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Sample Business ContractsHome: Sample Business Contracts:
1700 PACIFIC AVENUE
OFFICE LEASE
BY AND BETWEEN
F/P/D MASTER LEASE, INC.
AS LANDLORD,
AND
SERVICE ASSET MANAGEMENT COMPANY
AS TENANT
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TABLE OF CONTENTS
1. Definitions and Basic Lease Provisions ................................... 1
2. Leased Premises .......................................................... 4
3. Lease Term ............................................................... 4
4. Acceptance of Leased Premises ............................................ 5
5. Rent Payments ............................................................ 5
6. Electricity .............................................................. 6
7. Services by Landlord ..................................................... 8
8. Service Interruptions .................................................... 9
9. Operating Costs .......................................................... 10
10. Security Deposit ......................................................... 12
11. Assignment and Subletting ................................................ 12
12. Repair and Maintenance by Tenant ......................................... 15
13. Alterations and Additions by Tenant ...................................... 16
14. Use and Occupancy ........................................................ 18
15. Mechanics' Liens - Tenant's Obligations .................................. 20
16. Limitations on Liability of Landlord; Waiver ............................. 21
17. Tenant's Indemnification of Landlord: Assumption: Employees' Claims ...... 22
18. Tenant's Insurance ....................................................... 23
19. Landlord's Insurance ..................................................... 24
20. Rights Reserved by Landlord .............................................. 24
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21. Fire or Other Casualty ................................................... 27
22. Condemnation ............................................................. 27
23. Taxes on Tenant's Property ............................................... 28
24. Waiver of Subrogation .................................................... 29
25. Surrender Upon Termination or Expiration; Holdover ....................... 29
26. Removal of Tenant's Property ............................................. 30
27. Events of Default ........................................................ 31
28. Landlord's Remedies ...................................................... 32
29. No Implied Waiver ........................................................ 34
30. Waiver by Tenant ......................................................... 35
31. Attorneys' Fees and Legal Expenses ....................................... 35
32. Subordination ............................................................ 35
33. Quiet Enjoyment .......................................................... 36
34. Notice of Landlord's Default ............................................. 37
35. Rules and Regulations .................................................... 37
36. Estoppel Certificate ..................................................... 37
37. Notices .................................................................. 37
38. Hazardous Materials ...................................................... 38
39. Business Purpose ......................................................... 39
40. Severability ............................................................. 39
41. No Merger ................................................................ 39
42. Force Majeure ............................................................ 40
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43. Brokerage; Mutual Indemnities ............................................ 40
44. Gender ................................................................... 40
45. Joint and Several Liability .............................................. 41
46. No Representations ....................................................... 41
47. Entire Agreement; Amendments ............................................. 41
48. Paragraph Headings ....................................................... 41
49. Binding Effect ........................................................... 41
50. Exhibits ................................................................. 41
51. Counterparts ............................................................. 42
52. Rental Tax ............................................................... 42
53. Parking .................................................................. 42
54. Tenant's Service Providers ............................................... 43
55. Security Disclaimer ...................................................... 43
56. Intentionally Deleted .................................................... 44
57. Relocation of the Leased Premises ........................................ 44
58. Limitation of Actions .................................................... 46
59. Execution and Approval of Lease .......................................... 46
60. Right of First Notice .................................................... 46
61. Option to Extend Lease Term .............................................. 47
PAGE iii
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OFFICE LEASE
This Office Lease (this LEASE) is entered into as of May 20, 1998 (the
DATE OF THIS LEASE), by F/P/D Master Lease, Inc., a Texas corporation
(LANDLORD), and Service Asset Management Company, a North Carolina corporation
(TENANT).
1. DEFINITIONS AND BASIC LEASE PROVISIONS.
Some of the basic provisions and defined terms of this Lease are as
follows:
PROJECT: 1700 Pacific Avenue, Dallas, Texas, including the
LAND described on EXHIBIT B, the Building, the
On-Site Garage, the concourse, lobbies, plazas,
walkways, open spaces, landscaped areas, and similar
public areas located on, above, beneath or
immediately adjacent to the Land, and any truck
accessways, loading docks, or similar facilities
which serve the Building, the Off-Site Garage, and
the Building's interest in pedestrian tunnels,
skybridges or parking garages now or hereafter
connecting the Building to any building or garage
that may be located on any other block adjacent to or
nearby the block in which the Building is located.
BUILDING: The building located on the Land, known as 1700
Pacific Avenue, located at 1700 Pacific Avenue,
Dallas, Texas 75201.
LEASED PREMISES: 31,478 Rentable Square Feet as shown on EXHIBIT A.
Suite 1400 on Floor 14 of the Building and Suite 1500
on Floor 15 of the Building.
TENANT'S PROPORTIONATE 2.348%, determined by dividing the number of Rentable
SHARE: Square Feet contained in the Leased Premises by the
Total Building Area. The Tenant's Proportionate Share
shall change if the size of the Leased Premises
changes as a result of expansions, reductions, or
otherwise.
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TOTAL BUILDING AREA: 1,340,481 Rentable Square Feet.
MINIMUM RENT: $ 0.00 per month for months 1 through 6
$ 39,347.50 per month for months 7 through 42
$ 44,593.83 per month for months 43 through 66
$ 47,217.00 per month for months 67 through 90
$ 52,463.33 per month for months 91 through 126
RENT: The Minimum Rent and all other amounts payable by
Tenant to Landlord under this Lease, including
Tenant's Proportionate Share of Total Electricity
Costs for the Project and Excess Operating Costs.
COMMENCEMENT DATE: June 1, 1998. (See Paragraph 3)
EXPIRATION DATE: November 30, 2008. (See Paragraph 3)
LEASE TERM: 126 Months, ending on the Expiration Date.
BASE YEAR FOR OPERATING Calendar year 1998.
COSTS:
TENANT'S BROKER: Trinity Advisory Group, Inc.
LANDLORD'S BROKER: Faison-Stone, Inc., a Texas corporation.
SECURITY DEPOSIT: $ N/A
OFF-SITE GARAGE: The approximately 1400 space parking garage on the
western end of the block bounded by Harwood, Pearl,
Main, and Elm Streets in Dallas, Texas.
ON-SITE GARAGE: The approximately 300 space parking garage that is
part of the Building.
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PARKING: 4 spaces (Reserved or Unreserved) in the On-Site
Garage, 27 Unreserved spaces in the Off-Site Garage,
and, subject to availability up to 60 additional
unreserved spaces in the Off-Site Garage on a
month-to-month basis. (See Paragraph 53)
PERMITTED USE: General business offices.
TENANT PARTY(IES): Tenant and its directors, shareholders, partners,
trustees, members, agents, contractors,
subcontractors, employees, licensees, servants, and
invitees and all persons and entities claiming
through any of these persons or entities.
Addresses for notices under this Lease:
LANDLORD: F/P/D Master Lease, Inc.
c/o Faison-Stone, Inc.
1700 Pacific Avenue, Suite 4500
Dallas, Texas 75201
Attention: M. Scott Ozymy
Fax: (214) 969-0384
TENANT: Service Asset Management Company
1700 Pacific Avenue, Suite 1400
Dallas, Texas 75201
Attention: William D. Gross
Fax: (214)________-______________
with a copy to:
Service Asset Management Company
6907 Capital of Texas Highway #230
Austin, Texas 78755-0800
Attention: Roger J. Engemoen, Jr.
Fax: (512) 231-8526
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2. LEASED PREMISES.
Landlord, in consideration of the Rent and the obligations of Tenant under
this Lease, leases the Leased Premises to Tenant and Tenant leases the
Leased Premises from Landlord, subject to the terms of this Lease. The
number of RENTABLE SQUARE FEET in the Leased Premises and the Project is
the square footage of the applicable portion of the Project, is stipulated
for all purposes to be the number of Rentable Square Feet set forth in
Section 1 and is binding on Landlord and Tenant subject to changes in the
size of the Leased Premises.
3. LEASE TERM.
(a) The Lease Term begins on the earliest to occur of: (1) the date
Tenant occupies any part of the Leased Premises; (2) the
Commencement Date; or (3) the Ready for Occupancy Date (defined
below); and ends on the Expiration Date. Notwithstanding the
foregoing, if the Ready for Occupancy Date occurs before May 22,
1998, then the Lease Term shall begin on the earlier of (i) the date
Tenant occupies any part of the Lease Premises or May 25, 1998, and
if the Ready for Occupancy Date occurs on or after May 25, 1998 and
before July 3, 1998, then the Lease Term shall begin on the earlier
of (i) the date Tenant occupies any part of the Lease Premises, or
(ii) July 3, 1998.
(b) Subject to Paragraph 3(c) below, if the Ready for Occupancy Date
does not occur by the Commencement Date for any reason other than
omission, delay, or default by any Tenant Party, Tenant's obligation
to pay Rent does not commence until the Ready For Occupancy Date
occurs and the Expiration Date is extended for a period of time
equal to the time period beginning on the Commencement Date and
ending on the day before the Ready for Occupancy Date. This
abatement of Rent is Tenant's sole and exclusive remedy and is full
settlement of all claims that Tenant has against Landlord by reason
of the Leased Premises not being ready for occupancy by Tenant on
the Commencement Date.
(c) If Tenant occupies any part of the Leased Premises before the
Commencement Date or the Ready for Occupancy Date, as applicable,
the Lease Term and Tenant's obligation to pay Rent commence on the
date Tenant occupies the Leased Premises and the Expiration Date is
126 months after the date on which Tenant's occupancy commences.
Tenant is deemed to occupy the Leased Premises when Tenant takes
possession of any part of the Leased Premises for any purpose,
including placing furniture and installing Tenant's equipment in the
Leased Premises.
(d) When the first day of the Lease Term is established pursuant to this
Paragraph 3, Landlord shall prepare and Landlord and Tenant shall
exchange a letter acknowledging that date and, if the Expiration
Date changes under this Paragraph, the Expiration Date.
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(e) The READY FOR OCCUPANCY DATE is the earlier to occur of:
(1) the date that Landlord notifies Tenant that the City of Dallas
has approved the Leased Premises for occupancy; or
(2) the date the City of Dallas would have approved the Leased
Premises for occupancy but for delays caused by any Tenant
Party;
provided, if Landlord performs any Additional Work (defined in
EXHIBIT F), the Ready for Occupancy Date is deemed accelerated by
the number of days in the Additional Work Period (defined in EXHIBIT
F).
4. ACCEPTANCE OF LEASED PREMISES.
Tenant's occupancy of the Leased Premises is conclusive evidence that
Tenant: (A) accepts the Leased Premises as suitable for the purposes for
which they are leased; (B) accepts the Leased Premises and the Project as
being in a good and satisfactory condition; and (C) waives any defects in
the Leased Premises and the Project; provided, however, that by occupying
the Lease Premises, Tenant shall not be deemed to have accepted or waived
any defect therein about Tenant, in the exercise of reasonable care, could
not have learned prior to occupying the Leased Premises.
5. RENT PAYMENTS.
(a) The installment of Minimum Rent due for the seventh (7th) month of
the Lease Term is payable by Tenant when this Lease is executed.
Subsequent installments of Minimum Rent are payable by Tenant in
advance on the first day of each calendar month during the Lease
Term beginning on the first day of the eighth full calendar month
after the Commencement Date (or the Ready for Occupancy Date, if
applicable). Minimum Rent for any partial calendar month is prorated
on a per diem basis.
(b) All Rent is payable by Tenant at the times and in the amounts
specified in this Lease in legal tender of the United States of
America to Landlord at the following address or to any other person
or at any other address as Landlord may from time to time designate
by notice to Tenant:
F/P/D Master Lease, Inc.
P.O. Box 844792
Dallas, Texas 75284-4792
(c) Rent is payable by Tenant without notice, demand, abatement,
deduction, or set off. Tenant's obligation to pay Rent is
independent of any obligation of Landlord under
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this Lease. If any installment of Rent is not paid within 5 days
after it is due, Tenant shall pay a late charge in an amount equal
to 10% of the delinquent installment of Rent when it pays the
delinquent installment. In addition, any Rent not paid when due (and
which represents amounts not already specified as bearing interest
under other provisions of this Lease) bears interest from the due
date until the date paid at a rate (the INTEREST RATE) equal to the
lesser of the highest rate allowable under applicable law or 18% per
annum.
6. ELECTRICITY.
(a) Landlord, subject to payment by Tenant as specified below, shall
furnish electricity as follows:
- up to 2 watts per Rentable Square Foot in the Leased Premises
at 277 volts for lighting; and
- up to 1.25 watts per Rentable Square Foot in the Leased
Premises at 120 volts for office machines.
If Tenant wants to use any office equipment or lighting that will
cause Tenant's electricity requirements to exceed the specified
levels or that will generate, excess heat, Tenant must give Landlord
prior notice specifying Tenant's excess electricity requirements and
the specific equipment that generates excess heat. If the excess
electricity requirements can be supplied without, in Landlord's sole
opinion, overloading the existing Building systems, or if the
additional equipment necessary to supply Tenant's excess electricity
requirements can be installed without, in Landlord's sole opinion,
creating a dangerous condition in the Building, Landlord shall
supply Tenant's excess electricity requirements and Tenant shall pay
Landlord the cost of supplying the excess electricity requirements,
including all installation costs, on demand as additional Rent.
(b) If Tenant's electricity use exceeds the specified limits, Landlord
may, at its sole option, either:
- install separate submeter(s) for all or any part of the Leased
Premises and Tenant shall pay Landlord the installation cost
and the cost of the excess electricity as metered on demand as
additional Rent; or
- if Landlord does not elect to install separate submeter(s),
cause Landlord's engineer to determine the amount of excess
electricity to be allocated to Tenant based on the power
requirements of the equipment or lighting and Tenant shall pay
Landlord the cost of the excess electricity as reasonably
determined by Landlord's engineer on demand as additional
Rent.
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(c) If Tenant's electricity use exceeds the specified limits or any of
Tenant's equipment generates excess heat, Landlord may also, at its
sole option and without any obligation to do so, install
supplemental air conditioning units in the Leased Premises to offset
the heat-generating effect of Tenant's excess electricity usage and
Tenant's equipment and Tenant shall pay Landlord the installation
cost and the cost of operation, use, repair, and replacement of the
supplemental air conditioning units on demand as additional Rent.
(d) The obligation of Landlord to furnish electricity is subject to the
rules and regulations of the supplier of electricity and of any
municipal or other governmental authority regulating the business of
providing electricity. Landlord is not liable to any Tenant Party
for any failure or defect in the supply or character of electricity
furnished to the Leased Premises due to any requirement, act, or
omission of the entity supplying electricity to the Project.
(e) Tenant shall pay to Landlord, without any set off or deduction,
beginning on the Commencement Date, Tenant's Proportionate Share of
Total Electricity Costs for the Project (defined below) incurred in
the use, occupancy, and operation of the Project and all related
improvements and appurtenances, including electricity used for
heating and air-conditioning and perimeter lighting for the Project,
net of Submetered Power (defined below).
(f) The term TOTAL ELECTRICITY COSTS FOR THE PROJECT means the total
electricity cost charged to Landlord by the entity supplying
electricity to the Building, and the Building's share of electricity
costs charged for other portions of the Project, including taxes,
but may not include any administrative fee or charge by Landlord.
The term SUBMETERED POWER means all supplemental electricity that is
separately submetered by Landlord and paid by tenants in the
Building or that is separately tracked and calculated by Landlord's
engineer and paid by tenants in the Building.
(g) If Landlord at any time elects to install submeters measuring
electricity used in the Building or the Leased Premises, which may
include submeters measuring electricity used for heating and cooling
the Building or Leased Premises, then Tenant's Proportionate Share
of those actual costs will be based on actual use as measured by the
submeters, but, with any areas sharing a submeter being prorated on
the basis that the area of the Leased Premises bears to the total
area covered by the submeters.
(h) Landlord shall bill Tenant for Tenant's electricity charges under
this Paragraph monthly and Tenant shall pay its electricity charges
within 10 business days after receipt of each bill. Landlord shall
bill Tenant for Tenant's electricity charge for the last full or
partial month of the Lease Term as soon as practicable after the
termination or expiration of this Lease and Tenant shall pay the
bill within 10
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business days after receipt. Tenant's obligation to pay the bill
survives the termination or expiration of the Lease.
7. SERVICES BY LANDLORD.
Landlord shall maintain the Building, the On-Site Garage, the Off-Site
Garage and all common areas (exclusive of those portions of the Lease
Premises Tenant is obligated to maintain hereunder) in accordance with
standards customarily followed in the maintenance of first-class buildings
comparable to the Building in the downtown Dallas central business
district. Landlord, subject to payment by Tenant as specified below, shall
furnish the following services for the Leased Premises:
- air conditioning, both heating and cooling (as required by the
seasons), from 8:00 a.m. to 6:00 p.m. on weekdays and on Saturdays
from 8:00 a.m. to 1:00 p.m., except on Holidays (as defined below)
(the HVAC Standard Hours) amounts as are in the sole judgment of
Landlord reasonably required for comfortable use and occupancy under
normal business operations. Circulating air is not available other
than through the Building's HVAC system. If Tenant requires HVAC
services at any time other than HVAC Standard Hours, Landlord shall
furnish after-hours HVAC service for the times specified in a
request by Tenant received by the Project manager before 2:00 p.m.
on the business day the extra usage is required. Requests received
after that deadline will be handled in accordance with Landlord's
Building Policies in effect at the time. Tenant acknowledges receipt
of a copy of the current Building Policies. Landlord may make
changes in the Building Policies and the changes become effective
when a copy of the revised Building Policies is delivered to Tenant.
Tenant shall pay Landlord as additional Rent for extra service
within 5 days after receipt of a bill therefor the greater of (A)
the actual cost of the extra service [if more than one tenant has
requested and is furnished after-hours HVAC service for the same
hour(s) the charge will be prorated if reasonably possible], or (B)
$50 per hour per floor (whole or partial) of after-hours HVAC
service. HOLIDAYS are New Year's Day, Memorial Day, Independence
Day, Labor Day, Thanksgiving, and Christmas. BUSINESS DAYS are
weekdays other than Holidays.
- cold water (at the normal temperature of the water supply to the
Building) for lavatory and toilet purposes, water for drinking
purposes, and hot water (from the regular Building supply at
prevailing temperatures) for lavatory purposes to restrooms located
in the core area of the Building only, all water service to be at
supply points provided for general use of tenants of the Building
through fixtures installed by Landlord, or by Tenant with Landlord's
prior consent;
- janitor and maid service to the Leased Premises in accordance with
Exhibit G on days other than Fridays, Saturdays, and Holidays;
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- window washing and wall cleaning as determined by Landlord in its
reasonable discretion;
- operator-less passenger elevators for ingress and egress to and from
the floor(s) on which the Leased Premises are located (provided,
Landlord may reasonably limit the number of elevators to be in
operation on Saturdays, Sundays, and Holidays) and freight elevator
service in common with other tenants but only when scheduled through
the Project manager;
- common area rest room facilities; and
- electric lighting for all common areas and special service areas of
the Building in the manner and to the extent deemed by Landlord to
be reasonable and standard, including replacement of florescent
light tubes in Building standard light fixtures.
BUILDING STANDARD HOURS are weekdays, excluding Holidays, from 8:00 a.m.
to 6:00 p.m. Landlord may lock the Buildings at all times other than
during Building Standard Hours; provided, however, that Tenant shall at
all times have access to the Leased Premises by keys, magnetic cards, or
other access device provided by Landlord in accordance with this Lease,
subject to reasonable access control measures instituted by Landlord after
Building Standard Hours.
8. SERVICE INTERRUPTIONS.
(a) Landlord does not warrant that the services provided by Landlord
will be free from any slow-down, interruption, or stoppage by
governmental bodies, regulatory agencies, utility companies, and
others supplying services or caused by the maintenance, repair,
replacement, or improvement of any equipment involved in the
furnishing of the services or caused by changes of services,
alterations, strikes, lock-outs, labor controversies, fuel
shortages, accidents, acts of God, the elements, or other causes
beyond the reasonable control of Landlord. Landlord shall use due
diligence to resume the service upon any slowdown, interruption, or
stoppage.
(b) No slow-down, interruption, or stoppage of the services may be
construed as an eviction, actual or constructive, of Tenant or cause
an abatement of Rent or in any manner or for any purpose relieve
Tenant from its obligations under this Lease. Landlord is not liable
for damage to persons or property, or in default under this Lease,
as a result of any slow-down, interruption, or stoppage.
(c) Notwithstanding the foregoing, if there occurs an interruption in
HVAC, electricity, water or elevator services ("ESSENTIAL
SERVICES"), such interruption is not caused by Tenant or a Tenant
Party, such interruption renders at least 50% of the Leased Premises
untenantable, and such interruption continues to render at least 50%
of the
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Lease Premises untenantable for (i) 5 consecutive business days if
caused by Landlord's negligence or willful misconduct, or (ii) 30
consecutive days if not caused by Landlord's negligence or willful
misconduct, then Rent shall abate as to that portion of the Leased
Premises rendered untenantable from the 6th consecutive business day
or the 31st day, as the case may be, of such interruption and for as
long as such interruption continues thereafter. The foregoing
remedies shall be Tenant's sole and exclusive remedies with respect
to interruption of services.
9. OPERATING COSTS.
(a) The term OPERATING COSTS means those expenses (other than expenses
for electricity) directly incurred in the management, operation,
maintenance, repair, and security of the Project, including but not
limited to the cost of all utilities, building supplies, janitorial
service, maintenance, repairs, fire and extended coverage, public
liability, and other insurance costs, all labor and employee benefit
costs (including wages, salaries, and fees of all personnel engaged
in the management, operation, maintenance, repair, and security of
the Project), ad valorem taxes and assessments (both regular and
special), costs that reduce operating expenses or are required to
meet Applicable Laws [defined in Paragraph 14(a)], management fees,
consulting fees, legal fees, accounting fees, the Building's share
of fees, charges, taxes, expenses and other amounts due in
connection with pedestrian tunnels, pedestrian skybridges,
parking-garages, City of Dallas property required to be maintained
or operated by Landlord, and other elements of the Project or other
facilities that benefit the Building, and the fair market rental of
the Project managers' offices, together with payments or credits
Landlord makes to any tenant or tenants in the Project in lieu of
Landlord providing any of the services or paying for any of the
costs. If for any time period in question the Project is less than
95% occupied, Landlord shall increase Operating Costs as though the
Project were 95% occupied.
(b) The term EXCESS OPERATING COSTS means the amount by which the
Operating Costs for any calendar year after the Base Year exceed the
Operating Costs for the Base Year. Landlord shall calculate
Operating Costs and Excess Operating Costs on a Rentable Square Foot
basis by dividing the aggregate costs by the Total Building Area. If
the amount of ad valorem taxes and assessments for the Base Year is
subsequently modified, the modified amount is deemed to be the ad
valorem taxes and assessments for the Base Year and is substituted
for the original amount of taxes and assessments in the calculation
of Operating Costs for the Base Year.
(c) If there are Excess Operating Costs for any calendar year, Tenant
shall pay to Landlord as additional Rent an amount equal to the
product of the Excess Operating Costs (on a Rentable Square Foot
basis) multiplied by the number of Rentable Square Feet in the
Leased Premises. If the amount of ad valorem taxes and assessments
for the Base Year is reduced under subparagraph (b), Tenant shall
pay to Landlord as
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additional Rent any underpayment in Excess Operating Costs resulting
from the recalculation of the Operating Costs for the Base Year
within 30 days after delivery of any invoice therefor.
(d) On or before December 1 of the Base Year and each subsequent
calendar year, Landlord shall deliver to Tenant Landlord's
reasonable estimate of the Excess Operating Costs for the next
calendar year. Tenant shall pay to Landlord monthly as additional
Rent, in advance on or before the first day in each succeeding
calendar month, an amount equal to one twelfth (l/12th) of the
product of the number of Rentable Square Feet in the Leased Premises
times Landlord's estimated Excess Operating Costs for the applicable
calendar year. Landlord may adjust its estimate by notice to Tenant
at any time during the applicable calendar year if actual Excess
Operating Costs are substantially different from the estimate, and
thereafter payments by Tenant under this Paragraph adjust
accordingly. The term CALENDAR YEAR includes partial calendar years.
(e) No later than July 1 of each calendar year, Landlord shall deliver
to Tenant a statement (EXCESS OPERATING COSTS STATEMENT) certified
by an authorized representative of Landlord setting out in
reasonable detail the actual Excess Operating Costs for the prior
calendar year. If the estimated payments made by Tenant during the
prior calendar year exceed Tenant's share of actual Excess Operating
Costs for that year, Landlord shall credit the difference against
the next ensuing installments of estimated payments by Tenant under
this Paragraph. If the estimated payments made by Tenant during the
prior calendar year under this Paragraph are less than Tenant's
share of the actual Excess Operating Costs for that year, Tenant
shall pay the amount of the difference to Landlord in cash within 30
days after delivery of any invoice therefor by Landlord accompanied
by a statement of the actual Excess Operating Costs for that year as
additional Rent.
(f) Notwithstanding the foregoing, Operating Costs that are controllable
(which excludes electricity, taxes, utilities and insurance) shall
not increase, on a cumulative compounded basis by more than eight
percent (8%) per year during the Lease Term.
(g) If Operating Costs for any calendar year (other than taxes, utility
or insurance) increase by more than 5%, Tenant, at its expense, may
inspect, audit, and copy Landlord's books and records concerning the
applicable Excess Operating Costs Statement at Landlord's Project
Manager's offices during normal office hours within 6 months after
the date of the Excess Operating Costs Statement by giving Landlord
at least 30 days' prior notice. Tenant may not be in Landlord's
Project Manager's offices for more than a total of 5 business days.
Tenant shall make reasonable efforts to minimize any disruption to
Landlord's business while in Landlord's project manager's offices.
Landlord will use reasonable efforts to cooperate with the conduct
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of such audit. Tenant shall deliver to Landlord a copy of the audit
within 10 days after it is finalized.
- If Tenant disputes any Excess Operating Costs Statement as a
result of its audit and Landlord does not contest the accuracy
of Tenant's dispute, within 10 business days after demand,
Landlord shall reimburse Tenant the amount of any overpayment
or Tenant shall pay Landlord the amount of any underpayment,
together with interest thereon from the date due until paid at
the Interest Rate. If Landlord contests the results of
Tenant's audit, Landlord and Tenant shall use reasonable
efforts to resolve their differences. If Landlord and Tenant
are unable to resolve their differences after using reasonable
efforts, then, prior to the institution of legal action,
Landlord and Tenant agree to attempt to resolve such dispute
by participating in non-binding mediation. If Tenant retains a
third party (AUDITOR) to audit any Excess Operating Costs
Statement, the Auditor must be a nationally recognized
accounting firm that is not being compensated by Tenant on a
contingency fee basis. Prior to conducting an audit, Tenant
and any Auditor shall execute Landlord's standard form of
confidentiality agreement relating to the audit.
- Tenant may not conduct an audit of any Excess Operating Costs
Statement if Tenant is in default under this Lease at the time
Tenant delivers its notice to Landlord requesting the audit or
at the time the audit would be conducted. Except for
Affiliate, as hereinafter defined, sublessees or assignees, no
subtenant may conduct an audit and no assignee may conduct an
audit for any period during which the assignee was not in
possession of the Leased Premises.
10. SECURITY DEPOSIT. Intentionally Deleted.
11. ASSIGNMENT AND SUBLETTING.
(a) Tenant may not, without Landlord's prior written consent, except as
specified in subparagraph 11(i) below; (1) assign or transfer this
Lease or any interest therein; (2) permit any assignment of this
Lease or any interest therein by operation of law; (3) sublet the
Leased Premises or any part thereof; (4) grant any license,
concession, or other right of occupancy of any portion of the Leased
Premises; (5) mortgage, pledge, or otherwise encumber its interest
in this Lease; or (6) permit the use of the Leased Premises by any
parties other than Tenant and its employees. Landlord's consent to
any assignment, subletting, or reorganization is not a waiver of
Landlord's right to approve or disapprove any subsequent assignment,
subletting, or reorganization. Tenant and any guarantor of Tenant's
obligations under this Lease (GUARANTOR, whether one or more) shall
remain jointly and severally liable for the
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payment of Rent and performance of all other obligations under this
Lease after any assignment or subletting. If Tenant is a
partnership, Tenant, Guarantor, and the general partners of Tenant
prior to its reorganization shall remain jointly and severally
liable for the payment of Rent and performance of all other
obligations under this Lease after any reorganization.
(b) If an Event of Default (defined in Paragraph 27) occurs while the
Leased Premises or any part thereof are assigned or sublet,
Landlord, in addition to any other remedies under this Lease or
provided by law, may at its option collect directly from the
assignee or sublessee all rents payable to Tenant under the
assignment or sublease and apply the rent against any sums due to
Landlord under this Lease. Tenant authorizes and directs any
assignee or sublessee to make payments of rent directly to Landlord
upon receipt of notice from Landlord. No direct collection of rent
by Landlord from any assignee or sublessee is a novation or a
release of Tenant or Guarantor from the performance of their
obligations under this Lease or under any guaranty executed by
Guarantor. Receipt by Landlord of rent from any assignee, sublessee,
or occupant of the Leased Premises is not a waiver of the covenant
against assignment and subletting or a release of Tenant or
Guarantor.
(c) If Tenant wants to assign or sublease all or part of the Leased
Premises, it shall deliver a notice to Landlord specifying the name
of, financial information for, and the nature of the business of the
proposed assignee or subtenant, and the proposed effective date of
the assignment or sublease. Tenant may not assign or sublease all or
any part of the Leased Premises at any time when Tenant is in
default under this Lease, whether or not an Event of Default has
occurred.
(d) Landlord has a period of 20 days from receipt of Tenant's notice to
notify Tenant that Landlord elects, in Landlord's sole discretion,
to:
(1) terminate this Lease as to the space that is the subject of
Tenant's notice as of the date specified by Tenant, and if
more than thirty percent (30%) of the Leased Premises, whether
through one or more transactions, will be subject to
assignments or subleases as a results of the proposed sublease
or assignment, Landlord shall have the right to terminate the
Lease in its entirety;
(2) consent to the assignment or sublease; provided, if the rent
payable to the Tenant by the sublessee is greater than the
Minimum Rent, fifty percent (50%) of the excess rent is
payable by Tenant as additional Rent to Landlord on the same
dates Tenant pays Minimum Rent; or
(3) refuse to consent to Tenant's assignment or sublease of that
space and to continue this Lease in effect.
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If Landlord does not notify Tenant of Landlord's election within the
20-day period, Landlord is deemed to elect option (3).
(e) Any change in a majority of the voting rights or other control
rights of Tenant is an assignment for purposes of this Paragraph, If
Tenant is a partnership, then any transfer of a general partnership
interest is an assignment for purposes hereof.
(f) As a condition to the effectiveness of each assignment or
subletting, and whether or not Landlord's prior consent is required
for the assignment or subletting, Tenant shall pay to Landlord its
reasonable administrative and legal costs in connection therewith,
not to exceed $1,000.
(g) Any attempted assignment or sublease by Tenant or any attempted
reorganization of Tenant in violation of the terms of this Paragraph
is void.
(h) Tenant may not enter into any sublease, license, concession or other
agreement for any use, occupancy or utilization of the Leased
Premises that provides for a rental or other payment for the use,
occupancy, or utilization based in whole or in part on the net
income or profits derived by any person from the premises so leased,
used, occupied, or utilized.
(i) Tenant may, without the prior consent of Landlord, sublet all or any
part of the Leased Premises to an Affiliate (defined below), or
assign this Lease to an Affiliate, so long as (i) Tenant provides
Landlord a copy of the sublease or the assignment within 10 days
after its execution, (ii) the transaction was not entered into as a
subterfuge to avoid the obligations and restrictions of this Lease,
(iii) the assignee or sublessee is engaged in a business customarily
acceptable for a tenant in a first-class high-rise building in
Dallas, Texas, (iv) the assignee's or sublessee's proposed use of
the Leased Premises does not violate this Lease, and (v) the
assignee's or sublessee's net worth, creditworthiness and financial
standing is equal to or better than Tenant's as of the date of such
assignment or sublease. Landlord has no obligation to recognize an
Affiliate as the tenant under this Lease unless Landlord timely
receives a complete copy of the assignment or sublease. Tenant and
Guarantor remain jointly and severally liable for the payment of
Rent and performance of all other obligations under this Lease after
any assignment or subletting to an Affiliate. The term AFFILIATE
means any entity that acquires all or part of Tenant, or that is
acquired in whole or in part by Tenant, or which entity controls,
directly or indirectly, Tenant. For purposes of this subparagraph,
CONTROL means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a
corporation, whether through the ownership of voting securities or
by contract or otherwise.
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(j) If Landlord exercises its termination right set forth in
subparagraph 11(d)(l) above, the number of reserved (if any) and
unreserved parking spaces allocated to Tenant reduces
proportionately, effective as of the date of termination.
(k) Notwithstanding the foregoing, Landlord will not unreasonably
withhold its approval of an assignment of this Lease or a sublease
of a portion of the Leased Premises so long as the following
conditions are satisfied: (i) the assignee or sublessee is of a kind
and type and has a net worth and creditworthiness comparable to
other tenants customarily found in or comparable with first-class
office buildings in the downtown Dallas central business district
comparable to the Building; (ii) the assignee or sublessee is
engaged in a business customarily acceptable for a tenant in a
first-class office building in the downtown Dallas central business
district comparable to the Building; (iii) the assignee's or
sublessee's proposed use of the Leased Premises does not violate
this Lease or any restriction applicable to the Building; (iv) at
the time of such assignment or subletting, this Lease is in full
force and effect and there is no uncured Event of Default; (v) the
assignee or sublessee shall not use the Leased Premises or the
Building in a manner that adversely interferes with, burdens the use
of or otherwise increases the use of the public areas of the
Project, any Building system, or the use of the elevators or any
Building system; and (vi) in no event shall the following be
considered as suitable assignees or sublessees under this Lease: 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 Leased Premises.
(l) Notwithstanding the giving by Landlord of its consent to any
sublease or assignment with respect to the Leased Premises, no
sublessee or assignee may exercise any renewal options, expansion
options, rights of first offer or similar rights under this Lease
except in accordance with a separate written agreement entered into
directly between such sublessee or assignee and Landlord, provided
Tenant continues to be liable for the performance of all obligations
hereunder, as increased or otherwise affected by the exercise of
such rights. Tenant may not exercise any renewal options, expansion
options, rights of first offer or similar rights under this Lease if
Tenant has assigned any portion of its interest in this Lease or
subleased any portion of the Leased Premises.
12. REPAIR AND MAINTENANCE BY TENANT.
(a) Except for those repairs and maintenance obligations required to be
undertaken by Landlord as expressly provided in this Lease, Tenant
shall keep the Leased Premises [including, without limitation,
Standard Improvements and Tenant Improvements
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(both as defined in Exhibit F)] and all fixtures installed by or on
behalf of Tenant in good and tenantable condition. Tenant shall
promptly make all necessary non-structural repairs and replacements
to its fixtures and Tenant Improvements, all at Tenant's expense,
under the supervision and with the approval of Landlord. All repairs
and replacements must be equal in quality and class to the original
work. Without diminishing this obligation of Tenant, if Tenant fails
to make any repairs and replacements within 15 days after the
occurrence of the damage or injury, Landlord may at its option make
the repairs and replacements and Tenant shall pay Landlord on demand
as additional Rent the costs incurred by Landlord plus an
administrative fee equal to 10% of the costs; provided, however,
that with respect to any repair which reasonably requires more than
15 days to complete, Landlord shall not have the right to make such
repair or replacement as long as Tenant commences such repair within
such 15 day period and thereafter diligently pursues such repair to
completion.
(b) Tenant shall pay the cost of repairs and replacements due to damage
or injury to the Project or any part thereof caused by any Tenant
Party or by any malfunction or misuse of any equipment installed by
or on behalf of Tenant. This amount is payable by Tenant to Landlord
on demand as additional Rent, plus interest at the Interest Rate
from the date of payment by Landlord until paid by Tenant. If Tenant
requests Landlord to perform any maintenance or repairs to the
Leased Premises, over and above the services required to be
performed by Landlord pursuant to Paragraph 7, Tenant shall pay the
actual cost thereof, plus an administrative fee equal to 10% of the
actual cost thereof, to Landlord as additional Rent within 5
business days after demand.
(c) Tenant also shall pay the actual cost, plus an administrative fee
equal to 10% of the actual cost thereof, to Landlord as additional
Rent within 5 days after demand, of replacing fluorescent light
tubes in Building standard light fixtures located in the Leased
Premises.
13. ALTERATIONS AND ADDITIONS BY TENANT.
(a) Tenant may not make or permit any alterations, improvements, or
additions in or to the Leased Premises or the Project without
Landlord's prior consent. Provided Tenant has notified Landlord in
writing at least 10 days prior to the commencement of any such work
within the Leased Premises, Landlord will not unreasonably withhold
its approval of non-structural alterations or physical additions to
the Leased Premises which cost $10,000 or less in each case subject
to the following limitations: (i) such alterations and additions
will not impair the structural integrity of the Building, (ii) such
alterations and additions will not affect the mechanical,
electrical, plumbing, heating, air-conditioning or ventilation
systems of the Leased Premises, (iii) such alterations and additions
are accomplished in a good and workmanlike
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manner and in accordance with all applicable governmental
requirements, (iv) such alterations and additions are not visible
from outside the Leased Premises, and (v) Tenant obtains all
applicable governmental permits and approvals required in connection
with such alterations and additions. All alterations, additions, and
improvements made to, or fixtures or other improvements placed in or
upon, the Leased Premises, whether temporary or permanent in
character, by either party (except only Tenant's movable trade
fixtures, office furniture, and equipment) are a part of the Project
and are the property of Landlord when they are placed in the Leased
Premises without compensation to Tenant. Alterations, improvements,
and additions in and to the Leased Premises requested by Tenant must
be made in accordance with complete and accurate plans and
specifications and construction documents [including, without
limitation, complete mechanical, electrical and plumbing (MEP)
requirements] prepared by Tenant and approved in advance by
Landlord. All work must be performed at Tenant's expense either by
Landlord or by contractors and subcontractors approved in advance by
Landlord. If the work is not performed by Landlord, then all work
performed by Tenant's contractors and subcontractors is subject to
the following conditions:
(1) Each contractor and subcontractor must deliver evidence
satisfactory to Landlord that the insurance specified on
EXHIBIT D is in force prior to commencing work.
(2) Tenant shall ensure that all workers are cooperative with
Project personnel and comply with all Project Rules and
Regulations.
(3) Tenant must deliver to Landlord evidence that Tenant has
obtained all necessary governmental permits and approvals for
the improvements or alterations prior to starting any work.
(4) All construction must be done in a good and workmanlike manner
and is subject to approval by Landlord during and after
construction to determine compliance with the approved plans
and specifications and construction documents, in its sole
discretion.
(5) Lien releases from each contractor and subcontractor must be
submitted to Landlord within 5 days after completion of the
work performed by the contractor or subcontractor.
(6) Within 30 days after completion of any improvements or
alterations, Tenant, at its cost, shall deliver to Landlord 2
reproducible copies of "as-built" plans and specifications
(1/8" scale) for each floor where alterations or improvements
were made.
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All changes to the plans and specifications and construction
documents are also subject to Landlord's prior approval.
(b) Tenant must use Landlord's fire protection contractor and must
either (1) use Landlord's MEP engineer to prepare the MEP portions
of the plans and specifications and construction documents, or (2)
reimburse the cost of one review by Landlord's MEP engineer of the
plans and specifications and the construction documents. Landlord
shall cause its fire protection contractor and MEP engineer to
perform the work for Tenant at Landlord's contracted rates.
(c) All alterations and improvements by Tenant must comply with all
Applicable Laws. Tenant and its consultants must coordinate any
alterations or additions relating to compliance with Access Laws
with Landlord and Landlord's Access Law compliance plan for the
Project in preparing the plans and specifications and construction
documents. If Tenant's alterations or additions to the Leased
Premises or the manner in which Tenant uses the Leased Premises
cause Landlord to make any alterations or improvements to the
Project to comply with the provisions of the Americans With
Disabilities Act of 1990 (as amended), the Texas Architectural
Barriers Act (as amended) [Tex. Rev. Civ. Stat. Ann. Art. 9102], and
any similar law, rule or regulation relating to access by disabled
persons to the Leased Premises or the Project (collectively, ACCESS
LAWS), Tenant shall reimburse Landlord for the cost of the
alterations or improvements upon demand as additional Rent. Neither
Landlord's approval of Tenant's plans and specifications for the
alterations or improvements nor Landlord's acceptance of Tenant's
as-built plans is a confirmation or agreement by Landlord that the
improvements and alterations comply with Applicable Laws.
(d) Within 30 days after Tenant installs any telephone or data cables,
whether or not in connection with an alteration or addition to the
Leased Premises, Tenant, at its cost, shall deliver to Landlord 2
reproducible copies of "as-built" plans and specifications (1/8 "
scale) showing the location of the telephone and data cables.
(e) As between Landlord and Tenant, for purposes of the insurance
requirements of Paragraph 18, Tenant has an insurable interest in
all of the Tenant Improvements and alterations made by Tenant in the
Leased Premises, but all of the Tenant Improvements and alterations
shall be surrendered to Landlord with the Leased Premises upon the
expiration or earlier termination of the Lease as set forth in
Paragraph 25 of the Lease.
14. USE AND OCCUPANCY.
(a) The Leased Premises may be used and occupied by Tenant only for
general business offices and incidental uses and for no other
purpose without Landlord's prior consent, in its sole discretion.
Tenant shall use and maintain the Leased Premises in a clean,
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careful, safe, and proper manner and shall comply with all laws,
ordinances, orders, rules, and regulations of all governmental
bodies (state, federal, and municipal) applicable to or having
jurisdiction over the use, occupancy, operation, and maintenance of
the Leased Premises and the Project, including without limitations
all applicable environmental laws and the Access Laws (those laws,
ordinances, orders, rules, decisions, and regulations being called
APPLICABLE LAWS).
(b) Tenant may not deface or injure the Leased Premises or the Project
or any part thereof or overload the floors of the Leased Premises.
Tenant may not commit waste or permit waste to be committed or cause
or permit any nuisance on or in the Leased Premises or the Project.
Tenant shall pay Landlord on demand as additional Rent for any
damage to the Leased Premises or to any other part of the Project
caused by any negligence or willful act or any misuse or abuse
(whether or not the misuse or abuse results from negligence or
willful acts) by Tenant or any Tenant Party or any other person
(except Landlord or any of its agents, employees, or contractors)
authorized by Tenant to enter upon the Leased Premises.
(c) Tenant may not use or allow the Leased Premises to be used for any
purpose prohibited by any Applicable Law, or by any restrictive
covenants applicable to the Project, or as a manned express mail
pick up center for delivery services like Airborne and Federal
Express, or for the sale of bakery products for dessert items
including cookies, fudge slices, bar type cookies and cakes,
cupcakes and brownies, whether the product is sold packaged or
unpackaged if the sales would constitute more than 10% of Tenant's
gross receipts, or for a mini-bank or bank. Tenant may not sell,
purchase, or give away, or permit, except with Landlord's prior
approval, the sale, purchase, or gift of food in any form by or to
any Tenant Party or any other parties at the Leased Premises or the
Project. Tenant also will not use any part of the Leased 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 sale of merchandise, retail service shop, school or classroom,
or governmental or quasi-governmental bureau, department or agency.
Tenant shall conduct its business and occupy the Leased Premises and
control all Tenant Parties so as not to create any nuisance or
interfere with, annoy, or disturb any other tenants in the Project
or Landlord in its management of the Project and so as not to injure
the reputation of the Project.
(d) Tenant may not erect, place, or allow to be placed any sign,
advertising matter, stand, booth, or showcase in or upon the
doorsteps, vestibules, halls, corridors, doors, walls, windows, or
pavement of the Project visible outside the Leased Premises (except
for lettering on the door or doors to the Leased Premises as allowed
by the Rules and Regulations attached as EXHIBIT D) without the
prior consent of Landlord; provided, however, that on the interior
of any floor leased entirely by Tenant, Tenant may
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install signage approved by Landlord, which approval shall not be
unreasonably withheld, that is not visible from the exterior of the
Leased Premises.
(e) Tenant may not use or allow or permit the Leased Premises to be used
in any way or for any purpose that:
(1) Landlord deems hazardous on account of the possibility of fire
or other casualty;
(2) is visible from the exterior of the Leased Premises, adversely
affects ventilation in other areas of the Project, creates
unreasonable elevator loads, causes structural loads to be
exceeded, or creates unreasonable noise levels;
(3) increases the rate of fire or other insurance for the Project
or its contents or in respect of the operation of the Project;
or
(4) renders the Project uninsurable at normal rates by responsible
insurance carriers authorized to do business in the State of
Texas or renders void or voidable any insurance on the
Project.
If insurance premiums are increased because of Tenant's use of the
Leased Premises, then, in addition to any other remedies Landlord
may have, Tenant shall pay the amount of the increase to Landlord as
additional Rent within 5 days after demand.
15. MECHANICS' LIENS - TENANT'S OBLIGATIONS.
Tenant may not cause or permit any mechanic's or materialman's lien to be
placed upon Landlord's interest in the Project or the Leased Premises or
any part thereof or against Landlord's interest under this Lease by any
contractor, subcontractor, laborer, or materialman performing any labor or
furnishing any materials to Tenant for any improvement, alteration, or
repair of or to the Leased Premises, the Project, or any part thereof. If
any lien is filed on Landlord's interest or Tenant's interest in the
Leased Premises, Tenant shall cause the same to be discharged of record
within 20 days after filing. If Tenant does not discharge the lien within
the 20-day period, then, in addition to any other right or remedy of
Landlord, Landlord may, but is not obligated to, discharge the lien by
paying the amount claimed to be due or by procuring the discharge of the
lien by deposit in court or bonding. Any amount paid by Landlord relating
to any lien not caused by Landlord, and all reasonable legal and other
expenses of Landlord, including reasonable attorneys' fees, in defending
any action or in procuring the discharge of any lien, with interest
thereon at the Interest Rate from date of payment by Landlord until paid
by Tenant, is payable by Tenant to Landlord on demand as additional Rent.
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16. LIMITATIONS ON LIABILITY OF LANDLORD; WAIVER.
(a) To the fullest extent permitted by law, Tenant, on its behalf and on
behalf of all Tenant Parties, waives all claims (in law, equity, or
otherwise) against Landlord and Landlord's officers, directors,
shareholders, partners, trustees, members, agents, employees,
property manager and independent contractors (singularly, a Landlord
Party and collectively, Landlord Parties) arising out of, knowingly
and voluntarily assumes the risk of, and agrees that Landlord
Parties are not liable to any Tenant Parties for any of the
following:
(1) any injury or damage to person or property (including the
resulting loss of use, economic losses and consequential or
resulting damages of any kind from any cause) due to the
condition or design of, or any defect in, the Leased Premises
or Project that exists now or occurs in the future, except for
Landlord's gross negligence or willful misconduct;
(2) any injury or damage to person or property (including the
resulting loss of use, economic losses and consequential or
resulting damages of any kind from any cause) due to the
Leased Premises or Project or related improvements or
appurtenances being out of repair, or defects in or failure of
pipes or wiring, or backing up of drains, or the bursting or
leaking of pipes, faucets, and plumbing mixtures, or gas,
water, steam, electricity, or oil leaking, escaping, or
flowing into the Leased Premises, unless caused by Landlord's
willful misconduct or gross negligence;
(3) any loss or damage caused by the acts or omissions of other
tenants in the Project or of any other persons, excepting only
the willful misconduct or gross negligence of duly authorized
employees and agents of Landlord; or
(4) any loss or damage to property or person occasioned by theft,
fire, act of God, public enemy, injunction, riot,
insurrection, war, court order, requisition, order of
governmental authority, and any other cause beyond the control
of Landlord Parties.
(b) Notwithstanding the foregoing or anything else to the contrary
contained in this Lease, the liability of Landlord to any Tenant
Party for any default, indemnity by, or other obligation or
liability of Landlord under this Lease is limited to the interest of
Landlord in the Project. No Landlord Party has any personal
liability for any amounts payable or obligations performable by
Landlord under this Lease.
(c) The provisions of this Paragraph 16 shall survive the expiration or
earlier termination of this Lease.
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17. TENANT'S INDEMNIFICATION OF LANDLORD; ASSUMPTION; EMPLOYEES' CLAIMS.
(a) Tenant shall indemnify, defend, and hold Landlord Parties harmless
from all fines, suits, losses, costs, liabilities, claims, demands,
actions, and judgments (collectively, claims) arising out of or
relating to any of the following:
(1) any breach or default in performance of any obligation on
Tenant's part to be performed under this Lease, whether before
or during the Lease Term or after its expiration or earlier
termination;
(2) any act, omission, negligence, or misconduct of Tenant or any
Tenant Party, or of any other person entering upon the Leased
Premises under or with the express or implied invitation or
permission of Tenant;
(3) any alterations, activities, work, or things done, permitted,
allowed, or suffered by Tenant Parties in, at, or about the
Leased Premises or the Project, including the violation by
Tenant or any Tenant Party of any law, ordinance, or
governmental order of any kind; and
(4) the occupancy or use by Tenant or any Tenant Party of the
Leased Premises or the Project.
(b) Tenant is not required to indemnify, defend, or hold Landlord
Parties harmless from any claim, demand, fine, suit, loss,
liability, action or judgment arising solely from Landlord's gross
negligence or willful misconduct (except for damage to the Tenant
Improvements or Tenant's personal property, fixtures, furniture, and
equipment in the Leased premises to the extent that such damage is
covered by insurance that Tenant is required to carry under this
Lease (or would have been covered had Tenant carried the insurance
required under the provisions of this Lease).
(c) If any Landlord Party is made a party to any litigation commenced
against any Tenant Party or relating to this Lease or to the Leased
Premises, against which Tenant has agreed to indemnify Landlord
Parties pursuant to this Lease, then Tenant shall pay all costs and
expenses, including attorneys' fees and court costs, incurred by or
imposed upon the Landlord Party by virtue of the litigation. The
amount of all costs and expenses, including attorney's fees and
court costs, is a demand obligation payable by Tenant to Landlord as
additional Rent bearing interest at the Interest Rate from the date
of payment by Landlord until paid by Tenant.
(d) Deleted.
(e) The provisions of this Paragraph 17 survive the expiration or
earlier termination of this Lease.
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(f) The indemnification provisions of this Paragraph 17 shall not be
construed or interpreted as in any way restricting, limiting, or
modifying Tenant's insurance or other obligations under this Lease
and is independent of Tenant's insurance and other obligations under
this Lease.
18. TENANT'S INSURANCE.
(a) Tenant shall, at its expense, maintain at all times during the Lease
Term (and prior to the Lease Term with respect to activities of
Tenant under the Lease at the Project) insurance as set forth below:
(1) Commercial General Liability Insurance (1986 ISO Form or its
equivalent) written on an "occurrence" basis with respect to
the business carried on, in or from the Leased Premises and
Tenant's use and occupancy of the Leased Premises (including a
contractual liability) in an amount not less than $1,000,000
per occurrence and $2,000,000 general aggregate per location
for bodily injury and property damages (or with increased
limits as may be required from time to time by Landlord by
giving notice to Tenant) and without any deductible;
(2) Statutory Workers' Compensation Insurance in compliance with
the Worker's Compensation Laws of the state in which the
Leased Premises is located and including at least 100/500/100
Employers Liability Insurance.
(3) Excess/Umbrella Liability Insurance, applying on at least a
"following form" basis, with a minimum limit of $3,000,000
each Occurrence and Aggregate, where applicable; and
(4) "ISO Special Form" Property Insurance, including but not
limited to, coverage for:
(A) All office furniture, trade fixtures, office equipment,
merchandise, and all other items of Tenant's property
in, on, at, or about the Leased Premises and the
Building, including property installed by, for, or at
the expense of Tenant;
(B) Tenant Improvements; and
(C) Except for Standard Improvements, all other
improvements, betterments, alterations, and additions to
the Leased Premises.
Tenant's Property Insurance must also fulfill the following
requirements:
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(AA) It must be written on the equivalent of an ISO "Special
Form" Property Insurance Form or an equivalent form
acceptable to Landlord;
(BB) It must include earthquake and flood as covered causes
of losses;
(CC) It must include an agreed amount endorsement for not
less than one-hundred percent (100%) of the full
replacement cost (new without deduction for
depreciation) of the covered items and property; and
(DD) It must have a deductible no greater than $25,000 for
each loss.
It is the parties' intent that Tenant structure its property
insurance program so that no coinsurance penalty is imposed and
there are no valuation disputes with any insurer or with Landlord.
The property insurance coverage must include vandalism and malicious
mischief coverage.
(b) Tenant's policies must be written by an insurance company or
companies with a current A.M. Best's rating of A- IX or better and
be admitted to do business in the State of Texas. Landlord, any
mortgagees, any lessor under any ground, primary, or master lease,
and Landlord's property management company must be named as
additional insureds without restriction under the liability,
property and umbrella policies. Tenant shall obtain a written
obligation on the part of each insurance company to notify Landlord
at least 45 days prior to cancellation, non-renewal, or material
reduction of the coverage.
(c) Tenant shall deliver copies of duly executed certificates of
insurance to Landlord prior to occupying any part of the Leased
Premises, and on an annual basis thereafter. If Tenant fails to
comply with these insurance requirements, Landlord may obtain the
required insurance and Tenant shall pay to Landlord on demand as
additional Rent the premium cost thereof plus interest at the
Interest Rate from the date of payment by Landlord until paid by
Tenant.
19. LANDLORD'S INSURANCE.
Landlord shall carry, or cause to be carried: (A) Commercial General
Liability Insurance with limits of liability of not less than $1,000,000
each occurrence, single limit Bodily Injury and Property Damage combined;
and (B) the equivalent of ISO Special Form Property Insurance insuring the
Project for the full replacement value thereof, excluding Tenant
Improvements and Tenant's merchandise, trade fixtures, furnishings,
equipment, personal property, and any alterations or additions made by
Tenant.
20. RIGHTS RESERVED BY LANDLORD.
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Landlord reserves the following rights, exercisable without notice and
without liability to, and without consent of, any Tenant Party for damage
or injury to property, persons, or business and without effecting an
eviction, constructive or actual, or disturbance of Tenant's use or
possession or giving rise to any claim for set-off or abatement of Rent:
(a) To change the Building's or the Project's name or street address;
provided Landlord shall reimburse Tenant for the cost of a 1 month
supply of stationery.
(b) To install, affix, and maintain any signs on the exterior and
interior of the Project.
(c) To designate and approve, prior to installation, all types of window
shades, blinds, drapes, awnings, window ventilators, and similar
equipment, and to control all internal lighting that is visible from
the exterior of the Project.
(d) To designate, restrict, and control all sources within the Project
where Tenant may obtain ice, drinking water, towels, toilet
supplies, catering, food and beverages, and like or other services
on the Leased Premises and, in general, the exclusive right to
designate, limit, restrict, and control any business and any service
in or to the Project and its tenants.
(e) To enter upon the Leased Premises with reasonable notice (except in
the case of an emergency when no notice shall be required) at
reasonable hours to inspect, clean, or make repairs or alterations
to the Leased Premises (but without any obligation to do so, except
as expressly specified in this Lease), to make repairs or
alterations to any part of the Building or the Building systems
(including adjacent premises), to show the Leased Premises to
prospective lenders, purchasers, and, during the last 12 months of
the Lease Term, to show the Leased Premises to prospective tenants
at reasonable hours and, if the Leased Premises are vacant, to
prepare them for re-occupancy. Notwithstanding the foregoing,
Landlord shall not enter into areas previously designated in writing
by Tenant as high security areas unless (i) Landlord shows cause
therefor and is accompanied by a representative of Tenant, or (ii)
in the event of an emergency. Landlord's obligations under this
Lease shall be reduced to the extent of Tenant's refusal to grant
access to such portions of the Leased Premises.
(f) To retain at all times, and to use in appropriate instances, keys to
all doors within and into the Leased Premises. No locks may be
changed or added without the prior consent of Landlord.
(g) To decorate and make repairs, alterations, additions, changes, or
improvements, whether structural or otherwise, in and about the
Project, and for those purposes to enter upon the Leased Premises
and, during the continuance of the work, temporarily close doors,
entryways, public space, and corridors in the Project, to interrupt
or temporarily suspend Project services and facilities, and to
change the arrangement
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and location of entrances or passageways, doors and doorways,
corridors, elevators, stairs, toilets, or other public parts of the
Project, all without abatement or set off of Rent or affecting any
of Tenant's obligations under this Lease, so long as the Leased
Premises are reasonably accessible. In exercising the foregoing
rights, Landlord agrees to use reasonable efforts not to
unreasonably interfere with the conduct of Tenant's business in the
Leased Premises, including making reasonable efforts to cause
voluntary and intentional total interruptions of Essential Services
to occur after Building Standard Hours.
(h) To have and retain a paramount title to the Leased Premises and the
Project free and clear of any act of Tenant purporting to burden or
encumber the Leased Premises or the Project.
(i) To grant to anyone the exclusive right to conduct any business or
render any service in or to the Project, provided the exclusive
right does not operate to exclude Tenant from the uses expressly
permitted in this Lease.
(j) To approve the weight, size, and location of safes, heavy equipment,
file cabinets, book shelves, and other heavy items in and about the
Leased Premises and the Project and to require all those items and
all furniture to be moved into and out of the Project and the Leased
Premises only at times and in a manner specified by Landlord.
Movements of Tenant's property into or out of the Project and within
the Project are entirely at the risk and responsibility of Tenant.
To require permits before allowing Tenant's property to be moved
into or out of the Project.
(k) To take reasonable measures as Landlord deems advisable for the
security of the Project and its occupants including, without
limitation, the search of all persons entering or leaving the
Project, the evacuation of the Project for cause, suspected cause,
or for drill purposes, the temporary denial of access to the
Project, and the closing of the Project after Building Standard
Hours, subject to Tenant's right to admittance when the Project is
closed after Building Standard Hours under reasonable regulations
Landlord may prescribe from time to time.
(1) To transfer, assign, or convey, in whole or in part, the Project and
Landlord's rights under this Lease. If Landlord transfers, assigns,
or conveys its rights under this Lease, Landlord is released from
any further obligations under this Lease and Tenant shall look
solely to the successor in interest of Landlord for performance of
the obligations of "Landlord" under this Lease.
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21. FIRE OR OTHER CASUALTY.
(a) If the Leased Premises or any part thereof are damaged by fire or
other casualty, Tenant shall give prompt notice thereof to Landlord.
If the Project or the Building is so damaged by fire or other
casualty that substantial alteration or reconstruction of the
Project or the Building is, in Landlord's sole opinion, required
(whether or not the Leased Premises are damaged) or if any mortgagee
under a mortgage or deed of trust covering the Project requires that
the insurance proceeds payable as a result of the fire or other
casualty be used to retire the mortgage debt, Landlord may, at its
sole option, terminate this Lease by giving Tenant notice of
termination within 90 days after the date of the damage. If Landlord
terminates this Lease under this Paragraph, the Rent abates as of
the date of the damage.
(b) If Landlord does not elect to terminate this Lease, Landlord shall
within 90 days after the date of the damage commence to repair and
restore the Project (except that Landlord is not responsible for
delays outside its control) to substantially the same condition in
which it was immediately prior to the casualty. Upon such damage,
Tenant shall assign to Landlord (or Landlord's designee) all
insurance proceeds payable to Tenant under the property insurance
required pursuant to Paragraph 18 (save and except proceeds paid for
loss of Tenant's personal property) and Landlord shall repair and
replace the Standard Improvements, Tenant Improvements and
alterations installed in the Leased Premises; provided that Landlord
shall in no event be obligated to expend for such repair or
replacement amounts in excess of the insurance proceeds available to
Landlord (over and above amounts going to the mortgagee of the
Building and/or Project). Landlord is not liable for any
inconvenience or annoyance to any Tenant Party or injury to the
business of Tenant resulting in any way from casualty damage or the
repairs; provided, during the time and to the extent the Leased
Premises are unfit for occupancy, Landlord shall, either furnish
Tenant with comparable office space at prevailing market rates or a
fair diminution of Rent, in accordance with the mutual agreement of
Landlord and Tenant at the time.
(c) If the damages are caused by the negligence or willful misconduct of
any Tenant Party, Rent does not abate and Tenant shall pay to
Landlord on demand as additional Rent any damages in excess of the
amount paid by insurance proceeds received by Landlord.
22. CONDEMNATION.
(a) If all or substantially all of the Project or the Building is taken
for any public or quasi-public use under any governmental law,
ordinance, or regulation or by right of eminent domain or is sold to
the condemning authority in lieu of condemnation, then this Lease
terminates as of the date which is 7 days prior to the date when
physical
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possession of the portion of the Building or Project is taken by the
condemning authority. If less than all or substantially all of the
Project or the Building is taken or sold, Landlord (whether or not
the Leased Premises are affected) may terminate this Lease by giving
notice to Tenant within 90 days after the right of election accrues,
in which event this Lease terminates as of the date which is 7 days
prior to the date when physical possession of the portion of the
Building and Project is taken by the condemning authority.
(b) If this Lease is not terminated upon any taking or sale of less than
all or substantially all of the Project:
(1) the Rent reduces by an amount representing that part of the
Rent properly allocable to the portion of the Leased Premises
taken or sold; and
(2) Landlord shall, at Landlord's sole expense, restore the
Project to substantially its former condition to the extent
reasonably deemed feasible by Landlord, but:
(A) Landlord's restoration obligation does not exceed the
scope of the work done by Landlord in originally
constructing the Project and installing Standard
Improvements in the Leased Premises; and
(B) Landlord is not required to spend for the work an amount
in excess of the amount received by Landlord as
compensation or damages (over and above amounts going to
the mortgagee of the property taken) for the part of the
Project so taken.
(C) Landlord is entitled to receive all of the compensation
awarded upon a taking of any part or all of the Project,
including any award for the value of the unexpired Lease
Term. Tenant is not entitled to and expressly waives all
claim to any compensation; provided, Tenant is entitled
to receive any award for damages to the Tenant
Improvements not paid for by Landlord.
23. TAXES ON TENANT'S PROPERTY.
Tenant shall pay, and indemnify, defend, and hold Landlord harmless
against, all taxes levied or assessed against personal property,
furniture, fixtures, or other improvements placed by or for Tenant in the
Leased Premises. If any taxes for which Tenant is liable are levied or
assessed against Landlord or Landlord's property and if Landlord is
required to pay the taxes or if the assessed value of Landlord's property
is increased by inclusion of personal property, furniture, fixtures, or
other improvements placed by or for Tenant in the Leased Premises and
Landlord elects to pay the increased taxes, Tenant shall pay to Landlord
on demand as
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additional Rent that part of the taxes for which Tenant is liable under
this Paragraph. If Landlord is advised of any increase in property
valuation which could give rise to a property tax increase for which
Landlord is entitled to indemnification under this Paragraph 23, then
Landlord shall promptly notify Tenant of such increase and Tenant shall
thereafter have the right to contest such increase provided Tenant
contests such increase in accordance with all applicable laws as to
Tenant's personal property only and Tenant either pays the resulting tax
increase before it becomes due or provides Landlord with adequate security
for the payment of such tax and any penalty and interest should the
contest be denied.
24. WAIVER OF SUBROGATION.
Each party waives all claims that arise or may arise in its favor against
the other party, or anyone claiming through or under them, by way of
subrogation or otherwise, during the Lease Term or any extension or
renewal thereof, for all losses of, or damage to, any of its property
(whether or not the loss or damage is caused by the fault or negligence of
the other party or anyone for whom the other party is responsible), which
loss or damage is covered by valid and collectible fire and extended
coverage insurance policies, to the extent that the loss or damage is
recovered under the insurance policies. These waivers are in addition to,
and not in limitation of, any other waiver or release in this Lease with
respect to any loss or damage to property of the parties. Since these
mutual waivers preclude the assignment of any claim by way of subrogation
(or otherwise) to an insurance company (or any other person), each party
shall immediately give each insurance company issuing to it policies of
fire and extended coverage insurance written notice of the terms of these
mutual waivers, and have the insurance policies properly endorsed, if
necessary, to prevent the invalidation of the insurance coverages by
reason of these waivers.
25. SURRENDER UPON TERMINATION OR EXPIRATION; HOLDOVER.
(a) Upon the Expiration Date or any earlier termination of this Lease,
Tenant shall: (1) surrender to Landlord possession of the Leased
Premises in good repair and condition, reasonable wear and tear and
damages or destruction by any insured casualty excepted, and (2)
deliver to Landlord all keys to the Leased Premises and all parking
access cards. If Tenant does not immediately surrender possession,
Landlord may enter upon and take possession of the Leased Premises
and expel or remove Tenant and any other person who may be occupying
the Leased Premises, or any part thereof, by force if necessary,
without having any civil or criminal liability therefor.
(b) If Tenant or any of its successors in interest continues to hold any
part of the Leased Premises after the termination of this Lease, the
holding over is a tenancy at sufferance at a monthly rental equal to
175% of the monthly Minimum Rent payable at the time of termination,
plus the payment of all other Rent payable under this Lease. While
Tenant or its successor continues to hold the Leased Premises after
the
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termination of this Lease, the tenancy is subject to all terms of
this Lease; provided, all expansion rights, first refusal rights,
first notice rights, first offer rights, and renewal rights
automatically terminate. Landlord shall have the right to terminate
such tenancy at any time at will on one (1) day notice.
(c) No payments of money by Tenant to Landlord after the termination of
this Lease reinstate, continue, or extend the Lease Term and no
extension of this Lease after the termination or expiration thereof
is valid unless it is reduced to writing and signed by Landlord and
Tenant. Nothing in this Paragraph may be construed to give Tenant
the right to hold over beyond the Expiration Date or any earlier
termination of this Lease or preclude Landlord from having the right
to dispossess or otherwise terminate Tenant's right of possession.
Any month-to-month tenancy is terminable upon notice from Landlord.
26. REMOVAL OF TENANT'S PROPERTY.
(a) All furniture, movable trade fixtures, and equipment installed by or
on behalf of Tenant remains the property of Tenant and must be
removed by Tenant at its sole risk and expense at the termination of
this Lease, but may not be removed prior to the termination of this
Lease without Landlord's prior consent. Any removal of Tenant's
property must be accomplished in a good and workmanlike manner so as
not to damage the Leased Premises or the Project. Tenant, or
Landlord at Tenant's expense, shall repair any damage to the Leased
Premises or the Project caused by any removal. All furniture,
movable trade fixtures, and equipment installed by Tenant not
removed within 15 days after termination of the Lease are
conclusively presumed to be abandoned by Tenant. Landlord may, at
its option, take the possession of the property (including any
special use improvements) and either (1) declare it to be the
property of Landlord by notice to Tenant or (2) at the sole risk and
expense of Tenant and without payment of any compensation to Tenant,
remove it or any part thereof in any manner, that Landlord chooses
and store, sell, or otherwise dispose of it without incurring
liability to Tenant or any other person. All amounts payable to
Landlord under this Paragraph plus interest at the Interest Rate
from date of payment by Landlord until paid by Tenant are due on
demand as additional Rent.
(b) Upon request of Landlord, Tenant shall also remove, at its sole risk
and expense, any special use improvements installed by or on behalf
of Tenant in connection with the completion of the Tenant Finish
Work (as defined in EXHIBIT F), any Additional Work, or otherwise.
The term SPECIAL USE IMPROVEMENTS means all special improvements
installed specifically for use by Tenant and includes, without
limitation, telephone and data cables, computer floors and cables,
cafeteria equipment, telephones and telephone equipment,
supplemental air conditioning units and related equipment, equipment
supplying excess electricity to the Leased Premises, and similar
items. Any removal must be accomplished in a good and
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workmanlike manner so as not to damage the Leased Premises or the
Project. Tenant, or Landlord at Tenant's expense, shall repair any
damage to the Leased Premises or the Project caused by any removal.
27. EVENTS OF DEFAULT.
The following are events of default (EVENTS OF DEFAULT) by Tenant under
this Lease:
(a) Tenant fails to pay any Rent when due and the failure continues for
a period of 5 days.
(b) Tenant fails to comply with any of the terms of this Lease, other
than the payment of Rent, and does not cure the failure within 20
days after Landlord delivers notice of the failure to Tenant or, if
such failure is one which cannot be cured within such 20 day period,
Tenant fails to begin curing such failure within such 20 day period
and diligently pursue such cure to completion within 40 days after
the expiration of such 20 day period.
(c) Tenant or Guarantor becomes insolvent, makes a transfer in fraud of
creditors, commits any act of bankruptcy, makes an assignment for
the benefit of creditors, or admits in writing its inability to pay
its debts as they become due.
(d) Tenant or Guarantor files a petition under any section or chapter of
the Bankruptcy Code of the United States, as amended, or under any
similar law or statute of the United States or any state thereof, or
Tenant or Guarantor is adjudged bankrupt or insolvent in proceedings
filed against Tenant or Guarantor, or a petition or answer proposing
the adjudication of Tenant or Guarantor as a bankrupt or its
reorganization under any present or future federal or state
bankruptcy or similar law is filed in any court and the petition
or answer is not discharged or denied within 120 days after filing.
(e) A receiver or trustee is appointed for all or substantially all of
the assets of Tenant or Guarantor or of the Leased Premises or of
any of Tenant's property located therein in any proceeding brought
by Tenant or Guarantor, or any receiver or trustee is appointed in
any proceeding brought against Tenant or Guarantor and is not
discharged within 120 days after appointment or Tenant or Guarantor
shall consent to or acquiesce in the appointment.
(f) Tenant, if a natural person, dies or becomes incapacitated or, if
Tenant is not a natural person, Tenant is dissolved or ceases to
exist.
(g) Tenant's leasehold estate is taken on execution or other process of
law in any action against Tenant.
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(h) Tenant does not conduct its business in any substantial portion of
the Leased Premises for more than 5 days.
28. LANDLORD'S REMEDIES.
If an Event of Default occurs, Landlord may then or any time thereafter
while the Event of Default continues and without any further notice or
opportunity to cure except as expressly set forth in this Paragraph pursue
any one or more of the following remedies:
(a) Terminate this Lease (without terminating Tenant's obligation to pay
Rent for the balance of the Lease Term) by giving notice to Tenant,
in which event Tenant shall immediately surrender the Leased
Premises to Landlord. If Tenant fails to surrender the Leased
Premises, Landlord may, without prejudice to any other remedy it has
for possession or arrearages in Rent, take possession of the Leased
Premises and expel or remove Tenant and any other person occupying
the Leased Premises, or any part thereof, without being liable for
prosecution or any claim of damages. Tenant shall pay to Landlord on
demand as additional Rent the amount of all loss and damage Landlord
suffers by reason of the termination, whether through inability to
relet the Leased Premises on satisfactory terms or otherwise. Except
to the extent required by law, Landlord has no duty to re-let the
Leased Premises. Landlord's damages specifically include, but are
not limited to: (1) all reasonable expenses necessary to re-let the
Leased Premises including the cost of renovating, repairing, and
altering the Leased Premises for a new tenant or tenants,
advertisements, and brokerage fees; and (2) any increase in
insurance premiums caused by the vacancy of the Leased Premises.
Nothing in this Lease limits Landlord's right to prove and obtain in
bankruptcy or insolvency proceedings damages by reason of the
termination of this Lease in an amount equal to the maximum allowed
by any statute or rule of law in effect at the time when the damages
are to be proved, whether or not the amount is greater, equal to, or
less than the amount of the loss or damages referred to above.
(b) Take possession of the Leased Premises and remove Tenant or any
other person occupying the Leased Premises, or any part thereof,
without having any civil or criminal liability and without
terminating this Lease. Landlord may (but is under no obligation,
except as may be required by law, to) re-let the Leased Premises or
any part thereof for the account of Tenant, in the name of Tenant or
Landlord or otherwise, without notice to Tenant for a term or terms
(which may be greater or less than the period that would otherwise
have constituted the balance of the Lease Term) and on conditions
(which may include concessions or free rent) and for uses as
Landlord in its sole discretion may determine. Landlord may collect
and receive any rents payable by reason of any re-letting. Tenant
shall pay Landlord on demand as additional Rent all reasonable
expenses necessary to re-let the Leased Premises, which includes the
cost of renovating, repairing, and altering the Leased Premises for
a new tenant or tenants, advertisements, and brokerage fees, as well
as any deficiency
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that may arise by reason of the reletting. Landlord is not liable
for any failure to re-let the Leased Premises or any part thereof or
for any failure to collect any Rent due upon any re-letting. No
taking of possession of the Leased Premises by Landlord is an
election on Landlord's part to terminate this Lease unless a notice
of termination is given to Tenant under subparagraphs (a) or (e).
(c) Enter upon the Leased Premises without having any civil or criminal
liability and do whatever Tenant is obligated to do under the terms
of this Lease. Tenant shall reimburse Landlord on demand as
additional Rent for any expenses Landlord incurs in performing
Tenant's obligations under this Lease, together with interest at the
rate of 18% per annum from the date incurred until repaid by Tenant.
Landlord is not liable for any damages resulting to Tenant from
Landlord's actions or omissions in performing Tenant's obligations,
whether caused by the negligence of Landlord or otherwise.
(d) Interrupt or cause the interruption of any utility service serving
the Leased Premises, deactivate Tenant's parking access cards,
suspend elevator service to the Leased Premises, remove, alter, or
change any door, window, attic hatchway cover to the Leased
Premises, or any lock, latch, hinge, hinge pin, doorknob, or other
mechanism connected to any door, window, or attic hatchway cover to
the Leased Premises, and intentionally prevent Tenant from entering
the Leased Premises without resort to judicial process. Landlord is
under no obligation to restore any door, window, or attic hatchway
cover or any lock, latch, hinge, hinge pin, doorknob, or other
mechanism attached thereto or to deliver or make available to Tenant
any key to any door, window, or attic hatchway cover until Tenant
fully cures all Events of Default then existing under this Lease.
(e) Terminate this Lease and forthwith repossess the Leased Premises and
remove all persons or property therefrom, and be entitled to recover
forthwith as damages a sum of money equal to the total of (i) the
cost of recovering the Leased Premises (including, without
limitation, attorneys' fees and costs of suit), (ii) the cost as
reasonably estimated by Landlord of any alterations of, or repairs
to, the Leased Premises which are necessary or proper to prepare the
same for reletting, (iii) the unpaid Rent owed at the time of
termination, plus interest thereon from due date at the rate of 18%
per annum, (iv) the present value of the balance of the Rent for the
remainder of the Term less the present value of the fair market
rental value (and in computing the fair market rental value the
factors taken into account shall include without limitation the
market rental concessions and the time necessary to relet the Leased
Premises) of the Leased Premises for said period (in each case using
a discount rate of 8% per annum), and (v) any other sum of money and
damages owed by Tenant to Landlord.
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(f) If Tenant violates Section 27 (h), then Landlord, as its sole and
exclusive remedy, shall have the right, but not the obligation, at
Landlord's sole option, to terminate this Lease by delivering to
Tenant 30 days' prior written notice of the effective date of such
termination.
No repossession of or reentering all or any part of the Leased Premises,
and no re-letting of the Leased Premises or any part thereof, relieves
Tenant or Guarantor of any liabilities or obligations under this Lease,
all of which survive repossession or re-entering by Landlord. If Landlord
repossesses or re-enters all or any part of the Leased Premises after an
Event of Default, Tenant shall pay to Landlord the Rent required to be
paid by Tenant. No right or remedy of Landlord under this Lease is
intended to be exclusive of any other right or remedy. Each right and
remedy of Landlord is cumulative and all other rights or remedies under
this Lease or now or hereafter existing at law, in equity or by statute.
In addition to other remedies provided in this Lease, Landlord is
entitled, to the extent permitted by applicable law, to injunctive relief
in case of the violation, or attempted or threatened violation, of any of
the terms of this Lease, or to a decree compelling specific performance of
the terms of this Lease. Notwithstanding anything in this Lease to the
contrary, if Landlord is deemed to have a duty to mitigate its damages
arising from a default by Tenant under this Lease, then Landlord's duty to
mitigate shall be limited to using reasonable and good faith efforts to
relet the Leased Premises, which duty to relet the Leased Premises shall
not (i) require Landlord to give priority to the Leased Premises over
other premises owned or managed by Landlord or its affiliates, (ii)
require Landlord to relet for less than market rent, or (iii) require
Landlord to relet to a tenant (or for a use) which is not in keeping with
the first-class character of the Project.
29. NO IMPLIED WAIVER.
The failure of Landlord or Tenant to insist at any time upon the strict
performance of any of the terms of this Lease or to exercise any option,
right, power, or remedy contained in this Lease is not a waiver of the
right or remedy for the future. The waiver of any breach of this Lease or
violation of the Rules and Regulations attached to this Lease does not
prevent a subsequent act, which would have originally constituted a breach
or violation, from having all the force and effect of an original breach
or violation. No express waiver affects any terms other than the ones
specified in the waiver and those only for the time and in the manner
specifically stated. Acceptance by Landlord of any Rent after the breach
of any of the terms of this Lease or violation of any Rule or Regulation
is not a waiver of the breach or violation or the right to collect
applicable late charges and interest, and no waiver by Landlord of any of
the terms of this Lease is effective unless expressed in writing and
signed by Landlord.
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30. WAIVER BY TENANT.
Tenant waives and surrenders for itself and all persons or entities
claiming by, through, and under it, including creditors of all kinds: (A)
any right and privilege which it or any of them has under any present or
future constitution, statute, or rule of law to redeem the Leased Premises
or to have a continuance of this Lease for the Lease Term after
termination of Tenant's right of occupancy by order or judgment of any
court or by any legal process or writ, or under the terms of this Lease;
(B) the benefits of any present or future constitution, statute, or rule
of law that exempts property from liability for debt or for distress for
Rent; (C) any provision of law relating to notice or delay in levy of
execution in case of eviction of a tenant for nonpayment of Rent; (D) any
rights, privileges, and liens set out under Sections 91.004 and 93.003 of
the Texas Property Code (as amended), and Tenant exempts Landlord from any
liability or duty thereunder; and (E) any rights of Tenant to contest
reappraisals of the Project (but not ad valorem taxes on Tenant's personal
property in the Leased Premises) under Sections 41.143 and 42.015 of the
Texas Tax Code (as amended).
31. ATTORNEYS' FEES AND LEGAL EXPENSES.
If either party files litigation concerning the interpretation or
enforcement of this Lease, the prevailing party is entitled to recover
from the losing party the prevailing party's reasonable attorneys' fees,
court costs, and expenses, whether at the trial or appellate level.
32. SUBORDINATION.
(a) This Lease and all rights of Tenant under this Lease are subject and
subordinate to:
(1) any mortgage or deed of trust secured by a first lien against
the Project;
(2) all increases, renewals, modifications, consolidations,
replacements, and extensions of any first lien mortgage or
deed of trust;
(3) all ground, primary, or master leases now or hereafter
affecting the Building, the Project, or any portion thereof;
and
(4) all leases, restrictions, easements, and encumbrances recorded
in the Real Property Records of Dallas County, Texas, to the
extent they validly affect the Project.
Tenant shall, upon demand at any time or times, execute,
acknowledge, and deliver to Landlord, or to Landlord's first
mortgagee or any lessor, any instruments that may be necessary or
proper to more effectively effect or evidence this subordination to
any first mortgage, first deed of trust, or ground, primary, or
master lease.
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(b) If any first mortgage or first deed of trust against the Project is
foreclosed, or if any ground, primary, or master lease is
terminated, Tenant shall, upon request by the purchaser at the
foreclosure sale or the lessor under any ground, primary or master
lease:
(1) attorn to the purchaser or lessor and recognize the purchaser
or lessor as "Landlord" under this Lease; and
(2) execute, acknowledge, and deliver to the purchaser or lessor
an instrument in appropriate form acknowledging the
attornment.
(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 or election to terminate or otherwise adversely affect this
Lease and the obligations of Tenant under this Lease if any
foreclosure sale or ground, primary, or master lease termination
occurs. This Lease is not affected in any way whatsoever by any
foreclosure sale or ground, primary or master lease termination
unless the holder(s) of the indebtedness or other obligations
secured by the mortgages or deeds of trust declare otherwise.
(d) Notwithstanding the foregoing, any such first mortgagee or holder of
a first deed of trust or lessor under a ground, primary, or master
lease shall have the right, unilaterally, at any time to fully or
partially subordinate any such mortgage, deed of trust, or ground,
primary or master lease or other security instruments to this Lease
on such terms and subject to such conditions as such first mortgagee
or ground, primary, or master lessor may consider appropriate in its
sole discretion. Upon request, Tenant shall execute an instrument
confirming any such full or partial subordination.
(e) Notwithstanding the foregoing, Tenant shall have the right to
approve any subordination and non-disturbance agreements required of
Tenant, provided that Tenant hereby approves any subordination and
non-disturbance agreement that is not materially different from the
Subordination, Non-Disturbance and Attornment Agreement entered into
by Tenant and Landlord's First Mortgagee in connection with the
execution and delivery of this Lease.
33. QUIET ENJOYMENT.
If Tenant pays the Rent when due and timely performs all other obligations
of Tenant under this Lease, then Tenant may peaceably and quietly enjoy
the Leased Premises during the Lease Term without any disturbance from
Landlord or from any other person claiming by, through, or under Landlord,
but not otherwise, subject to the terms of this Lease and of the deeds of
trust, mortgages, ground, primary, or master leases, pedestrian tunnel
agreements,
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skybridge agreements, parking garage operating agreements, ordinances,
leases, utility easements, and agreements affecting the Project.
34. NOTICE OF LANDLORD'S DEFAULT.
If any act or omission by Landlord occurs that would give Tenant the right
to damages from Landlord or the right to terminate this Lease due to
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