LEASE AGREEMENT
STATE OF TEXAS
COUNTY OF DALLAS
THIS LEASE AGREEMENT, made and entered into by and between the Landlord
and Tenant hereinafter named.
WITNESSETH:
1 . DEFINITIONS AND BASIC PROVISIONS. The following definitions and basic
provisions shall be used in conjunction with and limited by the reference
thereto in the provisions of this lease:
(a) "Landlord": Campbell Creek, Ltd.
(b) "Tenant": Applied Digital Access, Inc.
(c) "Building":
i) Name: Campbell Creek Business Park -Phase II. Building 2.
2350 Campbell Creek Blvd.
Address: Richardson, Texas 75082
ii) Agreed Rentable Area of the Building: Building 2 - 54,165 square feet.
(d) "Premises": That portion of the Building which is cross-hatched on Exhibit
"A" attached hereto and made a part hereof. The Premises consists of
approximately 14,750 square feet of rentable area (all rentable area
being determined by measuring from the outer surfaces of exterior wall
and from the centerline of demising wall). All measurements shall utilize
and conform with BOMA Standards and shall be subject to field measurements
upon completion of Tenant's
Improvements (as hereinafter defined). In the event of an adjustment to the
square footage contained in the Premises necessitated by such field
measurement, Landlord shall adjust Tenant's Basic Rental and Tenant's Pro Rata
Share percentage (both as hereinafter defined) in direct proportion to such
change of the rentable area.
The Building, the land (the "Land") on which the Building is situated
(which land is particularly described on Exhibit A- I attached hereto), and all
improvements and appurtenances to the Building and the Land are referred to
collectively herein as the "Property".
(e) "Tenants's Pro Rata Share" percentage: 27.23% of Building 2 (the
rentable area of Premises divided by the rentable area of the
Building, expressed in a percentage).
(f) Base Expense Rate: $3.90 per square foot
(g) "Project": All buildings, structures and other improvements located on the
land which is described on Exhibit "B" attached hereto and made a part
hereof, together with such land.
(h) "Lease Term": A period of 84 months, which is anticipated to commence on
the earlier of January 1, 1998 or upon Substantial Completion (as defined in
Exhibit D attached hereto) and to end on December 31, 2004 ("EXPIRATION DATE"),
The date on which this Lease actually commences is herein called the
"Commencement Date".
(i) "Basic Rental":
Rental Rate Per Square "Basic Monthly
Period Foot of Rentable Area Rental"
January 1, 1998 - March 31, 1998 $15.25 $10,166.67
April 1, 1998 - June 30, 1998 $15.25 $15,250.00
July 1, 1998 - December 31, 2004 $15.25 $18,744.79
(j) "SECURITY Deposit": $18.744.79
(k) "Permitted Use": General Office/Technical Purposes and any other
lawful use incidental thereto.
(l) "Common Areas": All landscaped areas, parking areas, service roads,
loading facilities, sidewalks and other improvements and facilities in the
Project which are designated by Landlord from time to time for the common use
and enjoyment of more than
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one tenant in the Project.
(m) "Environmental Law": Any federal, state, or local law, statute,
ordinance, or regulation pertaining to health, industrial hygiene,
or the environmental conditions on, under, or about the Premises,
including without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 ("CERCLA") as
amended, 42 U.S.C. Section 9601 et seq. ("RCRA"), the Texas Water
Code ("TWC"), the Texas Solid Waste Disposal Act, Texas Health &
Safety Code ("THSC") Section 361.001 et seq., and regulations, rules,
guidelines, or standards promulgated pursuant to such laws, as such
statutes, regulations, rules, guidelines, and standards as are
amended from time to time.
2. LEASE GRANT. Landlord, in consideration of the rent to be paid and the
other covenants and agreements to be performed by Tenant and upon the terms and
conditions hereinafter stated, does hereby lease, demise and let unto Tenant
the Premises commencing on the Commencement Date and ending on the last day of
the Lease Term, unless sooner terminated as herein provided. If this lease is
executed before the Premises are available and Ready For Occupancy (as
hereinafter defined) and Landlord cannot deliver possession on the anticipated
Commencement Date, then Landlord shall not be deemed to be in default
hereunder, and Tenant agrees to accept possession of the Premises at such time
as Landlord is able to tender the same and such date shall be the Commencement
Date and this lease shall continue for the entire Lease Term. Landlord hereby
waives payment of rent covering any period prior to the tendering of possession
of the Premises to Tenant hereunder, unless such delay is caused by Tenant or
anyone acting under or for Tenant and such abatement shall be Tenant's-sole
remedy by reason of the Premises not being Ready For Occupancy. Likewise,
should Tenant occupy the Premises prior to the anticipated commencement date
specified in Section I(h), the Commencement Date shall be altered to coincide
with said occupancy with the anticipated ending date set forth in Section I(h)
remaining unchanged. For the purposes hereof, the term "Ready For Occupancy"
shall mean the first to occur of the following: (a) the date Landlord
substantially completes the work required of it under terms of Exhibit "D"
attached hereto AND SECURES A CERTIFICATE OF INSURANCE OR FINAL INSPECTION TO
BE ISSUED BY THE CITY OF RICHARDSON; or (b) the date Landlord would have
substantially completed the work required of it under the terms of Exhibit "D"
but for delays caused by Tenant, or its agents, employees or contractors; or
(c) the date Tenant takes possession of the Premises. By occupying the
Premises ON THE COMMENCEMENT DATE, Tenant shall be deemed to have accepted the
same as suitable for the purposes herein intended and waives any defects in the
Premises (WITH THE EXCEPTION OF ANY LATENT STRUCTURAL DEFECTS OR ANY LATENT OR
PATENT DEFECTS IN THE IN THE WORK OF EXHIBIT "D") and all related improvements
and appurtenances in the Building and to have acknowledged that the same comply
fully with Landlord's covenants and obligations. After the commencement date of
this Lease, Tenant shall, upon request from Landlord, execute and deliver to
Landlord a Letter of Acceptance of the Premises, which letter shall also state
the Commencement Date and the Expiration.
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Date.
3. RENT. In consideration of this lease, Tenant promises and agrees to pay
Landlord the Basic Monthly Rental without demand, deduction or set off, for
each month of the entire Lease Term. One such monthly installment together with
the Security Deposit shall be payable by Tenant to Landlord contemporaneously
with the execution hereof, and a like monthly installment shall be due and
payable without demand on or before the first day of each calendar month during
the term hereof beginning with the first calendar month following the
Commencement Date. Rent for any fractional month at the beginning or end of the
Lease Term shall be prorated, with any DIFFERENCES BETWEEN THE PREPAID MONTHLY
INSTALLMENT AND THE PRORATED RENT TO BE CREDITED TO THE SECOND MONTHLY
INSTALLMENT. The Security Deposit shall be held by Landlord without liability
for interest and as security for the performance by Tenant of Tenant's
covenants and obligations under this lease, it being expressly understood that
such deposit shall not be considered an advance payment of rental or a measure
of Landlord's damages in case of default by Tenant. Upon the occurrence of any
event of default by Tenant, Landlord may, from time to time, without prejudice
to any other remedy, use such deposit to the extent necessary to make good any
arrearages of rent and any other damage, injury, expense or liability caused to
Landlord by such event of default. Following any such application of the
Security Deposit, Tenant shall pay to Landlord on demand the amount so applied
in order to restore the Security Deposit to its original amount. If Tenant is
not then in default hereunder, any remaining balance of such deposit shall be
returned by Landlord to Tenant within thirty (30) days of termination of this
lease. If Landlord transfers its interest in the Premises during the Lease
Term, Landlord may assign the Security Deposit to the transferee and thereafter
shall have no further liability for the return of such Security Deposit.
4. RENTAL ESCALATION.
(a) The Basic Rental includes a component equal to the "Base Expense Rate"
(as defined in subsection l(f) hereof). In the event that the Operating
Expenses (HEREINAFTER DEFINED) per rentable square foot for any calendar year
during the Lease Term, exceed the Base Expense Rate, then Tenant shall be
obligated to pay to Landlord Tenant's Pro Rata Share of the amount by which
such Operating Expenses exceed the Base Expense Rate. All amounts which Tenant
is obligated to pay to Landlord under the terms of this Lease which are not
Basic Rental are herein called "Additional Rent". Basic Rental, Additional Rent
and all other sums required to be paid to Landlord by Tenant under this Lease
shall constitute rent and are sometimes collectively referred to as "Rent".
(b)The term "Operating Expenses" shall mean all costs and expenses of
owning, operating and maintaining the Project including, but not limited to the
following: (i) ad
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valorem taxes assessed against the Project together with any special
assessments and other real estate costs in the nature of taxes, assessments or
governmental impositions of any type for which Landlord is responsible (in the
event there is a change in the general system of real estate taxation such that
any alternative taxes, of whatever nature, are imposed upon Landlord in lieu
of, in whole or in part, general ad valorem taxes on the Project, or the
revenue of the Project, then such alternative taxes shall be deemed "ad valorem
taxes" or "real estate costs"); (ii) expense of operation, maintenance and
repair of the Common Areas, including, but not limited to, landscape, landscape
management, sprinkler maintenance and associated supply costs, license, permits
and inspection fees, trash removal, parking lot restriping and repairs,
exterior electrical repairs, and pest control for the Common Areas, in a manner
deemed reasonable by Landlord and appropriate and for the best interest of the
tenants of the Project; (iii) REASONABLE actual expenses incurred for
employees, such as wages, fringe benefits, taxes, unemployment and disability
insurance, workmen's compensation insurance, social security benefits and any
REASONABLE other expenses incurred in connection with such employees (the term
"employees" includes employees such as property manager, superintendents,
engineers, electricians, clerks, mechanics, helpers, security officers,
porters, cleaners and window washers, as well as contract laborers performing
services for the Project and other persons, firms, or corporations providing
contract services for the benefit of the Project); (iv) full contract cost of
third-party contractors for all of the foregoing; (v) all utility services for
utilities consumed for the benefit of the Common Areas, (vi) reasonable
consulting, legal, accounting and management fees for managing the Project,
provided however management fees shall not exceed five percent (5%) of gross
rentals during the Term; (vii) actual costs of insurance, including fire and
extended coverage, loss of rental insurance and general liability insurance;
(viii) amortization of REASONABLE costs of capital alterations or improvements
which would generally be regarded as ownership, operating, maintenance and
management costs which would normally be amortized over a period not to exceed
five (5) years; (ix) the reasonable costs and expenses of a consultant, if any,
or of contesting validity or amount of such real estate taxes, and (x) costs
of any energy-saving or labor-saving device or other equipment installed in the
Project amortized over such a period as is reasonably determined by Landlord,
but only to the extent of Landlord's good faith estimate of the actual the
Operating Expense savings.
(c) Said Operating Expenses shall not include administrative salaries and
wages of persons not involved in the day-to-day operations of the Project,
state or federal income taxes (unless such taxes are in lieu of general
ad valorem taxes as hereinbefore provided), or periodic alterations or
improvements to the construction of the Project (except as specifically
provided for herein), and in no case shall Tenant be charged additional
rent for
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any Operating Expenses such as painting, repainting, decorating, redecorating,
special cleaning service or special security service to the extent any of the
foregoing are directly related to the sole advantage of any particular occupant
of the Project other than Tenant.
(d) In the event that during the Lease Term said Operating Expenses for
any calendar year exceed, per rentable square foot (determined by dividing the
total Operating Expenses for such calendar year by the total rental square
footage of the Project), the Base Expense Rate, Tenant shall, in addition to
the Basic Rental specified in this Lease, pay Tenant's Pro Rata Share of such
increases to Landlord as Additional Rent, in each calendar year or partial year
during the term of this Lease, payable in monthly installments as hereinafter
provided.
(i) On or before the first day of each calendar year during
the Lease term, Landlord shall give Tenant written notice of Tenant's
estimated Additional Rent for the upcoming calendar year and the amount of
the monthly installment due for each month during such year. Tenant shall pay
to Landlord on the first day of each month thereafter the amount of the
applicable monthly installment, without demand, offset or deduction,
provided, however, if the applicable installment covers a partial month, then
such installment shall be prorated on a daily basis. Within one hundred
twenty (120) days after the end of each calendar year or as soon thereafter
as is reasonably possible, Landlord shall prepare and deliver to Tenant a
statement showing Tenant's actual Additional Rent for the previous calendar
year. If Tenant's total monthly payments of Additional Rent for the
applicable year are less than Tenant's actual Additional Rent, then Tenant
shall pay to Landlord the amount of such underpayment. If Tenant's total
monthly payments of Additional Rent for the applicable year are more than
Tenant's actual Additional Rent, then Landlord shall credit against the next
Additional Rent payment or payments due from Tenant the amount of such
overpayment. Unless Tenant takes written exception to any item within thirty
(30) days after the furnishing of an annual statement, such statement shall
be considered as final and accepted by Tenant. Any amount due Landlord as
shown on any such statement shall be paid by Tenant within thirty (30) days
after it is furnished to Tenant.
(ii) If, during any calendar year during the Lease Term, the
Building is not at least 95% occupied, then the Operating Expenses incurred
for such calendar year shall, for the purpose of making the calculations to
be made pursuant to this Section 4, be adjusted to reflect the amount of
Operating Expenses which Landlord determines would have been incurred had the
Building been occupied to the extent of at least 95% of the rentable area of
the Building during the entirety of such calendar year.
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(iii) Landlord shall be permitted, at anytime during any
calendar year when it reasonably forecasts that Operating Expenses for such
calendar year will exceed the Base Expense Rate together with any monthly
escalation reserves then being paid, to notify Tenant of such forecast. In
such event the amount of the monthly escalation reserves for the period
following such notice shall be increased by the amount which Landlord
reasonably forecasts will be necessary to pay the Operating Expenses for such
calendar year.
Notwithstanding anything to the contrary contained herein, for the purpose of
determining Additional Rent, Operating Expenses (exclusive of the Non-Capped
Operating Expenses, as hereinafter defined) for any calendar year shall not be
increased over the amount of Operating Expenses (exclusive of Non-Capped
Operating Expenses) during the calendar year in which the term of this Lease
commences by more than eight percent (8%) per year on a cumulative basis,
compounded annually. It is understood and agreed that there shall be no cap on
Non-Capped Operating Expenses, which are hereby defined to mean all Utility
Expenses, Real Estate Taxes and Insurance Premiums.
(e) AT ANY TIME WITHIN SIXTY (60) DAYS OF TENANT'S RECEIPT OF ANY
STATEMENT FROM LANDLORD RELATING TO ADDITIONAL RENT, LANDLORD SHALL FURNISH
TENANT FOLLOWING TENANT'S WRITTEN REQUEST THEREFOR, BUT NO MORE THAN ONCE IN
ANY CALENDAR YEAR, INCLUDING INVOICES AND OTHER SOURCE DOCUMENTS RELATING TO
EXPENSES. SUCH AUDIT SHALL BE LIMITED TO THE ITEMS NECESSARY TO A
DETERMINATION OF THE APPLICABLE EXPENSES. IN ANY EVENT, IF IT IS DETERMINED
THAT TENANT WAS OVERCHARGED BY MORE THAN FOUR PERCENT (4%), SUCH OVERCHARGE
SHALL ENTITLE TENANT TO CREDIT AGAINST ITS NEXT PAYMENTS OF ADDITIONAL RENT
THE AMOUNT OF THE OVERCHARGE AND THE COSTS ASSOCIATED WITH THE AUDIT (AND, IF
SUCH CREDIT OCCURS FOLLOWING THE EXPIRATION OF THE TERM, LANDLORD SHALL
PROMPTLY PAY THE AMOUNT OF SUCH CREDIT TO TENANT). IF THE AUDIT DETERMINES
THAT THE TENANT WAS OVERCHARGED LESS THAN FOUR PERCENT (4%), SUCH OVERAGE
SHALL ENTITLE TENANT TO CREDIT AGAINST ITS NEXT PAYMENT OF ADDITIONAL RENT
THE AMOUNT OF THE OVERCHARGE AND A TENANT SHALL PAY FOR ALL COSTS ASSOCIATED
WITH THE AUDIT. IF THE AUDIT SHALL DETERMINE THAT TENANT WAS UNDERCHARGED FOR
THE OPERATING EXPENSES, TENANT SHALL PROMPTLY PAY THE AMOUNT OF SUCH
UNDERCHARGE TO LANDLORD AND TENANT SHALL PAY FOR ALL COSTS ASSOCIATED WITH
THE AUDIT.
5. SERVICES. Tenant shall pay for the actual costs of utilities
(electricity, telephone, gas, water and sewer) that it consumes within the
Premises ("Premises Utilities"). Tenant shall pay the charges for such Premises
Utilities directly to the utility company that provides such utility service to
the Premises. Landlord shall, at its sole cost and expense, connect the
Premises to the main off-premises electrical supply and install all necessary
meters.
Landlord shall furnish, or cause to be furnished, at Landlord's own cost and
expense (as part
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of the Operating Expenses) the following services, subject to all other
provisions of this Lease.
(a) All utilities (except Premises Utilities) including electricity,
water, gas (if any), except telephone, for the Building Common Areas;
(b) Air conditioning, both heating and cooling service (as required by the
seasons) in accordance with equipment specified in Tenant's
Construction Plans. Such service shall include operating maintenance
and expensable replacement costs where necessary;
(c) All exterior landscaping, landscaping maintenance and exterior
common area maintenance;
(d) Trash and waste removal from the Building and daily trash and waste
removal from the Premises (Monday through Friday);
(e) Exterior Building glass cleaning no less than twice per year;
(f) Maintenance and repairs to the Building fire and safety systems
pursuant to approved plans and specifications;
(g) Full daily janitorial service five (5) days per week in and about the
Premises and the Building;
(h) Pest and rodent control service on an as-needed basis.
(i) Daily security guard service in the form of a roving patrol in the
parking lot. Notwithstanding anything to the contrary, Tenant
expressly acknowledges and agrees that Landlord is not warranting
the efficiency of any such security personnel, service, procedures
or equipment. Landlord shall not be responsible or liable in any
manner for failure of any such security personnel, services,
procedures or equipment to prevent, control, or apprehend anyone
suspected of causing personal injury or damage in, or around, the
Building or the Project.
Failure to any extent to furnish or any stoppage or interruption of these
defined services resulting from any cause shall not render Landlord liable in
any respect for damages to any person, property or business, nor shall the same
be construed as an eviction of Tenant or work an abatement of Basic Rental or
Additional Rent, nor relieve Tenant from fulfillment of any covenant or
agreement contained herein and Tenant shall have no claim, offset or abatement
rights as a result of any of the foregoing. NOTWITHSTANDING ANYTHING TO
CONTRARY CONTAINED
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HEREIN, IN THE EVENT LANDLORD SHALL FAIL TO PROVIDE THE SERVICES PROVIDED FOR
IN THIS PARAGRAPH 5 FOR A PERIOD OF TEN (10) CONSECUTIVE DAYS AFTER TENANT'S
WRITTEN NOTICE TO LANDLORD, TENANT'S BASIC RENT SHALL BE ABATED THEREAFTER
UNTIL SUCH SERVICES ARE RESTORED.
6. LEASEHOLD IMPROVEMENTS. Landlord shall install and construct the Tenant
Improvements as defined in and in accordance with Exhibit D (hereinafter, the
"Work Letter"), attached hereto and made a part hereof. The condition of the
Premises prior to construction of Tenant Improvements shall be in "Shell
Condition". "Shell Condition" shall be defined as meaning no existing tenant
improvements, but shall include a Building shell that is constructed in
accordance with the Project Criteria and specifications attached hereto as
Rider 5 and in accordance with all applicable governmental laws, codes and
regulations, is clear of debris and has all main electrical and plumbing, fire
sprinkler and mechanical trunk lines to the Premises.
7. USE.
(a) Tenant shall use the Premises only for the Permitted Use. Tenant will
not occupy or use the Premises, or permit any portion of the Premises to be
occupied or used, for any business or purpose other than the Permitted Use or
for any use or purpose which is unlawful in part or in whole or deemed to be
disreputable in any manner, or which may be dangerous to life, limb or
property, or keep any substance or carry on or permit any operation which might
emit offensive odors from the Premises, or any use which is extrahazardous on
account of fire, nor permit anything to be done which will in any way increase
the rate of fire insurance on any building in the Project or their contents;
and in the event that, by reason of acts of Tenant, there shall be any increase
in rate of insurance on any building in the Project or their contents created
by Tenant's acts or conduct of business then such acts of Tenant shall be
deemed to be an event of default hereunder and Tenant hereby agrees to pay to
Landlord the amount of such increase on demand and acceptance of such payment
shall not constitute a waiver of any of Landlord's other rights provided
herein. Tenant will conduct its business and control its agents, employees and
invitees in such a manner as not to create any nuisance, nor interfere with,
annoy or disturb other tenants or Landlord in management of the Project. Tenant
will maintain the Premises in a clean, healthful and safe condition and will
comply with all laws, ordinances, order, rules and regulations (state, federal,
municipal and other agencies or bodies having any jurisdiction thereof) with
reference to use, condition or occupancy of the Premises, including without
limitation any Environmental Law. Tenant shall indemnify and hold Landlord
harmless from any and all costs, expenses (including reasonable attorney's
fees) claims and causes of action arising from Tenant's failure to comply with
this Section. Tenant will not, without the prior written consent of Landlord,
paint, install lighting or decoration, or install any signs, window or door
lettering or advertising media of any type or window awning on or about the
Premises or any part thereof. Should Landlord agree in writing to any of the
foregoing items in the preceding
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sentence, Tenant will maintain such permitted item in good condition and repair
at all times. Outside storage, including but not limited to trucks or other
vehicles, is prohibited without Landlord's prior written consent.
(b) Tenant shall comply with provisions of Rider No. 4 attached hereto,
as it relates to Hazardous Substances and Materials.
8. REPAIRS AND MAINTENANCE.
(a) Landlord's Obligation: Landlord shall at its sole cost and expense (as
part of the Operating Expenses, except as specifically excluded above), and
throughout the Lease Term and any extensions thereof, provide maintenance and
repairs (including replacement parts and labor) to the Building and the
Premises, including (i) the ROOF (INCLUDING, BUT NOT LIMITED TO, ROOF MEMBRANE,
SKY-LIGHTS, SMOKE VENTS AND OTHER ROOF PENETRATIONS WHICH ARE A PART OF THE
ORIGINAL CONDITION OF THE BUILDING SET FORTH IN RIDER NO. 5), walls (including
glass curtain walls, windows, and exterior doors), foundation, and other
structural elements of the Building; (ii) heating, ventilating, air
conditioning, mechanical, electrical, plumbing, lighting, and other systems and
equipment; (iii) interior walls, ceilings and floors; and (iv) driveways,
sidewalks, curbs, signs (except Tenant's signs), landscaping, and other
exterior areas (including painting and striping of parking areas).
Notwithstanding any of the foregoing to the contrary, Landlord shall not be
required to repaint or replace the floor coverings and wall coverings in the
Premises during the term of the Lease.
(b) Tenant's Obligation: Tenant shall, at Tenant's sole cost and expense, (i)
keep the interior of the Premises (including, but not limited to, all fixtures,
walls, ceilings, floors, doors, windows [except replacement of exterior plate
glass unless the replacement is by reason of damage caused by Tenant or its
employees, contractors, invitees, agents or guests], appliances and equipment
which are a part of the Premises) in good repair and condition, (ii) repair or
replace any damage or injury done to the Building or any other part of the
Project caused by Tenant, Tenant's contractors agents, employees, licensees,
invitees or visitors or resulting from a breach of its obligations,(EXCEPT TO
THE EXTENT COVERED BY LANDLORD'S INSURANCE, IN WHICH CASE TENANT SHALL BE
RESPONSIBLE ONLY FOR THE DEDUCTIBLE OF SUCH INSURANCE COVERAGE) and (iii)
indemnify and hold Landlord harmless from any and all costs, expenses
(including reasonable attorneys' fees), claims and causes of action arising
from or incurred by and/or asserted in connection with such maintenance,
repairs, replacements, damage or injury or Tenant's breach of its obligations
under this Lease. All repairs and replacements performed by or on behalf of
Tenant shall be performed in a good and workmanlike manner and in accordance
with the standards applicable to alterations or improvements performed by
Tenant.
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(c) If Tenant should fail to perform any of its obligations WITHIN ANY
APPLICABLE CURE PERIOD hereunder with respect to repairs and maintenance, then
Landlord may, if it so elects, in addition to any other remedies provided
herein, effect such repairs and maintenance. Any sums expended by Landlord in
effecting such repairs and maintenance shall be deemed to be so much additional
rental owing by Tenant to Landlord and shall be due and payable, on demand,
together with interest thereon at the rate of eighteen percent (18%) per annum
from the date of each such expenditure by Landlord to the date of repayment by
Tenant.
9. ALTERATIONS AND IMPROVEMENTS. At the end or other termination of this
Lease, Tenant shall deliver the Premises to Landlord with all improvements
located thereon (except as otherwise herein provided) in good repair and
condition, reasonable wear and tear, casualty and condemnation excepted, and
shall deliver to Landlord all keys to the Premises. The cost and expense of any
repairs necessary to restore the condition of the Premises to said condition in
which they are to be delivered to Landlord shall be borne by Tenant. Tenant
will not make or allow to be made any alterations or physical additions in or
to the Premises without the prior written consent of Landlord, which consent
shall not be unreasonably withheld as to non-structural alterations PROVIDED
THAT NO CONSENT SHALL BE REQUIRED FOR NON-STRUCTURAL ALTERATIONS NOT EXCEEDING
$15,000.00 IN THE AGGREGATE, WHICH ARE OTHERWISE IN COMPLIANCE WITH THIS LEASE,
PROVIDED, HOWEVER, TENANT SHALL PROVIDE LANDLORD WITH AS-BUILT DRAWINGS AND A
COMPUTER DISKETTE (DXF FORMAT) WITHIN TEN (10) DAYS OF COMPLETION OF SUCH
ALTERATIONS. In such cases, Tenant agrees to cause such alterations to comply
with all applicable governmental laws, ordinances and regulations. Tenant shall
promptly pay for the costs of all work performed and shall indemnify Landlord
against liens, costs, damages or expenses incurred therewith including
reasonable attorney's fees incurred by Landlord if Landlord shall be joined in
any action or proceeding involving such work. Under no circumstances shall
Tenant commence such work until Landlord has been provided with evidence that
Tenant's contractor(s) is licensed and carries adequate public liability and
builders risk insurance and workman compensation as required by the State of
Texas and in amounts deemed satisfactory by Landlord. Upon completion of the
alterations, Tenant shall deliver to the Landlord "as-built" plans. At Tenant's
option, if Landlord performs such alterations, Tenant shall pay Landlord, as
Additional Rent, the cost thereof plus fifteen percent (15%) as reimbursement
for Landlord's overhead. All alterations, additions or improvements (whether
temporary or permanent in character) made in or upon the Premises, either by
Landlord or Tenant, shall be at Landlord's option, Landlord's property on
termination of this lease and shall remain on the Premises without compensation
to Tenant. All furniture, movable trade fixtures and equipment installed by
Tenant may be removed by Tenant at the termination of this lease if Tenant so
elects, and shall be so removed if required by Landlord, or if not so removed
shall, at the option of Landlord, become the property of Landlord. All such
installations, removals and restoration shall be accomplished in a good and
workmanlike manner so as not to damage the Premises or the primary structure or
structural qualities of any building improvements or the plumbing, electrical
lines or other utilities.
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10. COMMON AREAS. The use and occupation by Tenant of the Premises in
accordance with the terms of this lease shall include a right to use the Common
Areas in common with other tenants of the Project; subject, however, to the
terms and conditions of this Lease and to the Rules and Regulations for the use
of the Premises and the Common Areas which are attached hereto as Exhibit "C"
and made a part hereof as the same may be reasonably amended by Landlord from
time to time, with which Tenant covenants and agrees to comply.
All Common Areas shall be subject, at all times, to the exclusive control
and management by Landlord, and Landlord shall have the right from time to time
to change the dimensions and location and to establish, modify and enforce
reasonable rules and regulations with respect to all Common Areas. Landlord
shall have the right to construct additional buildings or improvements,
construct additional stories on existing buildings and to maintain, and operate
lighting facilities on all said areas and improvements; to change the area,
level, location and arrangement of parking areas and other facilities and to
restrict parking by Tenant or tenants and their officers, agents, employees and
contractors to designated parking area. Landlord also reserves the right to
dedicate portions of the Common Areas for streets, parks, utilities or other
public areas, PROVIDED, HOWEVER, IN NO EVENT SHALL THE PARKING RATIO FOR TENANT
BE REDUCED BELOW A RATIO OF ONE SPACE PER 300 SQUARE FEET LEASED. If the amount
of the Common Areas is diminished, Landlord shall not be subject to any
liability nor shall Tenant be entitled to any compensation or abatement of
Basic Rental or Additional Rent, nor shall such diminution of Common Areas be
deemed an actual or constructive eviction.
11. ASSIGNMENT AND SUBLETTING. Tenant shall not have the right to assign
or in any manner transfer this Lease or to sublet the whole or any part of the
Premises nor to grant any license, concession or other right of occupancy of
any portion of the Premises without the prior written consent of Landlord,
which consent shall not be unreasonably withheld. Landlord shall have the
option, upon receipt from Tenant of a written request for Landlord's consent to
a subletting or assignment, to cancel this Lease as of the date which is sixty
(60) days following the receipt by Landlord of the request from Tenant to
sublet or assign. The option of Landlord to cancel this Lease, as provided for
below, shall be exercised, if at all, within sixty (60) days following
Landlord's receipt of such written notice, by delivering to Tenant written
notice of Landlord's intention to exercise the option to so cancel this Lease.
If Tenant desires at any time to enter into an assignment of this Lease or a
sublease of the Premises or any portion thereof, Tenant shall give written
notice to Landlord of its desire to do so, which notice shall contain (a) the
name of the proposed assignee or subtenant, (b) the nature of the proposed
assignee's or subtenant's business to be carried on in the Premises, (c) the
terms and provisions of the proposed assignment or sublease, and (d) resumes,
business plans, references, financial information, and other information as
Landlord may reasonably request concerning the proposed assignee or subtenant.
Notwithstanding any permitted assignment or subletting, Tenant shall at all
times remain directly, primarily and fully responsible and liable for the
payment of the rent herein specified and for compliance with all of its other
obligations under the
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terms, provisions and covenants of this Lease. No assignee or sublessee of the
Premises or any portion thereof may assign or sublet the Premises or any
portion thereof WITHOUT THE PRIOR WRITTEN CONSENT OF THE LANDLORD, WHICH
CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED. Consent by Landlord to
one or more assignments or sublettings shall not operate as a waiver of
Landlord's rights as to any subsequent assignments or sublettings. Upon the
occurrence of an "event of default" as hereinafter defined, if the Premises or
any part thereof are then assigned or sublet Landlord, in addition to any other
remedies herein provided, or provided by law, may at its option collect
directly from such assignee or subtenant all rents becoming due to Tenant under
such assignment or sublease and apply such rent against any sums due to
Landlord from Tenant hereunder, and no such collection shall be construed to
constitute a novation or a release of Tenant from the further performance of
Tenant's obligations hereunder. In the event of the transfer and assignment by
Landlord of its interest in this Lease and the Project ( or the part thereof in
which the Premises are located) Landlord shall thereby be released from any
further obligations hereunder, and Tenant agrees to look solely to such
successor in interest of the Landlord for performance of such obligations.
Tenant shall not mortgage, pledge or otherwise encumber its interest in this
lease or in the Premises. NOTWITHSTANDING THE FOREGOING, TENANT SHALL HAVE THE
RIGHT TO SUBLET ANY PORTION OF THE PREMISES OR ASSIGN THE LEASE TO ANY PARENT,
SUBSIDIARY OR AFFILIATE OF TENANT WITHOUT LANDLORD APPROVAL, PROVIDED, HOWEVER,
IN ALL SUCH EVENTS, TENANT SHALL REMAIN LIABLE FOR THE LEASE.
12. LIABILITY.
(a) TENANT'S INDEMNITY. Tenant will indemnify and hold Landlord, Property
Manager and their respective partners, officers, directors, employees and
agents harmless from all claims, demands, actions, damages, loss, liabilities,
judgments, costs and expenses, including without limitation, attorney's fees
and court costs (each a "Claim" and collectively the "Claims") which (i) are
suffered by, recovered from or asserted against Landlord, (ii) are not paid by
insurance carried by Tenant or Landlord, and (iii) arise from or in connection
with (a) the use or occupancy of the Premises and/or the Common Areas, by
Tenant or its employees, guests, invitees, officers and agents or any accident,
injury or damage occurring in or at the Premises, or (b) any breach by Tenant
of any representation or covenant in this Lease; provided, however, such
indemnification of Landlord by Tenant shall not include any Claim waived by
Landlord under Paragraph 26 of this Lease, any Claim to the extent caused by
the negligence, gross negligence or willful misconduct of Landlord or any Claim
relating to hazardous or toxic materials except to the extent such Claim arises
out of a breach by Tenant.
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(b) LANDLORD'S INDEMNI1Y. Landlord will indemnify and hold Tenant and its
officers, directors, employees and agents harmless from all Claims which are
suffered by, recovered from or asserted against Tenant and which are not paid
by proceeds of insurance carried by Landlord or Tenant and which arise from or
in connection with (i) any accident, injury or damage occurring in or on the
Common Areas caused by Landlord's actions, or arising from negligence or
willful misconduct of Landlord, its agents, employees, contractors, or (ii) any
breach by Landlord of any representation or covenant in this Lease, provided,
however, such indemnification of Tenant by Landlord shall not include any Claim
waived by Tenant under Paragraph 26 of this Lease, any Claim to the extent
caused by the negligence, gross negligence or willful misconduct of Tenant or
any Claim relating to hazardous or toxic materials except to the extent such
Claim arises out of a breach by Landlord.
Tenant shall procure and maintain throughout the term of this lease a policy or
policies of insurance, at its sole cost and expense, insuring both Landlord and
Tenant against all claims, demands or actions arising out of or in connection
with: (i) the Premises; (ii) the condition of the Premises; (iii) Tenant's
operations in and maintenance and use of the Premises; and (iv) Tenant's
liability assumed under this Lease, the limits of such policy or policies to be
in the amount of not less than $3,000,000.00 per occurrence in respect of
injury to persons (including death), and in the amount of not less than
$1,000,000.00 per occurrence in respect of property damage or destruction,
including loss of use thereof. All such policies shall be procured by Tenant
from responsible insurance companies. Certified copies of Certificates of
insurance of such policies, shall be delivered to Landlord prior to the
commencement date of this lease. Not less than thirty (30) days prior to the
expiration date of any such policies, certificates of insurance certified
copies of the renewals thereof (bearing notations evidencing the payment of
renewal premiums) shall be delivered to Landlord. Such policies shall further
provide that not less than thirty (30) days written notice shall be given to
Landlord before such policy may be canceled or changed to reduce insurance
provided thereby.
13. CASUALTY INSURANCE
(a) Landlord shall, at all times during the Lease Term, maintain a policy or
policies of insurance issued by and binding upon one or more solvent insurance
companies insuring the Project, against loss or damage by fire, explosion and
other casualties insurable pursuant to standard fire and extended coverage
insurance forms
- -14
then in common use in the State of Texas. Landlord shall not be required to
insure any furniture, fixtures, equipment, machinery, goods, or supplies or
other personal property which Tenant may have brought into or which might
otherwise be located in or about the Premises. Landlord shall not be required
to insure alterations or improvements made to the Premises the cost of which is
in excess of the credit given by Landlord pursuant to Section 6 of this lease
or any alterations or improvement made by Tenant after the commencement date.
(b) Any insurance provided for in subsection 13(a) above may be effected by
self insurance or by a policy of blanket insurance. Tenant shall have no rights
in any policy or policies maintained by Landlord.
14. MORTGAGES. Tenant accepts this Lease subject to any deeds of trust,
security interests or mortgages which might now or hereafter constitute a lien
upon the Premises and to zoning ordinances and other building and fire
ordinances and governmental regulations relating to the use of the Premises. If
any such mortgage or deed of trust is enforced by the holder thereof, Tenant
shall, upon written request, attorn to the holder of such mortgage or deed of
trust or purchaser at such foreclosure sale, or any other person succeeding to
the interest of Landlord as a result of such enforcement, as the case may be,
and execute instruments affirming such attornment PROVIDED SUCH SUCCESSOR IN
INTEREST TO LANDLORD ASSUMES ALL OBLIGATIONS OF LANDLORD THEREAFTER ARISING.
Tenant shall at any time hereafter, on demand, execute any instruments,
releases or other documents that may be required by any mortgagee for the
purpose of subjecting and subordinating this Lease to the lien of any such deed
of trust, security interest or mortgage; PROVIDED, HOWEVER, SUCH SUBORDINATION
AGREEMENTS SHALL EXPRESSLY PROVIDE THAT TENANT'S OCCUPANCY OF THE PREMISES
SHALL NOT BE DISTURBED SO LONG AS TENANT PERFORMS ALL OF ITS COVENANTS AND
OBLIGATIONS HEREUNDER. With respect to any deed of trust, security interest or
mortgage hereafter constituting a lien on the Premises Landlord, at its sole
option, shall have the right to waive the applicability of this Section 14 so
that this lease will not be subject and subordinate to any such deed of trust,
security interest or mortgage.
15. INSPECTION. Without being deemed guilty of an eviction of Tenant and
without abatement of Rent, Landlord and Landlord's agents and representatives
shall have the right WITH REASONABLE NOTICE to enter upon and inspect the
Premises at any reasonable time during business hours, for the purpose of (i)
ascertaining the condition of the Premises or in order to make such repairs as
may be permitted to be made by Landlord and (ii) during THE LAST SIX (6) MONTHS
showing the Premises to prospective lenders, purchasers or tenants. Tenant
hereby waives any claims for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or Quite Enjoyment
of the Premises and any other loss occasioned thereby. During the last six (6)
months of the Lease Term Landlord shall have the right to erect on the grounds
of the
- -15
Building or the Premises a suitable sign indicating the Premises are available
for lease or for sale.
16. CONDEMNATION. If the whole or any substantial part of the Premises
should be taken for any public or quasi-public use under governmental law,
ordinance or regulation, or by right of eminent domain, or by private purchase
in lieu thereof and the taking would prevent or materially interfere with the
use of the Premises for the purposes contemplated by the Permitted Use, this
lease shall terminate and the Basic Rent and Additional Rent shall be abated
during the unexpired portion of this lease, effective when the physical taking
of said Premises shall occur.
If part of the Premises shall be taken for any public or quasi-public use
under any governmental law, ordinance or by right of eminent domain, or by
private purchase in lieu thereof, and this lease is not terminated as provided
in the subparagraph above, this lease shall not terminate but the rent payable
hereunder during the unexpired portion of this lease shall be reduced to such
extent as may be fair and reasonable under all of the circumstances.
In the event of any such taking or private purchase in lieu thereof,
Landlord shall receive the entire award (which shall include sales proceeds)
payable as a result of the condemnation, taking or sale thereof. Tenant shall,
however, have the right to recover from such authority through a separate award
which does not reduce Landlord's award, any compensation as may be awarded to
Tenant on account of moving and relocation expenses of Tenant's physical
property.
17. INSURANCE, FIRE OR OTHER CASUALTY. In the event that the Premises
should be damaged or destroyed by fire, tornado or other casualty to such an
extent that rebuilding or repairs cannot be completed ONE HUNDRED TWENTY (120)
days after the date on which such repairs commence, Landlord may at its option
terminate this lease, in which event the Basic Rental and Additional Rent shall
be abated during the unexpired portion of this lease effective with the date of
such damage. In the event the Premises should be damaged by fire, tornado or
other casualty covered by Landlord's insurance, but only to such extent that
rebuilding or repairs can be completed within ONE HUNDRED TWENTY (120) days
after the date of such damage, or if the damage should be more serious but
Landlord does not elect to terminate this lease, in either such event Landlord
shall within sixty (60) days after the date of such damage commence to rebuild
or repair the Premises and shall proceed with reasonable diligence to restore
the Premises to substantially the same condition in which they were immediately
prior to the happening of the casualty, except that Landlord shall not be
required to rebuild, repair or replace any part of the furniture, equipment,
fixtures and other improvements which may have been placed by Tenant or other
tenants within the Project or the Premises and Landlord shall not be obligated
to replace any improvements whose cost was in excess of the credit provided by
Landlord to Tenant under Section 6 of this lease. In the event that the
Premises are totally untenantable, Landlord shall abate the rent during the
time the Premises are unfit for occupancy. If the Premises are not totally
untenantable, Landlord shall allow Tenant a fair diminution of rent during the
time
- -16
the Premises are partially unfit for occupancy. With respect to the previous
two sentences, if the casualty was caused by Tenant, its agents, employees,
licensees or invitees, Basic Rental and Additional Rent shall be abated only to
the extent Landlord is compensated for such by loss of rents insurance, if any.
Notwithstanding the foregoing, (i) in the event any mortgagee under a deed of
trust, security agreement or mortgage on the Project should require that the
insurance proceeds be used to retire the mortgage debt or (ii) in the event
that the Project is damaged to such an extent that Landlord does not deem it
feasible to rebuild same (even though the Premises might not have been
substantially damaged) Landlord shall have no obligation to rebuild and this
Lease shall terminate upon notice to Tenant. Any insurance which may be carried
by Landlord or Tenant against loss or damage to the Project or to the Premises
shall be for the sole benefit of the party carrying such insurance and under
its sole control.
18. HOLDING OVER. Should Tenant, or any of its successors in interest, hold
over the Premises, or any part thereof, after the expiration of the term of
this lease, unless otherwise agreed in writing, such holding over shall
constitute and be construed as a tenant at sufferance tenancy at will only,
subject, however, to all of the terms, provisions, covenants and agreements on
the part of Tenant hereunder; such parties shall be subject to immediate
eviction and removal and Tenant or any such party shall pay Landlord as rent
for the period of such holdover an amount equal to the Basic Rental and
Additional Rent payable for the last month of the term of this lease plus FIFTY
PERCENT (50%) of such amount. Tenant shall also pay any damages sustained by
Landlord as a result of such holdover. The holding over by Tenant for any part
of a month shall entitle Landlord to collect the rent called for under this
Section 18 for the entirety of such month. The inclusion of this Section 18
shall not be construed as Landlord's consent for the Tenant to hold over.
19. TAXES ON TENANT'S PROPERTY. Tenant shall be liable for all taxes
levied or assessed against personal property, furniture or fixtures placed by
Tenant in the Premises. If any such taxes for which Tenant is liable are levied
or assessed against Landlord or Landlord's property and if Landlord elects to
pay the same or if the assessed value of Landlord's property is increased by
inclusion of personal property, furniture or fixtures placed by Tenant in the
Premises, and Landlord elects to pay the taxes based on such increase, Tenant
shall pay to Landlord upon demand that part of such taxes for which Tenant is
primarily liable hereunder.
20. EVENTS OF DEFAULT. The following events shall be deemed to be events
of default by Tenant under this Lease:
(a) Tenant shall fail to pay any of the Basic Rental or Additional Rent
hereby reserved and such failure shall continue for a period of ten (10) days
after WRITTEN NOTICE the date such payment was due, PROVIDED, HOWEVER, LANDLORD
SHALL NOT BE REQUIRED TO GIVE MORE THAT TWO (2) SUCH NOTICES PER YEAR.
- -17
(b) Tenant shall fail to comply with any term, provision or covenant of
this lease, other than the payment of rent, and shall not cure such failure
within THIRTY (30) days after written notice thereof to Tenant
(c)Tenant or any guarantor of Tenant's obligations shall become insolvent
or shall make an assignment for the benefit of creditors.
(d) Tenant or any guarantor shall file a petition under any section or
chapter of the National Bankruptcy Code, as amended, or under any similar law
or statute of the United States or any State thereof; or Tenant shall be
adjudged bankrupt or insolvent in proceedings filed against Tenant thereunder
and such adjudication shall not be vacated or set aside within thirty (30)
days.
(e)receiver or trustee shall be appointed for all or substantially all of
the assets of Tenant and such receivership shall not be terminated or stayed
within thirty (30) days.
(f) Tenant shall desert or vacate any substantial portion of the Premises
WITHOUT PAYMENT OF RENT for a period of five (5) or more days without written
permission of Landlord.
With respect to the defaults in subsections (c) through (f) above,
Landlord shall not be obligated to give Tenant notices of default and Tenant
shall have no right to cure such defaults.
21. REMEDIES. Upon the occurrence of any event of default specified in
Section 20 hereof, Landlord shall have the option to pursue any one or more of
the following remedies without any notice or demand whatsoever:
(a) Terminate this lease in which event Tenant shall immediately surrender
the Premises to Landlord, and if Tenant fails to do so, Landlord may, without
prejudice to any other remedy which it may have for possession or arrearages in
rent, enter upon and take possession and expel or remove Tenant and any other
person who may be occupying said Premises or any part thereof, by force if
necessary, without being liable for prosecution or any claim of damages
thereof; and Tenant agrees to pay to Landlord on demand the amount of all loss
and damage which Landlord may suffer by reason of such termination, whether
through inability to relet the Premises on satisfactory terms or otherwise,
including (i) accrued Rent to the date of termination and Late Charges, plus
interest thereon from the date due through the date paid, the unamortized cost
of Tenant's improvements, broker's fees and commissions, attorney's fees,
moving allowances and any other costs Landlord incurred in making this Lease,
the cost of recovering the Premises and the costs of reletting the
- -18
Premises; (ii) the Present Value of the Rent that would have accrued under the
Lease for the balance of the term but for such termination, reduced by the fair
market rental value of the Premises for such balance of the lease term
discounted at the Present Value; (iii) plus any other ACTUAL AND REASONABLE
costs or amounts necessary to compensate Landlord for its damages.
(b) Enter upon and take possession of the Premises and expel or remove
Tenant and any other person who may be occupying the Premises or any part
thereof, by force if necessary, without being liable for prosecution or any
claim for damages therefor, and if Landlord so elects, relet the Premises on
such terms as Landlord shall deem advisable and receive the rent thereof; and
Tenant agrees to pay to Landlord on demand any deficiency that may arise by
reason of such reletting for the remainder of the Lease Term.
(c) Enter upon the Premises by force if necessary, without being liable
for prosecution or any claim for damages therefor, and do whatever Tenant is
obligated to do under the terms of this lease; and Tenant agrees to reimburse
Landlord on demand for any expenses which Landlord may incur in thus effecting
compliance with Tenant's obligations under this lease, and Tenant further
agrees that Landlord shall not be liable for any damages resulting to the
Tenant from such action.
In the event Tenant fails to pay any Basic Rental or Additional Rent
hereunder as and when such is due, to help defray the additional cost to
Landlord for processing such late payments, Tenant shall pay to Landlord on
demand a late charge in an amount equal to percent ten percent (10%) of such
rent or additional rent, and the failure to pay such late charge, within ten
(10) days after demand therefore, shall be an event of default hereunder. The
provision for such late charge shall be in addition to all of Landlord's other
rights and remedies hereunder or at law and shall not be construed as
liquidated damages or as limiting Landlord's remedies in any manner.
No re-entry or taking possession of the Premises by Landlord shall be
construed as an election on its part to terminate this lease, unless a written
notice of such intention be given to Tenant. Notwithstanding any such reletting
or re-entry or taking possession, Landlord may at any time thereafter elect to
terminate this lease for a previous default. Pursuit of any of the foregoing
remedies shall not preclude pursuit of any of the other remedies herein
provided or any other remedies provided by law, nor shall pursuit of any remedy
herein provided constitute a forfeiture or waiver of any rent due to Landlord
hereunder or of any damages accruing to Landlord by reason of the violation of
any of the terms, provisions and covenants herein contained. Landlord's
acceptance of rent following an event of default hereunder shall not be
construed as Landlord's waiver of such event of default. No waiver by Landlord
of any violation or breach of any of the terms, provisions, and covenants
herein contained shall be deemed or construed to constitute a waiver of any
other violation or breach of any of the terms, provisions, and covenants herein
contained. Forbearance by
- -19
Landlord to enforce one or more of the remedies herein provided upon an event
of default shall not be deemed or construed to constitute a waiver of any other
violation or default. The loss or damage that Landlord may suffer by reason of
termination of this lease or the deficiency from any reletting as provided for
above shall include the expense of repossession and any repairs or remodeling
undertaken by landlord following possession. Should Landlord at any time
terminate this lease for any default, in addition to any other remedy Landlord
may have, Landlord may recover from Tenant all damages Landlord may incur by
reason of such default, including the cost of recovering the Premises and the
loss of rental for the remainder of the Lease Term.
In addition to the foregoing remedies, upon the occurrence of any event of
default Landlord is entitled and is hereby authorized, without any notice to
Tenant whatsoever, to enter upon the Premises by use of master key, a duplicate
key, or other peaceable means, and to change, alter, and/or modify the door
locks on all entry doors of the Premises, thereby permanently excluding Tenant,
and its officers, principals, agents, employees, representatives and invitees
therefrom. In the event that Landlord has either permanently repossessed the
Premises pursuant to the foregoing provisions of this Lease, or has terminated
that lease by reason of Tenant's default, Landlord shall not thereafter be
obligated to provide Tenant with a key to the Premises at any time, regardless
of any amounts subsequently paid by Tenant; provided, however, that in any such
instance, during Landlord's normal business hours and at the convenience of
Landlord, and upon receipt of written request from Tenant accompanied by such
Landlord will either (at Landlord's option) (i) escort Tenant or its authorized
personnel to the Premises to retrieve any personal belongings or other property
of Tenant not subject to the Landlord's Lien or security interest described
herein, or (ii) obtain a list from Tenant of such personal property as Tenant
intends to remove, whereupon Landlord shall remove such property and make it
available to Tenant at a time and place designated by Landlord. However, if
Landlord elects option (ii), Tenant shall pay, in cash in advance, all costs
and expenses estimated by Landlord to be incurred in removing such property and
making it available to Tenant and all moving and/or storage charges theretofore
incurred by Landlord with respect to such property. If Landlord elects to
exclude Tenant from the Premises without permanently repossessing or
terminating pursuant to the foregoing provisions of this Lease, then Landlord
shall not be obligated to provide Tenant a key to reenter the Premises until
such time as all delinquent rental and other amounts due under this Lease have
been paid in full and all other defaults, if any, have been completely cured to
Landlord's satisfaction (if such cure occurs prior to any actual permanent
repossession or termination), and Landlord has been given assurance reasonably
satisfactory to Landlord evidencing Tenant's ability to satisfy its remaining
obligations under this lease. This remedy of Landlord shall be in addition to,
and not in lieu of, any of its other remedies set forth in this Lease, or
otherwise available to Landlord at law or in equity. The foregoing provisions
shall override and control over any conflicting provisions of the Texas
Property Code as well as any successor statute governing the right of a
landlord to change the door locks of a commercial tenant.
- -20
22. SURRENDER OF PREMISES. No act or thing done by the Landlord or its
agents during the term hereby granted shall be deemed an acceptance of a
surrender of the Premises, and no agreement to accept a surrender of the
Premises shall be valid unless the same be made in writing and subscribed by
the Landlord.
23. ATTORNEYS' FEES. If on account of any breach or default by Tenant OR
LANDLORD in Tenant's OR LANDLORD'S OBLIGATIONS under this lease it should be
necessary or appropriate for Landlord to bring any action under this lease or
to enforce or defend any of Landlord's OR TENANT'S rights hereunder, then
LANDLORD OR TENANT agrees in each and any such case to pay to Landlord a
reasonable attorneys' fee.
24. LANDLORD'S LIEN: Section Deleted
- -21
25. MECHANIC'S LIEN. Tenant shall have no authority, express or implied,
to create or place any lien or encumbrance of any kind or nature whatsoever
upon, or in any manner to bind, the interest of Landlord in the Premises or to
charge the rentals payable hereunder for any claim in favor of any person
dealing with Tenant, including those who may furnish materials or perform labor
for any construction or repairs, and each such claim shall attach to, if at
all, only the leasehold interest granted to Tenant by this instrument. Tenant
covenants and agrees that it will pay or cause to be paid all sums legally due
and payable by it on account of any labor performed or materials furnished in
connection with any work performed on the Premises on which any lien is or can
be validly and legally asserted against its leasehold interest in the Premises
or the improvements thereon and that it will save and hold Landlord harmless
from any and all loss, cost or expense based on or arising out of asserted
claims or liens against the leasehold estate or against the right, title and
interest of the Landlord in the Premises or under the terms of this lease.
26. WAIVER OF SUBROGATION. Anything in this lease to the contrary
notwithstanding, the parties hereto waive any and all rights of recovery,
claim, action or cause of action, against each other, their agents, officers,
and employees, for any loss or damage that may occur to the Premises hereby
demised, or any improvements thereto, the Project or any improvements thereto,
by reason of fire, the elements, or any other cause which is insured against
pursuant to valid and collectible insurance policies (OR ANY INSURANCE PROVIDED
FOR IN SECTION 13), which are then in effect, regardless of cause or origin,
including negligence of the parties hereto, their agents, officers, and
employees.
27. SIGNS. Tenant shall have the right to install signs upon the Premises
in accordance with Rider No. 2 attached hereto.
28. NOTICES. Each provision of this Agreement, or of any applicable
governmental laws, ordinances, regulations, and other requirements with
reference to the sending, mailing or delivery of any notice, or with reference
to the making of any payment by Tenant to Landlord, shall be deemed to be
complied with when and if the following steps are taken:
(a) All rent and other payment required to be made by Tenant to Landlord
hereunder shall be payable to Landlord in Dallas County, Texas, at the address
hereinbelow set forth, or at such other address as Landlord may specify from
time to time by written notice delivered in accordance herewith.
(b) Any notice or document required to be delivered hereunder shall be
deemed to be delivered when actually received and whether or not received when
deposited in the United States mail, postage prepaid, certified or registered
mail (with return receipt
- -22
requested) addressed to the parties hereto at the respective addresses set out
opposite their names below, or at such other address as they have theretofore
specified by written notice delivered in accordance herewith. Notice also may
be given by telex or facsimile, provided each such transmission is confirmed
(and such confirmation is supported by documented evidence) as received.
LANDLORD: CAMPBELL CREEK LTD.
4099 MCEWEN ROAD, SUITE 370
DALLAS, TEXAS 75244 ATTN: PROPERTY MANAGER
TENANT:
APPLIED DIGITAL ACCESS, INC..
9855 SCRANTON ROAD
SAN DIEGO. CALIFORNIA 92121
ATTN: PRESIDENT FAX-.619.623.2208
29. FORCE MAJEURE. Whenever a period of time is herein prescribed for
action to be taken by Landlord or Tenant, Landlord or Tenant shall not be
liable or responsible for, and there shall be excluded from the computation for
any such period of time, any delays due to strikes, riots, acts of God,
shortages of labor or materials, war, governmental laws, regulations or
restrictions or any other causes of any kind whatsoever which are beyond the
control of Landlord or Tenant, provided, however, in no event shall the
foregoing apply to the financial obligations of either Landlord or Tenant to
the other under this Lease.
30. SEVERABILITY. If any clause or provision of this lease is illegal,
invalid or unenforceable under present or future laws, then and in that event,
it is the intention of the parties hereto that the remainder of this lease
shall not be affected thereby, and it is also the intention of the parties to
this lease that in lieu of each clause or provision of this lease that is
illegal, invalid, or unenforceable, there be added as a part of this lease a
clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable.
31. ENTIRE AGREEMENT; AMENDMENTS; BINDING EFFECT. This Lease contains the
entire agreement between the parties and may not be altered, changed or
amended, except by instrument in writing signed by both parties hereto. No
provision of this Lease shall be deemed to have been waived by Landlord unless
such waiver be in writing signed by Landlord and addressed to Tenant, nor shall
any custom or practice which may grow up between the parties in the
administration of the terms hereof be construed to waive or lessen the right of
Landlord to insist
- -23
upon the performance by Tenant in strict accordance with the terms hereof. The
terms, provisions, covenants and conditions contained in this lease shall apply
to, inure to the benefit of, and be binding upon the parties hereto, and upon
their respective successors in interest and legal representatives, except as
otherwise herein expressly provided.
32. QUIET ENJOYMENT. Provided Tenant has performed all of the terms,
covenants, agreements and conditions of this lease, including the payment of
rent, to be performed by Tenant, Tenant shall have the quiet possession of
peaceably and quietly hold and enjoy the Premises for the term hereof, without
hindrance from Landlord, subject to the terms and conditions of this lease.
33. EXISTENCE OF BROKER. Tenant represents and warrants that it has not
contacted or dealt with any real estate broker or agent in connection with the
execution of this lease, except as listed below, and Tenant agrees to indemnify
and hold harmless Landlord against all liabilities and costs (including but not
limited to attorneys' fees) incurred by Landlord as a result of Tenant's breach
of the warranties and representations contained herein.
BROKER: CB CORNMERCIAL (SUCH BROKER IS REPRESENTED BY PAT O'KEEFE AND
ANTHONY BOLNER)
34. GENDER. Words of any gender used in this lease shall be held and
construed to include any other gender, and words in the singular number shall
be held to include the plural, unless the context otherwise requires.
35. JOINT AND SEVERAL LIABILITY. If there be more than one Tenant, the
obligations hereunder imposed upon Tenant shall be joint and several. If there
be a guarantor of Tenant's obligations hereunder, the obligations hereunder
imposed upon Tenant shall be the joint and several obligations of Tenant and
such guarantor and Landlord need not first proceed against the Tenant hereunder
before proceeding against such guarantor, nor shall any such guarantor be
released from its guaranty for any reason whatsoever, including without
limitation, in case of any amendments hereto, waivers hereof or failure to give
such guarantor any notices hereunder.
36. ESTOPPEL CERTIFICATE. Tenant agrees promptly following any request by
Landlord to execute and deliver to Landlord within ten (10) days any documents,
evidencing the status of the Lease as may be required, either by a lender
("Lender") making a loan to Landlord to be secured by a deed of trust or
mortgage covering the Premises or the Project or a purchaser ("Purchaser") of
the Premises or the Project from Landlord (including an estoppel certificate
(i) certifying that this Lease is unmodified and in full force and effect, or,
if modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect and the date to which the
rent and other charges are paid in advance, if any, (ii) acknowledge that there
are
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not, to Tenant's knowledge, any uncured defaults on the part of the Landlord
hereunder, or so specifying such defaults, if any, as are claimed, and (iii)
such other matters as Landlord may reasonably request). If required by a Lender
or a Purchaser Tenant will deliver to Landlord current financial statements of
Tenant.
37. CAPTIONS. The captions contained in this lease are for convenience of
reference only, and in no way limit or enlarge the terms and conditions of this
lease.
38. NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of
light, air or view by any structure which may be erected on the Project or
lands adjacent to the Project shall in no way affect this Lease or impose any
liability on Landlord (even if Landlord is the adjacent land owner).
39. RELOCATION. - Section Deleted.
40. PARKING. The parking areas shall be designated for automobile parking
on a nonexclusive basis for all Property tenants (including Tenant) and their
respective employees, customers, invitees and visitors, provided, however,
Tenant shall be entitled to five (5) visitor spaces at a location mutally
acceptable to Landlord and Tenant. Parking and delivery areas for all vehicles
shall be in accordance with parking regulations established from time to time
by Landlord, with which Tenant agrees to conform. Tenant shall only permit
parking by its employees, customers and agents of automobiles in appropriate
designated parking areas. Tenant covenants that all items during the term of
the Lease, Tenant will not use in excess of one (1) parking space for each 250
rentable square feet in the Premises from Tenant's employees, invitees and
agents.
41. AUTHORITY OF TENANT. Tenant and each person signing this Lease on
behalf of Tenant represents to Landlord as follows: Tenant, if a corporation,
is duly incorporated and legally existing under the laws of the state of its
incorporation and is duly qualified to do business in the
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State of Texas. Tenant, if a partnership or joint venture, is duly organized
under the Texas Uniform Partnership Act. Tenant, if a limited partnership, is
duly organized under the applicable limited partnership act of the State of
Texas or, if organized under the laws of a state other than Texas, is qualified
under said Texas limited partnership act. Tenant has all requisite power and
all governmental certificates of authority, licenses, permits, qualifications
and other documentation to lease the Premises and to carry on its business as
now conducted and as contemplated to be conducted. Each person signing on
behalf of Tenant is authorized to do so. The foregoing representations in this
Paragraph 41 shall also apply to any corporation, partnership, joint venture or
limited partnership which is a general partner or joint venturer of Tenant.
Executed by Landlord this 1st day of October, 1997.
LANDLORD:
CAMPBELL CREEK, LTD.
By: /s/ James H. Kirchoff
Name: James H. Kirchhoff
Title: Vice President
TENANT:
Applied Digital Access, Inc.
By: /s/ James L. Keefe
Name: James L. Keefe
Title: Chief Financial Officer