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EXHIBIT 10.12
OFFICE LEASE
This Lease is made and executed as of this 1st day of
October, 1995, by the parties hereinafter identified as Landlord and Tenant and
upon the following terms and conditions:
ARTICLE 1.
BASIC LEASE PROVISIONS
For purposes of this Lease, the following terms shall have the meanings
ascribed to them in this Article 1:
1.01 LANDLORD AND ADDRESS:
The Utah State Retirement Investment Fund
c/o CB Commercial Realty Advisors
533 S. Fremont Avenue
Los Angeles, CA 90071
Attn: Director of Asset Management
1.02 TENANT AND CURRENT ADDRESS:
The Hotel Industry Switch Company
3811 Turtle Creek Blvd., Suite 1100
Dallas, Texas 75219
1.03 GUARANTOR(S) AND CURRENT ADDRESS(ES):
N/A
1.04 BUILDING: That certain property, building and other improvements
located on the land described in EXHIBIT A, attached hereto and
incorporated herein by this reference, with the street address of 3811
Turtle Creek Boulevard, Dallas, Texas 75219, and commonly referred to
as Turtle Creek Centre.
1.05 PREMISES: Suites No. 1100 and 1200, Floors 11 and 12 of the Building
as shown on the floor plan attached hereto as EXHIBIT 1.
1.06 AREA OF PREMISES: approximately 29,750 square feet, which number is
the final agreement of the parties and not subject to adjustment.
1.07 TERM: 7 years and 1 month
1.08 COMMENCEMENT DATE: The later of December 1, 1995 or the date Tenant
first occupies any portion of Floor 12, but in no event later than
February 1, 1996.
1.09 EXPIRATION DATE: December 31, 2002
1.10 MONTHLY BASE RENT:
Dates Monthly Base Rent
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Commencement Date - June 30, 1996 $29,964.00 ($20,453.13 as
to Floor 11 and $9,510.87
as to Floor 12)
July 1, 1996 - December 31, 1996 $35,435.13
January 1, 1997 - September 30, 1998 $40,906.25
October 1, 1998 - December 31, 2002 $45,864.58
The foregoing Monthly Base Rent amounts have been calculated based
upon an annual Monthly Base Rent of $16.50 per rentable square foot
for years 1 through 3 and $18.50 per rentable square foot for years 4
through the remainder of the Term, provided that the foregoing
Monthly Base Rent has been reduced by $16.50 per rentable square foot
for 7,958 square feet from Commencement Date through June 30, 1996,
and by $16.50 per rentable square foot for 3,979 square feet from
July 1, 1996 through December 31, 1996. Commencing January 1, 1997,
Tenant will pay $16.50 per rentable square foot for all 29,750 square
feet.
1.11 TOTAL MONTHLY BASE RENT FOR THE TERM: $3,620,483.61
1.12 TENANT'S SHARE: 10.038%, which is calculated by dividing the number of
rentable square feet contained in the Premises, which is 29,750, by
the number of rentable square feet contained in the Building, which is
296,378.
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1.13 BASE OPERATING YEAR: 1996
1.14 BASE EXPENSES: The total amount of Operating Expenses for the Base
Operating Year
1.15 SECURITY DEPOSIT: $1,528.58
1.16 LEASING BROKER(S) (IF ANY) AND ADDRESS(ES): Fults Associates
1.17 LANDLORD'S MANAGEMENT AGENT AND ADDRESS:
Compass Management, Inc.
3811 Turtle Creek Boulevard, Suite 240
Dallas, Texas 75219
or such other Management Agent as Landlord may designate from time to
time.
1.18 RENT PAYMENT ADDRESS:
The Utah State Retirement Investment Fund
P.O. Box 910517
Dallas, Texas 75391-0517
1.19 PARKING SPACES: the sum of (a) 89 parking spaces located in the
parking facilities located inside the Building's adjacent parking
garage ("Adjacent Garage Parking Spaces") all of which shall be
designated non-reserved parking spaces ("Non-Reserved Parking
Spaces"), provided that up to 12 Non-Reserved Parking Spaces may be
converted to executive non-reserved parking spaces ("Executive
Non-Reserved Parking Spaces"), plus (b) 2 parking spaces ("Reserved
Executive Parking Spaces") located in the parking facilities located
inside the Building's executive parking garage beneath the Building
("Executive Garage"). In addition, upon Tenant's request, Landlord
will temporarily make additional Non-Reserved Parking Spaces
("Additional Non-Reserved Parking Spaces") available to Tenant if and
to the extent available for an amount equal to the number of employees
of Tenant in excess of 89, Additional Non-Reserved Parking Spaces shall
be deemed available to Tenant only to the extent such spaces have not
been leased or committed to other tenants or potential tenants of the
Building. Landlord may terminate Tenant's right to use any Additional
Non-Reserved Parking Spaces that Landlord determines to lease or make
available to other tenants of the Building, provided that Landlord
shall be permitted to terminate Tenant's right to use spaces only to
the extent necessary to provide another tenant of the Building up to
but no more than one (1) parking space for every three hundred
thirty-three (333) rentable square feet contained in such other
tenant's premises.
ARTICLE 2.
DEMISE
2.01 INITIAL PREMISES. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the Premises for the Term and upon the terms,
covenants and conditions set forth in this Lease. Subject to the
provisions of Section 30.15 below, this Lease shall be in full force
and effect from the date it is fully executed by both parties. Tenant
covenants as a material part of the consideration for this Lease to
keep and perform each and all of the terms, covenants and conditions
by it to be kept and performed. This Lease is made upon the condition
of such performance.
2.02 RIGHT OF FIRST REFUSAL. If the Lease is then in full force and effect
and there is no Default hereunder, Tenant shall have the right of
first refusal to lease an additional 6,917 square feet of rentable
area located on the third (3rd) floor identified as such on Exhibit 2
attached hereto and incorporated herein for all purposes and all of
the rentable area on the tenth (10th) and thirteenth (13th) floors of
the Building ("ROFR Area").Such right of first refusal shall be
exercisable at the following times and upon the following conditions:
(a) If Landlord receives a bona fide offer from a
prospective tenant (the "Prospective Tenant") to lease premises (the
"Offered Premises") in the Building containing all or any part of the
ROFR Area (other than an offer to renew the term of or expand the
premises demised under an existing lease, as Tenant's right of first
refusal shall be subordinate to any renewal of the term of and any
expansion of premises demised under an existing lease) and Landlord
desires to accept such offer, then Landlord shall notify Tenant of
such fact. Tenant shall have a period of five (5) business days from
the date of delivery of such notice to notify Landlord whether Tenant
elects to exercise the right granted hereby to lease the Offered
Premises. If Tenant fails to give any notice to Landlord within the
required five (5) business day period, Tenant shall be deemed to have
refused its right to lease all or any portion of the ROFR Area.
(b) If Tenant refuses its right to lease the Offered
Premises, either by giving written notice thereof or by failing to
give any notice, Landlord shall thereafter have the right to lease the
Offered Premises to the Prospective Tenant on such terms and
provisions as may be acceptable to Landlord, provided such terms and
provisions are not materially more favorable to the Prospective Tenant
than the terms and provision set forth in the notice from Landlord to
Tenant. If Landlord and the Prospective Tenant fail to enter into a
lease, Tenant shall have the right of first refusal described herein
with respect to any subsequent bona fide offers from other prospective
tenants.
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(c) If Tenant exercises its right to lease the Offered
Premises, Landlord and Tenant shall, within thirty (30) days after
Tenant delivers to Landlord notice of its election, enter into a lease
agreement with respect to the Offered Premises on the same terms,
covenants, and conditions as are contained in this Lease, except as
follows:
(i) The rentable area of the Offered Premises
shall be equal to the area offered to be leased by the
Prospective Tenant.
(ii) The Monthly Base Rent rate to be paid for the
Offered Premises shall be equal to the Monthly Base Rent
offered to be paid by the Prospective Tenant, including any
offered increases from time to time in such rental rate.
(iii) The additional rental relating the Operating
Expenses for the Offered Premises shall be equal to the
additional rental relating Operating Expenses offered to be
paid by the Prospective Tenant, including any offered
increases from time to time in such rate.
(iv) The payment of monthly installments of
Monthly Base Rent with respect to the Offered Premises shall
continence on the effective date of the lease of the Offered
Premises as offered to the Prospective Tenant, or in the event
no specific effective date was so offered on the date mutually
acceptable to Landlord and Tenant, and rent for any partial
month shall be prorated.
(v) Possession of such portion of the Offered
Premises shall be delivered to Tenant on the basis offered to
the Prospective Tenant, subject to paragraph (vii) below.
Landlord will use reasonable diligence to make the Offered
Premises available to Tenant as soon after the effective date
stated above as it can, Landlord shall not be liable for the
failure to give possession of the Offered Premises on said
date by reason of the holding over or retention of possession
of any tenant, tenants, or occupants, nor shall such failure
impair the validity of this Lease, nor extend the term hereof,
but the rent for the Offered Premises shall be abated until
possession is delivered to Tenant and such abatement shall
constitute full settlement of all claims that Tenant might
otherwise have against Landlord by reason of said failure to
give possession of the Offered Premises to Tenant on the
scheduled effective date.
(vi) The term of the lease of the Offered Premises
shall commence on the date determined pursuant to subparagraph
(c)(iv) above, and shall continue thereafter until the date
on which the initial Term terminates.
(vii) If the term of the lease offered to the
Prospective Tenant exceeds the remainder of the then current
Term, any and all allowances and credits offered to the
Prospective Tenant (including, without limitation, any
leasehold improvement allowances and expenses) shall be
multiplied by a fraction, the numerator of which shall be the
total number of months remaining in the then current Term, and
the denominator of which shall be equal to the number of
months in the term offered to the Prospective Tenant.
(d) Any assignment or subletting of the Premises by
Tenant, or any termination of the Lease, shall terminate the refusal
right of Tenant hereby granted.
2.03 TERMINATION OF EXISTING LEASE. Tenant leases the eleventh floor and a
portion of the third floor pursuant to an existing lease entered into by
Landlord's predecessor in interest as previously amended. Effective upon the
Commencement Date, the existing lease shall automatically terminate, except for
Tenant's obligations thereunder that expressly survive such termination or
Tenant's obligations thereunder that have not been, but should have been,
performed prior to the Commencement Date.
ARTICLE 3.
TERM
3.01 INITIAL TERM. The term of this Lease shall commence on the
Commencement Date and expire on the Expiration Date unless sooner terminated as
provided in this Lease. If Landlord shall be unable to deliver possession of
the Premises to Tenant on the Commencement Date for any reason whatsoever, this
Lease shall not be void or voidable and Landlord shall not be subject to any
liability for the failure to deliver possession on said date nor shall such
failure to deliver possession on the Commencement Date affect the validity of
this Lease or the obligations of Tenant hereunder, provided that Tenant shall
be entitled to an abatement of rent applicable to Floor 12 if and to the extent
Landlord delivers Floor 12 to Tenant after December 1, 1995.
3.02 RENEWAL OPTION. Provided this Lease is then in full force and effect
and if there is no Default by Tenant under this Lease, Tenant shall have the
right to renew the Term, for an (1) additional period of five (5) years upon
the same terms, conditions and provisions applicable to the preceding Term of
this Lease (unless otherwise expressly provided herein), except that the
Monthly Base Rent for the additional term of five (5) year shall be the product
of (i) the number of rentable square feet then contained in the Premises
multiplied by (ii) an amount equal to the then prevailing market base rental
rate per rentable square foot per annum, as reasonably determined by Landlord,
charged for comparable office space in comparable buildings located north of
Woodall Rogers Freeway, south of Fitzhugh, west of McKinney Avenue and east of
Oak Lawn Avenue. Tenant shall exercise its right of renewal by delivering to
Landlord written notice ("Tenant's Notice") of Tenant's desire to renew the
term of this Lease as aforesaid at least nine (9) months (but not more than
twelve (12)
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Landlord shall deliver to Tenant a written notice ("Landlord's Notice")
specifying the Monthly Base Rent rate per square foot per annum for the
additional term of five (5) years. Tenant shall have until thirty (30) days
following delivery of Landlord's Notice in which to notify Landlord of Tenant's
continued exercise of its rights to renew the Term. Failure to notify Landlord
within such period or to timely deliver Tenant's Notice shall automatically
extinguish Tenant's rights to renew.
ARTICLE 4.
RENT
4.01 DEFINITIONS. For purposes of this Lease, the following terms shall
have the meanings ascribed to them in this Section 4.01:
(a) "ADJUSTMENT YEAR" shall mean each calendar year or
part thereof during the Term exclusive of the Base Year.
(b) "OPERATING EXPENSES" shall mean and include all
amounts, expenses and costs of whatever nature that Landlord incurs or
pays because of or in connection with the ownership, control,
operation, repair, management, replacement or maintenance of the
Building, all related improvements thereto or thereon and all
machinery equipment, landscaping, fixtures and other facilities,
including personal property, as may now or hereafter exist in or on
the Building. Except as otherwise provided below, Operating Expenses
shall be determined in accordance with generally accepted accounting
principles consistently applied and shall include, but shall not be
limited to, the following:
(1) Wages, salaries, fees, related taxes,
insurance costs, benefits (including amounts payable under
medical, pension and welfare plans and any amounts payable
under collective bargaining agreements) and reimbursement of
expenses of and relating to all personnel engaged in
operating, repairing, managing, replacing and maintaining the
Property;
(2) All supplies and materials for the Building,
including sales tax imposed in connection with the purchase
thereof;
(3) Legal and accounting fees and expenses
(except for legal fees incurred in connection with the
negotiation of, or the collection of amounts due under,
leases);
(4) Cost of all utilities for the Building,
including, without limitation, water, sewer, and fuel,
exclusive of electrical service;
(5) Fees and other charges payable under or in
respect of all maintenance, repair, janitorial and other
service agreements for or pertaining to the Building;
(6) Cost of all insurance, including all
deductibles thereunder, relating to the Building, or the
ownership, its occupancy or operations thereof;
(7) Cost of repairs and maintenance of the
Building, excluding only such costs which are paid by the
proceeds of insurance, by Tenant or by other third parties
(other than payment by Tenant or other tenants of the
Operating Expenses);
(8) Amortization of the cost (plus interest at
the then current market rate on the unamortized portion of
such cost from time to time) of purchasing and installing
capital investment items (including "retrofitting" or capital
replacements) that are for the purpose of reducing costs
includable in the definition of Operating Expenses or that may
be required by governmental authority, including but not
limited to, pursuant to the Americans with Disabilities Act.
All such costs shall be amortized over the reasonable life of
the capital investment items, with the reasonable life and
amortization schedule being determined in accordance with
sound management accounting principles;
(9) Management fees and reimbursed expenses of
Landlord's Management Agent (not to exceed a market management
fee for comparable buildings in the Dallas metropolitan area)
and administrative expenses not borne by the Landlord's
Management Agent;
(10) Fees and charges under any declaration of
covenants, easements or restrictions affecting the Building;
and
(11) All federal, state and local government
taxes, assessments and charges of any kind or nature, whether
general, special, ordinary or extraordinary, paid by Landlord
in a calendar year with respect to the Building ("Taxes");
provided, real estate taxes and special assessments (except as
provided below) shall be included in Operating Expenses for a
calendar year only to the extent such taxes and assessments
are paid during such calendar year, regardless of when
assessed. In addition, "Taxes" shall include, without
limitation, real estate and transit district taxes and
assessments, sales and use taxes, ad valorem taxes, personal
property taxes, any lease or lease transaction tax and all
taxes, assessments and charges in lieu of, substituted for, or
in addition to, any or all of the foregoing taxes, assessments
and charges. Taxes shall not include any federal, state or
local government income, franchise, capital stock, inheritance
or estate taxes, except to the extent such taxes are in lieu
of or a substitute for any of the taxes,
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assessments and charges previously described in this Section
4.01 (b). "Taxes" shall also include the amount of all fees,
costs and expenses (including, without limitation, attorneys'
fees and court costs) paid or incurred by Landlord each
calendar year in seeking or obtaining any refund or reduction
of Taxes or for contesting or protesting any imposition of
Taxes, whether or not successful and whether or not
attributable to Taxes assessed, paid or incurred in such
calendar year. If any special assessment payable in
installments is levied against all or any part of the Property,
then at the Landlord's discretion, Taxes for the calendar year
in which such assessment is levied and for each calendar year
thereafter shall include only the amount of any installments of
such assessment plus interest thereon paid or payable during
such calendar year (without regard to any right to pay, or
payment of, such assessment in a single payment).
Notwithstanding the foregoing, Operating Expenses shall not include:
(1) Principal or interest payments with respect
to mortgages against the Building;
(2) Ground lease payments;
(3) Depreciation;
(4) The cost of replacement of capital investment
items (except as provided in Section 4.01(b)(8));
(5) Charges for special items or services billed
separately to (and in addition to Expense Adjustment
Statements) and paid by tenants of the Building;
(6) Leasing commissions or other expenses solely
related to marketing space in the Building;
(7) The cost of electrical service; or
(8) For purposes of determining the Base Expenses
only, any Operating Expense incurred during the Base Year
which is not an ordinary, typical year-to-year Operating
Expense for the Building.
If at any time the Building is less than ninety-five percent (95%) occupied or
Landlord is not supplying services to ninety-five percent (95%) of all rentable
areas of the Building during an entire calendar year, then Landlord may adjust
that portion of each element of actual Operating Expenses that vary with
occupancy of the Building to Landlord's estimate of that amount which would
have been paid or incurred by the Landlord as Operating Expenses had the
Building been ninety-five percent (95%) occupied or serviced, and the Operating
Expenses as so adjusted shall be deemed to be the actual Operating Expenses for
such calendar year. If Landlord does not furnish during any Adjustment Year any
particular work or service (the cost of which, if performed by Landlord, would
constitute an Operating Expense) to a tenant which has undertaken to perform
such work or service in lieu of the performance thereof by Landlord, then
Operating Expenses shall be deemed to be increased by an amount equal to the
additional expense which would reasonably have been incurred during such
Adjustment Year by Landlord if it had, at its cost, furnished such work or
service to such tenant. The provisions of the preceding sentences will apply
only to those Operating Expenses that either vary with occupancy or by reason of
one or more tenants not receiving goods or services the cost of which
constitutes all or part or such Operating Expenses. If the Property is not
assessed as fully improved for any calendar year or part thereof, Landlord may
make an adjustment to the amount of Taxes for each such calendar year to reflect
the amount of Taxes which would have been assessed if the Property had been
assessed as fully improved, and the amount of any such adjustment shall be
included in the amount of Taxes for such calendar year. If the Building is not
fully leased and occupied by tenants during all or any portion of a calendar
year, then Landlord may make an adjustment to the amount of Taxes for such
calendar year to reflect the amount of Taxes which would have been assessed if
the Building had been fully leased and occupied by tenants during such calendar
year, and the amount of any such adjustment shall be included in the amount of
Taxes for such calendar year. Landlord shall calculate Operating Expenses (and
any adjustment thereto as provided above) during 1996 in the same manner as, and
consistent with, calculations to be made during subsequent years.
4.02 PAYMENT OF RENT. Tenant shall pay to Landlord's Management Agent, at
the address set forth in Article I above as the Rent Payment Address or to such
other person or entity and/or at such other place as Landlord may from time to
time direct in writing, all amounts due Landlord from Tenant hereunder,
including, without limitation, Monthly Base Rent, Expense Adjustment and
Electrical Cost (all amounts due hereunder being referred to collectively as
"Rent"). Except as specifically provided in this Lease, Rent shall be paid
without abatement, deduction or setoff of any kind, it being the intention of
the parties that, to the full extent permitted by law, Tenant's covenant to pay
Rent shall be independent of all other covenants contained in this Lease,
including Tenant's continued occupancy of the Premises. Tenant's obligation
hereunder to pay Rent accruing during the Term (whether or not the amount
thereof is determined or determinable as of the date of termination or
expiration of this Lease) shall survive the termination of this Lease, except
as otherwise provided herein.
4.03 PAYMENT OF MONTHLY BASE RENT. Monthly Base Rent shall be payable
monthly, in advance, on the first day of each calendar month during the Term,
except that Monthly Base Rent for the first full calendar month of the Term for
which Monthly Base Rent is due shall be paid concurrently with the execution of
this Lease by Tenant. If the Term commences on a day other than the first day
of a calendar month, then Monthly Base Rent for such month will be prorated on
a per diem basis based on a 30 day month and the excess of the installment or
Monthly Base Rent paid concurrently with the execution of this Lease by Tenant
over such prorated amount for the first calendar month of the Term shall be
applied against Monthly Base Rent for the first full calendar month of the
Term.
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4.04 EXPENSE ADJUSTMENT. In addition to Monthly Base Rent, Tenant shall pay
with respect to each Adjustment Year an amount equal to Tenant's Share of
Operating Expenses for the Adjustment Year in excess of the Base Expenses
("Expense Adjustment"). As to any Adjustment Year during the Term which does not
begin on January 1st or does not end on December 31st, Expense Adjustment with
respect to such Adjustment Year shall be prorated on a per diem basis.
Notwithstanding anything contained herein to the contrary, Operating Expenses
shall be deemed not to increase more than $.50 per rentable square foot per
calendar year (determined on a cumulative basis throughout the Term of the
Lease); provided that the foregoing cap on Operating Expenses shall not apply
to the following components of Operating Expenses: taxes, insurance, and
utilities.
4.05 PAYMENT OF ADJUSTMENTS. The Expense Adjustment with respect to each
Adjustment Year shall be paid in monthly installments in advance on the first
day of each calendar month during such Adjustment Year in amounts sufficient to
satisfy payment of the Expense Adjustment for such Adjustment Year as
reasonably estimated by Landlord from time to time prior to or during any
Adjustment Year and communicated to Tenant by written notice ("Estimated
Expense Adjustment"). If Landlord does not deliver such a notice ("Estimate")
prior to commencement of any Adjustment Year, Tenant shall continue to pay
Estimated Expense Adjustment as provided in the most recently received Estimate
(or Updated Estimate, as defined below) or the latest determined Expense
Adjustment, whichever is greater, until the Estimate for such Adjustment Year
is delivered to Tenant. If, during any Adjustment Year, Landlord reasonably
determines that Operating Expenses for such Adjustment Year have increased or
will increase, Landlord may deliver to Tenant an updated Estimate ("Updated
Estimate") for such Adjustment Year. Monthly installments of Estimated Expense
Adjustment paid subsequent to Tenant's receipt of the Estimate or Updated
Estimate for any Adjustment Year shall be in the amounts provided in such
Estimate or Updated Estimate, as the case may be. In addition, Tenant shall pay
to Landlord within thirty (30) days after receipt of such Estimate or Updated
Estimate, the amount, if any, by which the aggregate installments or the
Estimated Expense Adjustment provided in such Estimate or Updated Estimate, as
the case may be, with respect to prior months in such Adjustment Year exceed
the aggregate installments of the Estimated Expense Adjustment paid by Tenant
with respect to such prior months. Within one hundred twenty (120) days after
the end of each Adjustment Year, or as soon thereafter as practicable, Landlord
shall send to Tenant a statement ("Final Adjustment Statement") showing (i) the
calculation of the Expense Adjustment for such Adjustment Year, (it) the
aggregate amount of the Estimated Expense Adjustment previously paid by Tenant
for such Adjustment Year, and (iii) the amount, if any, by which the aggregate
amount of the installments of Estimated Expense Adjustment paid by Tenant with
respect to such Adjustment Year exceeds or is less than the Expense Adjustment
for such Adjustment Year. Tenant shall pay the amount of any deficiency to
Landlord within thirty (30) days after the date of such statement. Any excess
shall be refunded by Landlord, provided Tenant is not then in default under
this Lease, within thirty (30) days after the delivery of the Final Adjustment
Statement to Tenant. In addition, Tenant shall have the right, within three (3)
months after Tenant's receipt of the Final Adjustment Statement, on written
notice to Landlord, to have Landlord's books and records relating to
Operating Expenses audited by a qualified professional selected by Tenant and
approved by Landlord. Landlord shall have an opportunity to verify the findings
of the audit. If such audit, as verified by Landlord, reveals any errors,
Tenant's payments of its share of Operating Expenses shall be adjusted, and
appropriate payments shall be made by Landlord or Tenant, as the case may be,
within forty-five (45) days after completion of such audit. If the audit reveals
that Operating Expenses reflected in the Final Adjustment Statement were
overstated by more than five percent (5%), then Landlord shall pay the costs of
such audit. Otherwise all costs incurred by Tenant in connection with such audit
shall be paid by Tenant.
4.06 ELECTRICAL SERVICE. In addition to Monthly Base Rent and Tenant's
Share of Operating Expenses, Tenant shall pay with respect to the Base Year and
each Adjustment Year, as additional rental, (i) Tenant's Share of all
electrical service to the common areas of the Building ("Common Area Electrical
Service") and (ii) the cost of electrical service to the Premises ("Premises
Electrical Service") (the cost of the Common Area Electrical Service and the
Premises Electrical Service, the "Electrical Cost"). In the event the
electrical service to the Premises is submetered or otherwise measured in
accordance with the provisions of Section 8.03, Tenant shall pay to Landlord
the cost of such electrical service based upon rates determined by Landlord
from time to time (which shall not exceed the amount Tenant would have been
charged for such service by the local utility company furnishing such service).
In the event electrical service to the Premises is not measured by a submeter
or periodic determination by Landlord's engineers or other competent
consultants selected by Landlord (or a combination of such methods), then
Tenant shall pay to Landlord Tenant's Share of the cost of all electrical
service to tenants in the Building which does not exceed Building standard
consumption as established from time to time by Landlord. Tenant's Share shall
be based upon the statements therefor received by Landlord from the electrical
utility company providing such service, adjusted as Landlord determines
appropriate to eliminate over-standard consumption. In the event that other
tenants of the Building pay directly either to Landlord or third parties for
electricity supplied to their respective premises (e.g. separately metered
electricity), then Landlord shall adjust Tenant's Share by excluding from its
calculation the rentable area of all tenants making such payments. The cost of
electrical service shall include without limitation all fuel adjustment
charges, demand charges, and taxes. If, during any period of time, the area of
the Building is not ninety-five percent (95%) occupied, then, for purposes of
this Section 4.06, Landlord may adjust the actual costs of electrical service
that vary with the occupancy of the Building to Landlord's estimate of that
amount which would have been paid or incurred by Landlord for electrical
service had the Building been ninety-five percent (95%) occupied, and the costs
of electrical service as so adjusted shall be deemed to be actual electrical
costs for such calendar year. Landlord shall calculate the costs of electrical
service (and any adjustment thereto as provided above) during 1996 in the same
manner as, and consistent with, calculations to be made during subsequent
years.
4.07 ESTIMATED PAYMENTS. Tenant's Share of Electrical Costs with respect to
the Base Year and each Adjustment Year shall be paid in monthly installments in
advance on the first day of each calendar month during the Base Year and each
such Adjustment Year in amounts sufficient to satisfy payment of Tenant's Share
of Electrical Costs for the Base Year and each such Adjustment Year as
reasonably estimated by Landlord from time to time prior to or during the Base
Year and any
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Adjustment Year and communicated to Tenant by written notice ("Estimated
Electrical Cost Payments"). If Landlord does not deliver such a notice
("Electrical Estimate") prior to the commencement of any Adjustment Year,
Tenant shall continue to pay Estimated Electrical Cost Payments as provided in
the most recently received Electrical Estimate (or Updated Electrical Estimate,
as defined below) or the latest determined Estimated Electrical Cost Payment,
whichever is greater, until the Electrical Estimate for such Adjustment Year is
delivered to Tenant. If, during the Base Year or any Adjustment Year, Landlord
reasonably determines that the Electrical Costs for such Adjustment Year have
increased or will increase, Landlord may deliver to Tenant an updated Electrical
Estimate ("Updated Electrical Estimate") for the Base Year or such Adjustment
Year. Monthly installments of Estimated Electrical Cost Payments paid
subsequent to Tenant's receipt of the Electrical Estimate or Updated Electrical
Estimate for the Base Year or any Adjustment Year shall be in amounts provided
in such Electrical Estimate or Updated Electrical Estimate, as the case may be.
In addition, Tenant shall pay to landlord within thirty (30) days after receipt
of such Electrical Estimate or Updated Electrical Estimate, the amount, if any,
by which the aggregate installments of the Estimated Electrical Cost Payments
provided in such Electrical Estimate or Updated Electrical Estimate, as the
case may be,with respect to prior months in the Base Year or such Adjustment
Year exceed the aggregate installments of the Estimated Electrical Cost
Payments paid by Tenant with respect to such prior months. Within one hundred
twenty (120) days after the end of each Adjustment year, or as soon thereafter
as practicable, Landlord shall send to Tenant a statement ("Final Electrical
Cost Statement") showing (i) the calculation of Tenant's Share of Electrical
Cost for the Base Year or such Adjustment Year, (ii) the aggregate amount of
the Estimated Electrical Cost Payments previously paid by Tenant with respect
to such Adjustment Year, and (iii) the amount, if any, by which the aggregate
amount of the installments of the Estimated Electrical Cost Payments paid by
Tenant with respect to such Adjustment Year exceeds or is less than Tenant's
share of the Electrical Costs for the Base Year or such Adjustment Year. Tenant
shall pay the amount of any deficiency to Landlord within thirty (30) days
after the date of such statement. Any excess shall be refunded by Landlord,
provided Tenant is not then in default under this lease within thirty (30) days
after the delivery of the final Adjustment Statement to Tenant.
ARTICLE 5.
SECURITY DEPOSIT
As security for the performance of its obligations under this Lease,
Tenant, on execution of this Lease, shall deposit with Landlord a security
deposit in the amount set forth in Article I hereof ("Security Deposit"), and
agrees from time to time to pay Landlord within three (3) business days
following receipt of a request therefor, any sum or sums of money paid or
deducted therefrom by Landlord pursuant to the provisions of this Lease, in
order that at all times during the Term there shall be continually deposited
with the Landlord, a sum which shall never be less than the amount originally
deposited. The Security Deposit shall not be deemed an advance payment of Rent,
nor a measure of damages for any default by Tenant under this Lease, nor shall
the Security Deposit be a bar or a defense to any action that Landlord may
commence against Tenant. In the event of any default by Tenant hereunder,
Landlord shall have the right, but shall not be obligated, to apply or retain
all or any portion of the Security Deposit in payment of Tenant's obligations
hereunder, but any such application or retention shall not be obligated to hold
the Security Deposit as a separate fund, but may commingle the same with its
other funds. Upon expiration of the Term hereof, the Security Deposit (or the
balance thereof remaining after payment out of the same or deductions therefrom
as provided above) shall be returned to the Tenant within a reasonable period
of time following such expiration. No interest shall be payable with respect to
the Security Deposit. Landlord may commingle the Security Deposit with other
monies of Landlord. Landlord or any owner of the Building may transfer or
assign the Security Deposit to any new owner of the Building or to any assignee
or transferee of this Lease or may credit the Security Deposit against the
purchase price of the Building and upon such transfer or credit all liability
of the transferor or assignor of such security shall cease and come to an end.
No Mortgagee (as hereinafter defined) or person or entity who acquires legal or
beneficial title to the Building from such Mortgagee shall be liable for the
return of the Security Deposit unless such funds are actually received by such
Mortgagee or purchaser.
ARTICLE 6.
USE OF PREMISES; PARKING
6.01 PERMITTED USE. Tenant shall use and occupy the Premises solely for
general office purposes and for no other use or purpose. Notwithstanding
anything to the contrary in this Lease, the Premises shall not be used for any
purpose which would (i) adversely affect the appearance of the Building, (ii)
be visible from the exterior of, or the public areas of, the Building, (iii)
adversely affect ventilation in other areas of the Building (including without
limitation, the creation of offensive odors), (iv) create unreasonable elevator
loads, (v) cause structural loads to be exceeded, (vi) create unreasonable
noise levels, (vii) otherwise unreasonable interfere with Building operations
or other tenants of the Building, or (viii) violate legal requirements. In all
events, Tenant shall not engage in any activity which is not in keeping with
the first-class standards of the Building. Without limiting the foregoing,
Tenant will not use any part of the Premises for the following uses: health care
services, telephone or telegraph agency, radio, television or other
communication station, employment agency, public restaurant or bar, retail,
wholesale or discount shop for the sale of merchandise, retail service shop,
school or classroom (except as incidental to office uses but not as the
principal use thereof), or governmental or quasi-governmental bureau,
department or agency.
6.02 NO NUISANCE. Tenant shall not commit, or suffer to be committed, any
annoyance, waste, nuisance,act or thing against public policy, or which may
disturb the quiet enjoyment of Landlord or any other tenant or occupant of the
building. Tenant agrees not to deface or damage the Building in any manner.
6.03 PARKING. Landlord shall provide and Tenant shall lease and pay for,
from the commencement Date until expiration of the Term, the Parking Spaces.
Tenant does not have the right to use any specific parking spaces but only has
the right to use the number of Parking Spaces located in the parking facilities
generally. Tenant may not use additional
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parking spaces without the prior written consent of Landlord, in its sole
discretion. Tenant and its agents, employees, contractors, invitees or
licensees shall not interfere with the rights of Landlord or others entitled to
similar use of the parking facilities. All parking facilities furnished by
Landlord shall be subject to the reasonable control and management of Landlord,
who may, from time to time, establish, modify and enforce reasonable rules and
regulations with respect thereto. Landlord further reserves the right to
change, reconfigure, or rearrange the parking areas, to construct or repair
any portion thereof, and to restrict or eliminate the use of any parking areas
and do such other acts in and to such areas as Landlord deems necessary or
desirable without such actions being deemed an eviction of Tenant or a
disturbance of Tenant's use of the Premises and without Landlord being deemed
in default hereunder. Landlord may, in its sole discretion, convert the parking
facilities to a reserved and/or controlled parking facility. If specific
parking spaces are not assigned pursuant to the terms of this Lease, Landlord
reserves the right at any time to assign specific parking spaces and Tenant
shall thereafter be responsible to insure that its employees park in the
specifically designated parking spaces. Tenant shall, if requested by Landlord,
furnish to Landlord a complete list of the license plate numbers of all
vehicles operated by Tenant, Tenant's employees and agents. Landlord shall not
be liable for any damage of any nature to, or any theft of, vehicles, or
contents thereof, in or about such parking facility. At Landlord's request,
Tenant shall cause its employees and agents using Tenant's parking spaces to
execute an agreement confirming the foregoing. Excessive use of the parking
facilities by another tenant shall not be a default or breach of this Lease by
Landlord, and shall not suspend or terminate any of Tenant's obligations under
this Lease, and shall not entitle Tenant to exercise any other right or remedy
it may be afforded hereunder or at law or in equity. For the Parking Spaces,
Tenant shall pay Landlord during the term additional rental hereunder (a) the
sum of $0 per month during the first five years of the Term of this Lease and
thereafter $40.00 per month (plus any applicable sales tax) for each
Non-Reserved Parking Space, (b) if Tenant elects to convert a Non-Reserved
Parking Space to an Executive Non-Reserved Parking Space, then the sum of
$60.00 per month (plus any applicable sales tax) for each Executive
Non-Reserved Parking Space, (c) the sum of $100.00 per month (plus any
applicable sales tax) for each Reserved Executive Parking Space, and (d) the
sum of $40.00 per month (plus any applicable sales tax) for each Additional
Non-Reserved Parking Space, such sums to be payable monthly in advance on the
first day of each and every month during the Term, and a pro rata portion of
such sum shall be payable for any partial calendar month in the event this
Lease commences or ends on a date other than the first or last day of a
calendar month. Tenant's obligation to pay the above described parking rental
shall be considered an obligation to pay Rent for all purposes hereunder and
shall be secured in a like manner as is Tenant's obligation to pay any other
Rent. If the Parking Spaces are not available to Tenant during any portion of
the term of this Lease due to causes beyond the control of Landlord (including
casualty or condemnation), this Lease shall continue without abatement of Rent
and Landlord shall use reasonable efforts to make available to Tenant
sufficient substitute parking spaces within a one-half (.5) mile radius of the
Building until the Parking Spaces are again made available to Tenant at a
rental rate not to exceed the above described rental rate. Tenant shall have
the right at any time to convert up to twelve (12) Non-Reserved Parking Spaces
to twelve (12) Executive Non-Reserved Parking Spaces, provided Tenant provides
Landlord fifteen (15) days prior written notice. The sums described above
payable for each Executive Non-Reserved Parking Space shall be prorated for any
partial month.
ARTICLE 7.
RULES AND REGULATIONS
Tenant agrees to observe the reservations and rights reserved to
Landlord in this Lease. Tenant shall comply, and shall cause its employees,
agents, clients, customers, guests and invitees to comply, with the rules and
regulations attached hereto as EXHIBIT 3, and such revised or additional rules
and regulations adopted by Landlord during the Term and applied generally to
all office tenants of the Building. Any violation by Tenant or any of its
employees, agents, clients, customers, guests or invitees of any of the rules
and regulations so adopted by Landlord shall be a default by Tenant under this
Lease and may be restrained by court injunction; but whether or not so
restrained, Tenant acknowledges and agrees that it shall be and remain liable
for all damages, loss, costs and expense resulting from any violation by Tenant
or such other persons of any of said rules and regulations. Landlord shall use
reasonable efforts to cause tenants to comply with said rules and regulations
on a non-discriminatory basis, provided nothing in this Lease contained shall
be construed to impose upon Landlord any duty or obligation to enforce said
rules and regulations or the terms, covenants and conditions of any other lease
against any other tenant or any other persons, and Landlord shall not be liable
to Tenant for violation of the same by any other tenant, its employees, agents,
guests, invitees, licensees, customers, clients, family members, or by any
other person.
ARTICLE 8.
SERVICES PROVIDED
8.01 LANDLORD'S SERVICES. Landlord shall furnish:
(a) Cooled or heated air in season to provide a temperature
condition required, in Landlord's reasonable judgment, for comfortable
occupancy of the Premises under normal business operations and in the absence
of the use of equipment which affects the temperature or humidity which would
otherwise be maintained in the Premises, daily from 7:00 A.M. to 6:00 P.M.
(Saturdays 8:00 A.M. to 1:00 P.M.), Sundays and Holidays (as defined below)
excepted. If Tenant shall request, at least one (1) business day in advance,
Landlord shall provide after hours cooled or heated air for the Premises;
provided, that the Tenant shall pay Landlord's charges for such service
currently in the amount of Landlord's cost (including reasonable overhead) per
hour with a two (2) hour minimum charge (which hourly or minimum charges are
subject to change from time to time without notice) within ten (10) days after
receipt of Landlord's invoices therefor. Further, if the use of heat generating
equipment in the Premises different from that already maintained in the Premises
already occupied by Tenant as of the date hereof, affects the temperatures
otherwise maintained by the air conditioning system for normal business
operations, and thereby requires, in the sole judgment of Landlord, the
modification of the air conditioning or ventilation systems (including
installation of supplementary air conditioning units in the Premises) Landlord
may elect to perform such modification, and the cost thereof shall be paid by
Tenant to Landlord at the time of completion of such modification, or Landlord
may elect to require Tenant to perform such modification, at Tenant's sole cost
and expense. Any increased
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expense in maintaining or operating the system resulting, in Landlord's sole
opinion, from such modification shall be paid by Tenant. In addition, Tenant
shall, at Tenant's expense, perform all maintenance on any supplementary air
conditioning units installed in accordance with this Section 8.01(a) unless, in
the exercise of its right hereby expressly reserved, Landlord elects to perform
part or all of such maintenance at Tenant's expense. Tenant agrees to keep and
cause to be kept closed all windows in the Premises and at all times to
cooperate fully with Landlord in the operation of said system and to abide by
all reasonable regulations and requirements which Landlord may prescribe to
permit the proper functioning and protection of said heating, ventilation and
air conditioning systems. For purposes of this Lease, "Holidays" means those
federal or state holidays or such other days which Landlord, in its reasonable
discretion, designates to Tenant as "Holidays" for purposes of this Lease, such
designation being subject to change from time to time;
(b) Washroom facilities, not within the Premises (unless Tenant
leases an entire floor), for use by Tenant in common with other tenants in the
Building;
(c) Janitor service in and about the Premises as customarily
provided in similar office buildings in the submarket area that the Building is
located within;
(d) Passenger elevator service in common with other tenants and
occupants, daily from 8:00 A.M. to 6:00 P.M., Saturdays, Sundays and Holidays
excepted. Such normal passenger elevator service, if furnished at other times,
shall be optional with Landlord and shall never be deemed a continuing
obligation. Landlord, however, shall provide limited passenger service daily at
all times such normal passenger service is not furnished. Landlord shall
provide limited freight elevator service at such times as Landlord shall
determine; and
(e) Replacement of fluorescent lamps, bulbs, ballasts, and starters
in the building with standard ceiling mounted fixtures installed by Landlord
and incandescent bulb replacements in all public areas.
8.02 GOVERNMENT RESTRICTIONS. Tenant agrees that compliance with any
mandatory or voluntary energy conservation measures or other legal requirements
instituted by any appropriate governmental authority shall not be considered a
violation of any terms of this Lease and shall not entitle Tenant to terminate
this Lease or require abatement or reduction of Rent hereunder.
8.03 ELECTRICAL CONSUMPTION. Landlord shall provide or cause to be provided
to the Premises all electrical current required by Tenant in the normal use and
occupancy of the Premises. Without Landlord's prior written consent, Tenant
shall not install any equipment which would result in Tenant's connected load
exceeding, either in voltage, rated capacity, or overall load, that which
Landlord deems to be standard for the Building ("Building Standard Load") or
which would generate sufficient heat to affect the temperature otherwise
maintained in the Premises by the normal operation of the Building air
conditioning equipment serving the Premises. The obligation of Landlord to
provide or cause to be provided electrical service shall be subject to the
rules and regulations of the supplier of such electricity and of any municipal
or other governmental authority regulating the business of providing electrical
utility service. Except to the extent of Landlord's gross negligence, Landlord
shall not be liable or responsible to Tenant for any loss, damage or expense
which Tenant may sustain or incur if either the quantity or character of the
electric service is changed or is no longer available or no longer suitable for
Tenant's requirements. At any time when Landlord is furnishing electric current
to the Premises, Landlord may, at its option, upon not less than thirty (30)
days prior written notice to Tenant, discontinue the furnishing of such
electric current. If Landlord gives such notice of discontinuance, Landlord
shall make all reasonably necessary arrangements with the public utilities
supplying the electric current with respect to connecting electric current to
the Premises, but tenant shall contract directly with such public utility with
respect to supplying such service. Landlord shall have the right to measure
electrical usage in the Premises (1) by installing a submeter, (2) by periodic
determinations by Landlord's engineers or other competent consultants selected
by Landlord, or (3) by any combination of such methods. If Tenant's electrical
usage exceeds Building Standard Load, the cost of purchase and installation of
a submeter in the Premises shall be borne by Tenant. If Tenant's connected load
for electrical design exceeds the Building Standard Load, Tenant shall pay as
Additional Rent a surcharge of a proportionate part of all electrical service
costs which are attributable to the aggregate over-standard electrical
consumption by all tenants in the Building. Such proportion shall be equal to
the product of the aggregate cost of all over-standard electrical consumption
in the Building (as determined by Landlord) times a fraction in which the
numerator is Tenant's electrical design load in excess of the Building Standard
Load and the denominator is the aggregate of the total electrical design load
of all tenants in the Building in excess of the Building Standard Load.
Tenant's proportionate share of such sums shall be due within ten (10) days
after the date of receipt of a statement therefor from Landlord setting forth
the amount of the charges involved and calculating Tenant's proportionate share
thereof. If the electrical current consumed relative to the Premises shall be
separately metered, Tenant shall pay for all such electrical current directly
to the utility company supplying said service. Tenant agrees to purchase from
Landlord all replacement lamps, bulbs, ballasts and starters used in the
Premises and to pay Landlord a standard charge for furnishing and replacing
such lamps, bulbs, ballasts and starters. At no time shall Tenant permit the
use of electricity consumed in the Premises to exceed the capacity of feeders
to the Building or the risers or wiring installation. Landlord does not warrant
or represent that such capacity shall be adequate for Tenant's purposes.
8.04 ADDITIONAL SERVICES. Landlord shall in no event be obligated to furnish
any services or utilities, other than those specified in Article 8. Tenant
acknowledges that it shall be responsible for making arrangements for and shall
pay the cost of the installation, repair and maintenance of its own telephone
system. If Landlord elects to furnish services or utilities requested by Tenant
in addition to those specified herein (including utility services at times
other than those specified), Tenant shall pay to Landlord, Landlord's then
prevailing rates for such services and utilities within ten (10) days after
receipt of Landlord's invoices therefor. If Tenant shall fail to make any such
payment, Landlord may, without notice to Tenant, and in addition to Landlord's
other remedies under this Lease, discontinue any or all of the additional
services. Failure by Landlord to any extent to furnish any of the
aforementioned services to Tenant, the Premises or the Building, or any
cessation
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Landlord to any extent to furnish any of the aforementioned services to Tenant,
the Premises or the Building, or any cessation (including any partial
curtailment) thereof, shall not render Landlord liable in any respect for
damages to person, property or otherwise, nor to be construed as an eviction of
Tenant, nor work an abatement of Rent, nor relieve Tenant from fulfillment of
any covenant or agreement hereof. Should any of the equipment or machinery
utilized in supplying the services listed herein break down, or for any cause
cease to function properly, such failure shall not work as an abatement of
Rent, nor be construed as an eviction of Tenant, nor relieve Tenant from
fulfilling any covenant or agreement contained herein, nor render Landlord
liable for damages; however, Landlord shall use reasonable diligence to repair
same promptly. Notwithstanding the foregoing, if Tenant is prevented from
making reasonable use of the Premises for more than fifteen (15) consecutive
days, as its exclusive remedy therefor, Tenant shall be entitled to a
reasonable abatement of rent for each consecutive day (after such fifteen (15)
day period) that Tenant is so prevented from making reasonable use of the
Premises. In addition, and notwithstanding the foregoing, if Tenant is unable
to operate its business in the Premises as a result of such unavailability of
such services, and such unavailability is due to Landlord's gross negligence or
willful misconduct, then, if such unavailability continues for five (5)
consecutive business days, Tenant shall have the right, as its sole and
exclusive remedy, to a reasonable abatement of rent for each consecutive day
(after such five (5) day period) that Tenant is unable to operate its business
in the Premises.
8.05 MONUMENT SIGNAGE. The monument sign currently located on Blackburn
Driveway is encumbered by the rights of another tenant. Landlord also may use
such monument sign for purposes of identifying the Building generally. Tenant
shall be entitled to the non-exclusive use of the Tenant Portion of such sign
as identified on Exhibit 5, provided all uses thereof, including the signage
placed thereon, are approved by Landlord in all respects in Landlord's
reasonable discretion. In addition, to the extent of the portion of the sign
used by Tenant (but in no event less than 50%), Tenant shall pay its
proportionate share (but in no event less than 50%) of all costs in connection
therewith, provided Landlord will pay the costs of causing the monument sign to
comply with applicable law, Tenant acknowledging that such sign or the use
thereof may not currently comply with such laws and may have to be moved or
reconfigured to so comply. Landlord shall have the right to add the names of
other tenants and signage identifying the Building generally to such monument
sign before or after Tenant uses such monument sign and/or causes such monument
sign to comply with applicable laws, provided Tenant shall be entitled to use
at least 50% of the Tenant Portion of the signage surface area. Landlord shall
have the right to use the Landlord Portion of such sign, as identified on
Exhibit 5, to identify the Building generally. Landlord shall have the right to
determine whether the names of Tenant and other tenants are side by side
(horizontal), on top of each other (vertical), and the order of names.
ARTICLE 9.
LEASEHOLD IMPROVEMENTS; ALTERATIONS
9.01 ALTERATIONS. Except as may be otherwise provided in this Lease as to
initial Tenant improvements in accordance with Exhibit 4. Tenant shall not,
without Landlord's prior written consent, permit any alteration, improvement,
addition or installation in or to the Premises (all of which is collectively
referred to as "Work"), including installation of telephone, computer or
internal sound or paging systems or other similar systems, or the performance
of any decorating, painting and other similar work in the Premises. In the
event Landlord consents to any Work, Landlord reserves the right to cause such
Work to be performed by contractors and subcontractors designated by Landlord.
Tenant shall pay the cost of preparation of the plans for the Work, all permit
fees and the fees of said contractors and subcontractors. Except with respect
to Work performed by Landlord's designated contractor as general contractor,
Tenant shall pay to Landlord's then applicable construction supervision fee.
Before commencement of any Work or delivery of any materials into the Premises
or the Building, Tenant shall furnish to Landlord, for its prior written
approval, which approval shall not be unreasonably withheld or delayed,
architectural plans and specifications certified by a licensed architect or
engineer reasonably acceptable to Landlord, and such other documentation as
Landlord shall reasonably request. Tenant agrees to hold Landlord, its
beneficiaries and their respective agents, partners, officers, servants and
employees forever harmless against all claims and liabilities of every kind,
nature and description which may arise out of or in any way be connected with
any such Work, except to the extent caused by Landlord's gross negligence. At
the request of Landlord, Tenant will deliver a written indemnity against claims
or damages to tenants or occupants of any other premises affected by such Work.
Tenant shall pay Landlord's reasonable costs of reviewing plans and materials
submitted to Landlord for approval. Tenant shall pay the cost of all such Work
and the cost of decorating and altering the Premises and the Building
occasioned by any such Work. Landlord shall have the right to require Tenant to
deliver to Landlord cash or other security in an amount and form acceptable to
Landlord be held in escrow by Landlord to assure prompt payment for the cost of
any such Work and to require Tenant's contractors to evidence workman's
compensation, general liability and other insurance coverage, as reasonably
required by Landlord. All alterations, improvements, additions and installations
to or in the Premises shall become part of the Premises at the time of
installation.
9.02 TENANT'S WORK. In the event that Landlord permits Tenant to hire its
own contractors for the performance of any Work, then in addition to the
provisions of Section 9.01, the following shall apply: (i) prior to the
commencement of the Work or the delivery of any materials to the Building,
Tenant shall submit to Landlord for Landlord's approval, the names and
addresses of all contractors, contracts, necessary permits and licenses,
certificates of insurance (including, without limitation, Workmen's
Compensation, comprehensive general liability and adequacy of design insurance)
and instruments of indemnification and waivers of lien against any and all
claims, costs, expenses, damages and liabilities which may arise in connection
with the Work, all in such form and amount as shall be satisfactory to
Landlord; (ii) all such Work shall be done only by contractors or mechanics
approved by Landlord and at such time and in such manner as Landlord may from
time to time designate; (iii) upon completion of any Work, Tenant shall furnish
Landlord with as-built plans, contractors' affidavits, full and final waivers
of lien, receipted bills covering all labor and materials expended and used in
connection with such Work, and (iv) all such Work shall comply with all
insurance requirements, all laws, ordinances, rules and regulations
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good and workmanlike manner and with the use of new, quality grade materials.
9.03 NO MECHANIC'S LIENS. Without limitation of the provisions of Section
9.01, Tenant agrees not to suffer or permit any lien on any mechanic or
materialman to be placed or filed against the Premises or the Building. In case
any such lien shall be filed, Tenant shall immediately satisfy and release such
lien of record. If Tenant shall fail to have such lien satisfied, released of
record, or bonded around within thirty (30) days after its filing, Landlord may,
on behalf of Tenant, without being responsible for making any investigation as
to the validity of such lien and without limiting or affecting any other
remedies Landlord may have, pay the same and Tenant shall pay Landlord on demand
the amount so paid by Landlord.
9.04 REMOVAL OF TENANT'S PROPERTY. Subject to the rules and regulations,
Tenant, at any time Tenant is not in default hereunder, may remove from the
Premises its movable trade fixtures and personal property. Tenant shall
repair any damage to the Premises caused by such removal, failing which Landlord
may remove the same and repair the Premises and Tenant shall pay the cost
thereof to Landlord on demand.
9.05 INITIAL TENANT IMPROVEMENT. Initial Tenant improvements shall be made
to the Premises in accordance with Exhibit 4.
9.06 REFURBISHMENT ALLOWANCE. On December 1, 2000, Landlord shall pay to
Tenant a refurbishment allowance not to exceed $2.00 per rentable square foot
in the Premises of $59,500.00, for use by Tenant to refurbish the Premises,
upon satisfaction of the same conditions as set forth in Section 9.05.
ARTICLE 10.
CONDITION OF PREMISES
10.01 PREMISES CONDITION. No agreements or representations, except such as
are expressly contained herein and in the Work Letter attached hereto, if any,
have been made to Tenant respecting the condition of the Premises. By taking
possession, except as provided in the Work Letter, Tenant conclusively waives
all claims relating to the condition of the Premises and accepts the Premises
as being free from defects and in good, clean and sanitary order, condition and
repair, and agrees to keep the Premises in such condition, ordinary wear and
tear excepted. Landlord shall be responsible to cause restrooms and elevator
lobbies on each floor of the Premises to comply with applicable ADA standards
for handicapped persons, provided Tenant does not make alterations that require
changes to the elevator lobbies or restrooms, in which case Tenant shall then be
responsible for causing compliance.
10.02 CARE OF THE PREMISES. Subject to Article 12, and ordinary wear and tear
excepted, Tenant shall, at its own expense, keep the Premises clean and safe and
in as good repair and condition as when all of the work described in the Work
Letter was completed (or as to subsequent Work, as and when such Work was
completed) and shall promptly and adequately repair all damage to the Premises
and the Building caused by Tenant or any of its employees, agents, guests or
invitees, including replacing or repairing all damaged or broken glass, fixtures
and appurtenances resulting from any such damage, under the supervision and with
the approval of Landlord. If Tenant does not promptly and adequately make such
repairs or replacements, Landlord may, but need not, make such repairs and
replacements and Tenant shall pay Landlord the cost thereof on demand. Tenant,
at its sole expense, shall comply with all laws, orders and regulations of
federal, state, county and municipal authorities and with any directive of any
public officer or officers pursuant to law which shall impose any violation,
order or duty upon Landlord or Tenant with respect to the Premises or the use,
condition, or occupation thereof, including all handicapped access laws. Tenant
shall not do or permit to be done any act or thing in, on or about the Premises
or store anything therein which (i) will in any way conflict with any law,
statute, ordinance or governmental rule or regulation now in force or which may
hereafter be enacted or promulgated, (ii) is not appropriate to the permitted
use of the Premises, or (iii) will in any way increase the existing rate of, or
adversely affect, or cause a cancellation of, any fire or other insurance
policies covering the Building or any of its contents.
10.03 CARE OF THE BUILDING. Landlord, subject to Articles 12 and 14, shall be
obligated only to maintain and make necessary repairs to the structural
elements of the Building, the public corridors, public washrooms and lobby of
the Building, the exterior windows of the Building, and subject to the
provisions of Articles 8, 12 and 14, the electrical, plumbing, heating,
ventilation and air conditioning systems of the Building.
ARTICLE 11.
SURRENDER OF THE PREMISES
11.01 SURRENDER. At the termination of this Lease, by lapse of time or
otherwise, Tenant shall surrender possession of the Premises to Landlord and
deliver all keys to the Premises and all locks therein to Landlord and make
known to the Landlord the combination of all combination locks in the Premises,
and shall, subject to Articles 12 and 13, return the Premises and all equipment
and fixtures of the Landlord therein to Landlord in broom clean condition and
in as good condition as when Tenant originally took possession, ordinary wear
and tear excepted, failing which Landlord may restore the Premises and such
equipment and fixtures to such condition and the Tenant shall pay the cost
thereof to Landlord on demand.
11.02 REMOVAL OF FIXTURES. Upon termination of this Lease or of Tenant's right
to possession of the Premises, by lapse of time or otherwise, all installations,
additions, partitions, hardware, light fixtures, floor coverings, non-trade
fixtures and improvements, temporary or permanent, whether placed there by
Tenant or Landlord, shall be Landlord's property and shall remain upon the
Premises, all without compensation, allowance or credit to Tenant.
11.03 SURVIVAL. All obligations of Tenant under this Article II shall
survive the expiration or earlier termination of this
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Lease.
ARTICLE 12.
DAMAGE OR DESTRUCTION
12.01 DAMAGE BY FIRE OR OTHER CASUALTY. If, during the Term, more than
twenty-five percent (25%) of either of the Premises or the Building is damaged
or made untenantable by fire or other casualty, cause, condition or thing
whatsoever, Landlord may, by written notice to Tenant given within sixty (60)
days after such damage, terminate this Lease. Such termination shall become
effective as of the date of such damage. Unless this Lease is terminated, if the
Premises are made partially or wholly untenantable as aforesaid, Landlord,
subject to the provisions of this Article 12 shall restore the same at
Landlord's expense with reasonable promptness. If, as a result of a fire or
other casualty, the Premises are made partially or wholly untenantable, Tenant
may terminate this Lease if (A) Landlord fails to commence such restoration
within sixty (60) days after Landlord is able to take possession of the damaged
space in the Premises and fails to reasonably diligently complete the
restoration of the Premises, by giving notice thereof to Landlord (i) not later
than seventy (70) days after Landlord is able to take possession if Landlord has
not theretofore commenced such restoration or (ii) prior to the substantial
completion of such restoration, if Landlord commences such restoration within
said sixty (60) day period, but fails to complete the restoration of the
Premises within one hundred eighty (180) days from the date of casualty, and
such termination shall be effective as of the fifth (5) day after receipt of
said notice by Landlord, or (B) the restoration will take more than one hundred
eighty (180) days to complete by giving notice thereof to Landlord prior to
Landlord's commencement of restoration and within twenty (20) days after
Landlord notifies Tenant in writing of the estimated time necessary to complete
such restoration determined by an architect selected by Landlord, provided
Tenant shall have the right to select an architect to make such determination if
Landlord has not done so within thirty (30) days after such casualty, and
Tenant's termination right, if applicable shall be exercised within twenty (20)
days after Tenant's receipt of such architect's estimate. In the event of
termination of this Lease, Monthly Base Rent and Adjustments shall be prorated
on a per diem basis and paid only the effective date of such termination. If all
of the Premises are untenantable but this Lease is not terminated, all Monthly
Base Rent and Adjustments shall abate from the date of the fire or other
casualty until the Premises are ready for occupancy and reasonably accessible to
Tenant; if part of the Premises is untenantable, Monthly Base Rent and
Adjustments shall be prorated on a per diem basis and apportioned in accordance
with the part of the Premises which is usable by Tenant until the damaged part
is ready for Tenant's occupancy. In all cases, with respect to Landlord's
obligations under this Article 12, such obligations shall be adjusted and all
time periods extended by the period on account of delay caused by adjustment or
insurance loss, strikes, governmental approvals, labor difficulties or any cause
beyond Landlord's reasonable control. Notwithstanding anything to the contrary
in this Section 12.01, Tenant shall not have the right to terminate this Lease
and Rent shall in no event abate if such fire or other casualty, cause,
condition or thing was caused by the act or neglect of Tenant, its employees or
agents.
12.02 RENT CONCESSION AND CASUALTY. This following provision shall apply if,
as an economic concession set forth in the Rider hereto, Landlord has granted
Tenant a credit against Monthly Base Rent, Expense Adjustment, or Electrical
Cost, or has granted Tenant an abatement period with respect to Monthly Base
Rent, Expense Adjustment, or Electrical Cost (such credits or the amount of
Monthly Base Rent, Expense Adjustment, or Electrical Cost, which would have
accrued but for such abatement period being hereinafter referred to as "Rent
Concession"): In the event that, pursuant to any provision of this Lease,
Monthly Base Rent, Expense Adjustment, or Electrical Cost abate, in whole or in
part, by reason of the occurrence of a fire or other casualty ("Casualty
Abatement") and this Lease is not terminated, then to the extent that the
period of any Casualty Abatement coincides with any period that a Rent
Concession would otherwise have been applicable, the Rent Concession or such
portion thereof as would otherwise have been applicable if the Casualty
Abatement had not occurred ("Rent Concession Balance") will be deferred until
the Casualty Abatement period expires and the Rent Concession Balance will be
effective and applied at the rate set forth in the Rider during the period
immediately following the expiration of the Casualty Abatement. Notwithstanding
the foregoing, (a) the Rent Concession Balance will not be applicable to the
extent it exceeds the amount of rent loss insurance proceeds recovered by
Landlord with respect to the Casualty Abatement, (b) Tenant will not be
entitled to any cash refund or credit against any other amounts due Landlord by
reason of the foregoing provision and (c) the Term will not be extended by
reason of the applicability of the foregoing provision.
12.03 RESTORATION. If Landlord repairs and restores the Premises as provided
in Section 12.01 above, Landlord shall repair or restore any decorations
(excluding personal property), alterations or improvements to the Premises
installed or approved by Landlord; provided, and to the extent, Landlord's
and/or Tenant's casualty insurance proceeds, as hereinafter provided under
Article 15.02, applicable to such decorations, alterations and improvements are
received by or provided to Landlord for such purposes. Tenant shall be
responsible for repair and replacement of trade fixtures, furnishings,
equipment, personalty property or leasehold improvements belonging to Tenant.
Notwithstanding any provision of this Article 12 to the contrary, Landlord shall
not be obligated to make any restorations or repairs to the Premises, the cost
of which would exceed the proceeds of insurance received by Landlord with
respect thereto.
ARTICLE 13.
EMINENT DOMAIN
13.01 CONDEMNATION OF THE PREMISES. In the event that the whole or a
substantial part of the Building or the Premises shall be condemned or taken in
any manner for any public or quasi-public use (or sold under threat of such
taking), and as a result thereof, the remainder of the Premises cannot be used
for the same purpose as prior to such taking, the Lease shall terminate as of
the date possession is taken.
13.02 PARTIAL CONDEMNATION OF THE PREMISES. If less than a substantial part
of the Premises shall be so condemned or taken (or sold under threat thereof)
and after such taking the Premises can be used for the same purposes as prior
thereto, the Lease shall cease only as to the part so taken as of the date
possession shall be taken by such authority, and Tenant shall
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pay full Rent up to that date (with appropriate refund by Landlord of such Rent
attributable to the part so taken as may have been paid in advance for any
period subsequent to the date possession is taken) and thereafter Monthly Base
Rent, Expense Adjustment, and Electrical Cost shall be equitably adjusted to
reflect the reduction in the Premises by reason of such taking. Landlord shall,
at its expense, make all necessary repairs or alterations to the Building so as
to constitute the remaining Premises a complete architectural unit, provided
that Landlord shall not be obligated to undertake any such repairs or
alterations if the cost thereof exceeds the award actually received by Landlord
resulting from such taking.
13.03 BUILDING CONDEMNATION. If part of the Building shall be so condemned
or taken (or sold under threat thereof), or if any adjacent property or street
shall be condemned or improved by a public or quasi-public authority in such a
manner as to alter the use of any part of the Premises or the Building and, in
the opinion of Landlord, the Building or any part thereof should be altered,
demolished or restored in such a way as to materially alter the Premises,
Landlord may terminate this Lease by notifying Tenant of such termination
within sixty (60) days following the taking of possession by such public or
quasi-public authority, and this Lease shall expire on the date of the taking,
as fully and completely as if such date were the date hereinbefore set forth as
the expiration of the Term, and the Monthly Base Rent and Adjustments hereunder
shall be apportioned as of such date.
13.04 AWARD. Landlord shall be entitled to receive the entire award,
including the damages for the property taken and damages to the remainder, with
respect to any condemnation proceedings affecting the Building. Tenant agrees
not to make any claim against Landlord or the condemning authority for any
portion of such award or compensation, whether attributable to the value of any
unexpired portion of the Term, the loss of profits, goodwill, leasehold
improvements or otherwise, Tenant irrevocably assigning any and all such claims
to Landlord.
ARTICLE 14.
WAIVER OF CERTAIN CLAIMS
14.01 RELEASE. To the extent not expressly prohibited by law, Tenant
releases Landlord, its mortgage, stockholders, agents, partners, officers,
servants and employees, and their respective stockholders, agents, partners,
officers, servants and employees (collectively, "Related Parties"), from and
waives all claims for damages to person or property sustained by Tenant or by
any occupant of the Premises, the Building, or by any other person, resulting
directly or indirectly from fire or other casualty, any existing or future
condition, defect, matter or thing in the Premises, the Building, or any
portions thereof, or from any equipment or appurtenance therein, or from any
accident in or about the Building, or from any act of neglect of any tenant or
other occupant of the Building or of any other person, other than Landlord or
its agents. The foregoing provision shall not limit or reduce Landlord's
maintenance and repair obligations contained herein.
14.02 INDEMNIFICATION. Except as provided otherwise in this Lease, Tenant
agrees to hold harmless and indemnify Landlord and Landlord's Related Parties
against claims and liabilities, including reasonable attorneys' fees, from any
damage to person or property caused by the negligence or intentional torts of
Tenant or its agents. Landlord may, at its option, repair such damage or
replace such loss, and Tenant shall upon demand by Landlord reimburse Landlord
for all costs of such repairs, replacement and damages in excess of amounts, if
any, paid to Landlord under insurance covering such damages. In the event any
action or proceeding is brought against Landlord or Landlord's Related Parties
by reason of any such claims, then, upon notice from Landlord, Tenant covenants
to defend such action or proceeding by counsel reasonably satisfactory to
Landlord. In addition, except as provided otherwise in this Lease, Landlord
agrees to hold harmless and indemnify Tenant against claims and liabilities,
including reasonable attorneys' fees, from any damage to person or property
caused by the negligence or intentional torts of Landlord or its agents.
14.03 TENANT'S FAULT. If any damage to the Building or any equipment or
appurtenance therein, whether belonging to Landlord or to other tenants in the
Building, results from any act or neglect of Tenant, its agents, employees,
guests or invitees, Tenant shall be liable therefor and Landlord may, at
Landlord's option repair such damage, and Tenant shall, upon demand by
Landlord, reimburse Landlord the total cost of such repairs and damages to the
Building. If Landlord elects not to repair such damage, Tenant shall promptly
repair such damages at its own cost and in accordance with the provisions of
Sections 9.02 and 9.03 as if such repair constituted Work under such Sections.
If Tenant occupies space in which there is exterior glass, then Tenant shall be
responsible for the damage, breakage or repair of such glass, except to the
extent such loss or damage is recoverable under Landlord's insurance, if any.
ARTICLE 15.
INSURANCE; WAIVER OF SUBROGATION
15.01 TENANT'S INSURANCE. Tenant shall procure and maintain at its own cost
policies of comprehensive general public liability and property damage
insurance with contractual liability coverage for the agreements of indemnity
provided for under this Lease and a broad form general liability endorsement to
afford protection with such limits as may be reasonably requested by Landlord
from time to time (which as of the date hereof shall be not less than
$3,000,000 under a combined single limit of coverage) insuring Landlord and
Landlord's Related Parties from all claims, demands or actions for injury to or
death of any person or persons and for damage to property made by, or on behalf
of, any person or persons, firm or corporation, arising from, related to or
connected with the Premises. The insurance shall be issued by companies and be
in form and substance satisfactory to Landlord and any mortgagee of the
Building and shall name Landlord and Landlord's Managing Agent (and, if
requested by Landlord or any mortgagee, include any mortgagee) and their
respective agents and employees as additional insureds. The aforesaid insurance
policies shall provide that they shall not be subject to cancellation except
after at least thirty (30) days' prior written notice to Landlord and all such
mortgagees (unless such cancellation is due to non-payment of premiums, in which
event ten (10) days' prior written notice shall be required). The original
insurance policies (or certificates thereof satisfactory to Landlord), together
with satisfactory evidence of payment of the premium thereof, shall be
deposited with Landlord prior to the commencement of the Term and renewals
thereof not less
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than fifteen (15) days prior to the end of the term of each such coverage.
15.02 CASUALTY INSURANCE. Tenant shall carry fire and extended coverage
insurance of the type typically referred to as "all risk" insurance,
including water damage, insuring its interest in the tenant improvements in the
Premises (to the extent not covered by Landlord's property insurance) and its
interest in all its personal property and trade fixtures located on or within
the Building, including, without limitation, its office furniture, equipment
and supplies.
15.03 WAIVER OF SUBROGATION. NOTWITHSTANDING ANY OTHER PROVISION OF THIS
LEASE TO THE CONTRARY, LANDLORD AND TENANT EACH HEREBY WAIVE ALL RIGHTS OF
ACTION AGAINST THE OTHER FOR LOSS OR DAMAGE TO THE PREMISES, OR THE BUILDING
AND PROPERTY OF LANDLORD AND TENANT IN THE BUILDING, WHICH LOSS OR DAMAGE IS
INSURED OR IS REQUIRED PURSUANT TO THIS LEASE TO BE INSURED BY VALID AND
COLLECTIBLE INSURANCE POLICIES TO THE EXTENT OF THE PROCEEDS COLLECTED OR
COLLECTIBLE UNDER SUCH INSURANCE POLICIES, SUBJECT TO THE CONDITION THAT THIS
WAIVER SHALL BE EFFECTIVE ONLY WHEN THE WAIVER IS PERMITTED BY SUCH INSURANCE
POLICIES OR WHEN, BY THE USE OF GOOD FAITH EFFORT, SUCH WAIVER COULD HAVE BEEN
PERMITTED IN THE APPLICABLE INSURANCE POLICIES, EVEN IF CAUSED BY THE
NEGLIGENCE OF SUCH OTHER PARTY. THE POLICIES OF INSURANCE REQUIRED TO BE
MAINTAINED BY TENANT UNDER THE TERMS OF THIS LEASE SHALL CONTAIN WAIVER OF
SUBROGATION CLAUSES IN FORM AND CONTENT SATISFACTORY TO LANDLORD.
15.04 INCREASED COSTS. Tenant shall not conduct or permit to be conducted by
its employees, agents guests or invitees any activity, or place any equipment
in or about the Premises or the Building that will in any way increase the
cost of fire insurance or other Landlord insurance on the Building. If any
increase in the cost of fire insurance or other insurance is stated by any
insurance company or by the applicable Insurance Rating Bureau, if any, to be
due to any activity or equipment of Tenant in or about the Premises or the
Building, such statement shall be conclusive evidence that the increase in such
cost is due to such activity or equipment and, as a result thereof, Tenant
shall be liable for the amount of such increase. Tenant shall reimburse
Landlord for such amount upon written demand from Landlord and any such sum
shall be considered additional Rent payable hereunder. Tenant, at its sole
expense, shall comply with any and all requirements of any insurance
organization or company necessary for the maintenance of reasonable fire and
public liability insurance covering the Premises and the Building.
ARTICLE 16.
LANDLORD'S RIGHT OF ACCESS
16.01 ENTRY INTO PREMISES. Landlord and its contractors and representatives
shall have the right to enter the Premises at all reasonable times to perform
janitorial, cleaning, security, and other services and, after reasonable verbal
notice (except in the case of emergencies), to inspect the same, to make
repairs, alterations and improvements, to maintain the Premises and the
Building, specifically including, but without limiting the generality of the
foregoing, to make repairs, additions or alterations within the Premises to
mechanical, electrical and other facilities serving other premises in the
Building, to post such reasonable notices as Landlord may desire to protect its
rights, to exhibit the Premises to mortgagees and purchasers, and, during the
one hundred eighty (180) days prior to the expiration of the term, to exhibit
the Premises to prospective tenants. In the event the Premises are vacant,
Landlord may place upon the doors or in the windows of the Premises any usual or
ordinary ""To Let,'' "To Lease," or "For Rent" signs. To the extent that
Tenant's conduct of its business from the Premises is not materially interfered
with, Tenant shall permit Landlord to erect, use, maintain and repair pipes,
cables, conduit, plumbing, vents and wires, in, to and through the Premises to
the extent Landlord may now or hereafter deem necessary or appropriate for the
proper operation, maintenance and repair of the Building and any portion of the
Premises.
16.02 LANDLORD'S REPAIRS. Landlord shall also have the right to take all
material into the Premises that may be required for the purposes set forth in
the foregoing Section 16.01 without the same constituting a constructive
eviction of Tenant, in whole or in part, and, except as otherwise provided in
this Lease, Rent shall not abate (except as provided in Article 12) while said
repairs, alterations, improvements or additions are being made, by reason of
loss or interruption of business of Tenant, or otherwise. If Tenant shall not
be personally present to open and permit entry into the Premises, at any time,
when for any reason entry therein shall be reasonably necessary under the
circumstances, such as in an emergency or to make repairs, Landlord or
Landlord's agents may enter the Premises by a master key, or may forcibly enter
the same, without rendering Landlord or such agents liable therefor (if during
such entry Landlord or Landlord's agents shall accord reasonable care to
Tenant's property), and without in any manner affecting the obligations and
covenants of this Lease.
16.03 MINIMIZE INTERFERENCE. In exercising its rights under this Article 16,
Landlord will use reasonable efforts in minimize any interference with Tenant's
use or occupancy of the Premises, provided that Landlord will not be obligated
to provide overtime labor or perform work after regular Building hours.
ARTICLE 17.
RIGHTS RESERVED TO LANDLORD
Landlord shall have the following rights exercisable without notice and
without liability to Tenant for damage or injury to property, person or
business (all claim's for damage being hereby waived and released by Tenant)
and without effecting an eviction or disturbance of Tenant's use or
possession giving rise to any claim for set-offs or abatement of Rent:
(a) To change the name or street address of the Building (but not
the suite number of the Premises);
(b) To install and maintain signs on the exterior and interior of
the Building (without adversely affecting
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Tenant's signage rights granted in this Lease);
(c) To designate all sources furnishing sign painting and lettering,
towels, coffee cart service, vending machines or toilet supplies used or
consumed on the Premises and the Building;
(d) To have pass keys to the Premises;
(e) To grant to anyone the exclusive right to conduct any business or
render any service in the Building, provided such exclusive right
shall not operate, to exclude Tenant from the use expressly permitted
by this Lease;
(f) To make repairs, additions or alterations to the Building which
may change, eliminate or remove common areas, parking areas, if any, or
the method of ingress to or egress from the Building and such areas, to
convert common areas into leasable areas, or otherwise alter, repair or
reconstruct the common areas or change the use thereof, to change the
arrangement or location of entrances or passageways, doors and doorways,
corridors, elevators, stairs, toilets or other public parts of the
Building, and to close entrances, doors, corridors, elevators, plaza or
other facilities, and to perform any acts related to the safety,
protection, preservation, reletting, sale or improvement of the Premises
or the Building;
(g) To have access to all mail chutes or boxes according to the rules
of the United States Postal Service;
(h) To require all persons entering or leaving the Building during
such hours as Landlord may from time to time reasonably determine to
identify themselves to security personnel by registration or otherwise,
and to establish their right to enter or leave and to exclude or expel
any peddler, solicitor or beggar at any time from the Premises or the
Building;
(i) To close the Building at 7:00 p.m. on weekdays, 1:00 p.m. on
Saturdays, and all day on Sundays and Holidays, or at such other
reasonable times as Landlord may determine, subject, however, to
Tenant's right to admittance under such regulations as shall be
prescribed from time to time by Landlord in its sole discretion.
ARTICLE 18.
ABANDONMENT
Tenant shall not abandon the Premises at any time during the Term. Any
re-entry by Landlord following abandonment by Tenant shall not, unless Landlord
so elects in a written notice to Tenant, constitute or be deemed to constitute
acceptance by Landlord of a surrender of this Lease, but rather, upon such
abandonment, Tenant's right to possession of the Premises shall cease, but
Tenant shall remain liable for all of its obligations under this Lease. Without
limitation of the foregoing, upon any such abandonment, Landlord shall have the
remedies provided for in Article 21 below. If Tenant shall abandon or surrender
the Premises or be dispossessed by process of law or otherwise during the Term
or at termination of the Term, any personal property left on the Premises shall
be deemed to be abandoned at the option of Landlord, and title thereto shall
pass to Landlord under this Lease as a bill of sale. For purposes of this Lease,
and at the option of Landlord, the Premises shall be deemed vacated or abandoned
if Tenant, or an agent or employee of Tenant, shall not have conducted Tenant's
ordinary business upon the Premises during any period of fifteen (15)
consecutive days or shall have transferred all or substantially all of its
personnel, furniture and fixtures from the Premises without replacement.
ARTICLE 19.
TRANSFER OF LANDLORD'S INTEREST
As used in this Lease, the term "Landlord" means only the current owner
of the fee title to the Building or the leasehold estate under a ground lease
of the Building at the time in question. Each Landlord is obligated to perform
the obligations of Landlord under this Lease only during the time such Landlord
owns such interest or title. Any Landlord who transfers its title or interest
in the Building is relieved of all liabilities for the obligations of Landlord
under this Lease to be performed on or after the date of transfer. Tenant
agrees to look solely to the transferee with respect to all matters in
connection with this Lease.
ARTICLE 20.
TRANSFER OF TENANT'S INTEREST
20.01 LANDLORD'S CONSENT. Tenant shall not sell, assign, encumber, mortgage
or transfer this Lease or any interest therein, sublet or permit the occupancy
or use by others of the Premises or any part thereof, or allow any transfer
hereof of any lien upon Tenant's interest by operation of law or otherwise
(collectively, a "Transfer") without the prior written consent of Landlord in
its sole discretion. Any Transfer which is not in compliance with the
provisions of this Article 20 shall, at the option of Landlord, be void and of
no force or effect. Tenant shall, by written notice in the form specified in
the following sentence, advise Landlord of Tenant's intention on a stated date
(which shall not be less than sixty (60) days after the date of Tenant's
notice) to sublet, assign, mortgage or otherwise Transfer any part or all of
the Premises or its interest therein for the balance or any part of the Term,
and, in such event, Landlord shall have the right, to be exercised by giving
written notice to Tenant within thirty (30) days after receipt of Tenant's
notice, to recapture the space described in Tenant's notice and such recapture
notice shall, if given, cancel and terminate this Lease with respect to the
space therein described as of the date stated in Tenant's notice. Tenant's
notice shall state the name and address of the proposed subtenant, assignee,
pledgee, mortgage or transferee, and a true and complete copy of the proposed
sublease, assignment, pledge, mortgage or other conveyance and all related
documentation, executed by both parties, shall be delivered to Landlord with
said notice. If Tenant's notice shall cover all of the space hereby demised,
and Landlord shall elect to give the aforesaid recapture notice
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with respect thereto, then the Term shall expire and end on the date stated in
Tenant's notice as fully and completely as if that date had been herein
definitely fixed for the expiration of the Term. If, however, this Lease is
terminated pursuant to the foregoing with respect to less than the entire
Premises, the Monthly Base Rent, Expense Adjustment, and Electrical Cost then in
effect shall be adjusted on the basis of the number of rentable square feet
retained by Tenant in proportion to the original Area of the Premises, and this
Lease as so amended shall continue thereafter in full force and effect. In such
event, Tenant shall pay the cost of erecting demising walls and public corridors
and making other required modifications to physically separate the portion of
the Premises remaining subject to this Lease from the rest of the Premises. If
Landlord, upon receiving Tenant's notice that it intends to sublet or assign any
such space, shall not exercise its right to recapture the space described in
Tenant's notice. Landlord will, as hereinabove provided, determine whether to
approve the Tenant's request to sublet or assign the space covered by its
notice. Notwithstanding the foregoing provisions, Landlord will not unreasonably
withhold such consent to an assignment or sublease if the following conditions
are satisfied:
(a) In the reasonable judgment of Landlord, the subtenant or
assignee (A) is of a character or engaged in a business or proposes to
use the Premises in a manner which is in keeping with the standards of
Landlord for the Building, (B) will not violate the provisions of any
lease or agreement affecting the Building, and (C) does not have an
unfavorable reputation or credit standing;
(b) Either the area of the Premises to be sublet or the remaining
area of the Premises is regular in shape with appropriate means of
ingress or egress suitable for normal renting purposes;
(c) Tenant is not in default under this Lease;
(d) The proposed sublease or assignee is not a person or entity
with whom Landlord is then negotiating to lease space in the Building;
(e) The amount of the aggregate rent to be paid by the proposed
assignee or subtenant is not less than the current prevailing rent for
comparable direct lease space in the Building;
(f) The use of the Premises by such proposed assignee or sublessee
is permitted under this Lease; and
(g) In no event shall the following be considered as suitable
assignees or sublessees under this subsection; any governmental body,
agency or bureau (of the United States, any state, county, municipality
or any subdivision thereof); any foreign government or subdivision
thereof; any health care professional or health care service
organization; schools or similar organizations; employment agencies;
radio; television or other communication stations; restaurants; and
retailers offering retail services from the Premises.
If Landlord consents to such sublet or assignment, such consent shall be
expressly contingent upon Tenant's payment to Landlord, as Rent, the Landlord's
costs and expenses incurred in connection therewith, including, but not limited
to, attorney's fees and Landlord's construction supervision fee, if applicable.
Without limiting the foregoing, in no event shall the following be considered
suitable assignees or sublessees under this Section 20.01: any governmental
body, agency or bureau (of the United States, any state, county, municipality
or any subdivision thereof); any foreign government or subdivision thereof; any
health care professional or health care service organization; schools or
similar organizations; employment agencies; radio, television or other
communication stations; restaurants; and retailers.
20.02 EXCESS RENT. If Tenant individually, or as debtor or debtor in
possession or if a trustee in bankruptcy acting on behalf of Tenant pursuant to
the Bankruptcy Code, 11 U.S.C. 101 et seq., shall sublet or assign the Premises
or any part thereof or assign any interest in this Lease at a rental rate (or
additional consideration) in excess of the then current Monthly Base Rent,
Expense Adjustment, and Electrical Cost per rentable square foot, said excess
Rent (or additional consideration) shall be and become the property of Landlord
and shall be paid to Landlord as it is received by Tenant, less the Tenant's
reasonable brokerage (excluding commissions paid to brokers who are Tenant's
affiliates), legal and other expenses ("Tenant's Costs") incurred in connection
with such assignment or, in the case of a sublease, less the monthly pro rata
share of such Tenant's Costs as determined by dividing such Tenant's Costs by
the number of months in the term of such sublease. If Tenant shall sublet the
Premises or any part thereof, Tenant shall be responsible for all actions and
neglect of the subtenant and its officers, partners, employees, agents, guests
and invitees as if such subtenant and such persons were employees of Tenant.
Nothing in this Section 20.02 shall be construed to relieve Tenant from the
obligation to obtain Landlord's prior written consent to any proposed sublease.
20.03 NO WAIVER. The consent by Landlord to any Transfer shall not be
construed as a waiver or release of Tenant from liability for the performance
of all covenants and obligations to be performed by Tenant under this Lease,
and Tenant shall remain liable therefor, nor shall the collection or acceptance
of Rent from any assignee, subtenant or occupant constitute a waiver or release
of Tenant from any of its obligations or liabilities under this Lease. Any
consent given pursuant to this Article 20 shall not be construed as relieving
Tenant from the obligation of obtaining Landlord's prior written consent to any
subsequent assignment or subletting.
20.04 INCLUDED TRANSFERS. If Tenant is a partnership, a withdrawal or
change, whether voluntary, involuntary or by operation of law or in one or more
transactions, of partners owning a controlling interest in Tenant shall be
deemed a voluntary assignment of this Lease and subject to the provisions of
this Article 20. If Tenant is a corporation, any dissolution, merger,
consolidation or other reorganization of Tenant, or the sale, transfer or
redemption of a controlling interest of the capital stock of Tenant in one or
more transactions, shall be deemed a voluntary assignment of this Lease and
subject to the provisions of this Article 20. However, the preceding sentence
shall not apply to corporations the stock of which is traded through a national
or regional exchange or over-the-counter. Neither this Lease nor any interest
therein nor any estate
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created thereby shall pass by operation of law or otherwise to any trustee,
custodian or receiver in bankruptcy of Tenant or any assignee for the
assignment of the benefit of creditors of Tenant.
ARTICLE 21.
DEFAULT: LANDLORD'S RIGHTS AND REMEDIES
21.01 DEFAULT. The occurrence of any one or more of the following matters
constituted a default ("Default") by Tenant under this Lease:
(a) Failure by Tenant to pay any Rent or any other amounts due and
payable by Tenant under this Lease and such failure continues for five
(5) days after the giving of written notice of such failure by Landlord
to Tenant provided Landlord shall not be obligated to give more than two
(2) notices in any calendar year, and Tenant shall for all subsequent
failures to pay be in default immediately without the requirement of
Landlord to give notice of such failure to Tenant;
(b) Failure by Tenant to observe or perform any of the covenants in
this Lease in respect to assignment and subletting;
(c) Abandonment of the Premises as prohibited in Article 18;
(d) Failure by Tenant to cure forthwith, after notice thereof from
Landlord or another tenant acquiring knowledge thereof, any hazardous
condition that Tenant has created in violation of law or of this Lease;
(e) Failure by Tenant to observe or perform any other covenant,
agreement, condition or provision of this Lease, if such failure shall
continue for twenty (20) days after written notice thereof to Tenant by
Landlord;
(f) The levy upon execution of the attachment by legal process of
the leasehold interest of Tenant, or the filing or creation of a lien in
respect of such leasehold interest;
(g) Tenant or any guarantor of this Lease becomes insolvent or
bankrupt or admits in writing its inability to pay its debts as they
mature, makes an assignment for the benefit of creditors, or applies for
or consents to the appointment of a trustee or receiver for itself or
for all or a part of its property;
(h) Proceedings for the appointment of a trustee, custodian or
receiver of Tenant or any guarantor of this Lease or for all or a part
of Tenant's or such guarantor's property are filed against Tenant or
such guarantor and are not dismissed within thirty (30) days;
(i) Proceedings in bankruptcy, or other proceedings for relief under
any law for the relief of debtors, are instituted by or against Tenant
or any guarantor of this Lease, and, if instituted against Tenant or
such guarantor, are allowed against either or are consented to by either
or are not dismissed within sixty (60) days thereof;
(j) Tenant shall repeatedly default in the timely payment of Rent or
any other charges required to be paid, or shall repeatedly default in
keeping, observing or performing any other covenant, agreement,
condition or provision of this Lease, whether or not Tenant shall timely
cure any such payment or other default. For the Purposes of this
subsection, the occurrence of similar defaults three (3) times during
any twelve (12) month period shall constitute a repeated default.
Any notice periods provided for under this Article 21.01 shall run concurrently
with any statutory notice periods, and any notice given hereunder may be given
simultaneously with or incorporated into any such statutory notice.
21.02 LANDLORD'S REMEDIES. If a Default occurs, Landlord shall have the
following rights and remedies, which shall be distinct, separate and cumulative,
and which may be exercised by Landlord concurrently or consecutively in any
combination and which shall not operate to exclude or deprive Landlord of any
other right or remedy which Landlord may have in law or equity:
(a) Landlord may terminate this Lease by giving to Tenant notice of
the Landlord's intention to do so, in which event the Term shall end,
and all right, title and interest of Tenant hereunder shall expire, on
the date stated in such notice;
(b) Landlord may terminate the right of Tenant to possession of the
Premises without terminating this Lease by giving notice to Tenant that
Tenant's right of possession shall end on the date stated in such
notice, whereupon the right of Tenant to possession of the Premises or
any part thereof shall cease on the date stated in such notice but
Tenant's obligations under this Lease shall continue in full force and
effect; and
(c) Landlord may enforce the provisions of this Lease and may
enforce and protect the rights or Landlord hereunder by a suit or suits
in equity or at law for the specific performance of any covenant or
agreement contained herein, or for the enforcement of any other
appropriate legal or equitable remedy, including injunctive relief and
recovery of all moneys due or to become due from Tenant under any of the
provisions of this Lease.
21.03 SURRENDER OF POSSESSION. If Landlord exercises either of the remedies
provided for in subparagraphs (a) and (b) of Article 21.02, Tenant shall
surrender possession and vacate the Premises immediately and deliver possession
thereof to
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Landlord, and Landlord may then, or at any time thereafter, re-enter and take
complete and peaceful possession of the Premises, full and complete license so
to do being granted to Landlord, and Landlord may remove all property
therefrom, without being deemed in any manner guilty of trespass, eviction or
forcible entry and detainer and without relinquishing Landlord's right to Rent
or any other right given to Landlord hereunder or by operation of law.
21.04 DAMAGES. If Landlord terminates the right of Tenant to possession of
the Premises without terminating this Lease, such termination of possession
shall not release Tenant, in whole or in part, from Tenant's obligation to pay
the Rent hereunder for the full stated Term, and Landlord shall have the right
to the immediate recovery of all such amounts. Alternatively, at Landlord's
option, Landlord shall have the right, from time to time, to recover from
Tenant, and Tenant shall remain liable for, all Monthly Base Rent, Expense
Adjustment, Electrical Cost and any other sums then due under this Lease during
the period from the date of such notice or termination of possession to the end
of the Term. Landlord may file suit from time to time to recover any such sums
and no suit or recovery by Landlord of any such sums or portion thereof shall
be a defense to any subsequent suit brought for any other sums due under this
Lease. Alternatively, if Landlord elects to terminate this Lease, Landlord
shall be entitled to recover from Tenant all Monthly Base Rent, Expense
Adjustment, and Electrical Cost accrued and unpaid for the period up to and
including such termination date, as well as all other additional sums payable
by Tenant hereunder. In addition, Landlord shall be entitled to recover, as
damages for loss of the benefit of its bargain and not as a penalty, the sum of
(x) the unamortized cost to Landlord, computed and determined in accordance
with generally accepted accounting principles, of any tenant improvements
provided by Landlord at its expense, (y) the aggregate sum which at the time of
such termination represents the excess, if any, of the present value of the
aggregate Monthly Base Rent, Expense Adjustment, and Electrical Cost (as
reasonably estimated by Landlord) for the remainder of the Term over the then
present value of the then aggregate fair rental value of the Premises for the
balance of the Term, immediately prior to such termination, such present worth
to be computed in each case on the basis of a six percent (6%) per annum
discount from the respective dates upon which rentals would have been payable
hereunder had the Term not been terminated, and (z) any damages in addition
thereto, including reasonable attorney's fees and court costs, which Landlord
shall have sustained by reason of the breach of any of the covenants of this
Lease other than for the payment of Rent.
21.05 RELETTING. In the event Landlord terminates the right of Tenant to
possession of the Premises without terminating this Lease as aforesaid,
Landlord shall have no obligation to, but may relet the Premises or any part
thereof for the account of Tenant for such rent, for such time (which may be
for a term extending beyond the Term) and upon such terms as Landlord in
Landlord's sole discretion shall determine, and Landlord shall not be required
to accept any tenant offered by Tenant or to observe any instructions given by
Tenant relative to such reletting and may give the leasing of any unleased
space in the Building priority over the reletting of the Premises. Also, in any
such event, Landlord may make repairs, alterations and additions in or to the
Premises and redecorate (using only Building standard materials in
substantially the same configuration as the Premises) the same to the extent
deemed by Landlord necessary or desirable, and, in connection therewith, change
the locks to the Premises, and Tenant shall upon demand pay the cost thereof
together with Landlord's expenses of reletting. Landlord may collect the rents
from any such reletting and apply the same first to the payment of the expenses
of re-entry, redecoration, repair and alterations and the expense of reletting
(including without limitation brokers' commissions and attorneys' fees) and
second to the payment of Rent herein provided to be paid by Tenant. Any excess
of residue shall operate only as an offsetting credit against the amount of
Rent as the same theretofore became or thereafter becomes due and payable
hereunder, but the use of such offsetting credit to reduce the amount of Rent
due Landlord, if any, shall not be deemed to give Tenant any right, title or
interest in or to such excess or residue and any such excess or residue shall
belong solely to Landlord. No such re-entry or repossession, repairs,
alterations and additions, or reletting shall be construed as an eviction or
ouster of Tenant, an election on Landlord's part to terminate this Lease or an
acceptance of a surrender of this Lease, unless a written notice of such
intention be given to Tenant, or shall operate to release Tenant in whole or in
part from any of Tenant's obligations hereunder. Landlord may, at any time and
from time to time, sue and recover judgment for any deficiencies remaining
after the application of the proceeds of any such reletting.
21.06 REMOVAL OF TENANT'S PROPERTY. All property removed from the Premises by
Landlord pursuant to any provisions of this Lease or of law shall be handled,
removed or stored by Landlord at the cost, expense and risk of Tenant, and
Landlord, shall in no event be responsible for the value, preservation or
safekeeping thereof. Tenant shall pay Landlord upon demand for all expenses
incurred by Landlord in such removal and storage.
21.07 COSTS. Tenant shall pay all costs, charges and expenses, including
court costs and reasonable attorneys' fees incurred by Landlord or its
beneficiaries in enforcing Tenant's obligations under this Lease, in the
exercise by Landlord of any of its remedies in the event of a default, in any
litigation, negotiation or transactions in which Tenant causes Landlord,
without Landlord's fault, to become involved or concerned, or in consideration
of any request for approval of or consent to any action by Tenant which is
prohibited by this Lease or which may be done only with Landlord's approval or
consent, whether or not such approval or consent is given.
21.08 CUMULATIVE RIGHTS. All of Landlord's rights and remedies under this
Lease shall be cumulative with and in addition to any and all rights and
remedies which Landlord may have at law or equity. Any specific remedy provided
for in any provision of this Lease shall not preclude the concurrent or
consecutive exercise of a remedy provided for in any other provision hereof.
21.09 LOCK-OUT. If a Default occurs, Landlord is entitled and is hereby
authorized, without any notice to Tenant whatsoever, to enter upon the Premises
by use of a master key, a duplicate key, picking the locks, or other peaceable
means, and to change, alter, and/or modify the door locks on all entry doors of
the Premises, thereby excluding Tenant, and its officers, principals, agents,
employees, visitors and representatives therefrom. In the event that Landlord
has either terminated Tenant's right of possession to the Premises pursuant to
the foregoing provisions of this Lease, or has terminated this Lease by reason
of the Default, Landlord shall not thereafter be obligated to provide Tenant
with a key to the Premises at any time; provided, however, that in any such
instance, during Landlord's normal business hours and at the convenience
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of Landlord, and upon the written request of Tenant accompanied by such written
waivers and releases as Landlord may require, Landlord will escort Tenant or
its authorized personnel to the Premises to retrieve any personal belongings or
other property of Tenant not subject to Landlord's liens or security interests
described in this Lease or available under applicable laws. If Landlord elects
to exclude Tenant from the Premises without permanently repossessing the
Premises or terminating this Lease pursuant to the foregoing provisions of this
Lease, then Landlord (at any time prior to permanent repossession or
termination) shall not be obligated to provide Tenant a key to re-enter the
Premises until such time as all delinquent Rent has been paid in full and all
other Defaults, if any, have been completely cured to Landlord's satisfaction,
and Landlord has been given assurance reasonably satisfactory to Landlord
evidencing Tenant's ability to satisfy its remaining obligations under this
Lease. During any such temporary period of exclusion, Landlord will, during
Landlord's regular business hours and at Landlord's convenience, upon written
request by Tenant, escort Tenant or its authorized personnel to the Premises to
retrieve personal belongings of Tenant or its employees, and such other
property of Tenant as is not subject to Landlord's liens and security interests
described in this Lease or available under applicable laws. The provisions
hereof shall override and control any conflicting provisions of Section 93.002
of the Texas Property Code (as amended).
ARTICLE 22.
LIMITATION OF LIABILITY
22.01 LIMITATION. If Tenant obtains a money judgment against Landlord
resulting from any default or other claim arising under this Lease, that
judgment shall be satisfied only out of the rents, issues, profits, and other
income thereafter actually received on account of Landlord's right, title and
interest in the Building, and no other real, personal or mixed property of
Landlord (or of any of the partners which comprise Landlord, or of partners,
officers, shareholders, directors or principals of such partners comprising
Landlord, if any, or of Landlord's officers, shareholders, directors, or
owners, if any) wherever situated, shall be subject to levy, attachment or
execution, or otherwise used to satisfy any such judgment. Tenant hereby waives
any right to satisfy a judgment against Landlord except from the rents, issues,
profits and other income thereafter actually received on account of Landlord's
right, title and interest in the Building.
ARTICLE 23.
HOLDING OVER
If Tenant retains possession of the Premises or any part thereof after
the termination of the Term or any extension thereof, by lapse of time or
otherwise, Tenant, unless Landlord otherwise elects, shall become a tenant at
sufferance and shall pay Landlord monthly Rent, at one and one-half times the
rate of Monthly Base Rent, Expense Adjustment, and Electrical Cost in effect
for the month immediately preceding said holding over, computed on a per month
basis, for each month or part thereof (without reduction for any such partial
month) that Tenant thus remains in possession. Alternatively, at the election
of Landlord expressed in a written notice to Tenant and not otherwise, such
retention of possession shall constitute a renewal of this Lease for one (1)
year, requiring the payment by Tenant of Monthly Base Rent, Expense Adjustment,
and Electrical Cost then in effect, as adjusted for said year as if said year
were an extension of the Term. The provisions of this Article 23 do not exclude
Landlord's right of reentry or any other right hereunder.
ARTICLE 24.
SUBORDINATION AND ATTORNMENT
24.01 SUBORDINATION. Landlord may have heretofore encumbered or may
hereafter encumber with a mortgage or trust deed the Building, or any interest
therein, and may have heretofore sold and leased back or may hereafter sell and
lease back the land on which the Building is located, and may have heretofore
encumbered or may hereafter encumber the leasehold estate under such lease with
a mortgage or trust deed. (Any such mortgage or trust deed is herein called a
"Mortgage" and the holder of any such mortgage or the beneficiary under any
such trust deed is herein called a "Mortgagee." Any such lease of the
underlying land is herein called a "Ground Lease", and the lessor under any
such lease is herein called a "Ground Lessor." Any Mortgage which is a first
lien against the Building, the land on which the Building is located, the
leasehold estate or the lessor under a Ground Lease (if the property is not
then subject to an unsubordinated mortgage) is herein called a "First Mortgage"
and the holder or beneficiary of or Ground Lessor under any First Mortgage is
herein called a "First Mortgagee.") This Lease is, or shall be, subject and
subordinate to any First Mortgage now or hereafter encumbering the Building.
This provision shall be self-operative, and no further instrument of
subordination shall be required to effectuate such subordination. If requested
by a First Mortgagee, Tenant will either (i) subordinate its interest in this
Lease to said First Mortgage, and to any and all advances made thereunder and
to the interest thereon, and to all renewals, replacements, supplements,
amendments, modifications and extensions thereof, or (ii) make certain of
Tenant's rights and interest in this Lease superior thereto; and Tenant will
promptly execute and deliver such agreement or agreements as may be reasonably
required by such Mortgagee or Ground Lessor, provided, however, Tenant
covenants it will not subordinate this Lease to any Mortgage or Ground Lease
other than a First Mortgage (including a Ground Lease defined as a First
Mortgage hereunder) without the prior written consent of the First Mortgagee.
Tenant agrees that Landlord may assign the rents and interests in this Lease to
the holder of any Mortgage or Ground Lease. In conjunction with the foregoing
provisions, Tenant hereby acknowledges its agreement to execute the
Subordination, Non-Disturbance and Attornment Agreement and/or the Lease
Estoppel Certificate required by such Mortgagee and/or Ground Lessor within ten
(10) days following the receipt of a written request therefor. Landlord shall
attempt to obtain a non-disturbance agreement reasonably satisfactory to Tenant
from any future First Mortgagee, provided Landlord's failure to obtain such an
agreement shall not create any liability on the part of Landlord to Tenant,
create a default by Landlord under this Lease, or create a defense, offset, or
counterclaim to Tenant's obligations under this Lease.
24.02 ATTORNMENT. It is further agreed that (a) if any Mortgage shall be
foreclosed, or if any Ground Lease be terminated, (i) the liability of the
Mortgagee or purchaser at such foreclosure sale or the liability of a
subsequent owner designated as Landlord under this Lease shall exist only so
long as such Mortgagee, purchaser or owner is the owner of the Building or
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the land on which the Building is located, and such liability shall not continue
or survive after further transfer of ownership; and (ii) upon request of the
Mortgagee, if the Mortgage shall be foreclosed, Tenant will attorn, as Tenant
under this Lease, to the purchaser at any foreclosure sale under any Mortgage or
upon request of the Ground Lessor, if any Ground Lease shall be terminated,
Tenant will attorn as Tenant under this Lease to the Ground Lessor, and Tenant
will execute such instruments as may be necessary or appropriate to evidence
such attornment; (b) this Lease may not be modified, amended, canceled or
surrendered, without the prior written consent, in each instance, of the First
Mortgagee; and (c) Tenant waives the provisions of any statute or rule of law,
now or hereafter in effect, that may give or purport to give Tenant any right to
terminate or otherwise adversely affect Landlord's interest in this Lease or
reduce or limit the obligations of Tenant hereunder in the event of the
prosecution or completion of any such foreclosure proceeding. No Mortgagee or
any purchaser at a foreclosure sale shall be liable for any act or omission of
the Landlord which occurred prior to such sale or conveyance, nor shall Tenant
be entitled to any offset against or deduction from Rent due after such date by
reason of any act or omission of the Landlord prior to such date. Further,
Tenant agrees that no Mortgagee shall be bound by the prepayment of Rent made in
excess of thirty days before the date on which such payment is due or any
amendment or modification made with such Mortgagee's consent to the extent such
consent is required as provided above.
24.03 MORTGAGEE REQUIREMENTS. Should any prospective First Mortgagee require a
modification or modifications of this Lease, which modification or modifications
will not cause an increased cost or expense to Tenant or in any other way
materially and adversely change the rights and obligations of Tenant hereunder,
in the reasonable judgment of Tenant, then and in such event, Tenant agrees that
this Lease may be so modified and agrees to execute whatever documents are
required therefor and deliver the same to Landlord within fifteen (15) days
following the request therefor. Should any prospective Mortgagee or Ground
Lessor require execution of a short form of lease for recording (containing,
among other customary provisions, the names of the parties, a description of the
Premises and the Term of this Lease), Tenant agrees to execute such short form
of Lease and deliver the same to Landlord within fifteen (15) days following the
request therefor.
24.04 POWER OF ATTORNEY. If Tenant fails within fifteen (15) days after
written demand therefor to execute and deliver any instruments as may be
necessary or proper to effectuate any of the covenants of Tenant set forth above
in this Article, Tenant hereby makes, constitutes and irrevocably appoints any
one of the Landlord or its representatives as its attorney-in-fact (such power
of attorney being coupled with an interest) to execute and deliver any such
instruments for and in the name of Tenant.
ARTICLE 25.
ESTOPPEL CERTIFICATE
Tenant agrees that from time to time, upon not less than seven (7) days'
prior written request by Landlord, Tenant will, and Tenant will cause any
subtenant, licensee, concessionaire or other occupant of the Premises to,
promptly complete, execute and deliver to Landlord or any party or parties
designated by Landlord a statement in writing certifying: (i) that this Lease is
unmodified and in full force and effect (or if there have been modifications
that the same are in full force and effect as modified and identifying the
modifications); (ii) the dates to which the Rent and other charges have been
paid; (iii) that the Premises have been unconditionally accepted by the Tenant
(or if not, stating with particularity the reasons why the Premises have not
been unconditionally accepted); (iv) the amount of any Security Deposit held
hereunder; (v) that, so far as the party making the certificate knows, Landlord
is not in default under any provisions of this Lease, if such is the case, and
if not, identifying all defaults with particularity; and (vi) any other matter
reasonable requested by Landlord. Any purchaser or Mortgagee of any interest in
the Building shall be entitled to rely on said statement. Failure to give such a
statement within seven (7) days after said written request shall be conclusive
evidence, upon which Landlord and any such purchaser or Mortgagee shall be
entitled to rely that this Lease is in full force and effect and Landlord is not
in default and Tenant shall be estopped from asserting against Landlord or any
such purchaser or Mortgagee any defaults of Landlord existing at that time but
Tenant shall not thereby be relieved of the affirmative obligation to give such
statement. Moreover, if Tenant fails to deliver or cause to be delivered such
statement within said seven (7) day period, Landlord shall be entitled to
collect from Tenant upon demand, as liquidated damages occasioned by such delay
and not as a penalty (the actual damages resulting from such delay being
impossible to ascertain), a sum equal to one-fifteenth of the Monthly Base Rent
for each day, up to fifteen (15) days, after the expiration of said seven (7)
day period that Tenant fails to deliver such statement. If such failure persists
after such fifteen (15) day period, Landlord shall be entitled to pursue any and
all remedies it may have with respect to such Default, including termination of
this Lease or Tenant's right to possession and collection of damages, including
consequential damages, arising by reason for such Default.
ARTICLE 26.
INTENTIONALLY DELETED
ARTICLE 27.
NOTICES AND DEMANDS
27.01 PARTIES' NOTICES. All notices, demands, approvals, consents, requests
for approval or consent or other writings in this Lease provided to be given,
made or sent by either party hereto to the other ("Notice") shall be in writing
and shall be deemed to have been fully given, made or sent when made by personal
service or two (2) business days after deposit in the United States mail,
certified or registered and postage prepaid and properly addressed as follows:
To Landlord: The Utah State Retirement Investment Fund
c/o CB Commercial Real Estate Group, Inc.
533 South Fremont Avenue
Los Angeles, California 90071
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Attn: Managing Director
with a copy to:
The Utah State Retirement Investment Fund
c/o CB Commercial Realty Advisors, Inc.
533 South Fremont Avenue
Los Angeles, California 90071
Attn: Director of Asset Management
and a copy to:
Compass Management, Inc.
3811 Turtle Creek Boulevard, Suite 240
Dallas, Texas 75219
Attn: Property Manager for Turtle Creek
To Tenant: (i) If any Notice is to be given Tenant
prior to occupancy, to the address set forth
in Section 1.02.
(ii) If any Notice is to be given
Tenant after occupancy, to the
Premises; provided, however, if the
Premises shall have been vacated,
Notice may be posted on the door to the
Premises, except as Landlord may be
otherwise notified in writing.
The address to which any Notice should be given, made or sent to either party
may be changed by written notice given by such party as above provided.
27.02 MORTAGEE'S NOTICE AND CURE RIGHTS. Tenant agrees to give any First
Mortgagee, by registered or certified mail, a copy of any notice or claim of
default served upon the Landlord by Tenant, provided that prior to such notice
Tenant has been notified in writing (by way of service on Tenant of a copy or
an assignment of Landlord's interests in leases, or otherwise) of the address
of such First Mortgagee. Tenant further agrees that if Landlord shall have
failed to cure such default within twenty (20) days after such notice to
Landlord (or if such default cannot be cured or corrected within that time,
then such additional time as may be necessary if Landlord has commenced within
such twenty (20) days and is diligently pursuing the remedies or steps
necessary to cure or correct such default), then the First Mortgagee shall have
an additional thirty (30) days within which to cure or such default (or if such
default cannot be cured or corrected within that time, then such additional time
as may be necessary if such First Mortgagee has commenced within such thirty
(30) days and is diligently pursuing the remedies or steps necessary to cure or
correct such default, including the time necessary to obtain possession if ion
is to cure or correct such default) before Tenant may exercise any right or
remedy which it may have on account of any such default of Landlord. The
foregoing provision shall not limit Tenant's right to abate rent under Sections
8.04, 12.01, and 13.02.
27.03 NOTICE TO TENANT. Any notice, demand, request or consent to be made
by or required of Landlord, may be made and given by Landlord's Management
Agent with the same force and effect as if made and given by Landlord.
ARTICLE 28.
CONSTRUCTION OF LEASE
28.01 CONSTRUCTION. The language in all parts of this Lease shall in all
cases be construed as a whole according to its fair meaning and neither strictly
for nor against either Landlord or Tenant. Article and Section headings in this
Lease are for convenience only and are not to be construed as part of this Lease
or in any way defining, limiting, amplifying, construing, or describing the
provisions hereof. Time is of the essence of this Lease and every term, covenant
and condition hereof. The words "Landlord" and "Tenant," as herein used, shall
include the plural as well as the singular. The neuter gender includes the
masculine and feminine. In the event there is more than one person or entity
which executes this Lease as Tenant, the obligations to be performed and
liability of all such persons and entities shall be joint and several. All of
the covenants of Tenant here under shall be and deemed construed to be
"conditions" as well as "covenants" as though the words specifically expressing
or importing conditions were used in each separate instance. Landlord and Tenant
agree that in the event any term, covenant or condition herein contained (other
than with respect to the payment of Rent) is held to be invalid or void by any
court of competent jurisdiction, the invalidity of any such term, covenant or
condition shall in no way affect any other term, covenant or condition herein
contained.
28.02 Amendments. This Lease contains and embodies the entire agreement of
the parties hereto, and no representation, inducements or agreements, oral or
otherwise, not contained in this Lease shall be of any force or effect. This
Lease may not be modified in whole or in part in any manner other than by an
instrument in writing duly signed by both parties hereto.
ARTICLE 29.
REAL ESTATE BROKERS
Tenant represents and warrants unto Landlord that Tenant has directly
dealt with and only with the Broker(s), if any, identified in Article 1 of this
Lease as broker in connection with this Lease, and agrees to indemnify and hold
harmless Landlord from and against any and all claims or demands, damages,
liabilities and expenses of any type or nature whatsoever arising by reason of
the incorrectness or breach of the aforesaid representation or warranty.
Landlord shall pay, and agrees
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to indemnify and hold harmless Tenant from and against any claim by the
Broker(s) for its commission arising out of the execution and delivery of this
Lease pursuant to a separate agreement between Landlord and Broker.
ARTICLE 30.
MISCELLANEOUS
30.01 BENEFIT. Subject to the provisions of Articles 19 and 20 hereof, all
terms, covenants and conditions on this Lease shall be binding upon and inure
to the benefit of and shall apply to the respective heirs, executors,
administrators, successors, assigns and legal representatives or Landlord and
Tenant.
30.02 EXECUTION AND DELIVERY. The execution of this Lease by Tenant and
delivery of the same to Landlord or Landlord's Management Agent do not
constitute a reservation of or option to lease the Premises or an agreement by
Landlord to enter into a Lease, and this Lease shall become effective only if
and when Landlord executes and delivers a counterpart hereof to Tenant;
provided, however, the execution and delivery by Tenant of this Lease to
Landlord or Landlord's Management Agent shall constitute an irrevocable offer
by Tenant to lease the Premises on the terms and conditions herein contained,
which offer may not be withdrawn or revoked for thirty (30) days after such
execution and delivery. If Tenant is a corporation, it shall deliver to
Landlord concurrently with the delivery to Landlord of an executed Lease, a
certified resolution of Tenant's directors authorizing execution and delivery
of this Lease and the performance by Tenant of its obligations hereunder. If
Tenant is a partnership, it shall deliver to Landlord concurrently evidence of
execution and performance authority. Tenant shall not record this Lease or any
memorandum or other evidence hereof.
30.03 DEFAULT UNDER OTHER LEASE. If the term of any lease (other than this
Lease) made by Tenant for any demised premises in the Building shall be
terminated or terminable after the making of this Lease, because of any default
by Tenant under such other lease, such fact shall empower Landlord, at
Landlord's sole option, to declare this Lease to be in default by written
notice to Tenant.
30.04 APPLICABLE LAW. This Lease shall be governed by and construed in
accordance with the laws of the state in which the Building is located.
30.05 LATE CHARGES AND DEFAULT INTEREST. At the option of Landlord, Landlord
may impose a late payment fee equal to the lesser of five percent (5%) of the
amount due or the maximum amount permitted by applicable law if any payment of
Rent is paid more than five (5) days after its due date. In addition, any
amount due hereunder shall bear interest after default in the payment thereof
at the annual rate of the lesser of (i) the rate of eighteen percent (18%) per
annum or (ii) the maximum lawful interest rate permitted by applicable law.
30.06 NON-WAIVER OF DEFAULTS. No waiver of any provision of this Lease shall
be implied by any failure of Landlord to enforce any remedy on account or the
violation of such provision, even if such violation be continued or repeated
subsequently, and no express waiver shall affect any provision other than the
one specified in such waiver and in that event only for the time and in the
manner specifically stated. No receipt of monies by Landlord from Tenant
after the termination of this Lease will in any way alter the length of the
Term of Tenant's right of possession hereunder or, after the giving of any
notice, shall reinstate, continue or extend the Term or affect any notice given
Tenant prior to the receipt of such monies, it being agreed that after the
service of notice or the commencement of a suit or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of Rent shall not waive or affect said notice, suit or judgment,
nor shall any such payment be deemed to be other than an account of the amount
due, nor shall the acceptance of Rent be deemed a waiver of any breach by
Tenant of any term, covenant or condition of this Lease. No endorsement or
statement on any check or any letter accompanying any check or payment of Rent
shall be deemed an accord and satisfaction. Landlord may accept any such check
or payment without prejudice to Landlord's right to recover the balance due of
any installment or payment of Rent or pursue any other remedies available to
Landlord with respect to any existing Defaults. None of the terms, covenants
or conditions of this Lease can be waived by either Landlord or Tenant except
by appropriate written instrument.
30.07 FORCE MAJEURE. Neither Landlord nor Tenant shall not be deemed in
default with respect to the failure to perform any of the terms, covenants and
conditions of this Lease on its part to be performed, if such failure is due in
whole or in part to any strike, lockout, labor dispute (whether legal or
illegal), civil disorder, inability to procure materials, failure of power,
restrictive governmental laws and regulations, riots, insurrections, war, fuel
shortages, accidents, casualties, Acts of God, acts caused directly or
indirectly by the other (or the other's agents, employees, guest or invitees),
acts of other tenants or occupants of the Building or any other cause beyond
reasonable control. In such event, the time for performance shall be extended
by an amount of time equal to the period of the delay so caused. Except to
extent such release is prohibited by law, Landlord shall not be liable to
Tenant for any expense, injury, loss or damage resulting from work done in or
upon, or the use of, any adjacent or nearby building, land, street, alley or
underground vault or passageway. The foregoing shall not limit, reduce, or
otherwise affect Tenant's obligation to make payments due under this Lease,
except for abatement provided for in Sections 8.04, 12.01, and 13.02.
30.08 LANDLORD'S RIGHT TO PERFORM TENANT'S DUTIES. If Tenant fails timely to
perform any of its duties under this Lease, Landlord shall have the right (but
not the obligation), after the expiration of any grace period specifically
provided by this Lease, to perform such duty on behalf and at the expense of
Tenant without further notice to Tenant, and all sums expended or expenses
incurred by Landlord in performing such duty shall be deemed to be Rent under
this Lease and shall be due and payable to Landlord upon demand by Landlord.
30.09 RIDER, WORK LETTER AND EXHIBITS. Any Rider, Work Letter and/or Exhibit
attached hereto are hereby
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incorporated in this Lease by reference.
30.10 FINANCIAL STATEMENTS. Tenant shall, when requested by Landlord from
time to time, furnish a true and accurate audited statement of its financial
condition prepared in conformity with generally accepted accounting principles
and in a form reasonably satisfactory to Landlord.
30.11 RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall create
any relationship between the parties hereto other than that of Landlord and
Tenant, and it is acknowledged and agreed that Landlord shall not be deemed to
be a partner of Tenant in the conduct of its business, or a joint venturer or a
member of a joint or common enterprise with Tenant.
30.12 NO RECORDING. Tenant shall not record this Lease or any memorandum
thereof without the prior written consent of Landlord.
30.13 HAZARDOUS WASTE. During the term of the Lease, Tenant shall comply with
all statutes, ordinances, rules, orders, regulations and requirements of the
federal, state, county and city governments and all departments thereof
applicable to the presence, storage, use, maintenance and removal of petroleum
or petroleum products, natural or synthetic gas, urea formaldehyde foam
insulation, radon gas, asbestos, PCB transformers, other toxic, hazardous,
contaminated or pollutant substances, and underground storage tanks
(collectively, "Hazardous Materials") in, on or about the Premises, which
generation treatment, release, presence, storage, use, maintenance, removal or
disposition is caused or permitted by Tenant. In no event shall the aforesaid
be construed to mean that Landlord acquiesces, has given or will give its
consent or that Tenant need not obtain Landlord's consent prior to Tenant's
storing, using, maintaining, or removing Hazardous Materials in, on or about
the Premises, and Tenant shall not store, use, maintain, or remove Hazardous
Materials in, on or about the Premises. Tenant agrees to indemnify and forever
hold harmless Landlord, its agents, successors, and assigns, and Landlord's
Mortgagee(s), as their interest may appear, from all claims, losses, damages,
expenses and costs, including, but not limited to, losses, damages, expenses and
costs, incurred by reason of Tenant's use, storage, maintenance or removal of
Hazardous Materials in, on, or about the Premises, or any part of the Property.
30.14 BANKRUPTCY. Landlord and Tenant understand that, notwithstanding certain
provisions to the contrary contained herein, a trustee or debtor in possession
under the United States Bankruptcy Code ("Code") may have certain rights to
assume or assign this Lease. Landlord and Tenant further understand that, in
such event, Landlord is entitled under the Code to adequate assurance of future
performance of the terms and provisions of this Lease. The parties hereto agree
that, with respect to any such assumption or assignment, the term "adequate
assurance" shall include at least the following: (1) since the financial
condition and resources of Tenant were a material inducement to Landlord in
entering into this Lease, in order to assure Landlord that the proposed assignee
will have the resources with which to pay all Rent payable pursuant to the terms
hereof, any proposed assignee must have, as demonstrated to Landlord's
satisfaction, a net worth (as defined in accordance with generally accepted
accounting principles consistently applied) of not less than the net worth of
tenant on the date this Lease became effective, increased by seven percent (7%),
compounded annually, for each year from the Commencement Date through the date
of the proposed assignment; (2) since Landlord's asset will be substantially
impaired if the trustee in bankruptcy or any assignee of this Lease makes any
use of the Premises other than the Permitted Use, any proposed assignee must
have been engaged in the conduct of business for the five (5) years prior to any
such proposed assignment, which business does not violate the Permitted Use, and
such proposed assignee shall continue to engage in the Permitted Use; and (3)
any proposed assignee of this Lease must assume and agree to be personally bound
by the terms, covenants and provisions of this Lease.
30.15 LANDLORD'S CONTINGENCY. Tenant acknowledges and agrees that the terms
and conditions of this Lease are specifically contingent upon the approval by
Landlord's Mortgagee(s) of this Lease. Accordingly, in the event that
Landlord's Mortgagee(s) fails to approve this Lease, this Lease shall
automatically terminate and be of no further force or effect.
30.16 SECURITY. LANDLORD SHALL HAVE NO RESPONSIBILITY TO PREVENT, AND SHALL
NOT BE LIABLE TO TENANT, ITS AGENTS, EMPLOYEES, CONTRACTORS, VISITORS OR
INVITEES FOR, LOSSES DUE TO THEFT OR BURGLARY, OR FOR DAMAGES OR INJURY TO
PERSONS OR PROPERTY DONE BY PERSONS GAINING ACCESS TO THE PREMISES OR THE
BUILDING, AND TENANT HEREBY RELEASES LANDLORD FROM ALL LIABILITY FOR SUCH
LOSSES, DAMAGES OR INJURY, EVEN IF CAUSED BY LANDLORD'S NEGLIGENCE, EXCEPT TO
EXTENT SUCH WAIVER IS PROHIBITED BY LAW.
30.17 LIMITATION ON WARRANTIES. LANDLORD'S DUTIES AND WARRANTIES ARE LIMITED
TO THOSE EXPRESSLY STATED IN THIS LEASE AND SHALL NOT INCLUDE ANY IMPLIED DUTIES
OR IMPLIED WARRANTIES, NOW OR IN THE FUTURE. NO REPRESENTATIONS OR WARRANTIES
HAVE BEEN MADE BY LANDLORD OTHER THAN THOSE CONTAINED IN THIS LEASE. TENANT
HEREBY WAIVES ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE
PREMISES WHICH MAY EXIST BY OPERATION OF LAW OR IN EQUITY, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF HABITABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the day and year first above written.
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LANDLORD: TENANT:
THE UTAH STATE RETIREMENT THE HOTEL INDUSTRY SWITCH COMPANY
INVESTMENT FUND,
an independent agency of the By: /s/ JOHN F. DAVIS, III
State of Utah --------------------------------
Name: John F. Davis, III
By: CB Commercial Realty Title: President
Advisors, Inc., a Delaware
corporation, Agent
By: /s/ MATTHEW C. HURLBUT
- --------------------------------
Name: Matthew C. Hurlbut
Title Vice President
By: /s/ JOSEPH W. MARKLING
- --------------------------------
Name: Joseph W. Markling
Title: First Vice President
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EXHIBIT A
LEGAL DESCRIPTION
BEING a tract of land situated in the City of Dallas, Dallas County, Texas, and
being part of the W. Grigsby Survey, Abstract 501, and also being part of Block
1345 in the City of Dallas, and being the tracts of land conveyed to Turtle
Creek Square Limited, an Illinois partnership, with Turtle Creek Square, Inc.,
a Texas corporation, sole general partner, by deed dated 8/31/79, and recorded
in Volume 79172, Page 580, Deed Records, Dallas County, Texas, and being more
particularly described as follows:
BEGINNING at the intersection of the Northeasterly Line of Blackburn Street
with the Northwesterly Line of Turtle Creek Boulevard;
THENCE N 44 degrees 35' 00" W along said Northeasterly line of Blackburn Street
a distance of 326.65 feet to an iron rod set for corner;
THENCE N 45 degrees 25' 00" E departing along said Northeasterly Line of
Blackburn Street a distance of 1.92 feet to an iron rod set for corner, said
iron rod also being the beginning of a curve to the right;
THENCE along said curve to the right having a central angle of 40 degrees
22' 00", a radius of 70.00 feet and an arc length of 49.32 feet to an iron rod
set for corner;
THENCE N 85 degrees 47' 00" E a distance of 110.25 feet to an iron rod set for
corner, said iron rod also being the beginning of a curve to the left;
THENCE along said curve to the left having a central angle of 74 degrees 47'
00", a radius of 110.00 feet, and an arc length of 143.57 feet to an iron rod
set for corner;
THENCE N 11 degrees 00' 00" E a distance of 438.38 feet to an iron rod set for
corner;
THENCE S 79 degrees 00' 00" E a distance of 132.75 feet to an iron rod set for
corner;
THENCE S 11 degrees 00' 00" W a distance of 92.16 feet to an iron rod set for
corner;
THENCE S 79 degrees 00' 00" E a distance of 13.00 feet to an iron rod set for
corner;
THENCE S 11 degrees 00' 00" W a distance of 17.60 feet to an iron rod set for
corner;
THENCE S 79 degrees 00' 00" E a distance of 364.33 feet to an iron rod set for
corner situated in said Northwesterly Line of Turtle Creek Boulevard;
THENCE S 22 degrees 44' 30" W along said Northwesterly Line of Turtle Creek
Boulevard a distance of 212.69 feet to an iron rod set for corner;
THENCE N 79 degrees 00' 00" W departing said Northwesterly Line of Turtle Creek
Boulevard a distance of 309.80 feet to an iron rod set for corner;
THENCE S 11 degrees 00' 00" W a distance of 16.00 feet to an iron rod set for
corner;
THENCE N 79 degrees 00' 00" W a distance of 33.0 feet to an iron rod set for
corner;
THENCE S 11 degrees 00' 00" W a distance of 102.00 feet to an iron rod set for
corner;
THENCE N 79 degrees 00' 00" W a distance of 12.99 feet to an iron rod set for
corner;
THENCE S 33 degrees 30' 00" W a distance of 92.76 feet to an iron rod set for
corner;
THENCE S 56 degrees 30' 00" E a distance of 113.36 feet to an iron rod set for
corner;
THENCE S 33 degrees 30' 00" W a distance of 57.96 feet to an iron rod set for
corner;
THENCE S 56 degrees 30' 00" E a distance of 39.57 feet to an iron rod set for
corner;
THENCE N 86 degrees 57' 48" E a distance of 53.17 feet to an iron rod set for
corner;
THENCE S 56 degrees 35' 49" E a distance of 30.82 feet to an iron rod set for
corner;
THENCE S 56 degrees 30' 00" E a distance of 90.43 feet to an iron rod set for
corner situated in said Northwesterly Line of Turtle Creek Boulevard, said iron
rod also the beginning of a curve to the right;
THENCE along said Northwesterly Line of Turtle Creek Boulevard the following:
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Along said curve to the right having a central angle of 26 degrees 48' 58", a
radius of 274.10 feet and an arc length of 128.13 feet to an iron rod set for
corner;
S 84 degrees 44' 30" W a distance of 56.00 feet to an iron rod set for corner,
said iron rod the beginning of a curve to the left;
Along said curve to the left having a central angle of 23 degrees 25' 02", a
radius of 403.34 feet an arch length of 164.85 feet to the POINT OF BEGINNING
and containing 5.0237 acres or 218,831 square feet of land, more or less.
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EXHIBIT 1
FLOOR PLAN
[FLOOR PLAN]
TURTLE CREEK CENTRE FLOOR 11
14,386 USF 2/21/92
14,875 RSF
[FLOOR PLAN]
TURTLE CREEK CENTRE FLOOR 12
12,498 USF
14,875 RSF
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EXHIBIT 2
THIRD FLOOR ROFR AREA
[FLOOR PLAN]
TURTLE CREEK CENTRE FLOOR 3
12,577 USF
14,653 RSF
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EXHIBIT 3
RULES AND REGULATIONS
(1) Tenant shall not, whether temporarily, accidentally or
otherwise, allow anything to remain in, place or store anything in, or obstruct
in any way, any portion of the Building other than the Premises, including any
sidewalk, plaza area, driveway, passageway, entrance, exit, stairway, lobby,
corridor, hall, elevator, shipping platform, truck concourse or vault area in or
about the Building. All passageways, entrances, exits, elevators, stairways,
corridors, halls and roofs of the Building are not for the use of the general
public, and Landlord shall in all cases retain the right to control and prevent
access thereto by all persons in whose presence, in the judgment of Landlord,
shall be prejudicial to the safety, character, reputation or other interests of
the Building, its tenants or Landlord; provided, however, that nothing herein
contained shall be construed to prevent ingress and egress to persons with whom
Tenant deals within the normal course of Tenant's business. Tenant shall not
enter nor permit its employees, agents, guests or invitees to enter into areas
of the Building designated for the exclusive use of Landlord, its employees,
guests or invitees. Tenant shall not use, nor permit the use by its employees,
agents, guests or invitees, if any common area in the Building other than for
access to and from the Premises. No bicycle or motorcycle shall be brought into
the Building or kept on the Premises without the consent of Landlord.
(2) No deliveries of any nature nor freight, furniture or bulky
matter of any description will be received into the Building or carried into the
elevators except in such a manner, during such hours and using only the freight
elevators and those passageways as may be approved by Landlord, and then only
upon having been scheduled in advance. Any hand trucks, carryalls or similar
appliances used for the delivery or receipt of merchandise, supplies or
equipment shall be equipped with rubber tires, side guards and such other
safeguards as Landlord shall require.
(3) Tenant, or the employees, agents, servants, visitors or
licensees of Tenant shall not at any time place, leave or discard any rubbish,
paper, articles, or objects of any kind whatsoever outside the doors of the
Premises or in the corridors or passageways of the Building. No animals
(except for guide dogs for sight impaired persons) of any kind shall be brought
or kept in or about the Building. Tenant shall not permit any noise, odor or
litter which is objectionable to Landlord or other tenants of the Building to
emanate from the Premises.
(4) Any person in the Building will be subject to identification
by employees and agents of Landlord. All persons in or entering the Building
shall be required to comply with the security policies of the Building. Tenant
shall keep doors to unattended areas locked and shall otherwise exercise
reasonable precautions to protect property from theft, loss, or damage. Tenant
shall not attach or permit to be attached additional locks or similar devices to
any door or window, change existing locks or the mechanism thereof, or make or
permit to be made any keys for any door other than those provided by Landlord.
If more than two keys for one lock area desired, Landlord will provide them upon
payment therefor by Tenant. Upon termination of this Lease, or of the Tenant's
possession, the Tenant shall surrender to Landlord all keys to the Premises.
Landlord shall not be responsible for the theft, loss or damage of any property.
Landlord may at all times keep a pass key to the Premises. Canvassing,
soliciting or peddling in the Building is prohibited, and Tenant shall cooperate
to prevent same.
(5) Except for portions of the Premises specifically designated by
Tenant and consented to in writing by Landlord in advance to be used for an
employee kitchen or lounge area, Tenant shall not cook, sell, purchase or
permit the preparation, sale or purchase of food on the Premises.
(6) Tenant shall not mark, paint, drill into or in any way deface
any part of the Building or Premises. No boring, driving of nails or screws,
cutting or stringing of wires shall be permitted, except with the prior written
consent of Landlord, and as Landlord may direct. Tenant shall not install any
resilient tile or similar floor covering in the Premises except with the prior
approval of Landlord.
(7) Tenant shall give immediate notice to Landlord in case of
theft, unauthorized solicitation or accident in the Premises or in the Building
or of defects therein or in any fixtures or equipment, or of any known
emergency in the Building.
(8) Tenant shall not use the Premises or permit the Premises to be
used for any other purpose than the Permitted Use, without Landlord's prior
permission.
(9) Tenant shall not advertise for laborers giving the Premises as
an address, nor pay such laborers at a location in the Premises.
(10) The requirements of Tenant will be attended to only upon
application at the office of Landlord in the Building. Employees of Landlord
shall not perform any Work or do anything outside of their regular duties,
unless under special instructions from the office of Landlord.
(11) Tenant shall at all times keep the Premises neat and orderly.
(12) Tenant shall not make excessive noises, cause disturbances or
vibrations or use or operate any electrical or mechanical devices that emit
excessive sound or other waves or disturbances or create obnoxious odors, any
of which may be offensive to the other tenants and occupants of the Building,
or that would interfere with the operation of any device, equipment, radio,
television broadcasting or reception from or within the Building or elsewhere
and shall not place or install any projections, antennas, aerials or similar
devices inside or outside of the Premises or on the Building without Landlord's
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prior written approval.
(13) Tenant shall comply with all applicable federal, state and
municipal laws, ordinances and regulations, and building rules and shall not
directly or indirectly make any use of the Premises which may be prohibited by
any of the foregoing or which may be dangerous to persons or property or may
increase the cost of insurance or require additional insurance coverage. Tenant
shall not use, suffer or permit the Premises or any part hereof to be used for
the manufacture, sale or distribution by gift or otherwise of any spirituous,
fermented or intoxicating liquors or any drugs. Tenant shall not bring or store
firearms of any kind into the Building. Tenant shall not use the Premises for
the manufacture, distribution or sale of any merchandise or other materials.
Tenant shall not install any equipment utilizing an ammonia or other process
necessitating venting. Tenant shall not permit any odors, acids, vapors or
other gases or materials to be discharged from the Premises into the common
areas, waste lines, vents, flues or other tenant spaces in the Building. Tenant
shall not use, suffer or permit the use of the Premises or any part thereof for
housing accommodations, for lodging or sleeping purposes or for any immoral or
illegal purpose.
(14) The water and wash closets, drinking fountains and other
plumbing fixtures shall not be used for any purpose other then those for which
they were constructed, and no sweepings, rubbish, rags, coffee grounds or other
substances shall be thrown therein. All damages resulting from any misuse of
the fixtures shall be borne by the Tenant who, or whose servants, employees,
agents, visitors or licensees, shall have caused the same. No person shall waste
water by interfering or tampering with the faucets or otherwise.
(15) Tenant, its servants, employees, customers, invitees and
guests shall, when using the parking facilities in and around the building,
observe and obey all signs regarding fire lanes and no parking zones, and when
parking always park between the designated lines. Landlord reserves the right
to tow away, at the expense of the owner, any vehicle which is improperly
parked or parked in a no-parking zone. All vehicles shall be parked at the sole
risk of the owner, and Landlord assumes no responsibility for any damage to or
loss of vehicles, except to the extent of Landlord's gross negligence.
(16) Except as otherwise provided in the Lease, Tenant shall not
employ persons to do janitor, repair or decorating work in the Premises, and no
persons other than the janitors or contractors designated by Landlord shall
clean, decorate, remodel or repair the Premises without prior written consent
of Landlord.
(17) Tenant shall not install or operate any refrigerating, heating
or air-conditioning equipment, nor any equipment of any type or nature that
will or may necessitate any changes, replacements or additions to, or in the
use or, the water system heating system, plumbing system, air-conditioning
system or electrical system of the Premises or the Building, without first
obtaining the prior written consent of Landlord. Business machines and
mechanical equipment belonging to or installed by or at the direction of Tenant
that cause noise or vibration capable of being transmitted to the structure of
the Building or to any space therein to such a degree as to be objectionable to
Landlord or to any tenant in the Building shall be installed and maintained by
Tenant, at Tenant's expense, on vibration eliminators or other devices
sufficient to reduce such noise and vibration to a level satisfactory to
Landlord and such other tenants.
(18) Landlord reserves the right to prescribe and to approve the
weight, size and location of safes, book shelves and other heavy equipment,
fixtures and articles in and about the Premises and the Building and to require
all such items to be moved in and out of the Building and the Premises only at
such times and in such manner as Landlord shall direct and in all events at
Tenant's sole risk and responsibility. Tenant shall not overload any floors.
(19) Tenant shall not, without the prior written consent of
Landlord, install any shades, draperies, blinds or other window covering,
awning, sign, lettering, picture, notice, advertisement or object unacceptable
to Landlord on or against glass partitions, doors or windows that would be
visible outside the Premises or any sign, lettering, picture, notice or
advertisement within the Premises that would be visible outside the Premises.
Landlord shall have the right to prohibit any advertisement of or by Tenant in
any public media, by direct solicitation or otherwise, which advertisement, in
Landlord's opinion, tends to impair the reputation of Building or its
desirability as a high-quality office building. Upon written notice from
Landlord, Tenant shall immediately refrain from and discontinue any such
advertisement.
(20) Landlord reserves the right to rescind, add to and amend any
rules or regulations, to add reasonable new rules or regulations, and to waive
any rules or regulations with respect to any tenant or tenants.
(21) The Building shall be a no-smoking building, with no smoking
allowed in the Premises or in any other area of the Building, including any
exterior portions thereof, provided that Landlord may provide for a smoking
area, in which case Tenant shall ensure that its employees smoke only in such
smoking area.
31
EXHIBIT 4
Work Letter
The terms used herein shall have the meanings ascribed to them
in the Lease, unless otherwise stated herein.
1. Construction of the Premises. The Landlord and the
Tenant agree that their respective rights and obligations in reference to the
construction of the Premises shall be as provided herein. Floor 11 either is
complete or will be subject to a minor amount of work. None of such work will
have an impact on the Commencement Date for Floor 11, which shall be the date
provided in Section 1.08. The Allowance, as defined below, shall be determined
based on the square footage of both Floor 11 and Floor 12, though Landlord and
Tenant acknowledge and agree that Tenant need not spend it equally on the cost
of work on Floor 11 and Floor 12, but may spend proportionally more on Floor
12. In addition, the Landlord's Work will be completed in phases and Tenant
shall be entitled to apply those portions of the Allowance not spent in early
phases to the cost of the work in later phases.
1.01 Tenant's Plans and Specifications.
(a) Landlord shall cause to be prepared detailed
architectural, telephone, mechanical and engineering plans including all
dimensions and specifications for all work to be performed by Landlord in the
Premises substantially in accordance with the space plan provided by Tenant or
Tenant's architect and previously submitted to Landlord ("Plans").
(b) Tenant shall cooperate as necessary in connection
with the preparation of the Plans, in a complete and timely manner, and without
limiting the foregoing, shall provide to Landlord all information as shall be
required by Landlord's engineers to prepare mechanical plans pursuant to
Section 1.02 hereof, which information shall include, but not be limited to,
the following:
(1) any special floor-loading conditions which
may exceed the structural weight limits of the floor.
(2) specifications of any heat emanating
equipment to be installed by Tenant which may require special air conditioning,
(3) electrical specifications of any equipment
that requires non-standard electrical power outlets, and
(4) complete specifications of any data-line
wiring required, including cable routing, conduit size, cable type and similar
items (provided Landlord shall have the right to approve but shall not perform,
and the Landlord's Work, as hereinafter defined, shall exclude all data-line
wiring and cable routing in and to the Premises).
(c) The Plans shall be delivered to Tenant for its review
and consideration as soon as reasonably possible. Any change or modification of
such Plans shall not be valid or binding unless consented to by Landlord in
writing.
1.02 Landlord's Work.
(a) Landlord shall furnish and install substantially in
accordance with the Plans the materials and items described therein
("Landlord's Work"). The Plans, the costs of Tenant's space plan, Landlord's
Work, and the installation of cable described in Section 1.01 (b)(4), shall be
at Tenant's sole cost and expense, provided that Tenant shall be entitled to a
credit against the cost of the Plans, the costs of Tenant's space plan,
Landlord's Work, and the installation of cable described in Section 1.01(b)(4),
in an amount up to the lesser of (a) $178,500, (i.e., $6.00, multiplied by the
area of the Premises) or (b) the actual costs of the Plans and the Landlord's
Work (the "Allowance").
(b) If Landlord determines that the cost of the
Landlord's Work, will exceed the Allowance, then prior to commencement of the
Landlord's Work, Landlord will submit to Tenant a cost estimate for the
Landlord's Work ("Cost Estimate") which Tenant shall approve or reject within
seven (7) days after receipt thereof. It is understood that the cost of
Landlord's Work shall include Landlord's then applicable construction
supervision fee which shall not exceed four percent (4%) of the total cost of
the Landlord's Work, the cost of Tenant's space plan, the cost of the Plans,
and the costs of the installation of the cable described in Section 1.01(b)(4).
Tenant's failure to reject the Cost Estimate within said seven (7) day period
shall be to be an acceptance thereof. If Tenant rejects the Cost Estimate,
Tenant shall, together with such rejection, propose such changes to the Plans
as will cause the Cost Estimate to be acceptable. If the accepted Cost exceeds
the Allowance, then Tenant shall pay to Landlord the amount of such excess
within ten (10) business days after receipt by Tenant of a bill therefor, but
in no event later than the Commencement Date.
1.03 Extra Work.
(a) Tenant may request substitutions, additional or extra
work and/or materials over and above Landlord's Work ("Extra Work") to be
performed by Landlord provided that the Extra Work, in Landlord's judgment, (1)
shall not delay completion of Landlord's Work or the Commencement Date of the
Lease; (2) shall be practicable and consistent with existing physical
conditions in the Building and any other plans for the Building which have been
filed with the appropriate municipality or other governmental authorities
having jurisdiction thereover (3) shall not impair Landlord's ability to
perform any of Landlord's obligation hereunder or under the Lease or any other
lease of space in the Building; and (4) shall not affect any portion of the
Building other than the Premises.
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(b) (1) In the event Tenant requests Landlord to perform
Extra Work and if Landlord accedes to such request, then and in that event,
prior to commencing such Extra Work, Landlord shall submit to Tenant a written
estimate ("Estimate") for said Extra Work to be performed. Within seven (7)
days after Landlord's submission of the Estimate, Tenant shall, in writing,
either accept or reject the Estimate. Tenant's failure either to accept or
reject the Estimate within said seven (7) day period shall be deemed rejection
thereof.
(2) In the event that Tenant rejects the Estimate or the
Estimate is deemed rejected, Tenant shall within seven (7) days after such
rejection propose to Landlord such necessary revisions of the Plans so as to
enable Landlord to proceed as though no such Extra Work had been requested.
Should Tenant fail to submit such proposals regarding necessary revisions of
the Plans within said seven (7) day period, Landlord, in its sole discretion,
may proceed to complete Landlord's Work in accordance with the Plans already
submitted, with such variations as in Landlord's sole discretion may be
necessary so as to eliminate the Extra Work.
(c) (1) All Extra Work shall require the installation of new
materials at least comparable to Building standards and any substitution shall
be of equal or greater quality than that for which it is substituted.
(2) Tenant may request the omission of an item of
Landlord's Work, provided that such omission shall not delay the completion of
Landlord's Work and Landlord thereafter shall not be obligated to install the
same. Credits for items deleted or not installed shall be granted in amounts
equal to credits obtainable from subcontractors or materialmen. In no event
shall there be any cash credits.
(d) In the event Landlord performs Extra Work hereunder,
Tenant shall pay to Landlord, upon acceptance of the Estimate or submission of
Landlord's bid therefor, as the case may be, a sum equal to twenty percent
(20%) of the Estimate or bid price to the extent the Estimate together with the
amount set forth in the Cost Estimate exceeds the Allowance. In the event of
any such excess, Tenant shall pay to Landlord such excess cost for the Extra
Work within seven (7) days after receipt by Tenant of a bill therefore or at
such other time or times as agreed to, but in no event shall the entire balance
be paid later than the completion of the Extra Work.
2. COMPLETION-PUNCH LIST. When the Landlord is of the opinion
that the Landlord's Work is complete, then the Landlord shall so notify the
Tenant. The Tenant agrees that upon such notification, the Tenant promptly (and
not later than two (2) business days after the date of Landlord's said notice)
will inspect the Premises and furnish to the Landlord a written statement that
the Landlord's Work have been completed and are complete as required by the
provisions of this EXHIBIT 4 and the Lease with the exception of certain
specified and enumerated items (hereinafter referred to as the "Punch List").
The Tenant agrees that at the request of the Landlord from time to time
thereafter, the Tenant will indicate in writing to Landlord whether any prior
Punch List items have been completed. If the Punch List consists only of items
which would not materially impair the Tenant's use or occupancy of the
Premises, then, in such event, the Landlord's Work shall be deemed complete and
Tenant shall be deemed to have accepted possession of the Premises, provided,
Landlord shall promptly complete all such Punch List items; provided, however,
that in no event shall Landlord be obligated to repair latent defects, not
originally listed on the Punch List, beyond a period of six (6) months after
the Completion Date. The date on which the Landlord's Work is complete,
pursuant to the provisions of this subsection, is sometimes referred to as the
"Date of Substantial Completion" or "Substantial Completion Date." The
Landlord's Work shall be deemed to be substantially complete and the Date of
Substantial Completion will be deemed to have occurred upon the issuance of a
certificate of occupancy or other similar license, permit, or authorization.
Promptly after the Substantial Completion Date, upon Landlord's request, Tenant
will execute an instrument in the form attached hereto as EXHIBIT 4.1, setting
forth the Commencement Date of the Lease, so that said date is certain and such
instrument, when executed, is hereby made part of this Lease and incorporated
herein by reference.
3. POSSESSION-EXTENSION OF TERM AND ACKNOWLEDGMENTS.
(a) The Tenant will take possession of the Premises as of and
on the Commencement Date which, as set forth in Section 1.08 of the Lease,
shall be the later of (a) the date set forth in Section 1.08(a) or (b) the date
which is two (2) days following the Date of Substantial Completion of the
Landlord's Work as to 6917 rentable square foot area on Floor 12, but in no
event later than February 1, 1996. Landlord has not agreed or represented that
the Premises will be substantially ready for occupancy on the date specified in
Section 1.08(a) of the Lease. If for any reason whatsoever the Landlord's Work
as to such 6917 rentable square feet on Floor 12 is not complete on said date,
this Lease shall nevertheless continue in full force and effect, and no
liability shall arise against Landlord because of any such delay, provided,
however, that all Rent due hereunder shall abate on a per diem basis and, as
hereinabove provided, the Commencement Date shall be deferred until the Date of
Substantial Completion of the Landlord's Work as to such 6917 rentable square
foot area on Floor 12. Notwithstanding the foregoing, there shall be no
abatement of Rent and no deferral of the Commencement Date if the Landlord's
Work is not substantially complete due to any special equipment, fixtures or
materials, changes, alterations or additions requested by Tenant, any delay of
Tenant in submitting information necessary for the preparation of the Plans,
the failure of Tenant to timely approve or reject the Cost Estimate, the
failure of the Tenant to submit revisions following rejection or deemed
rejection of the Estimate, the requirement of Tenant for any Extra Work, or the
failure of the Tenant in supplying information of approving or authorizing
plans, specifications, estimates or other matters, or any other act or omission
of Tenant ("Tenant Delay"). If Tenant shall occupy all or any part of the
Premises prior to the Commencement Date, all of the covenants and conditions of
this Lease, including the obligation to pay Rent, shall be binding upon the
parties hereto in respect to such occupancy as if the first day of the Term had
been the date when Tenant began such occupancy.
(b) In the event the Date of Substantial Completion of the
Landlord's Work as to such 6917 rentable square foot area on Floor 12, or the
date Landlord's Work would have been complete but for any Tenant Delays, is
later than the date setforth in Section 1.08(a) of the Lease, (1) the Date of
Substantial Completion of the Landlord's Work as to such
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6917 rentable square foot area on Floor 12, shall be modified to be the earlier
of the Date of Substantial Completion of the Landlord's Work as to such 6917
rentable square foot area on Floor 12, or the date Landlord's Work would have
been complete but for any Tenant Delays and Monthly Base Rent, Expense
Adjustment, and Electrical Cost will commence accordingly, (2) the Expiration
Date shall be on the last day of the calendar month in which the original Term
as set forth in Article I would expire if it were measured from the earlier of
the Date of Substantial Completion of the 6917 rentable square foot area on
Floor 12, or the date Landlord's Work would have been complete but for any
Tenant Delays, and (3) the Term shall be modified to be the period from the Date
of Substantial Completion of the 6917 rentable square foot area on Floor 12 to
the Expiration Date. Promptly after the Date of Substantial Completion of the
6917 rentable square foot area on Floor 12, the parties will execute an
instrument in the form attached as Addendum 1 hereto, setting forth the
Expiration Date of the Lease, as so modified, so that said dates are certain
and such instrument, when executed, is hereby made a part of this Lease and
incorporated herein by reference.
4. TENANT'S ENTRY PRIOR TO COMPLETION DATE. Landlord may permit
Tenant or its agents or laborers to enter the Premises at Tenant's sole risk
prior to the Commencement Date in order to perform through Tenant's own
contractors such work as Tenant may desire, at the same time that Landlord's
contractors are working in the Premises. The foregoing License to enter prior
to the Commencement Date, however, is conditioned upon Tenant's labor not
interfering with Landlord's contractors or with any other tenant or its labor.
If at any time such entry shall cause disharmony. interference or union
disputes of any nature whatsoever, or if Landlord shall, in Landlord's
reasonable judgment, determine that such entry, such work or the continuance
thereof shall interfere with, hamper or prevent Landlord from proceeding with
the completion of the Building or Landlord's Work at the earliest possible
date, this license may be withdrawn by Landlord immediately upon written notice
to Tenant. Such entry shall be deemed to be under and subject to all of the
terms, covenants and conditions of the Lease, and Tenant shall comply with
all of the provisions of the Lease which are the obligations or covenants of
the Tenant, including, but not limited to, the provisions of Section 9.01 of the
Lease, except that the obligation to pay Rent shall not commence until the
Commencement Date. In the event that Tenant's agents or laborers incur any
charges from Landlord, including, but not limited to, charges for use of
construction or hoisting equipment on the Building site, such charges shall be
deemed an obligation of Tenant and shall be collectible as Rent pursuant to the
Lease, and upon default in payment thereof, Landlord shall have the same
remedies as for a default in payment of Rent pursuant to the Lease.
5. LANDLORD'S ENTRY AFTER SUBSTANTIAL COMPLETION. At any time
after the Commencement Date, Landlord may enter the Premises to complete Punch
List items, and such entry by Landlord, its agents, servants, employees or
contractors for such purpose shall not constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any abatement or diminution
of Rent, or relieve Tenant from any obligation under this Lease, or impose any
liability upon Landlord or its agents.
6. DELAYS. Landlord and Tenant mutually acknowledge that the
Landlord's construction process in order to complete the Premises requires a
coordination of activities and a compliance by the Landlord and Tenant without
delay of all obligations imposed upon the Landlord and Tenant pursuant to this
EXHIBIT 4 and that time is of the essence in the performance of Landlord's and
Tenant's obligations hereunder and Landlord's and Tenant's compliance with the
terms and provisions or this EXHIBIT 4.
7. PROVISIONS SUBJECT TO LEASE. The provisions of this EXHIBIT 4
are specifically subject to the provisions of the Lease.
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EXHIBIT 4.1
NOTICE OF LEASE TERM DATES
Re: Office Building Lease (the "Lease") dated _________,199__ between The
Utah State Retirement Investment Fund, an independent agency of the
State of Utah ("Landlord") and _______________ a ____________
corporation ("Tenant") for the premises located at 3811 Turtle Creek
Boulevard, Suite _______, Dallas, Texas and commonly known as Turtle
Creek Centre ("Premises")
The undersigned, as Tenant, hereby confirms as of this _____ day of ______,
199_, the following:
1. The Substantial Completion Date for the Premises occurred on ______,
199_, and Tenant is currently occupying the same.
2. The Commencement Date, Expiration Date, and expiration date of the
Abatement Period, as each is defined in the Lease, are as follows:
Commencement Date:__________________
Expiration Date:____________________
3. All alterations and improvements required to be performed by
Landlord pursuant to the terms of the Lease to prepare the entire Premises
for Tenant's initial occupancy have been satisfactorily completed.
4. As of the date hereof, Landlord has fulfilled all of its obligations
under the Lease.
5. The Lease is in full force and effect and has not been modified,
altered, or amended.
6. There are no offsets or credits against Rent.
LANDLORD:
THE UTAH STATE RETIREMENT INVESTMENT FUND,
an independent agency of the State of Utah
By: CB Commercial Realty Advisors, Inc.
a Delaware corporation, Agent
By: /s/ MATTHEW C. HURLBUT
-----------------------------------------
Its: Vice President
-----------------------------------------
By:
-----------------------------------------
Its:
-----------------------------------------
Date:
-----------------------------------------
TENANT:
-----------------------------------------
-----------------------------------------
By: /s/ JOHN F. DAVIS, III
-----------------------------------------
Its:
-----------------------------------------
Date:
-----------------------------------------
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FIRST AMENDMENT TO OFFICE LEASE
THIS FIRST AMENDMENT TO OFFICE LEASE (this "Amendment") is effective
as of the 25th day of February, 1998 (the "Effective Date"), by and between THE
UTAH STATE RETIREMENT INVESTMENT FUND, an independent agency of the State of
Utah ("Landlord"), and PEGASUS SYSTEMS, INC. ("Tenant").
W I T N E S S E T H:
WHEREAS, Landlord and The Hotel Industry Switch Company ("Original
Tenant") entered into that certain Office Lease (the "Lease") dated October 1,
1995, covering approximately 29,750 square feet of rentable area on the
eleventh (11th) and twelfth (12th) floors in the building (the "Building")
commonly known as Turtle Creek Centre in Dallas, Texas;
WHEREAS, Original Tenant assigned all of its interests under the Lease
to Tenant; and
WHEREAS, Landlord and Tenant desire to modify the terms of the Lease
to expand the Premises and to modify certain other provisions of the Lease as
set forth herein but not otherwise.
NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby mutually acknowledged and confessed, Landlord and Tenant,
intending to be and being legally bound, do hereby agree as follows:
1. Defined Terms. All capitalized terms used herein and not defined
herein shall have the meanings set forth in the Lease.
2. Expansion of Premises. Commencing on the earlier to occur of (a)
July 1, 1998, or (b) two (2) days following the Date of Substantial Completion,
as provided in the Work Letter attached hereto and made a part hereof as
Exhibit B (the "Expansion Date"), Section 1.05 of the Lease shall be amended to
expand the Premises to include an additional 4,585 rentable square feet on the
fifth (5th) floor of the Building (the "Expansion Space") as shown on Exhibit A
attached hereto and incorporated herein, such that the total rentable square
footage of the Premises as of the Expansion Date shall be 34,335 rentable
square feet. The Expansion Space shall be added to and become part of the
Premises for all purposes of the Lease and shall be subject to all of the terms
and conditions contained in the Lease (including, without limitation, the
payment of Monthly Base Rent, Expense Adjustment, and Electrical Cost in
accordance with Article 1 and Article 4 of the Lease as modified herein),
subject to the modifications contained in this Amendment.
3. Lease Term for Expansion Space. The Term for the Expansion Space
shall commence on the Expansion Date and shall terminate on the Expiration Date
(as defined in Section 1.09 of the Lease), which is December 31, 2002, unless
the Initial Term of the Lease is extended pursuant to Section 3.02 of the Lease
and Tenant gives notice to Landlord in accordance with the provisions of
Section 3.02 of the Lease that it intends to renew the Lease as to the
Expansion Space, in which case the Term for the Expansion Space shall terminate
on the last day of the renewal Term. If Tenant elects to exercise its renewal
option set forth in Section 3.02 of the Lease, Tenant shall not be required to
renew the Term of the Lease as to the Expansion Space but may, at Tenant's
option, renew the Term of the Lease as to the Expansion Space in accordance
with the provisions of Section 3.02 of the Lease and this Paragraph 3.
4. Monthly Base Rent. Commencing on the Expansion Date and continuing
through and until the Expiration Date, Tenant's Monthly Base Rental for the
Expansion Space only (which amounts shall be in addition to and not in lieu of
the Monthly Base Rental as to the Existing Premises [defined below]) shall be
determined in accordance with this Paragraph 4. With respect to the Expansion
Space only, Tenant shall pay Monthly Base Rental in the following amounts:
36
Dates Annual Base Rent Monthly Base Rent
----- ---------------- -----------------
Expansion Date through $114,625.00 $9,552.08
the Expiration Date
The foregoing Annual Base Rent amount is calculated based upon an Annual Base
Rent equal to the product of (x) $25.00, multiplied by (y) the rentable square
feet comprising the Expansion Space. Such amount is subject to increase
pursuant to Article 4 of the Lease.
As used in this Amendment, "Existing Premises" means the Premises
excluding the Expansion Space.
Commencing on the Expansion Date and continuing through and until the
Expiration Date, with respect to the Expansion Space only, Tenant shall be
obligated to pay (a) Tenant's Share of the Common Area Electrical Service and
the cost of electrical service to the Expansion Space in accordance with
Article 4 of the Lease, (b) Tenant's Share of Operating Expenses in accordance
with Article 4 of the Lease, and (c) other amounts payable under the Lease;
provided that effective as of the Expansion Date (i) Tenant's Share (as defined
in Section 1. 1 2 of the Lease) as to the Expansion Space only shall be 1.547%
and (ii) the Base Operating Year (as defined in Section 1.13 of the Lease) as
to the Expansion Space only shall be 1998. The Monthly Base Rent, Tenant's
Share of Electrical Costs, and Tenant's Share of Operating Expenses shall be
payable in accordance with the timing and procedures applicable thereto
pursuant to Article 4 of the Lease.
5. Tenant Improvements. Tenant shall accept the Expansion Space in its
current condition, as-is, without recourse to Landlord. ADDITIONALLY, LANDLORD
SHALL MAKE NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASEHOLD
IMPROVEMENTS IN THE EXPANSION SPACE. ALL IMPLIED WARRANTIES WITH RESPECT
THERETO, INCLUDING BUT NOT LIMITED TO THOSE OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE, ARE EXPRESSLY NEGATED AND WAIVED. Notwithstanding the
foregoing, Landlord hereby authorizes Tenant to undertake certain improvements
in the Expansion Space, and Landlord and Tenant each shall comply with the
provisions of the Work Letter attached hereto as Exhibit B in the construction
of such improvements to the Expansion Space.
6. Parking. Commencing on the Expansion Date and continuing through
and until the Expiration Date, Section 1. 19 of the Lease shall be amended to
provide that in addition to and not lieu of the Parking Spaces provided for
therein, Landlord shall furnish to Tenant and Tenant shall lease from Landlord
additional parking rights for (i) nineteen (19) Non-Reserved Parking Spaces,
and (ii) at Tenant's discretion up to three (3) Reserved Executive Parking
Spaces (collectively, the "Additional Parking Spaces"). The Additional Parking
Spaces shall become part of the Parking Spaces for all purposes under the Lease
and rental for the Additional Parking Spaces shall be due and payable in
accordance with the provisions of and in the amounts provided under Section
6.03 of the Lease.
7. Address Changes.
(a) As of the Effective Date, Section 1.01 of the Lease shall be
deleted in its entirety and replaced with the following:
The Utah State Retirement Investment Fund
c/o Westmark Realty Advisors, LLC
865 South Figueroa Street, Suite 3500
Los Angeles, California 90017-2543
Attn: Director of Asset Management
2
37
(b) As of the Effective Date, Section 1.02 of the Lease shall be
deleted in its entirety and replaced with the following:
Pegasus Systems, Inc.
3811 Turtle Creek Boulevard
Suite 1100
Dallas, Texas 75219
(c) As of the Effective Date, Section 1.16 of the Lease shall be
deleted in its entirety and replaced with the following:
Fults Realty Corporation
3811 Turtle Creek Boulevard, Suite 240
Dallas, Texas 75219
Cawley International
5420 LBJ Freeway
Suite 740
Dallas, Texas 75240
(d) As of the Effective Date, the address provided in Section 1.17
of the Lease shall be deleted in its entirety and replace with the following:
Bradford Management Company of Dallas, Inc.
3811 Turtle Creek Boulevard, Suite 240
Dallas, Texas 75219
(e) As of the Effective Date, Section 1. 1 8 of the Lease shall be
deleted in its entirety and replaced with the following:
The Utah State Retirement Investment Fund
P.O. Box 730208
Dallas, Texas 75373-0208
(f) As of the Effective Date, Landlord's address for notice
purposes in Section 27.01 of the Lease shall be deleted and replaced with the
following:
To Landlord: Westmark Realty Advisors, LLC
865 South Figueroa Street Suite 3500
Los Angeles, California 90017-2543
Attn: Director of Asset Management
with a copy of each Notice to Landlord to be sent to:
Westmark Realty Advisors, LLC
5400 LB Freeway
Suite 1100
Dallas, Texas 75240-6249
Attn: Asset Manager
and a copy to:
Bradford Management Company of Dallas, Inc.
3811 Turtle Creek Boulevard, Suite 240
Dallas, Texas 75219
Attn: Property Manager for 3811 Turtle Creek
8. Brokerage Commission. Except for the commission payable to Cawley
International ("Broker") which commission is Landlord's responsibility pursuant
to a separate agreement signed by Landlord and Broker, Landlord and Tenant
hereby represent and warrant to each other that no commission is due and
payable to any broker or other leasing agent in connection with this Amendment
as a result of its own dealings with any such broker or leasing
3
38
agent, and Landlord and Tenant hereby agree to indemnify and hold each other
harmless from and against all loss, damage, cost and expense (including
reasonable attorneys' fees) suffered by the other party as a result of a breach
of the foregoing representation and warranty.
9. Full Force and Effect. In the event any of the terms of the Lease
conflict with the terms of this Amendment, the terms of this Amendment shall
control. Except as amended hereby, all terms and conditions of the Lease shall
remain in full force and effect, and Landlord and Tenant hereby ratify and
confirm the Lease as amended hereby. The Lease, as amended herein, constitutes
the entire agreement between the parties hereto and no further modification of
the Lease shall be binding unless evidenced by an agreement in writing signed
by Landlord and Tenant.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed on the day and year first written above.
LANDLORD:
THE UTAH STATE RETIREMENT INVESTMENT
FUND, an independent agency of the State of Utah
By: Westmark Realty Advisors, L.L.C., a
Delaware limited liability company, its Agent
By: /s/ Matthew C. Hurlburt
-----------------------------------------------
Name: Matthew C. Hurlbut
Its: Authorized Signatory
By: /s/ Joseph W. Markling
-----------------------------------------------
Name: Joseph W. Markling
Its: Authorized Signatory
TENANT:
PEGASUS SYSTEMS, INC.
By: /s/ John F. Davis
-----------------------------------------------
Name: John F. Davis
Its: President
4
39
EXHIBIT A
EXPANSION SPACE
A-1
40
EXHIBIT B
WORK LETTER
The terms used herein shall have the meanings ascribed to them in this
Amendment, unless otherwise stated herein.
1. CONSTRUCTION OF THE EXPANSION SPACE. The Landlord and the Tenant
agree that their respective rights and obligations in reference to the
construction of the Expansion Space shall be as follows:
1.01 TENANT'S PLANS AND SPECIFICATIONS.
(a) Landlord shall cause to be prepared detailed
architectural, telephone, mechanical and engineering plans including all
dimensions and specifications for all work to be performed by Landlord in the
Expansion Space substantially in accordance with the space plan to be approved
by the parties ("Plans").
(b) Tenant shall cooperate as necessary in connection with
the preparation of the Plans, in a complete and timely manner, and without
limiting the foregoing, shall provide to Landlord all information as shall be
required by Landlord's engineers to prepare mechanical plans pursuant to
Section 1.02 hereof, which information shall include, but not be limited to,
the following:
(1) any special floor-loading conditions which may exceed
the structural weight limits of the floor,
(2) specifications of any heat emanating equipment to be
installed by Tenant which may require special air conditioning,
(3) electrical specifications of any equipment that
requires non-standard electrical power outlets, and
(4) complete specifications of any data-line wiring
required, including cable routing, conduit size, cable type and similar items
(provided Landlord shall have the right to approve but shall not perform, and
the Landlord's Work, as hereinafter defined, shall exclude all data-line wiring
and cable routing in and to the Expansion Space).
(c) The Plans shall be delivered to Tenant for its review and
consideration as soon as reasonably possible. Any change or modification of
such Plans shall not be valid or binding unless consented to by Landlord in
writing.
1.02 LANDLORD'S WORK.
(a) Landlord shall furnish and install substantially in
accordance with the Plans the materials and items described therein
("Landlord's Work"). The Plans and Landlord's Work shall be at Tenant's sole
cost and expense, provided that Tenant shall be entitled to a credit against
the cost of the Plans and Landlord's Work in an amount up to the lesser of (a)
$77,945.00 (i.e., $17.00, multiplied by the area of the Expansion Space) or (b)
the actual costs of the Plans and the Landlord's Work (the "Allowance"). If the
cost of the Landlord's Work is less than the Allowance, Landlord shall retain
such excess and Tenant shall not be entitled to receive such excess.
(b) If Landlord determines that the cost of the Landlord's
Work, will exceed the Allowance, then prior to commencement of the Landlord's
Work, Landlord will submit to Tenant a cost estimate for the Landlord's Work
("Cost Estimate") which Tenant shall approve or reject within seven (7) days
after receipt thereof. It is understood that the cost of Landlord's Work shall
include Landlord's construction supervision fee which shall be either (a) five
percent (5%) of the Job Cost (defined below) between $50,000 and $100,000, or
(b) four (4%) of the Job Cost that exceeds $100,000. Tenant's failure to reject
the Cost Estimate within said seven (7) day period shall be deemed to be an
acceptance thereof. If Tenant rejects the Cost Estimate, Tenant shall, together
with such rejection, propose such changes to the Plans as will cause the Cost
Estimate to be acceptable. If the accepted Cost Estimate exceeds the Allowance,
then
41
Tenant shall pay to Landlord the amount of such excess within ten (10) business
days after receipt by Tenant of a bill therefor, but in no event later than the
Expansion Date.
As used herein, "Job Cost" shall mean the actual costs of the
Plans, Landlord's Work, and Extra Work (defined below), if any.
1.03 EXTRA WORK.
(a) Tenant may request substitutions, additional or extra
work and/or materials over and above Landlord's Work ("Extra Work") to be
performed by Landlord provided that the Extra Work, in Landlord's judgment, (1)
shall not delay completion of Landlord's Work or the Expansion Date of the
Lease; (2) shall be practicable and consistent with existing physical
conditions in the Building and any other plans for the Building which have been
filed with the appropriate municipality or other governmental authorities
having jurisdiction thereover; (3) shall not impair Landlord's ability to
perform any of Landlord's obligation hereunder or under the Lease or any other
lease of space in the Building; and (4) shall not affect any portion of the
Building other than the Expansion Space.
(b) (1) In the event Tenant requests Landlord to perform
Extra Work and if Landlord accedes to such request, then and in that event,
prior to commencing such Extra Work, Landlord shall submit to Tenant a written
estimate ("Estimate") for said Extra Work to be performed. Within seven (7)
days after Landlord's submission of the Estimate, Tenant shall, in writing,
either accept or reject the Estimate. Tenant's failure either to accept or
reject the Estimate within said seven (7) day period shall be deemed rejection
thereof.
(2) In the event that Tenant rejects the Estimate or the
Estimate is deemed rejected, Tenant shall within seven (7) days after such
rejection propose to Landlord such necessary revisions of the Plans so as to
enable Landlord to proceed as though no such Extra Work had been requested.
Should Tenant fail to submit such proposals regarding necessary revisions of
the Plans Within said seven (7) day period, Landlord, in its sole discretion,
may proceed to complete Landlord's Work in accordance with the Plans already
submitted, with such variations as in Landlord's sole discretion may be
necessary so as to eliminate the Extra Work.
(c) (1) All Extra Work shall require the installation of new
materials at least comparable to Building standards and any substitution shall
be of equal or greater quality than that for which it is substituted.
(2) Tenant may request the omission of an item of
Landlord's Work, provided that such omission shall not delay the completion of
Landlord's Work and Landlord thereafter shall not be obligated to install the
same. Credits for items deleted or not installed shall be granted in amounts
equal to credits obtainable from subcontractors or materialmen. In no event
shall there be any cash credits.
(d) In the event Landlord performs Extra Work hereunder,
Tenant shall pay to Landlord, upon acceptance of the Estimate or submission of
Landlord's bid therefor, as the case may be, a sum equal to twenty percent
(20%) of the Estimate or bid price to the extent the Estimate together with the
amount set forth in the Cost Estimate exceeds the Allowance. In the event of
any such excess, Tenant shall pay to Landlord such excess cost for the Extra
Work within seven (7) days after receipt by Tenant of a bill therefore or at
such other time or times as agreed to, but in no event shall the entire balance
be paid later than the completion of the Extra Work.
2. COMPLETION-PUNCH LIST. When the Landlord is of the opinion that the
Landlord's Work is complete, then the Landlord shall so notify the Tenant. The
Tenant agrees that upon such notification, the Tenant promptly (and not later
than two (2) business days after the date of Landlord's said notice) will
inspect the Expansion Space and furnish to the Landlord a written statement
that the Landlord's Work have been completed and are complete as required by
the provisions of this EXHIBIT B and the Lease with the exception of certain
specified and enumerated items (hereinafter referred to as the "Punch List").
The Tenant agrees that at the request of the Landlord from time to time
thereafter, the Tenant will indicate in writing to Landlord whether any prior
Punch List items have been completed. If the Punch List consists
B-2
42
only of items which would not materially impair the Tenant's use or occupancy
of the Expansion Space, then, in such event, the Landlord's Work shall be
deemed complete and Tenant shall be deemed to have accepted possession of the
Expansion Space, provided, Landlord shall promptly complete all such Punch List
items; provided, however, that in no event shall Landlord be obligated to
repair latent defects, not originally listed on the Punch List, beyond a period
of six (6) months after the Completion Date. The date on which the Landlord's
Work is complete, pursuant to the provisions of this subsection, is sometimes
referred to as the "Date of Substantial Completion" or "Substantial Completion
Date." The Landlord's Work shall be deemed to be substantially complete and the
Date of Substantial Completion will be deemed to have occurred upon the
issuance of a certificate of occupancy or other similar license, permit, or
authorization. Promptly after the Substantial Completion Date, upon Landlord's
request, Tenant will execute an instrument in the form attached hereto as
EXHIBIT B-1, setting forth the Expansion Date of the Expansion Space, so that
said date is certain and such instrument, when executed, is hereby made part of
this Amendment incorporated herein by reference.
3. POSSESSION-EXTENSION OF TERM AND ACKNOWLEDGMENTS.
(a) The Tenant will take possession of the Expansion Space as of
and on the Expansion Date which, as set forth in Paragraph 2 of this Amendment,
shall be the earlier to occur of (a) July 1, 1998 or (b) the date which is two
(2) days following the Date of Substantial Completion. Landlord has not agreed
or represented that the Expansion Space will be substantially ready for
occupancy on July 1, 1998; provided however that Landlord has agreed that
Landlord will use its commercially reasonable efforts to cause the Expansion
Space to be substantially ready for occupancy on July 1, 1998. If for any
reason whatsoever the Landlord's Work is not complete on said date, this
Amendment shall nevertheless continue in full force and effect, and no
liability shall arise against Landlord because of any such delay, provided,
however, that all Rent due hereunder as to the Expansion Space only shall abate
on a per them basis and, as hereinabove provided, the Expansion Date shall be
deferred until the Date of Substantial Completion. Notwithstanding the
foregoing, there shall be no abatement of Rent and no deferral of the Expansion
Date if the Landlord's Work is not substantially complete due to any special
equipment, fixtures or materials, changes, alterations or additions requested
by Tenant, any delay of Tenant in submitting information necessary for the
preparation of the Plans, the failure of Tenant to timely approve or reject the
Cost Estimate, the failure of the Tenant to submit revisions following
rejection or deemed rejection of the Estimate, the requirement of Tenant for
any Extra Work, or the failure of the Tenant in supplying information of
approving or authorizing plans, specifications, estimates or other matters, or
any other act or omission of Tenant ("Tenant Delay"). If Tenant shall occupy
all or any part of the Expansion Space prior to the Expansion Date, all of the
covenants and conditions of this Amendment, including the obligation to pay
Rent, shall be binding upon the parties hereto in respect to such occupancy as
if the first day of the term of the Expansion Space had been the date when
Tenant began such occupancy.
(b) In the event the Date of Substantial Completion or the date
Landlord's Work would have been complete but for any Tenant Delays, is later
than July 1, 1998, (1) the Date of Substantial Completion shall be modified to
be the earlier of the Date of Substantial Completion or the date Landlord's
Work would have been complete but for any Tenant Delays and Monthly Base Rent,
Expense Adjustment, and Electrical Cost as to the Expansion Space will commence
accordingly, and (2) the Expiration Date shall not be adjusted.
4. TENANT'S ENTRY PRIOR TO COMPLETION DATE. Landlord may permit Tenant
or its agents or laborers to enter the Expansion Space at Tenant's sole risk
prior to the Expansion Date in order to perform through Tenant's own
contractors such work as Tenant may desire, at the same time that Landlord's
contractors are working in the Expansion Space. The foregoing license to enter
prior to the Expansion Date, however, is conditioned upon Tenant's labor not
interfering with Landlord's contractors or with any other tenant or its labor.
If at any time such entry shall cause disharmony, interference or union
disputes of any nature whatsoever, or if Landlord shall, in Landlord's sole
judgment, determine that such entry, such work or the continuance thereof shall
interfere with, hamper or prevent Landlord from proceeding with the completion
of the Building or Landlord's Work at the earliest possible date, this license
may be withdrawn by Landlord immediately upon written notice to Tenant. Such
entry shall be deemed to be under and subject to all of the terms, covenants
and conditions of this Amendment and the Lease, and Tenant shall comply with
all of the provisions of this Amendment and the Lease
B-3
43
which are the obligations or covenants of the Tenant, including, but not
limited to, the provisions of Section 9.01 of the Lease, except that the
obligation to pay Rent as to the Expansion Space only shall not commence until
the Expansion Date. In the event that Tenant's agents or laborers incur any
charges from Landlord, including, but not limited to, charges for use of
construction or hoisting equipment on the Building site, such charges shall be
deemed an obligation of Tenant and shall be collectible as Rent pursuant to the
Lease, and upon default in payment thereof, Landlord shall have the same
remedies as for a default in payment of Rent pursuant to the Lease.
5. LANDLORD'S ENTRY AFTER SUBSTANTIAL COMPLETION. After the Expansion
Date, Landlord may enter the Expansion Space (i) during normal business hours
only after giving reasonable notice to Tenant, and (ii) at any time after
normal business hours with no requirement for notice to Tenant to complete
Punch List items, and such entry by Landlord, its agents, servants, employees
or contractors for such purpose shall not constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any abatement or diminution
of Rent, or relieve Tenant from any obligation under this Amendment or the
Lease, or impose any liability upon Landlord or its agents.
6. DELAYS. Landlord and Tenant mutually acknowledge that the
Landlord's construction process in order to complete the Expansion Space
requires a coordination of activities and a compliance by the Tenant without
delay of all obligations imposed upon the Tenant pursuant to this EXHIBIT B and
that time is of the essence in the performance of Tenant's obligations
hereunder and Tenant's compliance with the terms and provisions or this EXHIBIT
B.
7. PROVISIONS SUBJECT TO LEASE. The provisions of this EXHIBIT B are
specifically subject to the provisions of this Amendment and the Lease.
B-4
44
EXHIBIT B-1
NOTICE OF AMENDED LEASE TERM DATES
Re: Office Building Lease (the "Original Lease") dated October 1, 1995
(the "Original Lease"), as assigned by that certain Assignment and
Assumption of Lease dated _____________, 1998 (the "Assignment"), as
amended by that certain First Amendment to Office Lease dated
____________, 1998 (the "First Amendment"; together with the Original
Lease and the Assignment, the "Lease") by and between The Utah State
Retirement Investment Fund, an independent agency of the State of Utah
("Landlord") and Pegasus Systems, Inc., a corporation ("Tenant") for
the premises located at 3811 Turtle Creek Boulevard, Suite 1100 &
1200, Dallas, Texas and commonly known as Turtle Creek Centre
("Premises"), including approximately 4,585 square feet of expansion
space ("Expansion Space") added to the Premises pursuant to the First
Amendment.
The undersigned, as Tenant, hereby confirms as of this _____ day of
._____________., 19___, the following:
1. The Substantial Completion Date for the Expansion Space occurred on
_________________, 199___, and Tenant is currently occupying the same.
2. The Expansion Date and Expiration Date, as each is defined in the First
Amendment, are as follows:
Expansion Date:
------------------------------------
Expiration Date: December 31, 2002
3. All alterations and improvements required to be performed by Landlord
pursuant to the terms of the First Amendment to prepare the Expansion Space for
Tenant's initial occupancy have been satisfactorily completed.
4. As of the date hereof, Landlord has fulfilled all of its obligations
under the Lease.
5. The Lease is in full force and effect and has not been modified,
altered, or amended (except by the First Amendment).
6. There are no offsets or credits against Rent.
B-1-1
45
LANDLORD:
THE UTAH STATE RETIREMENT INVESTMENT
FUND, an independent agency of the
State of Utah
By: Westmark Realty Advisors, L.L.C.,
a Delaware limited liability company,
its Agent
By:
-----------------------------------------
Name: Matthew C. Hurlbut
Its: Authorized Signatory
By:
-----------------------------------------
Name: Joseph W. Markling
Its: Authorized Signatory
TENANT:
PEGASUS SYSTEMS, INC.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
B-1-2
46
SECOND AMENDMENT TO OFFICE LEASE
THIS SECOND AMENDMENT TO OFFICE LEASE (this "Amendment") is effective
as of 2 day of November, 1998 (the "Effective Date"), by and between THE UTAH
STATE RETIREMENT INVESTMENT FUND, an independent agency of the State of Utah
("Landlord"), and PEGASUS SYSTEMS, INC. ("Tenant").
W I T N E S S E T H:
WHEREAS, Landlord and The Hotel Industry Switch Company ("Original
Tenant") entered into that certain Office Lease dated October 1, 1995, as
amended by that certain First Amendment to Office Lease dated February 25,
1998, and as assigned by that certain Assignment and Assumption of Lease dated
February 25, 1998 (as amended and assigned, the "Lease,") covering
approximately 34,335 square feet of rentable area on the fifth (5th), eleventh
(11th) and twelfth (12th) floors in the building (the "Building") commonly
known as Turtle Creek Centre in Dallas, Texas;
WHEREAS, Original Tenant assigned all of its interests under the Lease
to Tenant; and
WHEREAS, Landlord and Tenant desire to modify the terms of the Lease
to expand the Premises and to modify certain other provisions of the Lease as
set forth herein but not otherwise.
NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars
($10.00) and other good and valuable consideration, the receipt and sufficiency
of which are hereby mutually acknowledged and confessed, Landlord and Tenant,
intending to be and being legally bound, do hereby agree as follows:
1. Defined Terms. All capitalized terms used herein and not defined
herein shall have the meanings set forth in the Lease.
2. Expansion of Premises. Commencing on the Expansion Date (as defined
below) as to each portion of the Expansion Space (defined below) as set forth
in this paragraph below, the Leased Premises shall be expanded to include the
following space (collectively, the "Expansion Space"):
(i) 10,000 rentable square feet on the seventeenth (17th) floor of
the Building as shown on Exhibit A attached hereto ("First Space"); and
(ii) 4,568 rentable square feet on the seventeenth (17th) floor of
the Building as shown on Exhibit A attached hereto ("Second Space").
As used in this Amendment, the term "Applicable Expansion
Space" shall mean the First Space or the Second Space, as applicable.
As used in this Amendment, the term "Expansion Date" shall mean
the date set forth below for the Applicable Expansion Space:
Applicable Expansion Space Expansion Date
-------------------------- --------------
First Space January 1, 1999
Second Space April 1, 1999
The Expansion Space shall be added to and become part of the Premises
for all purposes of the Lease and shall be subject to all of the terms and
conditions contained in the Lease (including, without limitation, the payment
of Monthly Base Rent, Expense Adjustment, and Electrical Cost in accordance
with Article 1 and Article 4 of the Lease as modified herein), subject to the
modifications contained in this Amendment.
3. Lease Term for Expansion Space. The Term for each Applicable
Expansion Space shall commence on the Expansion Date set forth in Paragraph 2
above as to such space,
47
and shall terminate on the Expiration Date (as defined in Section 1.09 of the
Lease), which is December 31, 2002, unless the Initial Term of the Lease is
extended pursuant to Section 3.02 of the Lease, in which case the Term for the
Expansion Space shall terminate on the last day of the renewal Term. If Tenant
elects to exercise its renewal option set forth in Section 3.02 of the Lease,
Tenant shall renew the Term of the Lease as to all of the Premises, including
the Expansion Space.
4. Monthly Base Rent. Commencing on the Expansion Date as to each
Applicable Expansion Space and continuing through and until the Expiration
Date, Tenant's Monthly Base Rent for the Expansion Space only (which amounts
shall be in addition to and not in lieu of the Monthly Base Rent as to the
Existing Premises [defined below]) shall be determined in accordance with this
Paragraph 4. With respect to the Expansion Space only, Tenant shall pay Monthly
Base Rent in the following amounts:
Dates Annual Base Rent Monthly Base Rent
----- ---------------- -----------------
Expansion Date for the First $270,000.00 $22,500.00
Space through the Expiration
Date
Expansion Date for the Second $123,336.00 $10,278.00
Space through the Expiration
Date
The foregoing Annual Base Rent amount is calculated based upon an Annual Base
Rent equal to the product of (x) $27.00, multiplied by (y) the rentable square
feet comprising the Expansion Space. Such amount is subject to increase
pursuant to Article 4 of the Lease.
As used in this Amendment, "Existing Premises" means the
Premises excluding the Expansion Space.
Commencing on the Expansion Date and continuing through and
until the Expiration Date, with respect to the Expansion Space only, Tenant
shall be obligated to pay (a) Tenant's Share of the Common Area Electrical
Service and the cost of electrical service to the Expansion Space in accordance
with Article 4 of the Lease, (b) Tenant's Share of Operating Expenses in
accordance with Article 4 of the Lease, and (c) other amounts payable under the
Lease; provided that effective as of the Expansion Date (i) Tenant's Share (as
defined in Section 1.12 of the Lease) as to the First Space only shall be
3.374% and as to the Expansion Space only shall be 4.915%, and (ii) the Base
Operating Year (as defined in Section 1.13 of the Lease) as to the Expansion
Space only shall be 1999. The Monthly Base Rent, Tenant's Share of Electrical
Costs, and Tenant's Share of Operating Expenses shall be payable in accordance
with the timing and procedures applicable thereto pursuant to Article 4 of the
Lease.
5. Tenant Improvements. Tenant shall accept the Expansion Space in its
current condition, as-is, without recourse to Landlord. ADDITIONALLY, LANDLORD
SHALL MAKE NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASEHOLD
IMPROVEMENTS IN THE EXPANSION SPACE. ALL IMPLIED WARRANTIES WITH RESPECT
THERETO, INCLUDING BUT NOT LIMITED TO THOSE OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE, ARE EXPRESSLY NEGATED AND WAIVED. Notwithstanding the
foregoing, Landlord hereby authorizes Tenant to undertake certain improvements
in the Expansion Space, and Landlord and Tenant each shall comply with the
provisions of the Work Letter attached hereto as Exhibit B in the construction
of such improvements to the Expansion Space. Notwithstanding the foregoing,
Landlord represents to Tenant that the restrooms and utilities on the
seventeenth (17th) floor are in good working order.
6. Right of First Notice. (a) After the first six (6) months of the
initial Lease Term, if space on floor 18 of the Building (the "First Notice
Space") is available for lease and Landlord receives an expression of interest
in the First Notice Space from a prospective tenant, Landlord shall deliver a
notice to Tenant offering to lease the First Notice Space to Tenant. Landlord's
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48
notice must specify the First Notice Rate (defined below). The term "available
for lease" means that the First Notice Space is not then subject to any
existing rights of third parties, including, without limitation, rights of
first notice, expansion rights, extension rights, options to lease, or other
rights.
(b) Tenant may elect to lease the First Notice Space by
delivering a notice (the "Response Notice") to Landlord within 7 business days
after the date of Landlord's notice specifying that Tenant elects either (i) to
lease all, but not less than all, of the First Notice Space or (ii) to decline
to lease the First Notice Space.
(c) If (i) Landlord does not receive the Response Notice
within the 7 business day period or (ii) in the Response Notice Tenant does not
elect to lease all of the First Notice Space, Tenant is deemed to waive its
right to lease the First Notice Space and Tenant has no further rights under
this Paragraph 6.
(d) If Tenant timely delivers a Response Notice electing to
lease all of the First Notice Space, Tenant's lease of the First Notice Space
commences not later than 90 days after Landlord's receipt of the Response
Notice (unless Landlord and Tenant agree on an earlier commencement date) and
is on the same terms as the Lease except that the Monthly Base Rent and other
applicable terms for the First Notice Space adjust based on the First Notice
Rate. Landlord shall prepare, and Landlord and Tenant will execute and deliver,
within 10 days after Landlord's receipt of the Response Notice, an amendment to
the Lease adding the First Notice Space to the Premises upon the terms
specified in this Paragraph, Tenant shall execute and deliver the amendment to
Landlord within 10 days after Tenant's receipt of the amendment, and Landlord
will deliver to Tenant a counterpart of the amendment executed by Landlord.
(e) Landlord is not obligated to offer the First Notice Space
to Tenant, and Tenant may not exercise its option to lease the First Notice
Space, if at the time Landlord would otherwise be obligated to give the Notice
to Tenant, Tenant is in default under this Lease.
(f) The terms "First Notice Rate" means the Base Rent, as
determined by Landlord in its sole discretion to be the then market base rent
for the First Notice Space.
(g) Tenant may not assign this option to lease the First
Notice Space to any assignee of the Lease, nor may any sublessee or assignee
exercise this option.
(h) Section 2.02 of the Lease is hereby amended to provide
that Tenant shall have no further rights of refusal during the last two years
of the then Term of this Lease.
7. Monument Signage. Section 8.05 of the Lease shall be amended to
provide that in addition to and not in lieu of the Monument Signage provided
for therein, for so long as (a) either (1) Tenant leases not less than three
(3) full floors of the Building under the Lease, or (2) Tenant is the largest
tenant in the Building, and (b) there is no uncured Default under the Lease,
Tenant shall have the exclusive right to use and maintain the existing monument
("Monument") signage generally located at the comer of Turtle Creek Boulevard
and Blackburn Street. The location, design, method of attachment, size,
materials, coloring, lettering and lighting of all such Monument signage shall
be subject to Landlord's approval, which approval shall not be unreasonably
withheld if such signage is similar to Tenant's existing monument signage, and
further subject to all other approvals as may be required including without
limitation the City of Dallas or any applicable scenic district, and in any
event to be consistent with the Building's design, signage and graphics
program. If at any time it is necessary to remove the signage due to the
requirements of applicable laws, rules or regulations, Landlord shall be
entitled, at Landlord's cost, to replace the signage with another sign on or
about the Building which provides substantially the same exposure for Tenant.
Landlord shall at all times be entitled to make such changes in the signage as
may be required by applicable laws as a condition of the continued use of the
Monument at Landlord's cost. Any change in the names displayed on the Monument
(i) shall be made by Landlord at Tenant's sole cost and expense, (ii) shall
utilize the materials, colors, method of illumination and lettering type
currently utilized, and (iii) must be approved by Landlord in its reasonable
discretion. In the event Tenant's name is changed, Landlord will not
unreasonably withhold approval of a change to the name displayed on the
Monument. Upon the expiration or earlier termination of this Lease (as concerns
all signage), or in the event Tenant no longer leases more than three (3) full
floors of the Building pursuant to the Lease or is otherwise
3
49
not entitled to maintain such signage under the terms of the Lease, or if there
is an uncured Default under the Lease, Landlord, at Landlord's expense, shall
have the right to remove all such signage and make all necessary repairs to the
Monument so as to return the Monument to its respective original condition.
Tenant shall have no right to install any signage on the Building or in any
other location except as expressly set forth in the Lease. In addition,
Tenant's rights under this Paragraph shall terminate upon Tenant's assignment
of this Lease or sublease of the Premises.
8. Premises Condition. Landlord shall be responsible as an Operating
Expense to ensure the restrooms on the seventeenth (17th) floor of the Building
comply with applicable ADA standards for handicapped persons and other
accessibility requirements and laws, provided Tenant does not make alterations
that require changes to the restrooms, in which case Tenant shall then be
responsible for causing compliance.
9. Termination of Lease as to Fifth Floor Premises. Effective as of
January 1, 1999 (the "Reduction Date"), the Premises shall be reduced by, and
the Lease terminated as to, the 4,585 square feet of rentable area on the fifth
(5th) floor of the Building (as added to the Premises pursuant to the First
Amendment) as shown on Exhibit C attached hereto and incorporated herein (the
"Terminated Space"). As of the Reduction Date and through and until the
Expiration Date, the Premises shall consist of 39,750 square feet of rentable
area on the eleventh (11th), twelfth (12th) and seventeenth (17th) floors of
the Building (which square footage shall be increased by 4,568 square feet to
44,318 square feet of rentable area as of the Expansion Date for the Second
Space pursuant to Paragraph 2 above) for all purposes of the Lease. From and
after the Reduction Date, Tenant shall no longer have any rights (including the
right of possession) in the Terminated Space, and Landlord and Tenant shall be
released of all further obligations, covenants and agreements as to the
Terminated Space accruing under the Lease after the Reduction Date.
Notwithstanding the foregoing, in no event shall Landlord or Tenant be released
from (i) any of its obligations, covenants or agreements with respect to the
Terminated Space which accrue under the Lease prior to the Reduction Date
(including, without limitation, Tenant's obligation to pay rent with respect to
the Terminated Space for the period prior to the Reduction Date in accordance
with the provisions of the Lease), or (ii) any other provisions of the Lease
which by their terms survive the termination or expiration of the Lease.
10. Surrender of Terminated Space. Subject to Landlord delay of
completion of construction of improvements to the First Space, Tenant agrees to
surrender the Terminated Space to Landlord on the Reduction Date in the
condition required by Section 11.01 of the Lease without any subleases or
leases in effect with respect thereto, and free of occupancy by any person or
entity. Tenant represents and warrants to Landlord that there are no
agreements, written or oral, between Tenant and any other person or entity with
respect to the occupancy of all or any portion of the Terminated Space after
the Reduction Date. Subject to Landlord delay of completion of construction of
improvements to the First Space, if Tenant fails to timely surrender the
Terminated Space to Landlord in accordance with the provisions of this
Amendment, the provisions of Article 23 of the Lease shall apply to any such
holding over by Tenant with respect to the Terminated Space and Tenant shall
not be released from its obligations, covenants and agreements under the Lease
relating to the Terminated Space during such holdover period. From the date
hereof until the Reduction Date, upon reasonable prior verbal notice to Tenant,
Landlord shall have access to the Terminated Space for purposes of trying to
lease the Terminated Space.
11. Parking. Commencing on the Expansion Date and continuing through
and until the Expiration Date, Section 1.19 of the Lease shall be amended to
provide that in lieu of (but not in addition to) the Parking Spaces provided
for therein, (a) all parking spaces added pursuant to the First Amendment shall
be terminated, Tenant no longer being entitled to such spaces, and (b) Landlord
shall furnish to Tenant and Tenant shall lease from Landlord additional parking
rights for (i) forty-four (44) Non-Reserved Parking Spaces, and (ii) four (4)
Reserved Executive Parking Spaces (collectively, the "Additional Parking
Spaces"). The Additional Parking Spaces shall become part of the Parking Spaces
for all purposes under the Lease and rental for the Additional Parking Spaces
shall be due and payable in accordance with the provisions of and in the
amounts provided under Section 6.03 of the Lease.
Additional Non-Reserved Parking Spaces may be available to Tenant
on an as available basis ("Additional Temporary Spaces") at the same rates for
Non-Reserved Parking
4
50
Spaces set forth in Section 6.03 of the Lease. Additional Temporary Spaces
shall be made available on a month-to-month basis and may be terminated by
Landlord at any time if Landlord determines that such Additional Temporary
Spaces can no longer be made available to Tenant because Landlord needs such
Additional Temporary Spaces to provide existing or new tenants of the Building
parking spaces in the ratio of one (1) space for every three hundred (300)
rentable square feet.
12. Brokerage Commission. Except for the commission payable to Cawley
International ("Broker") which commission is Landlord's responsibility pursuant
to a separate agreement signed by Landlord and Broker, Landlord and Tenant
hereby represent and warrant to each other that no commission is due and
payable to any broker or other leasing agent in connection with this Amendment
as a result of its own dealings with any such broker or leasing agent, and
Landlord and Tenant hereby agree to indemnify and hold each other harmless from
and against all loss, damage, cost and expense (including reasonable attorneys'
fees) suffered by the other party as a result of a breach of the foregoing
representation and warranty.
13. In the event any of the terms of the Lease conflict with the terms
of this Amendment, the terms of this Amendment shall control. Except as amended
hereby, all terms and conditions of the Lease shall remain in full force and
effect, and Landlord and Tenant hereby ratify and confirm the Lease as amended
hereby. The Lease, as amended herein, constitutes the entire agreement between
the parties hereto and no further modification of the Lease shall be binding
unless evidenced by an agreement in writing signed by Landlord and Tenant.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed on the day and year first written above.
LANDLORD:
THE UTAH STATE RETIREMENT INVESTMENT FUND,
an independent agency of the State of Utah
By: CB Richard Ellis Investors, LLC,
its Agent
By: /s/ Matthew C. Hurlbut
--------------------------------------
Name: Matthew C. Hurlbut
By: /s/ Victor R. Moore
--------------------------------------
Name: Victor R. Moore
TENANT:
PEGASUS SYSTEMS, INC.
By: /s/ John F. Davis, III
--------------------------------------
Name: John F. Davis, III
Title: President
5
51
EXHIBIT A
EXPANSION SPACE
A-1
52
EXHIBIT B
WORK LETTER
The terms used herein shall have the meanings ascribed to them in the Lease,
unless otherwise stated herein.
1. CONSTRUCTION OF THE PREMISES. The Landlord and the Tenant agree
that their respective rights and obligations in reference to the construction
of the Premises shall be as follows:
1.01 TENANT'S PLANS AND SPECIFICATIONS.
(a) Landlord, shall cause to be prepared detailed architectural,
telephone, mechanical and engineering plans including all dimensions and
specifications for all work to be performed by Landlord in the Premises
substantially in accordance with the space plan to be approved by Landlord and
Tenant ("Plans").
(b) Tenant shall cooperate as necessary in connection with the
preparation of the Plans, in a complete and timely manner, and without limiting
the foregoing, shall provide to Landlord all information as shall be required
by Landlord's engineers to prepare mechanical plans pursuant to Section 1.02
hereof, which information shall include, but not be limited to, the following:
(1) any special floor-loading conditions which may exceed the
structural weight limits of the floor,
(2) specifications of any heat emanating equipment to be
installed by Tenant which may require special air conditioning,
(3) electrical specifications of any equipment that requires
non-standard electrical power outlets, and
(4) complete specifications of any data-line wiring required,
including cable routing, conduit size, cable type and similar items (provided
Landlord shall have the right to approve but shall not perform, and the
Landlord's Work, as hereinafter defined, shall exclude all data-line wiring and
cable routing in and to the Premises).
(c) The Plans shall be delivered to Tenant for its review and
consideration as soon as reasonably possible. Any change or modification of
such Plans shall not be valid or binding unless consented to by Landlord in
writing.
1.02 LANDLORD'S WORK.
(a) Landlord shall furnish and install substantially in accordance
with the Plans the materials and items described therein ("Landlord's Work").
The Plans and Landlord's Work shall be at Tenant's sole cost and expense,
provided that Tenant shall be entitled to a credit against the cost of the
Plans and Landlord's Work in an amount up to the lesser of (a) $116,544.00,
(i.e., $8.00, multiplied by the area of the Premises) or (b) the actual costs
of the Plans and the Landlord's Work (the "Allowance").
(b) If Landlord determines that the cost of the Landlord's Work
will exceed the Allowance, then prior to commencement of the Landlord's Work,
Landlord will submit to Tenant a cost estimate for the Landlord's Work ("Cost
Estimate") which Tenant shall approve or reject within five (5) days after
receipt thereof. It is understood that the cost of Landlord's Work shall
include Landlord's then applicable construction supervision fee. Tenant's
failure to reject the Cost Estimate within said five (5) day period shall be
deemed to be an acceptance thereof. If Tenant rejects the Cost Estimate, Tenant
shall, together with such rejection, propose such changes to the Plans as will
cause the Cost Estimate to be acceptable. If the accepted Cost Estimate exceeds
the Allowance, then Tenant shall pay to Landlord the amount of such excess
within ten (10) business days after receipt by Tenant of a bill therefor, but
in no event later than the Expansion Date for the Applicable Expansion Space.
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1.03 EXTRA WORK.
(a) Tenant may request substitutions, additional or extra work
and/or materials over and above Landlord's Work ("Extra Work") to be performed
by Landlord provided that the Extra Work, in Landlord's judgment, (1) shall not
delay completion of Landlord's Work or the Expansion Date for the Applicable
Expansion Space pursuant to this Amendment; (2) shall be practicable and
consistent with existing physical conditions in the Building and any other
plans for the Building which have been filed with the appropriate municipality
or other governmental authorities having jurisdiction thereover; (3) shall not
impair Landlord's ability to perform any of Landlord's obligation hereunder or
under the Lease or any other lease of space in the Building; and (4) shall not
affect any portion of the Building other than the Premises.
(b) (1) In the event Tenant requests Landlord to perform Extra Work
and if Landlord accedes to such request, then and in that event, prior to
commencing such Extra Work, Landlord shall submit to Tenant a written estimate
("Estimate") for said Extra Work to be performed. Within five (5) days after
Landlord's submission of the Estimate, Tenant shall, in writing, either accept
or reject the Estimate. Tenant's failure either to accept or reject the
Estimate within said five (5) day period shall be deemed rejection thereof.
(2) In the event that Tenant rejects the Estimate or the
Estimate is deemed rejected, Tenant shall within five (5) days after such
rejection propose to Landlord such necessary revisions of the Plans so as to
enable Landlord to proceed as though no such Extra Work had been requested.
Should Tenant fail to submit such proposals regarding necessary revisions of
the Plans within said five (5) day period, Landlord, in its sole discretion,
may proceed to complete Landlord's Work in accordance with the Plans already
submitted, with such variations as in Landlord's sole discretion may be
necessary so as to eliminate the Extra Work.
(c) (1) All Extra Work shall require the installation of new
materials at least comparable to Building standards and any substitution shall
be of equal or greater quality than that for which it is substituted.
(2) Tenant may request the omission of an item of Landlord's
Work, provided that such omission shall not delay the completion of Landlord's
Work and Landlord thereafter shall not be obligated to install the same.
Credits for items deleted or not installed shall be granted in amounts equal to
credits obtainable from subcontractors or materialmen. In no event shall there
be any cash credits.
(d) In the event Landlord performs Extra Work hereunder, Tenant
shall pay to Landlord, upon acceptance of the Estimate or submission of
Landlord's bid therefor, as the case may be, a sum equal to twenty percent
(20%) of the Estimate or bid price to the extent the Estimate together with the
amount set forth in the Cost Estimate exceeds the Allowance. In the event of
any such excess, Tenant shall pay to Landlord such excess cost for the Extra
Work within five (5) days after receipt by Tenant of a bill therefore or at
such other time or times as agreed to, but in no event shall the entire balance
be paid later than the completion of the Extra Work.
2. COMPLETION-PUNCH LIST. When the Landlord is of the opinion that the
Landlord's Work is complete, then the Landlord shall so notify the Tenant. The
Tenant agrees that upon such notification, the Tenant promptly (and not later
than two (2) business days after the date of Landlord's said notice) will
inspect the Premises and furnish to the Landlord a written statement that the
Landlord's Work has been completed and is complete as required by the
provisions of this EXHIBIT B, this Amendment and the Lease with the exception
of certain specified and enumerated items (hereinafter referred to as the
"Punch List"). The Tenant agrees that at the request of the Landlord from time
to time thereafter, the Tenant will indicate in writing to Landlord whether any
prior Punch List items have been completed. If the Punch List consists only of
items which would not materially impair the Tenant's use or occupancy of the
Premises, then, in such event, the Landlord's Work shall be deemed complete and
Tenant shall be deemed to have accepted possession of the Premises, provided,
Landlord shall promptly complete all such Punch List items; provided, however,
that in no event shall Landlord be obligated to repair latent defects, not
originally listed on the Punch List, beyond a period of six (6) months after
the
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Completion Date. The date on which the Landlord's Work is complete, pursuant to
the provisions of this subsection, is sometimes referred to as the "Date of
Substantial Completion" or "Substantial Completion Date. " The Landlord's Work
shall be deemed to be substantially complete and the Date of Substantial
Completion will be deemed to have occurred upon the issuance of a certificate
of occupancy or other similar license, permit, or authorization.
Notwithstanding the foregoing, Tenant shall be obligated to pay Monthly Base
Rent, Tenant's Share of Electrical Costs, Tenants' Share of Operating Expenses,
and any other amounts pursuant to the Lease and this Amendment as of the
Expansion Date for the Applicable Expansion Space.
3. POSSESSION-EXTENSION OF TERM AND ACKNOWLEDGMENTS.
(a) The Tenant will take possession of the Premises as of and on
the Expansion Date for the Applicable Expansion Space as set forth in Section 2
of this Amendment. Landlord has not agreed or represented that the Premises
will be substantially ready for occupancy on the date specified in Section 2 of
this Amendment. If for any reason whatsoever the Landlord's Work is not
complete on said date, this Amendment shall nevertheless continue in full force
and effect, and no liability shall arise against Landlord because of any such
delay, provided, however, that all Rent due hereunder shall abate on a per them
basis. Notwithstanding the foregoing, there shall be no abatement of Rent and
no deferral of the Expansion Date for the Applicable Expansion Space if the
Landlord's Work is not substantially complete due to any special equipment,
fixtures or materials, changes, alterations or additions requested by Tenant,
any delay of Tenant in submitting information necessary for the preparation of
the Plans, the failure of Tenant to timely approve or reject the Cost Estimate,
the failure of the Tenant to submit revisions following rejection or deemed
rejection of the Estimate, the requirement of Tenant for any Extra Work, or the
failure of the Tenant in supplying information of approving or authorizing
plans, specifications, estimates or other matters, or any other act or omission
of Tenant ("Tenant Delay"). If Tenant shall occupy all or any part of the
Premises prior to the Expansion Date for the Applicable Expansion Space, all of
the covenants and conditions of this Amendment, including the obligation to pay
Rent, shall be binding upon the parties hereto in respect to such occupancy as
if the first day of the Term had been the date when Tenant began such
occupancy.
4. TENANT'S ENTRY PRIOR TO COMPLETION DATE. Landlord may permit Tenant
or its agents or laborers to enter the Premises at Tenant's sole risk prior to
the Expansion Date for the Applicable Expansion Space in order to perform
through Tenant's own contractors such work as Tenant may desire, at the same
time that Landlord's contractors are working in the Premises. The foregoing
license to enter prior to the Expansion Date, however, is conditioned upon
Tenant's labor not interfering with Landlord's contractors or with any other
tenant or its labor. If at any time such entry shall cause disharmony,
interference or union disputes of any nature whatsoever, or if Landlord shall,
in Landlord's sole judgment, determine that such entry, such work or the
continuance thereof shall interfere with, hamper or prevent Landlord from
proceeding with the completion of the Building or Landlord's Work at the
earliest possible date, this license may be withdrawn by Landlord immediately
upon written notice to Tenant. Such entry shall be deemed to be under and
subject to all of the terms, covenants and conditions of the Lease, and Tenant
shall comply with all of the provisions of the Lease which are the obligations
or covenants of the Tenant, including, but not limited to, the provisions of
Section 9.01 of the Lease, except that the obligation to pay Rent shall not
commence until the Expansion Date for the Applicable Expansion Space. In the
event that Tenant's agents or laborers incur any charges from Landlord,
including, but not limited to, charges for use of construction or hoisting
equipment on the Building site, such charges shall be deemed an obligation of
Tenant and shall be collectible as Rent pursuant to the Lease, and upon default
in payment thereof, Landlord shall have the same remedies as for a default in
payment of Rent pursuant to the Lease.
5. LANDLORD'S ENTRY AFTER SUBSTANTIAL COMPLETION. At any time after
the Expansion Date for the Applicable Expansion Space, Landlord may enter the
Premises to complete Punch List items, and such entry by Landlord, its agents,
servants, employees or contractors for such purpose shall not constitute an
actual or constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of Rent, or relieve Tenant from any obligation under
this Amendment or the Lease, or impose any liability upon Landlord or its
agents.
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6. DELAYS. Landlord and Tenant mutually acknowledge that the
Landlord's construction process in order to complete the Premises requires a
coordination of activities and a compliance by the Tenant without delay of all
obligations imposed upon the Tenant pursuant to this EXHIBIT B and that time is
of the essence in the performance of Tenant's obligations hereunder and
Tenant's compliance with the terms and provisions or this EXHIBIT B.
7. PROVISIONS SUBJECT TO LEASE. The provisions of this EXHIBIT B are
specifically subject to the provisions of this Amendment.
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EXHIBIT C
FIFTH (5TH) FLOOR TERMINATED SPACE
C-1