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Sample Business ContractsHome: Sample Business Contracts:
Lease between Scient and Pembroke Real Estate, Inc. dated May 1, 1999
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TABLE OF CONTENTS
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Page
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DEFINITIONS AND BASIC PROVISIONS.............................. 1
LEASE GRANT................................................... 1
TERM.......................................................... 1
Term........................................................ 1
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RENT.......................................................... 1
(a) Payment............................................. 1
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(b) Consumer Price Index Increases to Basic Rental...... 1
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(c) Electrical Costs.................................... 1
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(d) Annual Cost Statement............................... 1
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(e) Adjustments to Electrical Costs..................... 1
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DELINQUENT PAYMENT; HANDLING CHARGES.......................... 2
SECURITY DEPOSIT.............................................. 2
LANDLORD'S OBLIGATIONS........................................ 2
(a) Services............................................ 2
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(b) Excess Utility Use.................................. 3
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(c) Discontinuance...................................... 3
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(d) Restoration of Services............................. 4
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(e) Abatement........................................... 4
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(f) Restoration Costs................................... 4
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IMPROVEMENTS; ALTERATIONS; REPAIRS; MAINTENANCE............... 5
(a) Improvements; Alterations........................... 5
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(b) Repairs; Maintenance................................ 6
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(c) Performance of Work................................. 6
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(d) Mechanic's Liens.................................... 6
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USE........................................................... 6
ASSIGNMENT AND SUBLETTING..................................... 7
(a) Transfers; Consent.................................. 7
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(b) Cancellation........................................ 8
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(c) Additional Compensation............................. 8
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(d) Transfer Restrictions............................... 8
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(e) Bankruptcy Provisions............................... 9
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(f) Withholding of Consent.............................. 10
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(g) Transfer Without Landlord Consent................... 11
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(h) Miscellaneous....................................... 12
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INSURANCE; WAIVERS; SUBROGATION; INDEMNITY.................... 12
(a) Insurance........................................... 12
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(b) Waiver of Negligence Claims No Subrogation.......... 13
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(c) Indemnity........................................... 14
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(d) Miscellaneous....................................... 14
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(e) Landlord Indemnity.................................. 14
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SUBORDINATION ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE...... 15
(a) Subordination....................................... 15
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(b) Attornment.......................................... 15
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(c) Notice to Landlord's Mortgagee....................... 15
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(d) Non-Disturbance Agreement from Current Landlord's
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Mortgagee........................................... 15
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RULES AND REGULATIONS......................................... 16
CONDEMNATION.................................................. 16
(a) Taking - Landlord's and Tenant's Rights............. 16
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(b) Taking - Landlord's Rights.......................... 16
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(c) Award............................................... 16
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FIRE OR OTHER CASUALTY........................................ 10
(a) Repair Estimate..................................... 16
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(b) Landlord's and Tenant's Rights...................... 16
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(c) Landlord's Rights................................... 17
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(d) Repair Obligation................................... 17
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TAXES......................................................... 17
EVENTS OF DEFAULT............................................. 18
REMEDIES...................................................... 18
PAYMENT BY TENANT; NON-WAIVER................................. 19
(a) Payment by Tenant................................... 19
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(b) No Waiver........................................... 19
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LANDLORD'S LIEN............................................... 19
SURRENDER OF PREMISES......................................... 19
HOLDING OVER.................................................. 20
CERTAIN RIGHTS RESERVED BY LANDLORD........................... 20
SUBSTITUTION SPACE............................................ 21
MISCELLANEOUS................................................. 22
(a) Landlord Transfer................................... 22
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(b) Landlord's Liability................................ 22
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(c) Force Majeure....................................... 22
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(d) Brokerage........................................... 22
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(e) Estoppel Certificates............................... 23
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(f) Notices............................................. 23
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(g) Separability; Gender and Number..................... 23
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(h) Amendments; and Binding Effect...................... 23
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(i) Quiet Enjoyment..................................... 23
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(j) Joint and Several Liability......................... 23
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(k) Captions............................................ 24
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(1) No Merger........................................... 24
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(m) Landlord Consent.................................... 24
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(n) No Offer............................................ 24
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(o) Exhibits............................................ 24
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(p) Entire Agreement.................................... 24
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(q) Governing Law....................................... 25
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(r) Financial Reports................................... 25
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(s) Abandonment......................................... 25
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(t) Signs............................................... 26
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SPECIAL PROVISIONS............................................ 26
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LEASE
THIS LEASE AGREEMENT (this "Lease") is entered into as of May 1, 1999,
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between PEMBROKE REAL ESTATE, INC. ("Landlord"), and SCIENT CORPORATION, a
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California corporation ("Tenant").
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DEFINITIONS AND 1. The definitions and basic provisions set forth in
BASIC PROVISIONS the foregoing Basic Lease Information (the "Basic Lease
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Information") executed by Landlord and Tenant
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contemporaneously herewith are incorporated herein by
reference for all purposes.
LEASE GRANT 2. Subject to the terms of this Lease, Landlord
leases to Tenant, and Tenant leases from Landlord, the
Premises.
TERM 3. Term. Possession of the Initial Premises during
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the Term shall be as follows:
RSF Floor Monthly Rental Rate Term
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5,000-10,000* 3rd Free 5/1/99-6/30/99
11,422 3rd Free 7/1/99-12/31/99
11,423 3rd $23.50 + E 7/1/99-12/31/99
22,845 3rd $23.50 + E 1/1/00-12/31/04
*Location on the 3rd floor of the Building and actual rentable square feet
to be determined at a later date.
RENT 4. (a) Payment. Tenant shall timely pay to Landlord
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the Basic Rental and all additional sums to be paid by
Tenant to Landlord under this Lease, including the amounts
set forth in Exhibit C, without deduction or set off, at
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Landlord's Address (or such other address as Landlord may
from time to time designate in writing to Tenant). Basic
Rental, adjusted as herein provided, shall be payable
monthly in advance. The third monthly installment of Basic
Rental shall be payable contemporaneously with the execution
of this Lease; thereafter, monthly installments of Basic
Rental shall be due on the first day of the fourth full
calendar month of the Term and continuing on the first day
of each succeeding calendar month during the Term. Basic
Rental for any fractional month at the beginning of the Term
shall be prorated based on 1/365ths of the current annual
Basic Rental for each day of the partial month this Lease is
in effect, and shall be due on the Commencement Date.
(b) Consumer Price Index Increases to Basic
---------------------------------------
Rental. Intentionally deleted.
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(c) Electrical Costs. Tenant shall pay to Landlord
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an amount equal to the product of (1) the cost of all
electricity used by the Building ("Electrical Costs"),
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multiplied by (2) Tenant's Proportionate Share. Such amount
shall be payable monthly based on Landlord's estimate of the
amount due for each month, and shall be due on the
Commencement Date and on the first day of each calendar
month thereafter unless Landlord has theretofore furnished
Tenant with information indicating the amount due, in which
event such amount shall be due within thirty (30) days after
Landlord has delivered to Tenant an invoice therefor.
Landlord reserves the right to change the manner in which
electricity at the Building is metered.
(d) Annual Cost Statement. By April 1 of each
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calendar year, or as soon thereafter as practicable,
Landlord shall furnish to Tenant a statement of Landlord's
actual Electrical Costs (the "Annual Cost Statement") for
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the previous year adjusted as provided in Section 4.(e). If
the Annual Cost Statement reveals that Tenant paid more for
Electrical Costs than Tenant's Proportionate Share of
Electrical Costs in the year for which such statement was
prepared, then Landlord shall reimburse or credit Tenant for
such excess within 30 days after delivery of the Annual Cost
Statement in question; likewise, if Tenant paid less than
Tenant's Proportionate Share of Electrical Costs, then
Tenant shall pay Landlord such deficiency within 30 days
after delivery of the Annual Cost Statement in question.
(e) Adjustments to Electrical Costs. With respect
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to any calendar year or partial calendar year in which the
Building is not occupied to the extent of 100% of the
rentable area thereof, the Electrical Costs for such period
shall, for the purposes hereof, be increased to the amount
which would have been
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incurred had the Building been occupied to the extent of
100% of the rentable area thereof, and Tenant shall
thereafter pay to Landlord an amount equal to the product of
(1) such amount of Electrical Costs, multiplied by (2)
Tenant's Proportionate Share.
DELINQUENT 5. All payments required of Tenant hereunder shall
PAYMENT bear interest from the date due until paid at the maximum
HANDLING CHARGES lawful rate in effect at the time such payment was due or
sum was advanced, or if there is no ascertainable maximum
lawful rate then in effect, at a rate of five percent (5%)
in excess of the floating prime or base rate of interest
established from time to time for responsible commercial
borrowers by a national bank selected by Landlord. Landlord
hereby notifies Tenant that for purposes of TEX. REV. CIV.
STAT. ANN. Art. 5069-1.04, as it may from time to time be
amended, the "applicable rate ceiling" shall be the
"indicated rate" ceiling; provided, however, that, to the
extent permitted by applicable law, Landlord reserves the
right to change the "applicable rate ceiling" from time to
time by further notice and disclosure to Tenant. Tenant
agrees that such interest is to compensate Landlord for
Tenant's use of Landlord's money after the applicable
payment was due. Additionally, Tenant shall pay to Landlord
as additional rent hereunder a late charge equal to 10% of
the delinquent payment; provided, however, Tenant shall have
no obligation to pay such late charge in connection with the
first payment of Rent (including, without limitation, Basic
Rental) due during any twelve (12) month period which is not
paid by Tenant on the date such payment was due but is paid
on or before the fifth (5th) day after such payment was due.
The parties hereto acknowledge and agree that (i) such late
charge represents a fair and reasonable estimate of the
costs Landlord will incur in processing any delinquent
payment by Tenant, (ii) such late charge shall be paid to
Landlord as liquidated damages for each payment not made by
Tenant as and when due under this Lease, and (iii) the
payment of such late charge is to compensate Landlord for
its cost and inconvenience incurred as a consequence of
Tenant's delinquency and for the additional administrative
expense incurred by Landlord or its managing agent in
handling and processing delinquent payments. In no event,
however, shall the charges permitted under this Section 5 or
elsewhere in this Lease, to the extent the same are
considered to be interest under applicable law, exceed the
maximum lawful rate of interest.
SECURITY DEPOSIT 6. Contemporaneously with the execution of this
Lease, Tenant shall pay to Landlord, in immediately
available funds, the Security Deposit, which shall be held
by Landlord without liability for interest and as security
for the performance by Tenant of its obligations under this
Lease. The Security Deposit is not an advance payment of
Rent or a measure or limit of Landlord's damages upon an
Event of Default (defined below). Landlord may, from time to
time and without prejudice to any other remedy, use all or a
part of the Security Deposit to perform any obligation which
Tenant was obligated, but failed, to perform hereunder and
such failure has continued for a period of time equal to or
greater than five (5) days after Tenant's receipt of written
notice of its failure to perform any such obligation.
Following any such application of the Security Deposit,
Tenant shall pay to Landlord on demand the amount so applied
in order to restore the Security Deposit to its original
amount. Within a reasonable time after the Term ends,
provided Tenant has performed all of its obligations
hereunder, Landlord shall return to Tenant the balance of
the Security Deposit not applied to satisfy Tenant's
obligations. If Landlord transfers its interest in the
Premises, then Landlord may assign and deliver the Security
Deposit to the transferee and Landlord thereafter shall have
no further liability for the return of the Security Deposit.
LANDLOARD'S 7. (a) Services. Provided no Event of Default exists
OBLIGATIONS --------
and subject to any event beyond the reasonable control of
Landlord (including, without limitation, the events
described in Section 25.(c) below), Landlord will furnish to
Tenant (1) water (hot and cold) at those points of supply
provided for general use of tenants of the Building; (2)
heating, ventilation, and air-conditioning ("HVAC") as
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appropriate and at such times as Landlord normally furnishes
these services to all tenants of the Building, and at such
temperatures and in such amounts as are reasonably
considered by Landlord to be standard; (3)janitorial service
to the Premises on weekdays other than holidays for
Building-standard installations (Landlord reserves the right
to bill Tenant separately for extra janitorial service
required for non-standard installations) and such window
washing as may from time to time in Landlord's judgment be
reasonably required; (4) elevators for ingress and egress to
the floor on which the Premises are located,
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in common with other tenants, provided that Landlord may
reasonably limit the number of elevators to be in operation
at times other than during customary business hours and on
holidays; (5) replacement of Building-standard light bulbs
and fluorescent tubes, provided that Landlord's standard
charge for such bulbs and tubes shall be paid by Tenant; and
(6) electrical current during normal business hours other
than for computers, electronic data processing equipment,
special lighting, equipment that requires more than 110
volts, or other equipment whose electrical energy
consumption exceeds normal office usage. Landlord shall
maintain the common areas of the Building in reasonably good
order and condition, except for damage occasioned by Tenant,
or its employees, agents or invitees. If Tenant desires any
of the services specified in this Section 7.(a) at any time
other than times herein designated (other than HVAC service
which is governed by the immediately following sentence),
such services shall be supplied to Tenant upon the written
request of Tenant delivered to Landlord before 3:00 p.m. on
the business day preceding such extra usage, and Tenant
shall, within thirty (30) days after Tenant's receipt of an
invoice therefor, pay to Landlord the cost of such services
together with an overhead charge equal to ten percent (10%)
of the actual cost of any such service. If Tenant desires
any HVAC service at any time other than the times herein
designated, such HVAC service shall be supplied to Tenant
upon the written request of Tenant delivered to Landlord
before 3:00 p.m. on the business day preceding such extra
usage, and Tenant shall, within thirty (30) days after
Tenant's receipt of an invoice therefor, pay to Landlord the
Initial After-Hours HVAC Charge, which Initial After-Hours
HVAC Charge is subject to change by Landlord if electrical
rates are increased by any provider of electricity or if
Landlord's costs to provide this service otherwise increase
after the Commencement Date.
(b) Excess Utility Use. Landlord shall use
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reasonable efforts to furnish electrical current for
computers, electronic data processing equipment, special
lighting, equipment that requires more than 110 volts, or
other equipment whose electrical energy consumption exceeds
normal office usage through the then-existing feeders and
risers serving the Building and the Premises, and Tenant
shall pay to Landlord the cost of such service within thirty
(30) days after Landlord has delivered to Tenant an invoice
therefor. Landlord may determine the amount of such
additional consumption and potential consumption by either
or both: (1) a survey of standard or average tenant usage of
electricity in the Building performed by a reputable
consultant selected by Landlord and paid for by Tenant; or
(2) a separate meter in the Premises installed, maintained,
and read by Landlord, at Tenant's expense. Tenant shall not
install any electrical equipment requiring special wiring or
requiring voltage in excess of 110 volts or otherwise
exceeding Building capacity unless approved in advance by
Landlord. The use of electricity in the Premises shall not
exceed the capacity of existing feeders and risers to or
wiring in the Premises. Any risers or wiring required to
meet Tenant's excess electrical requirements shall, upon
Tenant's written request, be installed by Landlord, at
Tenant's cost, if, in Landlord's sole and absolute judgment,
the same are necessary and shall not cause permanent damage
or injury to the Building or the Premises, cause or create a
dangerous or hazardous condition, entail excessive or
unreasonable alterations, repairs, or expenses, or interfere
with or disturb other tenants of the Building. If Tenant
uses machines or equipment (other than general office
machines and personal computers, but excluding computer
rooms and electronic data processing equipment) in the
Premises which affect the temperature otherwise maintained
by the air conditioning system or otherwise overload any
utility, Landlord may install supplemental air conditioning
units or other supplemental equipment in the Premises, and
the cost thereof, including the cost of installation,
operation, use, and maintenance, shall be paid by Tenant to
Landlord within thirty (30) days after Landlord has
delivered to Tenant an invoice therefor.
(c) Discontinuance. Landlord's obligation to
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furnish services under Section 7.(a) shall be subject to the
rules and regulations of the supplier of such services and
governmental rules and regulations. Landlord may, upon not
less than 60-days' prior written notice to Tenant,
discontinue any such service to the Premises, provided
Landlord first arranges for a direct connection thereof
through the supplier of such service. Tenant shall, however,
be responsible for contracting with the supplier of such
service and for paying all deposits for, and costs relating
to, such service.
(d) Restoration of Services. Except as expressly
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provided
3
<PAGE>
below, Landlord shall not be liable for, and Tenant shall
not be entitled to, any damages or termination right or any
abatement or reduction of rental by reason of Landlord's
failure to furnish any of the services (collectively, the
"Landlord Services") to be furnished by Landlord as provided
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above, nor shall such failure constitute a constructive
eviction of Tenant or breach of any implied warranty or
relieve Tenant from any obligation hereunder, whether such
failure is caused by accident, breakage, repairs, energy
shortages or restrictions, strikes, lockouts or other labor
disturbances or labor disputes of any character, riots,
civil disturbances or by any other cause, similar or
dissimilar, beyond the control of Landlord. Except as may be
limited by law, Landlord shall not be liable under any
circumstances for loss of or injury to property, however
occurring, through or in connection with or incidental to
failure to furnish any of the Landlord Services, nor shall
Landlord be responsible for any act or omission or
commission on the part of the person or persons employed to
furnish any of the Landlord Services. Notwithstanding
anything to the contrary contained in this Lease, Tenant
agrees that Landlord shall not be liable for, and Tenant
shall not be entitled to, any damages or any abatement or
reduction of rental by reason of Landlord's failure to
supply any of the Landlord Services during any period when
Landlord uses commercially reasonable efforts to supply such
services or the cause of such failure is beyond the control
of Landlord. After receiving notice of any interruption of
any of the Landlord Services, Landlord shall use
commercially reasonable efforts to restore any interrupted
or unavailable Landlord Services.
(e) Abatement. Subject to the provisions of the
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preceding Section 7.(d), if a stoppage of any of the
Landlord Services causes a material portion of the Premises
to become untenantable by Tenant for more than ten (10)
consecutive business days after Tenant gives Landlord
written notice of such stoppage, then and in that event,
Tenant, as its sole and exclusive remedy therefor, shall be
entitled to a pro-rata abatement of Rent as to such
untenantable portion of the Premises commencing on the
eleventh (11th) consecutive business day that the same are
untenantable and continuing until the restoration of such
services. Notwithstanding the foregoing, however, Tenant
shall not be entitled to any abatement of Rent due to
untenantability (a) caused by an act or omission of Tenant
or any of Tenant's employees, agents, contractors, visitors
or licensees, or (b) where the stoppage of the Landlord
Services in question is caused by (1) fire or other casualty
in which case Section 15 shall apply, or (2) condemnation or
taking in which case Section 14 shall apply.
(f) Restoration Costs. If a stoppage (other than
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any stoppage caused by an act or omission of Tenant or any
of Tenant's employees, agents, contractors, visitors or
licensees, any stoppage caused by fire or other casualty or
condemnation or taking, or any cause beyond the control of
Landlord) of any of the Landlord Services causes a material
portion of the Premises to become untenantable by Tenant for
more than thirty (30) consecutive days after Tenant gives
Landlord written notice of such stoppage, Tenant may
commence to restore the applicable Landlord Services unless
Landlord has begun taking action(s) to restore the
applicable Landlord Services and Landlord is continuing to
pursue the same with commercially reasonable diligence. All
actual third-party costs reasonably incurred by Tenant in
connection with restoring the applicable Landlord Services
("Restoration Costs") shall, if not disputed by Landlord and
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submitted to arbitration as provided below, be paid to
Tenant by Landlord within thirty (30) days following
Landlord's receipt of a written demand therefor together
with written evidence acceptable to Landlord of the amount
of such Restoration Costs. If Landlord disputes Landlord's
obligation to pay all or any portion of the Restoration
Costs set forth in any such written demand, Landlord may
dispute such costs and defer any payment of the same by
giving Tenant written notice thereof (a "Services Failure
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Dispute Notice") within ten (10) business days after
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Landlord's receipt of Tenant's written demand, and Landlord
and Tenant shall thereafter proceed to diligently and in
good faith attempt to resolve such dispute and, if the
parties are unable to resolve the same within sixty (60)
days after Tenant's receipt of the applicable Services
Failure Dispute Notice, such dispute shall be submitted for
resolution by binding arbitration in accordance with the
terms, conditions and provisions of the Exhibit K attached
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to this Lease. If Landlord does not so dispute Tenant's
claim for Restoration Costs and does not pay the same within
such thirty (30) day period, Tenant may offset such
Restoration Costs against up to twenty-five percent (25%) of
the next due installment(s) of Basic Rental until such time
as the full amount of such Restoration Costs has been
reimbursed unless the amount of such Restoration
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Costs is equal to or greater than the entire amount of Basic
Rental due and payable for the six (6) calendar months
following the date on which such stoppage initially
occurred, in which case only that amount of such Restoration
Costs may be offset against such percentage of the next due
installment(s) of Basic Rental until such time as that
amount of the applicable Restoration Costs has been
reimbursed; provided, however, in no event shall such cap on
the amount of Restoration Costs to be offset against Basic
Rental relieve Landlord from its obligation to pay the
remaining amount of such non-disputed and/or arbitrated
Restoration Costs.
IMPROVEMENTS; 8. (a) Improvements Alterations. Improvements to the
ALTERATIONS; ------------------------
REPAIRS; Premises shall be installed at the expense of Tenant only in
MAINTENANCE accordance with plans and specifications which have been
previously submitted to and approved in writing by Landlord.
After the initial Tenant improvements are made (including,
without limitation, any leasehold improvements made in
connection with expansions by Tenant pursuant to the Exhibit
G attached hereto), no alterations or physical additions in
or to the Premises which individually cost more than
$5,000.00 or, together with the cost of all alterations or
physical additions made during the immediately preceding 12
month period, cost more than $10,000.00 in the aggregate may
be made without Landlord's prior written consent, which
consent will not be unreasonably withheld or delayed;
provided, however, that Landlord will be able to withhold
its consent, in its sole and absolute discretion, with
respect to any alterations or physical additions in or to
the Premises, regardless of cost, which (A) are made to or
affect (1)the structural components of the Building, or (2)
the systems of the Building, or (B) are visible from the
exterior of the Building. If requested in writing at the
time of Tenant's request for Landlord's written consent to
any proposed alterations or physical additions in or to the
Premises, Landlord will, if Landlord's consent to the same
is given, notify Tenant in writing whether Landlord will
require that Tenant remove such alterations or physical
additions at the expiration or earlier termination of this
Lease. Tenant shall not paint or install lighting or
decorations, signs, window or door lettering, or advertising
media of any type on or about the Premises without the prior
written consent of Landlord. All alterations, additions, or
improvements (whether temporary or permanent in character,
and including without limitation all air-conditioning
equipment and all other equipment that is in any manner
connected to the Building's plumbing system) made in or upon
the Premises, either by Landlord or Tenant, shall be
Landlord's property at the end of the Term and shall remain
on the Premises without compensation to Tenant. Approval by
Landlord of any of Tenant's drawings and plans and
specifications prepared in connection with any improvements
in the Premises shall not constitute a representation or
warranty of Landlord as to the adequacy or sufficiency of
such drawings, plans and specifications, or the improvements
to which they relate, for any use, purpose, or condition,
but such approval shall merely be the consent of Landlord as
required hereunder. Notwithstanding anything in this Lease
to the contrary, Tenant shall be responsible for the cost of
all work required to comply with the retrofit requirements
of any Disability Laws (as hereinafter defined) (including,
without limitation; the Americans with Disabilities Act of
1990, and all rules, regulations, and guidelines promulgated
thereunder, as the same may be amended from time to time)
necessitated by any installations, additions, or alterations
made in or to the Premises at the request of or by Tenant or
by Tenant's or any Permitted Transferee's (as defined in
Section 25.(s) below) use of the Premises (other than
retrofit work whose cost has been particularly identified as
being payable by Landlord in an instrument signed by
Landlord and Tenant), regardless of whether such cost is
incurred in connection with retrofit work required in the
Premises (including the Work described in Exhibit D) or in
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other areas of the Building. All changes, alterations or
modifications (other than changes, alterations or
modifications required [1] as a result of Tenant's or any
Permitted Transferee's particular use of all or any portion
of the Premises, and/or [2] to cause the Premises to comply
with all applicable Disability Laws which Tenant has agreed
to do in this Section 8), if any, necessary to make portions
of the Building (other than the Premises) comply with all
applicable Laws (including, without limitation, Disability
Laws) shall be the responsibility of Landlord; provided,
however, if such changes, alterations or modifications are
required as a result of Tenant's or any Permitted
Transferee's use of the Premises or any changes, alterations
or modifications made to the Premises by or on behalf of
Tenant, then the same shall be made by Landlord at the sole
cost and expense of Tenant. Landlord shall have the right to
delay making any of the changes, alterations and/or
modifications referred to in the immediately preceding
sentence while Landlord is contesting in good faith the
action or actions being taken by any
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governmental authority in connection therewith. As used
in this Lease, the term "Disability Laws" shall mean the
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provisions of (i) Tex. Rev. Civ. Stat. Ann. art. 9102, as
amended, (ii) the Americans With Disabilities Act of 1990,
42 U.S.C. (S)(S)12101-12213, as amended, and (iii) any other
similar public accommodation Laws (as hereinafter defined).
As used herein, the term "Laws" shall mean all laws,
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Statutes, ordinances, resolutions, rules, codes,
regulations, restrictions (including, without limitation,
restrictive covenants or deed restrictions), policies,
orders, determinations or requirements from time to time in
existence of any governmental authority.
(b) Repairs; Maintenance. Tenant shall maintain
--------------------
the Premises in a clean, safe, operable, attractive
condition, and shall not permit or allow to remain any waste
or damage to any portion of the Premises. Tenant shall
repair or replace, subject to Landlord's direction and
supervision, any damage to the Building caused by Tenant or
Tenant's agents, contractors, or invitees. If Tenant fails
to make such repairs or replacements within 30 days after
the occurrence of such damage, then Landlord may make the
same at Tenant's cost. In lieu of having Tenant repair any
such damage outside of the Premises, Landlord may repair
such damage at Tenant's cost. The cost of any repair or
replacement work performed by Landlord under this Section 8
shall be paid by Tenant to Landlord within ten (10) days
after Landlord has delivered to Tenant an invoice therefor.
(c) Performance of Work. All work described in
-------------------
this Section 8 shall be performed only by Landlord or by
contractors and subcontractors approved in writing by
Landlord. Landlord acknowledges that Equis Corporation is
involved in the management of the Work (as defined in the
Exhibit D attached to this Lease). Tenant shall cause all
contractors and subcontractors to procure and maintain
insurance coverage against such risks, in such amounts, and
with such companies as Landlord may reasonably require, and
to procure payment and performance bonds reasonably
satisfactory to Landlord covering the cost of the work. All
such work shall be performed in accordance with all legal
requirements and in a good and workmanlike manner so as not
to damage the Premises, the primary structure or structural
qualities of the Building, or plumbing, electrical lines, or
other utility transmission facility. All such work which may
affect the HVAC system, electrical system, or plumbing must
be approved by the Building's engineer of record.
(d) Mechanic's Liens. Tenant shall not permit any
----------------
mechanic's liens to be filed against the Premises or the
Building for any work performed, materials furnished, or
obligation incurred by or at the request of Tenant. If such
a lien is filed, then Tenant shall, within ten (10) business
days after Landlord has delivered notice of the filing to
Tenant, either pay the amount of the lien or diligently
contest such lien and deliver to Landlord a bond or other
security reasonably satisfactory to Landlord. If Tenant
fails to timely take either such action, then Landlord may
pay the lien claim without inquiry as to the validity
thereof, and any amounts so paid, including expenses and
interest, shall be paid by Tenant to Landlord within ten
(10) days after Landlord has delivered to Tenant an invoice
therefor.
USE 9. Tenant shall continuously occupy and use the
Premises only for the Permitted Use and shall comply with
all Laws relating to the use, condition, and occupancy of
the Premises. The Premises shall not be used for any use
which is disreputable, creates extraordinary fire hazards or
results in an increased rate of insurance on the Building or
its contents or the storage of any hazardous materials or
substances, or is otherwise in violation of any of the terms
and provisions of this Lease. Landlord acknowledges and
agrees that the business of Tenant as indicated on the S-1
filed with the Securities and Exchange Commission is not
disreputable. If, because of Tenant's acts, the rate of
insurance on the Building or its contents increases, then
such acts shall be an Event of Default, Tenant shall pay to
Landlord the amount of such increase within five (5)
business days after Tenant's receipt of written demand for
such amount, and acceptance of such payment shall not
constitute a waiver of any of Landlord's other rights.
Tenant shall conduct its business and control its agents,
employees, and invitees in such a manner as not to create
any nuisance or interfere with other tenants or Landlord in
its management of the Building. The Premises shall not be
occupied by more than one (1) person per one hundred
seventy-five (175) net rentable square feet contained in the
Premises (with the understanding that Tenant may provide
working areas/stations at a ratio of one per 145 net
rentable square feet in the
6
<PAGE>
Premises), and (ii) Tenant shall not conduct its business
within the Premises for more than fourteen (14) consecutive
hours during any business day (an insubstantial number of
employees working more than 14 consecutive hours during any
business day shall not constitute the conduct of Tenant's
business within the Premises for more than 14 consecutive
hours during such business day).
ASSIGNMENT AND 10. (a) Transfers Consent. Tenant shall not, without
SUBLETTING -----------------
the prior written consent of Landlord (which consent will
not be unreasonably withheld or delayed), (1) assign,
transfer, or encumber this Lease or any estate or interest
herein, whether directly or by operation of law, (2) permit
any other entity to become Tenant hereunder by merger,
consolidation, or other reorganization, (3) if Tenant is an
entity other than a corporation whose stock is publicly
traded, permit the transfer of an ownership interest in
Tenant so as to result in a change in the current control of
Tenant, (4) sublet any portion of the Premises, (5) grant
any license, concession, or other right of occupancy of any
portion of the Premises, or (6) permit the use of the
Premises by any parties other than Tenant (any of the events
listed in Sections 10.(a)(1) through 10.(a)(6) being a
"Transfer"). If Tenant requests Landlord's consent to a
--------
Transfer, then Tenant shall provide Landlord with (A) a
written description of all terms and conditions of the
proposed Transfer (including, without limitation, the
proposed use of the Premises to be affected by such
Transfer), (B) copies of the proposed Transfer
documentation, (C) the following information about the
proposed transferee: name and address; reasonably
satisfactory information about its business and business
history; its proposed use of the Premises; banking,
financial, and other credit information; and general
references sufficient to enable Landlord to determine the
proposed transferee's creditworthiness and character, and
(D) such other information as Landlord may reasonably
request in writing within ten (10) days after its receipt of
the information described in clauses (A), (B) and (C) of
this paragraph. If Landlord fails to respond to any written
request by or on behalf of Tenant for Landlord's consent to
any Transfer within thirty (30) days of Landlord's receipt
of such written request and all of the information and
materials required by the immediately preceding sentence,
the request shall be deemed to have been denied by Landlord.
Tenant shall reimburse Landlord for its reasonable
attorneys' fees and other expenses reasonably incurred in
connection with considering any request for its consent to a
Transfer. If Landlord consents to a proposed Transfer, then
(i) Tenant agrees specifically to pay over to Landlord, as
Rent, all sums provided to be paid under the terms and
conditions of such Transfer which are in excess of the
amounts otherwise required to be paid by Tenant to Landlord
pursuant to this Lease, and (ii) the proposed transferee
shall deliver to Landlord a written agreement whereby it
expressly assumes the Tenant's obligations hereunder;
provided, however, that any sublessee of less than all of
the space in the Premises shall be liable only for
obligations under this Lease that are properly allocable to
the space subject to the applicable Transfer (excluding,
however, any obligation to pay Basic Rental and Tenant's
share of Excess, Tax Excess and DCURD Excess due hereunder
but including Tenant's share of Electrical Costs due
hereunder that are properly allocable to the space subject
to such Transfer). Landlord's consent to a Transfer shall
not release Tenant from performing its obligations under
this Lease, but rather Tenant and its transferee shall be
jointly and severally liable therefor. Landlord's consent to
any Transfer shall not waive Landlord's rights as to any
subsequent Transfers. If an Event of Default occurs while
the Premises or any part thereof are subject to a Transfer,
then Landlord, in addition to its other remedies, may
collect directly from such transferee all rents becoming due
to Tenant and apply such rents against Rent. Tenant
authorizes its transferees to make payments of rent directly
to Landlord upon receipt of notice from Landlord to do so.
If Tenant elects to assign this Lease or sublease all or any
portion of the Premises, Tenant may advertise the same
provided that Tenant has obtained the prior written consent
of Landlord to the form and content of any such advertising.
Tenant agrees that in the event Landlord withholds its
consent to any Transfer contrary to the provisions of this
Section 10, Tenant's sole remedy shall be to seek an
injunction in equity to compel performance by Landlord to
give its consent and Tenant expressly waives any right to
damages in the event of such withholding by Landlord of its
consent.
(b) Cancellation. Landlord may, within 30 days
------------
after submission of Tenant's written request for Landlord's
consent to a Transfer of the entire Premises or a portion of
the Premises for a term that ends within the last twelve
(12) months of the Term of this Lease, and all of the
information and
7
<PAGE>
materials required by this Section 10, cancel this Lease
(or, as to a subletting or assignment, cancel as to the
portion of the Premises proposed to be sublet or assigned)
as of the date the proposed Transfer was to be effective. If
Landlord cancels this Lease as to any portion of the
Premises, then this Lease shall cease for such portion of
the Premises and Tenant shall pay to Landlord all Rent
accrued through the cancellation date relating to the
portion of the Premises covered by the proposed Transfer and
all brokerage commissions paid or payable by Landlord in
connection with this Lease that are allocable to such
portion of the Premises. No Rent shall accrue after such
cancellation date for the portion of the Premises cancelled.
Thereafter, Landlord may lease such portion of the Premises
to the prospective transferee (or to any other person)
without liability to Tenant.
(c) Additional Compensation. Prior to the
-----------------------
occurrence and other than during the continuance of an Event
of Default, Tenant shall pay to Landlord, immediately upon
receipt thereof, 50% of all compensation received by Tenant
for a Transfer that exceeds the Basic Rental and Tenant's
share of Electrical Costs, Excess, Tax Excess and DCURD
Excess allocable to the portion of the Premises covered
thereby (100% of such compensation is herein referred to as
the "Transfer Profits"); provided, however, that to the
----------------
extent any cash payment with respect to a Transfer (or any
other proceeds of such Transfer once the same have been
converted to cash) is paid to Landlord, Tenant shall receive
a dollar-for-dollar credit towards the Rent due hereunder
which is allocable to the portion of the Premises covered by
such Transfer and Landlord shall retain the amount, if any,
of such cash payment (or any other proceeds of such
Transfer) that exceeds the Basic Rental and Tenant's share
of Electrical Costs due hereunder which is allocable to the
portion of the Premises covered by such Transfer.
Notwithstanding the foregoing, after the occurrence and
during the continuance of an Event of Default, Tenant shall
pay to Landlord, immediately upon receipt thereof, 100% of
all Transfer Profits. Tenant hereby assigns to Landlord any
and all rights it might have or ever acquire in any cash or
other proceeds of any Transfer (whether or not such Transfer
was consented to by Landlord) subject, however, to Tenant's
conditional right to receive 50% of the Transfer Profits as
provided above. This covenant and assignment shall run with
the Land and shall bind Tenant and Tenant's heirs,
executors, administrators, personal representatives,
successors and assigns. Any assignee or purchaser of
Tenant's interest in this Lease or any sublessee of all or
any portion of the Premises (each such assignee, purchaser
or sublessee is herein sometimes referred to as a
"Transferee"), by occupying the Premises or any portion(s)
----------
thereof and/or assuming Tenant's obligations hereunder,
shall assume liability to Landlord for all amounts paid to
persons other than Landlord by such Transferee in connection
with any such assignment or sale of Tenant's interest in
this Lease or subletting of all or any portion of the
Premises.
(d) Transfer Restrictions. Tenant agrees not to
---------------------
(i) sublease any space in the Building to or from another
tenant of the Building or any Affiliate of such tenant, or
(ii) accept or make any assignment of a lease of any space
in the Building to or from another tenant of the Building or
any Affiliate of such tenant, without the written consent of
Landlord first had and obtained (which Landlord may grant or
deny in its sole discretion notwithstanding anything to the
contrary contained in this Lease). Landlord agrees not to
unreasonably withhold its consent to a request by Tenant to
sublease all or any portion of the Premises to or from
another tenant of the Building if Landlord does not then
have space Available For Rent (as hereinafter defined) in
the Building that is Comparable in Size (as hereinafter
defined) to either (1) the Premises or the applicable
portion thereof to be sublet, or (2) the space to be
subleased by Tenant from another tenant of the Building. For
the purposes of this Section 10, space in the Building shall
be considered "Available For Rent" if (A) the applicable
------------------
space is not then leased by a tenant and is not then subject
to any expansion options, rights of first offer or other
options or rights of other tenants or other third parties
(or is subject to any of the foregoing, but the party owning
the same has waived, been deemed to have waived, or failed
to timely exercise the same with respect to the leasing of
the applicable space by Landlord within the consent period
identified in Section 10.(a) above), or (B) if the
applicable space is then leased and the applicable tenant's
lease expires, or shall terminate effective as of a date
which is, 4 months or less from the date on which it is
being determined whether the applicable space is Available
For Rent and such space is not then subject to any expansion
options, rights of first offer or other options or rights of
other tenants or other third parties (or is subject to any
of the foregoing, but the party owning the same has waived,
8
<PAGE>
been deemed to have waived, or failed to timely exercise the
same with respect to the leasing of the applicable space by
Landlord within the consent period identified in Section
10.(a) above), and space in the Building shall be considered
"Comparable in Size" if it is between 75% and 125% of the
------------------
amount of net rentable square feet of space being compared
to such space (by way of example only, if Tenant is
proposing to sublease 10,000 net rentable square feet of
space of the Premises, then any space containing at least
7,500 net rentable square feet of space and not more than
12,500 net rentable square feet of space would be considered
Comparable in Size). For the purposes of this Lease, the
term "Affiliate" shall mean a person or entity directly or
---------
indirectly, through one or more intermediaries, controlling,
controlled by or under common control with the party in
question. The term "control", as used in this Section 10,
-------
means, with respect to an entity that is a corporation, the
right to the exercise, directly or indirectly, of more than
50% of the voting rights attributable to the shares of the
controlled corporation and, with respect to an entity that
is not a corporation, the possession, directly or
indirectly, of the power to direct or cause the direction of
the management or policies of the controlled entity. In
determining whether a person or entity is an Affiliate of an
individual, the aggregate voting rights or interests in
other entities which are held by members of such
individual's immediate family members or by trusts for the
benefit of such individual's immediate family members shall
be attributed to such individual.
(e) Bankruptcy Provisions. Tenant (or any
---------------------
Transferee), Tenant (or any Transferee) as debtor-in-
possession, and any trustee or receiver of Tenant's (or any
Transferee's) assets (each, whether as to Tenant or any
Transferee, a "Tenant's Representative") shall have no
-------- --------------
greater rights to assume or assign this Lease or any
interest in this Lease, or to sublease all or any portion of
the Premises, than the rights provided to Tenant in this
Section 10 except to the extent Landlord shall be required
to permit such assumption, assignment or subletting by the
provisions of any Applicable Bankruptcy Law (as hereinafter
defined). Without limiting the generality of the foregoing,
if, pursuant to Applicable Bankruptcy Law, a Tenant's
Representative is permitted to assign this Lease in
disregard of the restrictions contained in this Section 10
(or if this Lease shall be assumed by a trustee or receiver
of Tenant or any Transferee), then the right of any Tenant's
Representative to assume or assign this Lease or to sublease
any of the Premises shall be subject to the following
conditions: (1) such Applicable Bankruptcy Law shall provide
to such Tenant's Representative a right of assumption of
this Lease which Tenant's Representative shall have timely
exercised and such Tenant's Representative or proposed
assignee shall have fully cured any default of Tenant (or
any Transferee) under this Lease; (2) such Tenant's
Representative or proposed assignee, as applicable, shall
have deposited with Landlord, as security for the timely
payment of Rent, cash security in an amount equal to the sum
of (i) the amount of the Security Deposit, if any, required
to be deposited with Landlord by the initial Tenant named in
this Lease, and (ii) one year's Basic Rental and Tenant's
share of Electrical Costs, Excess, Tax Excess and DCURD
Excess then reserved hereunder for the calendar year
preceding the year in which such assignment is intended to
become effective, which deposit shall be held by Landlord,
without interest, for the balance of the Term of this Lease
as security for the full and faithful performance of all of
the obligations under this Lease on the part of Tenant yet
to be performed; (3) such Tenant's Representative or
proposed assignee, as applicable, shall have provided
adequate assurance of the future performance of the
obligations of Tenant (or any Transferee) under this Lease
including, without limitation, the source of payment of Rent
and performance of all other obligations under this Lease
(which adequate assurance shall include, without limitation,
demonstration to the satisfaction of Landlord that [a] in
the case of an assumption of this Lease, Tenant's
Representative has and will continue to have sufficient
unencumbered assets after the payment of all secured
obligations and administrative expenses to assure Landlord
that Tenant's Representative will have sufficient funds to
fulfill the obligations of Tenant under this Lease, or [b]
in the case of an assignment of this Lease, such assignee
shall have a net worth, exclusive of good will and computed
in accordance with generally accepted accounting principles,
equal to the greater of (y) at least ten (10) times the sum
of all monthly installments of Basic Rental due under this
Lease during the initial Term hereof, or (z) the net worth
of the initial Tenant named in this Lease on the Lease Date,
which net worth shall be evidenced by current financial
statements of the proposed assignee, audited by an
independent certified public accountant reasonably
acceptable to Landlord); (4) the use of the Premises shall
be in accordance with the requirements of this Lease
9
<PAGE>
and, further, shall in no way diminish the reputation of the
Building as a first-class office building or impose any
additional burden upon the Building or increase the services
which Landlord would be required by this Lease to provide;
(5) the assumption or any contemplated assignment of this
Lease or subleasing of any portion of the Premises, as
applicable, shall not breach any provision in any other
lease Of space in the Building or any mortgage, financing
agreement or other agreement by which Landlord is bound; and
(6) Landlord shall have, or would have had absent the
Applicable Bankruptcy Law, no right under this Section 10 to
refuse consent to the proposed assignment or subletting by
reason of the identity or nature of the proposed assignee or
sublessee or the proposed use of the Premises to be affected
by such assignment or subletting. If all defaults are not
cured and such adequate assurance is not provided within
sixty (60) days after there has been an order for relief
under Applicable Bankruptcy Law, then (A) this Lease shall
be deemed rejected, (B) Tenant or any other person in
possession shall vacate the Premises, and (C) Landlord shall
be entitled to retain any Rent due hereunder, together with
any security deposit previously received from Tenant, and
shall have no further liability to Tenant or any person
claiming by, through or under Tenant or any trustee. If
Tenant assigns this Lease to any party and such party or its
successors or representatives causes a termination or
rejection of this Lease pursuant to Applicable Bankruptcy
Law, then, notwithstanding any such termination or
rejection, Tenant shall remain fully liable for the
performance of all covenants, agreements, terms, provisions
and conditions contained in this Lease as though the
termination or rejection never occurred and shall, without
in any way limiting the foregoing, in writing reinstate and
ratify the terms of this Lease as the same existed
immediately prior to the termination or rejection. As used
herein, the term "Applicable Bankruptcy Law" shall mean any
-------------------------
law, whether federal or state, relating to bankruptcy,
insolvency, reorganization, liquidation, winding-up or
composition or adjustment of, or relief from, debts.
Notwithstanding anything contained in this Lease to the
contrary, (i) all amounts payable by Tenant to or for the
benefit of Landlord under this Lease, whether or not
expressly denominated as Rent, shall constitute rent for the
purposes of Section 502(b)(7) of the United States
Bankruptcy Code, and (ii) this is a contract under which
applicable Law excuses Landlord from accepting performance
from (or rendering performance to) any person or entity
other than Tenant within the meaning of Sections 365(c) and
365(e)(2) of the United States Bankruptcy Code.
(f) Withholding of Consent. For the purposes of
----------------------
this Section 10, Landlord shall be deemed to have reasonably
withheld its consent to a Transfer if the refusal is based
on any one or more of the following: (1) Tenant's failure to
satisfy its obligations in the second and fourth sentences
of the Section 10.(a) above; (2) Landlord, in its sole
discretion reasonably exercised, has determined that one or
more of the reputation, business, proposed use of the
Premises, and/or the financial responsibility of and by the
proposed transferee is not satisfactory to Landlord (for the
purposes of this Lease, Landlord shall be conclusively
deemed to have reasonably exercised its discretion to
withhold its consent to an assignment or subletting to a
person or entity that either [a] is not of the character,
quality or financial strength of a tenant to whom Landlord
would generally lease space in the Building, or [b] is
similar in reputation, business, proposed use of space in
the Building and/or financial responsibility to either [i] a
prospective tenant of space in the Building to whom Landlord
elected not to lease such space, or [ii] a proposed assignee
or sublessee whose proposed assignment or subletting was not
consented to by Landlord); (3) at the time thereof an Event
of Default has occurred and is continuing or an event has
occurred and is continuing which with the giving of notice
or the passage of time, or both, would constitute an Event
of Default; (4) the proposed assignee or sublessee is an
existing tenant of the Building or Landlord reasonably
believes that the proposed assignee or sublessee is an
Affiliate (as defined in Section 10.(e) below) of an
existing tenant of the Building and Landlord then has space
Available For Rent in the Building that is Comparable in
Size to the Premises or the applicable portion thereof to be
sublet; (5) the portion(s) of the Premises subject to the
proposed Transfer will, in Landlord's sole discretion
reasonably exercised, cause the Premises to be excessively
and/or unacceptably "chopped-up"; (6) a lessor under any
Primary Lease (as defined in Section 12.(a) below) or the
holder of any Mortgage (as defined in Section 12.(a) below)
has objected to the proposed Transfer and Landlord has not
requested that such lessor or holder make such an objection;
(7) without limiting clause (4) of this paragraph, the
proposed Transfer conflicts in any manner with this Lease
(including, but not limited to, the use permitted by Section
9 above or any requirements or restrictions related
thereto); (8) the fact
10
<PAGE>
that the proposed assignee or sublessee is a governmental or
telemarketing entity or any other high-density user; (9) the
proposed assignee's or sublessee's primary business is
prohibited by a non-compete or similar provision of another
lease of space at the Building; (10) the proposed assignee
or sublessee is a competitor or Affiliate of Landlord; (11)
the proposed assignee or sublessee is then, or has within
twelve months immediately preceding Tenant's written request
for Landlord's consent to such Transfer been, a person or
entity with whom Landlord is dealing or has dealt regarding
the possibility of leasing space in the Building and
Landlord then has space Available For Rent in the Building
that is Comparable in Size to the Premises or the applicable
portion thereof to be sublet; or (12) the fact that the
instrument effecting the proposed Transfer is not in form
and content reasonably satisfactory to Landlord.
(g) Transfer Without Landlord Consent.
---------------------------------
Notwithstanding anything to the contrary set forth above,
Tenant may assign this Lease in its entirety or sublease all
or any portion of the Premises without the prior written
consent of Landlord to (1) any partnership, corporation or
other business entity into or with which Tenant shall be
merged, converted or consolidated in accordance with
applicable statutory provisions governing merger, conversion
or consolidation of the applicable business entity, or (2) a
partnership, corporation or other business entity which is a
direct successor to Tenant owning all or substantially all
of Tenant's business and assets provided that, in connection
with any assignment or subletting described in clauses (1)
and (2) of this Section 10.(g), (A) Tenant shall have
notified Landlord in writing prior to such assignment or
subletting, (B) at the time thereof, no Event of Default has
occurred and is continuing and no event has occurred and is
continuing which with the giving of notice or the passage of
time, or both, would constitute an Event of Default, (C) the
proposed transferee shall deliver to Landlord a written
agreement whereby it expressly assumes all of the Tenant's
obligations under this Lease; provided, however, that any
sublessee of less than all of the space in the Premises
shall be liable only for obligations under this Lease that
are properly allocable to the space subject to the
applicable Transfer (excluding, however, any obligation to
pay Rent due hereunder), (D) the proposed assignee or
sublessee shall not be an existing tenant of the Building or
an Affiliate of such tenant, (E) Tenant shall have agreed
specifically to pay over to Landlord, as additional rent,
all sums provided to be paid under the terms and conditions
of such assignment or sublease which are in excess of the
amounts otherwise required to be paid by Tenant to Landlord
pursuant to this Lease with respect to the portion of the
Premises covered by such Transfer, (F) Tenant shall have
reimbursed Landlord for all costs and expenses reasonably
incurred by Landlord (including, without limitation,
reasonable attorneys' fees) in connection with such
assignment and/or subletting, and (G) in the case of a
Transfer described in clauses (1) and (2) of this paragraph,
Tenant shall have provided Landlord with evidence reasonably
acceptable to Landlord that the proposed assignee/sublessee
has a demonstrable net worth not less than the net worth of
Tenant as of the date of such assignment or subletting. Any
assignment or subletting permitted without Landlord's prior
written consent as provided above (a "Permitted Transfer
------------------
Without Landlord Consent") shall not release Tenant from any
------------------------
of its obligations (including, without limitation, its
obligation to pay Rent) under this Lease. For the purposes
of this Section 10.(g), the term "Tenant" shall also mean a
permitted assignee or sublessee of the initial Tenant named
in this Lease.
(h) Miscellaneous. Landlord's consent to a
-------------
Transfer shall not release Tenant from performing its
obligations under this Lease, but rather Tenant and its
Transferee shall be jointly and severally liable therefor;
provided, however, that any sublessee of less than all of
the space in the Premises shall be liable only for
obligations under this Lease that are properly allocable to
the space subject to the applicable Transfer (excluding,
however, any obligation to pay Basic Rental and Tenant's
share of Excess, Tax Excess and DCURD Excess due hereunder
but including Tenant's share of Electrical Costs due
hereunder that are properly allocable to the space subject
to such Transfer). Landlord's consent to any Transfer shall
not waive Landlord's rights as to any subsequent Transfers.
If an Event of Default occurs while the Premises or any part
thereof are subject to a Transfer, then Landlord, in
addition to its other rights and/or remedies, may collect
directly from such Transferee all rents becoming due to
Tenant and apply such rents against all Rent due hereunder
(including, without limitation, all Basic Rental and
Tenant's share of Electrical Costs, Excess, Tax Excess and
DCURD Excess due hereunder). Tenant authorizes its
Transferees to make payments of
11
<PAGE>
rent directly to Landlord upon receipt of notice from
Landlord to do so. Without limiting Landlord's consent
rights and as a condition to obtaining Landlord's consent to
any proposed Transfer, (i) each sublessee must confirm in
writing that its sublease is subject and subordinate to this
Lease, and (ii) each Transferee shall agree to cause the
Premises to comply at all times with all applicable Laws
(including, without limitation, all Disability Laws
applicable to such Transferee's particular use of, or
activities or business operations conducted within, the
applicable portion(s) of the Premises or any specific
handicaps that such Transferee's employees, officers or
directors might have). Except as expressly provided in this
Lease to the contrary, no assignee or sublessee of the
Premises or any portion thereof shall have the right to
assign or sublet the Premises or any portion thereof. In the
event that, following an assignment or subletting permitted
by this Section 10, this Lease or the rights and obligations
of Tenant hereunder are terminated for any reason, Landlord
may, at its sole option, deem this Lease to be thereafter a
direct lease to the assignee or sublessee of Tenant covering
such assignee's or sublessee's premises.
INSURANCE; 11. (a) Insurance. Tenant shall at its expense procure
WAIVERS; ---------
SUBROGATION; and maintain throughout the Term the following insurance
INDEMNITY policies' (1) commercial general liability insurance in
amounts of not less than a combined single limit of
$5,000,000 (the "Initial Liability Insurance Amount"),
----------------------------------
insuring Tenant, Landlord and all other Landlord Parties (as
hereinafter defined) against all liability for injury to or
death of a person or persons or damage to property arising
from the use and occupancy of the Premises (this insurance
coverage shall include broad form property damage liability
and shall contain an exception to any pollution exclusion
which insures damage or injury arising out of heat, smoke or
fumes from a hostile fire), (2) contractual liability
insurance coverage sufficient to cover Tenant's indemnity
obligations hereunder, (3) Special Form (formerly referred
to as "All Risk") insurance (no exclusions shall be
permitted with respect to vandalism, malicious mischief,
theft and sprinkler leakage) covering the full value of
Tenant's property and improvements, and other property
(including property of others), in the Premises (in the
event there is a dispute as to the amount that comprises
full value of such property and improvements, the decision
of Landlord shall be conclusive, and evidence of this
insurance shall be provided on ACORD Form 27), (4) workers'
compensation insurance in the statutory limits and
employer's liability insurance (no "alternative" form of
coverage shall be acceptable) in an amount of not less than
$1,000,000.00 bodily injury by accident, each accident,
$1,000,000.00 bodily injury by disease, policy limit, and
$1,000,000.00 bodily injury by disease, each employee, each
(and any commercial umbrella applicable thereto) containing
a waiver of subrogation endorsement using endorsement form
WC 429394 (i.e., a waiver of subrogation endorsement) or
such other endorsement form as may be reasonably required by
Landlord, and such endorsements shall be in favor of all
Landlord Parties, (5) business income and extra expense
insurance (formerly known as "business interruption
insurance") in such amounts as will reimburse Tenant for
direct or indirect loss of earnings attributable to all
perils commonly insured against by prudent tenants or
attributable to prevention of access to the Premises or to
the Building as a result of such perils, but in no event
shall such coverage be for less than twelve (12) months of
income and expenses, (6) business automobile liability
insurance covering owned, non-owned and hired vehicles in an
amount of not less than $1,000,000 combined single limit for
bodily injury and property damage should Landlord deem such
insurance to be necessary, and (7) any other and further
insurance as Tenant, Landlord or any Landlord's Mortgagee
may require from time to time in form, amounts and for
insurance risks against which a prudent tenant would protect
itself. Not more frequently than every five (5) years, if,
in the opinion of Landlord's risk management group, the
amount of liability insurance at that time maintained by
Tenant as required by this Lease (i.e., commercial general
liability, employer's liability and/or business automobile
liability insurance) is not adequate, Landlord shall notify
Tenant of Landlord's risk management group's recommended
increase of the same and Tenant shall increase the
applicable liability insurance coverage to such recommended
amount. As used herein, the term "Landlord Parties" shall
----------------
mean (i) Landlord, (ii) any Landlord's Mortgagee, (iii) the
Building manager and any other parties which Landlord shall
deem necessary, (iv) Landlord's, Landlord's Mortgagee's and
the Building manager's respective shareholders, members,
partners and Affiliates, and (v) any directors, officers,
employees, agents or contractors of such persons or
entities. Tenant's insurance shall provide primary coverage
to Landlord when any policy issued to Landlord provides
duplicate or similar coverage, and in such
12
<PAGE>
circumstance Landlord's policy will be excess over Tenant's
policy. All property insurance policies written on behalf of
Tenant shall name all Landlord Parties as a loss payee as
their respective interests may appear, and shall contain (or
be endorsed to provide) a waiver of any subrogation rights
which Tenant's insurers may have against Landlord Parties
and against those for whom Landlord Parties are, at law,
responsible whether any such damage is caused by the act,
omission or fault of any Landlord Parties or by those for
whom any Landlord Parties are, at law, responsible. Tenant's
liability insurance shall (1) be written on an occurrence
basis on either Insurance Services Office ("ISO") form CG
---
0001 1092 or CG 0001 0695, (2) contain standard commercial
general liability "other insurance" wording, unmodified in
any way that would make it excess over or contributory with
an additional insured's own commercial general liability
insurance coverage, and (3) be primary and noncontributory
to any other insurance carried by Landlord or any other
Landlord Parties. All commercial general liability insurance
maintained by Tenant as required by this Lease (and any
commercial umbrella applicable thereto) shall be endorsed
using ISO form CG 2404 1093 (i.e., a waiver of subrogation
endorsement) and ISO form CG 2026 1185, and both such
endorsements shall be unmodified and shall be in favor of
all Landlord Parties. No deductible or self-insured
retention in excess of $10,000.00 shall apply to any
liability insurance of Tenant without the prior written
consent of Landlord. All policies shall be taken out with
insurers acceptable to Landlord, licensed in the State of
Texas and with a rating of (i) "A-" "XII" or better as set
forth in the most current issue of Best's Key Rating Guide,
and/or (ii) "A-" or better as set forth in the most current
issue of Standard & Poor Insurance Solvency Review. Tenant
agrees that certificates of insurance (or, if required by
Landlord or any Landlord's Mortgagee, certified copies of
each such insurance policy), in form and content acceptable
to Landlord, will be delivered to Landlord as soon as
practicable after the placing of the required insurance, but
in no event later than five (5) days prior to which Tenant
takes possession of all or any part of the Premises. All
policies shall indicate that at least thirty (30) days prior
written notice shall be delivered to Landlord and any
Landlord's Mortgagee by the insurer prior to termination,
cancellation or change of such insurance. Copies of
endorsements must be attached to all certificates delivered
by Tenant to Landlord as required by this Lease and Landlord
Parties must be identified, as applicable, as the
"additional insured" or "beneficiary" on such certificates.
Landlord must be notified in writing immediately by Tenant
of claims against Tenant that might cause a reduction below
seventy-five percent (75%) of any aggregate limit of any
insurance policy maintained by Tenant as required by this
Lease. Any deductible selected by Tenant shall be the sole
responsibility of Tenant.
(b) Waiver of Negligence Claims No Subrogation.
------------------------------------------
Landlord shall not be liable to Tenant or those claiming by,
through, or under Tenant for any injury to or death of any
person or persons or the damage to or theft, destruction,
loss, or loss of use of any property or inconvenience (a
"Loss") caused by casualty, theft, fire, third parties, or
----
any other matter (including Losses arising through repair or
alteration of any part of the Building, or failure to make
repairs, or from any other cause), regardless of whether the
negligence of any party caused such Loss in whole or in
part. Landlord and Tenant each waives any claim it might
have against the other for any damage to or theft,
destruction, loss, or loss of use of any property, to the
extent the same is insured against under any insurance
policy that covers the Building, the Premises, Landlord's or
Tenant's fixtures, personal property, leasehold
improvements, or business, or, in the case of Tenant's
waiver, is required to be insured against under the terms
hereof, regardless of whether the negligence or fault of the
other party caused such loss; however, Landlord's waiver
shall not include any deductible amounts on insurance
policies carried by Landlord or apply to any coinsurance
penalty which Landlord might sustain. Each party shall cause
its insurance carrier to endorse all applicable policies
waiving the carrier's rights of recovery under subrogation
or otherwise against the other party.
(c) Indemnity. Subject to Section 11.(b), Tenant
---------
shall defend, indemnify, and hold harmless Landlord and its
agents from and against all claims, demands, liabilities,
causes of action, suits, judgments, and expenses (including
attorneys' fees) for any Loss arising from any occurrence on
the Premises or from Tenant's failure to perform its
obligations under this Lease (other than a Loss arising from
the sole or gross negligence of Landlord or its agents),
even though caused or alleged to be caused by the joint,
comparative, or concurrent negligence or fault of Landlord
or its agents, and even though any such claim, cause of
13
<PAGE>
action, or suit is based upon or alleged to be based upon
the strict liability of Landlord or its agents. THIS
INDEMNITY PROVISION IS INTENDED TO INDEMNIFY LANDLORD AND
ITS AGENTS AGAINST THE CONSEQUENCES OF THEIR OWN NEGLIGENCE
OR FAULT AS PROVIDED ABOVE WHEN LANDLORD OR ITS AGENTS ARE
JOINTLY, COMPARATIVELY, OR CONCURRENTLY NEGLIGENT WITH
TENANT. This indemnity provision shall survive termination
or expiration of this Lease.
(d) Miscellaneous. If Tenant or any contractor of
-------------
Tenant performs any work on any portion or portions of the
Premises, prior to the commencement of any such work, Tenant
shall deliver to Landlord certificates issued by insurance
companies licensed to do business in the State of Texas, in
form and content acceptable to Landlord, evidencing that
commercial general liability, workers' compensation,
employer's liability, automobile liability and other
insurance as required by Landlord and any Landlord's
Mortgagee, in amounts and with companies reasonably
satisfactory to Landlord, are in force and effect and
maintained by all contractors and subcontractors engaged by
Tenant or any contractor of Tenant to perform such work, and
name all Landlord Parties as additional insureds. Tenant
agrees that in the event of damage or destruction to the
leasehold improvements in the Premises covered by insurance
required to be taken out by Tenant pursuant to this Section,
Tenant will use the proceeds of such insurance for the
purpose of repairing or restoring such leasehold
improvements. In the event of (1) damage or destruction to
the Building entitling Landlord or Tenant to terminate this
Lease pursuant to Section 15 below, and (2) a termination of
this Lease pursuant to such Section, then (i) if the
Premises have also been damaged, Tenant will pay to Landlord
all of Tenant's insurance proceeds relating to the leasehold
improvements in the Premises, and (ii) if the Premises have
not been damaged, Tenant will deliver to Landlord, in
accordance with the provisions of this Lease, possession of
the Premises together with all leasehold improvements
located therein except as otherwise expressly provided in
this Lease.
(e) Landlord Indemnity. Landlord shall be liable
------------------
for, and shall indemnify, defend, protect and hold Tenant
and Tenant's partners and their respective officers,
directors, employees, agents, successors and assigns
(collectively, the "Tenant Indemnitees") harmless from and
------------------
against, any and all claims, demands, actions, damages
(excluding, however, consequential or special damages),
losses, liabilities, judgments, costs and expenses
(including, without limitation, attorneys' fees and court
costs) (each a "Claim" and collectively the "Claims"), to
----- ------
the extent (i) arising or resulting from the sole or gross
negligence or willful misconduct of Landlord or any Landlord
Indemnitees, and (ii) not covered or required to be covered
by Tenant's insurance described in Section 11.(a) above;
provided, however, such indemnification by Landlord shall
not include Claims waived by Tenant in Section 11.(b) above
and any Claim to the extent caused by or resulting from the
negligence, gross negligence or willful misconduct of Tenant
or its assignees, sublessees, officers, directors,
employees, agents, servants, contractors, customers or
invitees.
SUBORDINATION 12. (a) Subordination. This Lease shall be
ATTORNMENT; -------------
NOTICE TO Subordinate to any deed of trust, mortgage, or other
LANDLORD'S security instrument (a "Mortgage"), or any ground lease,
MORTGAGEE --------
master lease, or primary lease (a "Primary Lease"), that now
------- -----
or hereafter covers all or any part of the Premises (the
mortgagee under any Mortgage or the lessor under any Primary
Lease is referred to herein as "Landlord's Mortgagee");
---------- ---------
provided, however, that the foregoing subordination in
respect of any Primary Lease or Mortgage placed on the
Building after the Lease Date shall not become effective
until and unless the lessor under such Primary Lease or the
holder of such Mortgage delivers to Tenant a non-disturbance
agreement (a "Non-Disturbance Agreement") which provides
-------------------------
that if Tenant is not then in default under, or in breach of
any provision of, this Lease, Landlord's Mortgagee will not
disturb Tenant's right of occupancy of the Premises (i.e.,
Tenant's quiet enjoyment rights as more particularly
provided in Section 25(i) below) in the event of a
foreclosure of any such Mortgage or a termination of any
such Primary Lease (a Non-Disturbance Agreement may also
include Tenant's agreement to attorn as set forth below and
will contain such other provisions as Landlord's Mortgagee
shall require in connection therewith). Although the
subordination in the immediately preceding sentence shall be
self-operating, Tenant, or its successors in interest,
shall, upon Landlord's request, execute and deliver upon
14
<PAGE>
demand any and all Non-Disturbance Agreements delivered to
Tenant subordinating this Lease to such Primary Lease or
Mortgage. Tenant also agrees that any Landlord's Mortgagee
may elect (which election shall be revocable) to have this
Lease superior to its Primary Lease or the lien of its
Mortgage and, in the event of such election and upon
notification by such Landlord's Mortgagee to Tenant to that
effect, this Lease shall be deemed superior to the said
Primary Lease or Mortgage, whether this Lease is dated prior
to or subsequent to the date of such Primary Lease or
Mortgage. Although the subordination in the immediately
preceding sentence shall be self-operating, Tenant, or its
successors in interest, shall, upon Landlord's request,
execute and deliver upon the demand of Landlord any and all
instruments desired by Landlord, subordinating, in the
manner reasonably requested by Landlord, any such Primary
Lease or Mortgage to this Lease. If Tenant fails to execute
and deliver to Landlord any Non-Disturbance Agreement or any
such subordination instrument delivered to Tenant for
Tenant's execution within ten (10) business days after
Tenant's receipt of the same, then (1) such failure shall
constitute an Event of Default until such time as the
applicable instrument has been executed by Tenant and
delivered to Landlord, (2) Tenant shall be deemed to have
agreed to all of the terms and provisions of such Non-
Disturbance Agreement or such subordination instrument, and
(3) Tenant shall thereafter be estopped from disclaiming any
of the obligations, benefits and burdens set forth therein
including, without limitation, (i) the subordination of this
Lease to any Mortgage, Primary Lease or similar instruments,
(ii) any non-disturbance rights provided to Tenant therein,
and (iii) any attornment agreements of Tenant set forth
therein. Landlord is hereby irrevocably appointed and
authorized as agent and attorney-in-fact of Tenant, coupled
with an interest, to execute all such Non-Disturbance
Agreements and subordination instruments in the event Tenant
fails to execute said instruments within ten (10) business
days after Tenant's receipt of the same.
(b) Attornment. Tenant shall attorn to any party
----------
succeeding to Landlord's interest in the Premises, whether
by purchase, foreclosure, deed in lieu of foreclosure, power
of sale, termination of lease, or otherwise, upon such
party's request, and shall execute such agreements
confirming such attornment as such party may reasonably
request.
(c) Notice to Landlord's Mortgagee. Tenant shall
------------------------------
not seek to enforce any remedy it may have for any default
on the part of the Landlord without first giving written
notice by certified mail, return receipt requested,
specifying the default in reasonable detail, to any
Landlord's Mortgagee whose address has been given to Tenant,
and affording such Landlord's Mortgagee a reasonable
opportunity to perform Landlord's obligations hereunder.
(d) Non-Disturbance Agreement from Current
--------------------------------------
Landlord's Mortgagee. Landlord shall use its reasonably best
--------------------
efforts to obtain a Non-Disturbance Agreement from the
Landlord's Mortgagee whose Mortgage currently covers the
Building. Upon the delivery to Tenant of multiple originals
of a Non-Disturbance Agreement executed by such Landlord's
Mortgagee and the other party or parties thereto (other than
Tenant), Tenant shall, within ten (10) days after Tenant's
receipt of the same, execute each of the same and return all
but one of such originals to Landlord at Landlord's address
for notices set forth in this Lease.
RULES AND 13. Tenant shall comply with the rules and regulations
REGULATIONS of the Building which are attached hereto as Exhibit B.
---------
Landlord may, from time to time, change such rules and
regulations for the safety, care, or cleanliness of the
Building and related facilities, provided that such changes
are applicable to all tenants of the Building and will not
unreasonably interfere with Tenant's use of the Premises.
Tenant shall be responsible for the compliance with such
rules and regulations by its employees, agents, and
invitees.
CONDEMNATION 14. (a) Taking - Landlord's and Tenant's Rights. If
-------- ------------------------------
any part of the Building is taken by right of eminent domain
or conveyed in lieu thereof (a "Taking"), and such Taking
------
prevents Tenant from conducting its business in the Premises
in a manner reasonably comparable to that conducted
immediately before such Taking, then Landlord may, at its
expense, relocate Tenant to office space reasonably
comparable to the Premises, provided that Landlord notifies
Tenant of its intention to do so within 30 days after the
Taking. Such relocation may be for a portion of the
remaining Term or the entire Term. Landlord shall complete
any such relocation within 180 days after Landlord has
notified Tenant
15
<PAGE>
of its intention to relocate Tenant. If Landlord does not
elect to relocate Tenant following such Taking, then Tenant
may terminate this Lease as of the date of such Taking by
giving written notice to Landlord within 60 days after the
Taking, and Rent shall be apportioned as of the date of such
Taking. If Landlord does not relocate Tenant and Tenant does
not terminate this Lease, then Rent shall be abated on a
reasonable basis as to that portion of the Premises rendered
untenantable by the Taking.
(b) Taking - Landlord's Rights. If any material
--------------------------
portion, but less than all, of the Building becomes subject
to a Taking, or if Landlord is required to pay any of the
proceeds received for a Taking to Landlord's Mortgagee, then
this Lease, at the option of Landlord, exercised by written
notice to Tenant within 30 days after such Taking, shall
terminate and Rent shall be apportioned as of the date of
such Taking. If Landlord does not so terminate this Lease
and does not elect to relocate Tenant, then this Lease will
continue, but if any portion of the Premises has been taken,
Basic Rental shall abate as provided in the last sentence of
Section 14.(a).
(c) Award. If any Taking occurs, then Landlord
-----
shall receive the entire award or other compensation for the
Land, the Building, and other improvements taken, and Tenant
may separately pursue a claim against the condemnor for the
value of Tenant's personal property which Tenant is entitled
to remove under this Lease, moving costs, loss of business,
and other claims it may have.
FIRE OR OTHER 15. (a) Repair Estimate. If the Premises or the
CASUALTY ---------------
Building are damaged by fire or other casualty (a
"Casualty"), Landlord shall, within 60 days after such
--------
Casualty, deliver to Tenant a good faith estimate (the
"Damage Notice") of the time needed to repair the damage
-------------
caused by such Casualty.
(b) Landlord's and Tenant's Rights. In the event
------------------------------
the Premises or the Building are damaged by a Casualty and
the insurance proceeds have been made available therefor by
the holder or holders of any Mortgages or the lessor under
any Primary Lease, the damage shall be repaired by and at
the expense of Landlord to the extent of such insurance
proceeds available therefor, provided such repairs can, in
Landlord's sole opinion, be made within one hundred twenty
(120) days after the occurrence of such damage without the
payment of overtime or other premiums. Until such repairs
are completed, Rent shall be abated effective as of the date
of such fire or other casualty in proportion to the part of
the Premises which is unusable by Tenant in the conduct of
its business. If repairs cannot, in Landlord's sole opinion,
be made within one hundred twenty (120) days after the
occurrence of such damage without the payment of overtime or
other premiums, Landlord may, at its option, make them
within a reasonable time, and in such event, this Lease
shall continue in effect and Rent shall be abated in the
manner provided in the immediately preceding sentence. In
the case of repairs which, in Landlord's opinion, cannot be
made within such one hundred twenty (120) day period, or in
the event that sufficient insurance proceeds for repairs are
not available to Landlord, Landlord shall notify Tenant
within sixty (60) days of the date of occurrence of such
damage as to whether or not Landlord will make such repairs.
If Landlord elects not to make such repairs which cannot be
made within such one hundred twenty (120) day period, or for
which sufficient insurance proceeds are not available to
Landlord, then either party may, by written notice to the
other, terminate this Lea |
