaining to
such Refusal Space.
38. MISCELLANEOUS.
38.1 QUIET ENJOYMENT. Tenant, upon payment of the rent
and performance of the covenants herein contained, shall quietly have, hold and
enjoy the Premises subject to the terms and provisions of this Lease.
38.2 LIENS BY TENANT. In no event shall Tenant have the
right to create or permit there to be established any lien or encumbrance of
any nature against the Premises or the Building for any improvement or
improvements by Tenant, and Tenant shall fully pay the cost of any improvement
or improvements made or contracted for by Tenant. Any mechanic's lien filed
against the Premised or the Building for work claimed to have been done, or
materials claimed to have been furnished to Tenant, shall be duly discharged by
Tenant within ten (10) days after the filing of the lien.
38.3 ATTORNEYS' FEES. If, on account of any breach or
default by Tenant of its obligations to Landlord under the terms, conditions
and covenants of this Lease, it shall become necessary for Landlord to employ
an attorney to enforce or defend any of its rights or remedies hereunder, then
Landlord shall be entitled to reasonable attorneys' fees, court costs and
related expenses incurred therein, whether or not legal suit is actually
brought.
38.4 FORCE MAJEURE. Whenever a period of time is herein
described for the taking of action by Landlord or Tenant (except with respect
to the payment of rental or other sums due under this Lease), such party shall
not be liable or responsible for, and there shall be excluded from the
computation of such period of time, any delays due to strikes, riots, acts of
God, shortages of labor or materials, war, governmental laws, regulations or
restrictions, or any other cause not reasonably within the control of such
party and which such party, by the exercise of due diligence, is unable, wholly
or in part, to prevent or overcome.
38.5 INDEPENDENT OBLIGATIONS OF TENANT. The obligation of
Tenant to pay all rental and other sums hereunder provided to be paid by Tenant
and the obligation of Tenant to perform Tenant's other covenants and duties
hereunder constitute independent, unconditional obligations to be performed at
all times provided for hereunder, save and except only when an abatement
thereof or reduction therein is hereinabove expressly provided for and not
otherwise. Tenant waives and relinquishes all rights which Tenant might have
to claim any nature of lien against or withhold, or deduct from or offset
against any rental and other sums provided hereunder to be paid Landlord by
Tenant. Tenant waives and relinquishes any right to assert, either as a claim
or as a defense, that Landlord is bound to perform or is liable for the
nonperformance of any implied covenant or implied duty of Landlord not
expressly herein set forth.
38.6 TIME IS OF ESSENCE. In all instances where Landlord
or Tenant is required to pay any sum or do any act at a particular indicated
time or within an indicated period, it is understood that time is of the
essence.
38.7 RECORDATION. This Lease shall not be recorded by
either party without the consent of the other.
38.8 APPLICABLE LAW AND VENUE. All monetary obligations
of Landlord and Tenant (including, without limitation, any monetary obligation
of Landlord or Tenant for damages for any breach of the respective covenants,
duties or obligations of Landlord or Tenant hereunder) are performable in the
county in which the Building is located and in the county in which Landlord's
principal business office is located. The laws of the State in which the
Building is located shall govern the interpretation, validity, performance and
enforcement of this Lease.
38.9 JOINT AND SEVERAL LIABILITY. If Tenant is composed
of more than one (1) person or entity, each person and/or entity comprising
Tenant shall be jointly and severally liable for the performance of the
obligations of Tenant under this Lease, including specifically, without
limitation, the payment of rental and all other sums payable hereunder.
38.10 SUBMISSION OF LEASE NOT AN OFFER. Submission of this
Lease for examination does not constitute an offer, right of first refusal,
reservation of, or option for, the Premises or any other premises in the
Building. This Lease shall become effective only upon execution and delivery
by both Landlord and Tenant.
38.11 AUTHORITY TO DO BUSINESS. Tenant warrants that
Tenant is, and shall remain throughout the Term of this Lease, authorized to do
business and in good standing in the State in which the Building is located.
Tenant agrees, upon request by Landlord, to furnish Landlord satisfactory
evidence of Tenant's authority for entering into this Lease.
38.12 RELATIONSHIP OR PARTIES. Nothing herein contained
shall be deemed or construed by the parties hereto, nor by any third party, as
creating the relationship of principal and agent, or of partnership or of joint
venture between the parties hereto, it being understood and agreed that neither
the method of the computation of rental, nor any other provision contained
herein, nor any acts of the parties hereto, shall be deemed to create any
relationship between the parties hereto other than the relationship of landlord
and tenant.
38.13 USE OF LANGUAGE. Words of any gender used in this
Lease shall be held and construed to include any other gender, and words in the
singular shall be held to include the plural, unless the context otherwise
requires. The captions or headings of paragraphs in this Lease are inserted
for convenience only, and shall not be considered in construing the provisions
hereof, if any question of intent should arise.
38.14 SUCCESSORS. The provisions of this Lease shall be
binding upon and inure to the benefit of the heirs, personal representatives,
successors and assigns of the parties, but this provision shall in no way alter
the restriction herein in connection with assignment, subletting and other
transfer by Tenant. All rights, powers, privileges, immunities and duties of
Landlord under this Lease, including, but not limited to, any notices required
or permitted to be delivered by Landlord to Tenant hereunder, may, at
Landlord's option, be exercised or performed by Landlord's attorney or agent.
38.15 SEVERABILITY. If any term or provision of this Lease
shall, to any extent, be held invalid or unenforceable by a final judgment of a
court of competent jurisdiction, the remainder of this Lease shall not be
affected thereby.
12
39. ENTIRE AGREEMENT. It is expressly agreed by Tenant, as a
material consideration for the execution of this Lease, that this Lease with
the specific references to written extrinsic documents, is the entire agreement
of the parties; that no prior representations, warranties, understandings,
stipulations, agreements or promises pertaining to this Lease or the Premises
shall be binding on Landlord unless such representations, warranties,
understandings, stipulations, agreements or promises are expressly stated in
this Lease or the documents incorporated herein. All exhibits, attachments,
annexed instruments and addenda referred to herein shall be considered a part
hereof for all purposes with the same force and effect as if copied at full
length herein. It is likewise agreed that this Lease may not be altered,
waived, amended or extended except by an instrument in writing, signed by both
Landlord and Tenant.
EXECUTED as of the day and year first above written.
LANDLORD: CARDINAL COLLINS TECH CENTER, INC., A TEXAS CORPORATION
BY: /s/ MICHAEL R. MCCORMICK
-----------------------------------
NAME: MICHAEL R. MCCORMICK
-----------------------------------
TITLE: Vice President
-----------------------------------
TENANT: HIGHWAYMASTER CORPORATION, INC., A DELAWARE CORPORATION
BY: /s/ J. P. MCCORMICK
-----------------------------------
NAME: J. P. MCCORMICK
-----------------------------------
TITLE: Ex. VP & CFO
-----------------------------------
13
EXHIBIT "A"
[FLOOR PLAN OF BUILDING 5 AT CARDINAL TECHNOLOGY CENTER, RICHARDSON, TEXAS]
[LOCATION MAP]
BUILDING FEATURES:
-----------------
o 24' CLEAR HEIGHT
o CONVENTIONAL SPRINKLER
o GRADE-LEVEL, REAR-LOAD
o CONCRETE PAVING
o SWB TELEPHONE
BUILDING AREA:
-------------
o TOTAL AREA - 90,800 SF
o PARKING PROVIDED - 255 SPACES
o ADDL PARKING AVAILABLE - 66 SPACES
FOR INFORMATION CONTACT
TALYNN OTSUKI, SIOR
PH (972) 690-9923
FAX (972) 690-9925
[ONYX REALTY SERVICES, INC. LOGO]
14
EXHIBIT "B"
LEGAL DESCRIPTION
BUILDING 5:
Lot 1. Block C, Collins Business Park, an addition to the City of Richardson,
Texas according to the plat recorded in Volume 97028, Page 1850 of the Deed
Records of Dallas County, Texas.
15
EXHIBIT "C"
BUILDING RULES AND REGULATIONS
1. Should Tenant alter any exterior lock or install any new or
additional exterior locks or exterior windows of the Premises, Tenant shall
furnish Landlord with a key for such locks.
2. No Tenant shall at any time occupy any part of the Premises as
sleeping or lodging quarters.
3. Landlord will not be responsible for lost or stolen personal
property, equipment, money or jewelry from the Premises, the Building or the
Common Area regardless of whether such loss occurs when area is locked against
entry or not.
4. No birds, fowl, or animals shall be brought into or kept in or
about the Premises.
5. The water closets and other water fixtures shall not be used
for any purpose other than those for which they were constructed, and any
damage resulting to them from misuse, or the defacing or injury of any part of
the Premises shall be borne by the person who shall occasion it. No person
shall waste water by interfering with the faucets or otherwise.
6. No person shall disturb the other occupants of the Building by
the use of any musical instruments, the making of unseemly noises, causing
objectionable odors, or other unreasonable use.
7. Any action or condition not meeting the highest standard of
dignity and good taste should be reported directly to Landlord.
8. No signs, advertisements or notices shall be allowed in any
form on windows or doors inside or outside the Premises or any other part of the
Building, and no signs except in uniform location and uniform styles fixed by
Landlord shall be permitted on exterior identification pylons, if any, in the
public corridors or on corridor doors or entrances to the Premises.
9. No draperies, shutters, or other window covering shall be
installed on exterior windows or without Landlord's written approval. Landlord
shall have the right to require installation and continued use of uniform
window covering for such windows.
10. Tenant shall not place, install or operate in the Premises or
in any other part of the Building any engine, stove or cook thereon or therein,
or place or use in or about the Premises any explosives, gasoline, kerosene,
oil, acids, caustics or any (other than with a microwave oven) other
inflammable, explosive or hazardous materials, fluid or substance without the
prior written consent of Landlord.
11. Employees of Landlord shall not receive or carry messages for
or to any tenant or other person, nor contract with or render free or paid
services to any tenant or tenant's agents, employees or invitees. In the event
any of Landlord's employees perform any such services, such employee shall be
deemed to be the agent of any such tenant regardless of whether or how payment
is arranged for services, and Landlord is expressly relieved from and all
liability in connection with any such services and any associated injury or
damage to person or property.
12. None of the entries, sidewalks, vestibules, elevator shafts,
passages, doorways or hallways and similar areas shall be blocked or
obstructed, or any rubbish, litter, trash or material of any nature placed,
emptied or thrown into such areas, or such areas be used at any time for any
purpose except for ingress or egress by Tenant, Tenant's agents, employees or
invitees to and from the Premises and for going from one to another part of the
Building.
13. Tenant and Tenant's employees, agents and invitees shall
observe and comply with the driving and parking signs and markers on the
premises or parking facilities surrounding the Building.
14. Landlord shall have the right to prescribe the weight and
position of safes, computers and other heavy equipment that exceed the building
structure specifications and which shall, in such cases, in order to distribute
their weight, stand on supporting devices approved by Landlord. All damage done
to the Premises or to the Building by placing in or taking out any property of
Tenant, or done by Tenant's property while in the Premises or the Building,
shall be repaired immediately at the sole expense of Tenant.
16
EXHIBIT "D"
WORK LETTER
1. COMPLETION SCHEDULE. Within twenty (20) business days after
the execution of the Lease, Landlord shall deliver to Tenant, for Tenant's
review and approval, a schedule (the "Work Schedule") setting forth a timetable
for the planning and completion of the installation of the Tenant Improvements
(as defined in Paragraph 2 below) to be constructed in the Premises. The Work
Schedule shall set forth each of the various items of work to be done or
approval to be given by Landlord and/or Tenant in connection with the
completion of the Tenant Improvements and shall become the basis for completing
the Tenant Improvements.
2. TENANT IMPROVEMENTS. Reference herein to "Tenant
Improvements" shall include all work to be done in the Premises pursuant to the
Tenant Improvement Plans (defined in Paragraph 3 below), including, but not
limited to, partitioning, doors, ceilings, floor coverings, wall finishes
(including paint and wall covering), electrical (including lighting, switching,
telephones, outlets, etc.), plumbing, heating, ventilating and air
conditioning, fire protection, cabinets and other millwork and covered parking,
but excluding Building Standard architectural services and any construction
management fees paid to Landlord's representative.
3. TENANT IMPROVEMENT PLANS. Immediately after the execution of
the Lease, Tenant agrees to meet with Landlord's architect (the "Architect")
and/or space planner for the purpose of promptly preparing a space plan for the
layout of the Premises. Based upon such space plan, Architect shall prepare
final working drawings and specifications for the Tenant Improvements. Such
final working drawings and specifications are referred to herein as the "Tenant
Improvement Plans." The Tenant Improvement Plans must be consistent with
Landlord's standard specifications (herein referred to as the "Standards" or
"Building Standards") for tenant improvements for the Building, as the same may
be changed from time to time by Landlord and are subject to Landlord's final
approval. Tenant will at all times cooperate with the Architect, furnishing
all reasonable information and material concerning Tenant's organization,
staffing, growth expectations, physical facility needs (including, without
limitation, needs arising by reason of the provisions of the Texas
Architectural Barriers Act, the American With Disabilities Act of 1990, and
interpretations or regulations promulgated thereunder and/or amendments
thereto, together with any successor statutes or similar enactment's or
governmental requirements (collectively, the "Disability Acts"), equipment,
inventory, etc., necessary for the Architect to efficiently and expeditiously
prepare the Tenant Improvement Plans.
Within ten (10) business days following the date of Landlord's
receipt of the Tenant Improvement Plans, Landlord will advise Tenant of
Landlord's approval or disapproval of the Tenant Improvement Plans. If Landlord
disapproves any aspect of the Tenant Improvement Plans, Landlord shall so
notify Tenant and specify the reasons for such disapproval (including, without
limitation, any change in the nature or scope of the work contemplated by the
preliminary space plan). Landlord may also specify how any such disapproved
item may be made reasonably acceptable to Landlord, and Tenant shall, within
five (5) business days thereafter, deliver to Landlord revised Tenant
Improvement Plans incorporating the revisions required by Landlord.
4. NONSTANDARD TENANT IMPROVEMENTS. Landlord shall permit Tenant
to deviate from the Standards for the Tenant Improvements (the
"Non-Standards"), provided that (a) the deviations shall not be of a lesser
quality than the Standards; (b) the deviations conform to applicable
governmental regulations, and necessary governmental permits and approvals have
been secured; (c) the deviations do not require building service beyond the
level normally provided to other tenants in the Building and do not overload
the floors; and (d) Landlord has determined in its sole discretion that the
deviations are of a nature and quality that are consistent with the overall
objectives of the Landlord for the Building.
5. FINAL PRICING AND DRAWING SCHEDULE. After the preparation of
the Tenant Improvement Plans and after Landlord's written approval thereof, in
accordance with the Work Schedule, the Tenant Improvement Plans shall
thereafter be submitted to the appropriate governmental body by Architect for
plan checking and the issuance of a building permit. Landlord, with Tenant's
cooperation, shall cause to be made to the Tenant Improvement Plans any changes
necessary to obtain the building permit. Concurrent with the plan checking,
Landlord shall obtain bids for construction of the Tenant Improvements from a
minimum of three (3) mutually acceptable general contractors and/or
subcontractors (the "Approved Contractors"). Unless Landlord and Tenant shall
mutually agree to the contrary, the Approved Contractor which submitted the
lowest bid shall be deemed to be the selected "Contractor". After final
approval of the Tenant Improvement Plans, no further changes may be made
thereto without the prior written approval from both Landlord and Tenant, and
then only after agreement by Tenant to pay any excess costs resulting from the
design and/or construction of such changes. Tenant hereby acknowledges that any
such changes shall be subject to the terms of Paragraph 8 below.
6. CONSTRUCTION OF TENANT IMPROVEMENTS. After the Tenant
Improvement Plans have been prepared and approved, the Contractor has been
selected, and a building permit for the Tenant Improvements has been issued,
Landlord shall cause Contractor to begin installation of the Tenant
Improvements in accordance with the Tenant Improvement Plans. Landlord shall
supervise the completion of such work and shall use its reasonable efforts to
secure substantial completion of the work in accordance with the Work Schedule.
The cost of such work shall be paid as provided in Paragraph 7 below.
7. PAYMENT FOR THE TENANT IMPROVEMENTS.
(a) Landlord hereby grants to Tenant a "Tenant
Improvement Allowance" in an amount not to exceed $30.00 per rentable square
foot of Rentable Area in the Premises for construction of the Tenant
Improvements.
The Tenant Improvement Allowance shall be used only for:
(i) Payment of the cost of preparing the space
plan and the Tenant Improvement Plans, including mechanical, electrical,
plumbing and structural drawings and of all other aspects necessary to complete
the Tenant Improvement Plans. The Tenant Improvement Allowance will not be used
for the payment of extraordinary design work not included within the scope of
Landlord's Standard;
(ii) Payment of the cost of plan check, permit and
license fees relating to construction of the Tenant Improvements;
(iii) Payment for the cost of construction of the
Tenant Improvements, including, but not limited to, the following:
(A) Installation within the Premises of
all partitioning, doors, floor
coverings, ceilings, wall coverings
and painting, millwork and similar
items;
(B) All electrical wiring, lighting
fixtures, outlets and switches, and
other electrical work to be
installed with the Premises;
(C) The furnishing and installation of
all duct work, terminal boxes,
diffusers and accessories required
for the completion of the heating,
ventilation and air conditioning
systems within the Premises;
(D) Any additional Tenant requirements
including, but not limited to,
covered parking facilities, odor
control, special heating,
ventilation and air conditioning,
noise or vibration control or other
special systems;
(E) All fire and life safety control
systems including, without
limitation, fire walls, halon, fire
alarms, piping, wiring and
accessories, installed within the
Premises;
17
(F) All plumbing, fixtures, pipes and
accessories to be installed within
the Premises;
(G) Testing and inspection costs; and
(H) Contractors' fees, including but not
limited to any fees based on general
conditions.
(iv) All other costs to be expended by Landlord in
the construction of the Tenant Improvements.
(b) The cost of each item referenced in Paragraph 7(a)
above shall be charged against the Tenant Improvement Allowance. In the event
that the cost of installing the Tenant Improvements, as established by the
Contractor's final bid, shall exceed the Tenant Improvement Allowance, or if
any of the Tenant Improvements are not to be paid out of the Tenant Improvement
Allowance as provided in Paragraph 7(a) above, the excess (the "Excess") shall
be paid by Tenant to Landlord prior to the commencement of construction of the
Tenant Improvements.
(c) In the event that, after the Tenant Improvement Plans
have been prepared and a price therefor established by Contractor's final bid,
Tenant shall require any changes or substitutions to the Tenant Improvement
Plans, any additional costs related thereto shall be paid by Tenant to Landlord
prior to the commencement of construction of the Tenant Improvements. Landlord
shall have the right to decline Tenant's request for a change to the Tenant
Improvement Plans if such changes are inconsistent with the provisions of
Paragraphs 3 and 4 above, or if the change would, in Landlord's opinion,
unreasonably delay construction of the Tenant Improvements.
(d) In the event that increases in the cost of the Tenant
Improvements as set forth in Contractors final bid are due to the requirements
of any governmental agency, Tenant shall pay Landlord the amount of such
increase within five (5) days of Landlord's written notice; provided, however,
that Landlord shall first apply toward such increase any remaining balance in
the Tenant Improvement Allowance.
(e) In the event that the cost of installing the Tenant
Improvements are less that the Tenant Improvement Allowance, then Base Rental
as defined in Paragraph 1.M of the Lease shall be reduced by an amount equal to
the unused portion of the Tenant Improvement Allowance divided by one-hundred
twenty.
Notwithstanding anything contained herein to the contrary, Landlord
shall install, at their sole cost and expense, nine (9) 10' x 10' and four (4)
8' x 8'3" building standard exterior glass panels.
8. COMPLETION OF TENANT IMPROVEMENTS AND COMMENCEMENT DATE. In
the event that on the Commencement Date the construction and installation of
the Tenant Improvements are not substantially completed, as determined by
Architect, then, notwithstanding Paragraph 1.K of the Lease, the Commencement
Date shall be postponed (as Tenant's sole and exclusive remedy) until such work
is substantially completed, the Term shall continue for the full period of time
set forth in Paragraph 1.K of the Lease, and Landlord shall not be liable for
any claims or damages in connection with the failure to substantially complete
the construction of the Tenant Improvements by a specific date; provided,
however, that if there shall be a delay in substantial completion of the Tenant
Improvements as a result of (a) Tenant's failure to approve any items or
perform any other obligation in accordance with and by the date specified in
the Work Schedule, (b) Tenant's request for materials, finishes or
installations other than those readily available, (c) Tenant's changes in the
Tenant Improvement Plans after the approval by Tenant, or (d) Tenant's request
to deviate from the Standards for Tenant Improvements, then the Commencement
Date shall be accelerated by the number of days of such delay. The Tenant
Improvements shall be deemed substantially complete upon certification of such
fact by the Architect notwithstanding the fact that minor details of
construction, mechanical adjustments or decorations which do not materially
interfere with Tenant's use and enjoyment of the Premises remain to be
performed (items normally referred to as "punch list" items).
18
EXHIBIT "E"
SIGN SPECIFICATIONS
BUILDING MOUNTED
- ----------------
o To be located on the top band of the building
o Size not to exceed 3' high by 12' wide
o Font style, logo, and color to be consistent with that used in
Tenant's business operation
o Letters may be backlit with white neon
MONUMENT SIGNAGE
- ----------------
[DRAWING OF MONUMENT SIGN]
NOTE:
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CLEAR ANODIZED ALUMINUM
LETTERS W/ SATIN FACES &
SANDBLASTED EDGES
LETTER STYLE TO BE APPROVED
BY LANDLORD.