FIRST LEASE AMENDMENT
AND
AGREEMENT
This First Lease Amendment and Agreement (this "Amendment") is made and
entered into to be effective as of February 1, 1996, by and between PRINCIPAL
MUTUAL LIFE INSURANCE COMPANY, an Iowa corporation ("Landlord") and ZALE
DELAWARE, INC., a Delaware corporation ("Tenant"), as tenant.
RECITALS
A. Landlord entered into that certain dated as of September 17, 1992
(the "Original Lease") with ▇▇▇▇ Corporation, as debtor and
debtor-in-possession, as tenant ("Original Tenant") with respect to the land
described on Exhibit A attached hereto and made a part hereof and the
remainder of the "Premises" as defined in the Original Lease (and hereinafter
so referenced), the street address of which is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇.
B. Original Tenant assigned to Tenant all of Original Tenant's rights,
title and interests in and to the Original Lease, and Tenant accepted such
assignment and expressly assumed and agreed to perform all of the terms,
covenants, conditions, obligations and liabilities required of the Original
Tenant under the Original Lease, all as evidenced by that certain Memorandum of
Assignment of Lease dated as of July 30, 1993, executed between Original Tenant
and Tenant.
C. Landlord is the current owner of the Premises and the landlord's
interest under the Original Lease, and Tenant is the current owner of the
leasehold estate and all of the tenant's rights, title, interests, obligations
and liabilities under the Original Lease, free and clear of any mortgages or
encumbrances on said leasehold estate.
D. Landlord and Tenant desire to amend the Original Lease as hereinafter
provided.
NOW, THEREFORE, FOR TEN DOLLARS ($10.00) IN HAND PAID, the mutual covenants
and agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
AGREEMENT
1. RECITALS AND ATTACHMENT I. The Recitals set forth above are
incorporated herein and made a part hereof by this reference and ATTACHMENT I
and ATTACHMENT II attached hereto are hereby made a part of this Amendment and
of the Original Lease.
2. AMENDMENTS. The Original Lease is hereby amended as follows:
(a) The following words are included at the top of the title page and
again at the top of page 1 of the Lease so as to appear underlined and in
all upper case letters above the title "Lease":
"NOTICE: CERTAIN PROVISIONS OF THIS LEASE ARE SUBJECT TO ARBITRATION
IN ACCORDANCE WITH THE TERMS HEREOF UNDER THE TEXAS GENERAL
ARBITRATION ACT, TEXAS CIVIL PRACTICE AND REMEDIES CODE, CHAPTER 171."
(b) The first sentence of Section 2 is deleted in its entirety and the
following is substituted therefor:
"(a) The term of this Lease (the "Term") shall be 60 months (plus any
Extension Periods properly effectuated as hereinafter described),
beginning on September 17, 1992 (the "Commencement Date"). Subject to
the last sentence of this Section 2(a), there shall be no rights to
renew or extend the initial Term of 60 months, except as expressly
provided in subsection 2(b) below."
(c) The following shall be added as a new subsection (b) to Section 2:
"(b) So long as no Event of Default by Tenant exists at the time of
the Extension Notice (hereinafter defined) or at the time for the
commencement of the Extension Period (hereinafter defined), Tenant
shall have the option to extend the initial Term for three (3)
successive periods (each being hereinafter referred to as an
"Extension Period"), the first such Extension Period being for a
period of 126 months (the "First Extension Period"), and the two
following Extension Periods being each for a period of five (5) years,
without any gap or lapse in the Term, subject to the following
conditions. An Extension Period can be
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effected only by Tenant giving written notice to Landlord of
Tenant's election to exercise its option to do so no later than
twelve (12) months prior to the then-scheduled expiration date of
the then current Term (an "Extension Notice") and, with respect to
any Extension Period other than the First Extension Period, by Basic
Rental for the subject Extension Period being determined as provided
on ATTACHMENT I attached hereto and made a part hereof, or otherwise
agreed upon in writing by Tenant and Landlord, all before the first
day of the twelve (12) month notice period for the Extension Notice
as described above. Tenant's option to effect an Extension Period
shall expire and terminate automatically without the necessity or
any further notice or action by any party if an Extension Notice is
not timely delivered to Landlord or, with respect to the Extension
Periods other than the First Extension Period, the Basic Rental for
such Extension Period is not determined as provided on ATTACHMENT I
or otherwise agreed upon in writing by Tenant and Landlord before
the first day of the twelve (12) month notice period for the
Extension Notice as described above. Any Extension Period properly
effectuated as herein provided shall begin immediately after the
scheduled expiration date of the Term in effect at the time that
Tenant forwards the Extension Notice. All terms and conditions of
this Lease during any Extension Period shall be the same as in
effect immediately prior to the commencement of that Extension
Period, except that (i) for the First Extension Period, Basic Rental
shall be as indicated in Section 3a. of this Lease, and (ii) with
respect to any Extension Period other than the First Extension
Period, the Basic Rental for such Extension Period shall be
determined as described above, expressed as an amount per annum
(payable in monthly installments)."
(d) Subsection 3(a) is amended by deleting the period at the end thereof
and substituting the following language therefor:
", until the expiration of the 60th month of the Term. If Tenant
exercises its option to extend the Term of this Lease for the First
Extension Period, the following provisions shall apply and Basic
Rental during the First Extension Period shall be as follows:
Beginning on the first day of the 61st month of the
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Term and continuing through and including the 120th month of the
Term, the Basic Rental shall be $2,906,960.40 per annum and shall be
payable in monthly installments of $242,246.70 each. Beginning on
the first day of the 121st month of the Term and continuing through
and including the 156th month of the Term, the Basic Rental shall be
$3,140,235.00 per annum, and shall be payable in monthly
installments of $261,686.25 each. Beginning on the first day of the
157th month of the Term and continuing through and including the
186th month of the Term, the Basic Rental shall be $3,319,677.00 per
annum, and shall be payable in monthly installments of $276,639.75
each."
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(e) The lead in paragraph of subsection 3(b) is deleted and the following
is substituted therefor:
"b. Additional Rent. In addition to the Basic Rental, Tenant shall
pay on behalf of Landlord "Additional Rent" (herein so called) equal
to the actual Basic Costs (defined below) incurred and directly
related to the Premises. "Basic Costs" shall mean all expenses and
disbursements of every and pertaining to the Premises in connection
with the following items:"
(f) Subsection 3(b)(ii) is amended by deleting from the next-to-the-last
sentence thereof the words "the first four (4) years" and substituting
therefor the words "all except the last year", and by deleting from the
last sentence thereof the words "from funds held in escrow for such purpose
or from other funds".
(g) The last paragraph of subsection 3(b), beginning with the words
"Additional Rent" is deleted in its entirety, and the following is
substituted therefor:
"Additional Rent shall be payable directly to the entity requiring
such payment as such amounts become due and payable."
(h) Subsection 3(c) is amended as follows:
(i) the third sentence is deleted in its entirety and replaced with
the following:
"Basic Rental is also sometimes referred to in this Lease
as "Scheduled Rent"."
(ii) the fourth sentence is amended by deleting the sixth word
("Rent") and replacing same with the words "Scheduled Rent", by
inserting the word "either" prior to the words "by wire
transfer", by deleting the words "▇▇▇▇▇▇▇▇ ▇▇▇▇ Central Office
Group, Inc." and substituting therefor the words "▇▇▇▇▇▇▇▇ ▇▇▇▇
Dallas/Fort Worth, Inc.", and by adding the words "or by check
delivered to ▇▇▇▇▇▇▇▇ ▇▇▇▇ Dallas/Fort Worth, Inc., at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, either method of payment
being at Tenant's option." after "ABA no. 3001964".
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(iii) the following sentence is added to the end of subsection 3(c) so
as to constitute the new last sentence thereof:
"Tenant shall deliver to Landlord evidence satisfactory to
Landlord of payment in full of all Taxes and insurance
premiums prior to the date on which any such amounts would
become delinquent, and shall, at Landlord's written request,
deliver evidence of payment in full of any other portions of
the Additional Rent as Landlord may reasonably require."
(i) Subsection 6(b) is amended by (1) deleting from the first sentence
thereof the words "prior to the expiration or termination of this Lease"
and substituting therefor the words "no later than the Utilities Separation
Date (as hereinafter defined),", (2) deleting from the second sentence the
words "no later than the date of termination or expiration of this Lease,"
and (3) adding the following as the new last two sentences of subsection
6(b):
"As used in this Lease, the term "Utilities Separation Date"
shall mean the earlier to occur of (i) the termination of this
Lease, (ii) sixty (60) days after Tenant has received written
notice from Landlord that Landlord has entered into a bona fide
contract to sell the Land and/or the Building to a third party
(which contract may contain conditions and/or a "free look"
period), or (iii) September 30, 1997 (unless Tenant exercises its
option to extend the Term of this Lease for the First Extension
Period, in which case such date set forth in this clause (iii)
shall be March 30, 2007); provided, however, that with respect to
any executed contract described in clause (ii) above, Landlord
shall give Tenant written notice of any termination of such
contract by its terms within two (2) business days of receiving
notice of such termination, and (A) if Tenant has not commenced
the separation of utilities described in this subsection 6(b) at
the time that such notice of termination is received from
Landlord, Tenant shall not be obligated to commence such
separation of utilities until such time as Tenant receives notice
that such contract
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has been reinstated or that a new contract as described in
clause (ii) has been executed, at which time the Utilities
Separation Date shall be sixty (60) days after such notice; and
(B) if Tenant has already commenced the separation of utilities
described in this subsection 6(b) at the time that such notice
of termination is received from Landlord, such notice from
Landlord shall have no effect on the then time Utilities
Separation Date, nor relieve Tenant of its obligations to
timely complete such separation of utilities by such date, and
Tenant shall continue to diligently pursue such work until the
separation of utilities contemplated by this subsection 6(b) is
completed. Notwithstanding anything in this Lease to the
contrary, it is agreed and understood that upon receipt by
Tenant of written notice from Landlord that a bona fide
contract has been entered into with a third party as described
in clause (ii) above, Tenant will promptly commence all actions
necessary to effectuate the separation of utilities as
contemplated by this subsection 6(b) and any separate agreement
executed with Landlord, and will diligently pursue same, taking
all necessary action so as to be able to complete such
separation of utilities within sixty (60) days after receiving
such notice, until such time, if any, as the Utilities
Separation Date is recalculated as described in (A) above
pursuant to a notice from Landlord of the, termination of such
contract."
(j) Subsection 7(b) is amended as follows:
(i) after the words "free standing structure" in (i), the
following words are added:
", which, for purposes of this Lease, shall be deemed to
mean a permanent improvement containing walls and a roof,
and which is not attached to the Premises"
(ii) the words "or (v) cost in excess of $25,000, or cause all of
such alterations and additions over a 90-day period to
exceed $50,000 in costs (any alterations or
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additions meeting the requirements of (i) through (v)
inclusive" are deleted and replaced with the words "(any
alteration or addition meeting the requirements of (i)
through (iv) inclusive";
(iii) the words "; provided, however, that the cost limitations
set forth in (v) of the preceding sentence shall not apply
to Exhibit B items" are deleted;
(iv) the third sentence of subsection 7(b) is amended by deleting
the words "through (v)" and substituting therefor the words
"through (iv)";
(v) the fifth sentence of subsection 7(b) is amended by adding
the following words after the words "Landlord shall not
unreasonably withhold, condition or delay its approval":
"(A) with respect to construction or installation of any
alterations described above in (iii) or (iv), inclusive, in
this subsection 7b, or (B) with respect to the construction
or installation of any alterations described above in (i) or
(ii), inclusive, in this subsection 7b.,";
(vi) the fifth sentence of subsection 7(b) is further amended by
adding the following words in clause (c) immediately after
the words "mechanical systems and":
", except for two exterior doors which may be installed for
Tenant's security purposes to serve Tenant's credit union
area at its location as of January, 1996,";
(vii) the next to the last sentence of subsection 7(b) is deleted
in its entirety.
(viii) the following sentence is added to the end of subsection
7(b):
"Except with respect to the two exterior doors for the
credit union described above,
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Landlord may condition its consent to alterations for
which its consent is required upon Tenant's agreement and
obligation to remove such alterations at the expiration or
termination of this Lease, including, without limitation,
any consent regarding any structures on the Premises which
are free standing structures or which would otherwise
constitute free standing structures if not for the lack of
one or more walls."
(k) Subsection 7(b) is further amended by adding the following to the end
thereof.
"Landlord shall reimburse or disburse to Tenant for alterations,
purchases, work or payments made or performed by Tenant in compliance
with all of the requirements and conditions set forth in this Section
7b, which are commenced after February 1, 1996 (as described below,
the "Reimbursable Tenant Expenditures") in an amount not to exceed
$4,719,324.60 (the "Tenant Allowance Amounts"), subject to the
limitations and conditions hereafter provided. The Reimbursable
Tenant Expenditures shall be comprised o and only of (1) any tenant
improvements performed in compliance with the provisions of this
Section 7b., including, without limitations, purchase and installation
of telephone and data cabling and any other equipment and materials
which are to remain in the Building, (2) payment of remodeling tax,
moving costs, design-related costs paid to third parties, up to
$358,884 of design-related costs for work performed by Tenant's
in-house staff or related employees (the "In-house Design Allowance"),
and furniture and furniture systems pertaining to the Premises, (3)
any costs associated with a first amendment of this Lease, which are
Tenant's responsibility (subject to the provisions of Section 6 of
this Amendment), (4) the value of any use by Tenant of Tenant's
internal resources to provide any of the services or material
described in (1) or (2) above, except for the value of the work
pertaining to the In-house Design Allowance, but including any
design-related costs performed by Tenant's in-house staff or related
employees in excess of $358,884, and (5) the Construction Management
Fee (hereinafter defined). Landlord shall be obligated to fund to
Tenant the Tenant Allowance Amounts only as
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reimbursement or payment to Tenant for Reimbursable Tenant
Expenditures within twenty (20) days after Tenant's delivery to
Landlord of a written request therefor, accompanied by documentation
sufficient to satisfy the following conditions precedent to such
reimbursement or payment:
(A) With respect to any Reimbursable Tenant Expenditures which relate to
Hard Construction (as hereinafter defined) described in (1) above:
(i) prior to commencement, such alterations were the subject of at
least three (3) competitive bids by qualified contractors, mutually
acceptable to both Landlord and Tenant (Tenant reserving the right to
pre-select the general contractor based on fee and general conditions
negotiations, so long as such general -contractor is acceptable to
both Tenant and Landlord, Tenant agreeing to request in writing
Landlord's written approval prior to pre-selecting any general
contractor, which request by Tenant shad be accompanied by any
necessary information regarding such general contractor as Landlord
may reasonably require, and Landlord agreeing not to unreasonably
withhold or delay its approval after receipt of such written request
and accompanying documentation from Tenant, with Landlord's approval
being deemed given if Landlord does not respond to such request within
fifteen (15) business days after receipt of Tenant's request and
accompanying documentation);
(ii) Tenant or Tenant's representatives prepared the bid instructions,
conducted the bid opening and clarified and qualified all construction
bids for the alterations (unless the general contractor is pre-selected
by Tenant and approved by Landlord as provided above);
(iii) such alterations were the subject of a contract properly entered
into with Tenant on the Approved Contract Form (as used in this Lease,
"Approved Contract Form" shall mean. the form of AIA Construction
Contract agreed to in writing between Tenant and Landlord as
constituting the "Approved Contract Form," and containing no changes
therefrom which are not beneficial to the "Owner" under the terms
thereof, or any other form of contract approved in writing by
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Landlord for the specific work in question);
(iv) at Landlord's option and cost, the selection of the contractor,
the preparation of the bid package, Landlord's confirmation that any
construction contract is on the Approved Contract Form, Landlord's
approval of the plans and specifications and the performance of the
construction were all coordinated with and monitored by Landlord or
its representative;
(v) any alterations which affect in any way the structural elements of
the Building (including, without limitation, the roof, foundation,
"footprint" of the shell of the existing improvements, the HVAC,
mechanical, electrical or plumbing systems, structural floors or other
structural components, or load bearing walls, firewalls or restroom
walls within the Building) were the subject of (a) Landlord's approval
(written, or deemed in accordance with the provisions of Section 7(e))
prior to commencement, including, without limitation, Landlord's prior
approval of the plans and specifications therefor, and (b) Landlord's
or Landlord's representative's reasonable supervision throughout the
progress of the work involved;
(vi) Tenant has delivered to Landlord with respect to such alterations
for which no prior disbursement of Tenant Allowance Amounts has been
made, a written request therefor (a) specifying by name, current
address, telephone number and amount owed, all parties to whom Tenant
has paid or is obligated to pay such Reimbursable Tenant Expenditures,
and describing in reasonable detail the work done or material
purchased which constitutes the subject Reimbursable Tenant
Expenditures; (b) accompanied by copies of all statements, vouchers,
or invoices from the parties named therein, in form reasonably
satisfactory to Landlord; (c) accompanied by appropriate recordable
waivers of lien rights satisfactory to Landlord, executed by all
contractors, subcontractors, laborers, and materialmen who have
furnished labor or material in connection with such Reimbursable
Tenant Expenditures; and (d) certifying that all bills for labor and
material of every kind and character incurred by Tenant and due and
payable on or before the date of the application for such disbursement
have been paid, except bills to be paid from the proceeds of such
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request for disbursement or being contested in accordance with the
provisions of this Lease; provided, however, that this condition (vi)
shall be deemed unsatisfied with respect to, and Landlord shall not be
obligated to make any disbursement under this Subsection (A) in
connection with, any request by Tenant for a disbursement to the
extent that such disbursement relates to matters which are then the
subject of an inspection report by Landlord's representative
indicating that the subject work is unfinished or defective, or
involves substandard materials, or has not been completed in a good
and workmanlike manner in accordance with all applicable plans and
specifications therefor and in accordance with all applicable private
or deed restrictions, and all applicable federal, state and local
laws, codes, ordinances, regulations and statutes, or requires
corrective action.
Notwithstanding anything in this Subsection (A) to the contrary, it is
agreed that (1) any Reimbursable Tenant Expenditures described in this
Subsection (A) relating to labor or materials which (1) cost, in the
aggregate for the job, less than $50,000, and (II) do not constitute a
portion of a larger amount of work of similar nature being done
contemporaneously or work which would ordinarily be included under a
contract of greater scope, but are segregated so as to be below the
$50,000 limit, shall be subject to satisfying only the conditions of
clauses (v) (to the extent applicable) and (vi) above to entitle
Tenant to disbursements therefor as herein provided (the work
described in this clause (1) being hereinafter referred to as the
"Small Expenditure Items"), and (2) to the extent that any
Reimbursable Tenant Expenditures described in this Subsection (A)
pertain to work which, by its nature and customary practice in the
construction industry, is never or rarely the subject of plans
(including, without limitation, those items described on Attachment II
attached hereto and made a part hereof), Tenant shall not be obligated
to provide plans therefor as one of the conditions which must be
satisfied to entitle Tenant to disbursements for such Reimbursable
Tenant Expenditures (the work described in this clause (2) and on
Attachment II being hereinafter referred to as the "No Plan Required
items").
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(B) With respect to any Reimbursable Tenant Expenditures consisting of
matters other than those described above in (1) and (4) and those
pertaining to the In-house Design Allowance, Tenant has delivered to
Landlord evidence reasonably satisfactory to Landlord of the cost of such
of items or matters.
(C) With respect to any Reimbursable Tenant Expenditures consisting of the
matters described above in (4) and those pertaining to the In-house Design
Allowance, Tenant has delivered to Landlord evidence reasonably
satisfactory to Landlord as to the value of such services or resources at
current market value and that such services or resources are directly
related to Tenant's occupancy and use of the Premises.
As used in this Section 7, "Hard Construction" shall mean any construction,
improvements, demolition or alterations, including, without limitation, the
installation of voice and data cabling, full height, moveable partitions
("highwall"), tenant improvements and installation of tenant fixtures,
performed pursuant to this Section 7(b), commenced prior to October 1,
1999, but shall not include nonattached fixtures or equipment of Tenant
such as computers, telephones or telephone switches or furniture or
appliances which are not fixtures, artwork or graphics, or design,
consulting or moving services. Tenant shall pay Landlord's representatives
(as designated by Landlord) a construction management fee equal to 2.5% of
all costs for materials and labor required for all Hard Construction, up to
but not exceeding the total of all Tenant Allowance Amounts pertaining to
Hard Construction (the "Construction Management Fee"). To the extent that
Tenant is entitled to receive same as a portion of the Tenant Allowance
Amounts, the Construction Management Fee shall be paid to Landlord's
representative on behalf of Tenant directly by Landlord upon receipt by
Landlord from Landlord's representative of an inspection report regarding
the work to which such portion of the Construction Management Fee pertains
and any other matters reasonably required by Landlord.
Notwithstanding anything in this Section 7 to the contrary, a) Tenant shall
not be entitled to any Tenant Allowance Amounts for, and Landlord shall not
be obligated to make any payment to Tenant with respect to, any of the
types expenditures by Tenant described in (3) or (4) above or with respect
to expenditures for furniture or furniture systems
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(collectively, the "Limited Tenant Categories"), to the extent that any
such disbursement or payment by Landlord would cause the total amount
paid or disbursed by Landlord for any or all of such types of
expenditures to exceed, in the aggregate, $1,130,484.60, (b) other than
with respect to the Small Expenditure Items not of the described in
subsection 7(b)A(v), all plans (except with respect to the No Plan
Required Items) and specifications and all construction contracts
pertaining to any Reimbursable Tenant Expenditures must be previously
approved in writing by Landlord (or deemed approved as hereinbefore
provided) prior to any related construction, and (c) Tenant shall not
request and Landlord shall have no obligation to fund (i) more than one
(1) disbursement of Reimbursable Tenant Expenditures in any thirty (30)
day period, or (ii) any request for disbursement of any Reimbursable
Tenant Expenditures which is, in the aggregate, for less than $5,000.00.
If Tenant exercises its option to extend the Term of this Lease for the
First Extension Period, the following provisions shall apply: To the extent
that any portion of the Tenant Allowance Amounts pertaining to the Limited
Tenant Categories have not and will not be requested by Tenant to be funded
by Landlord on or prior to October 1, 1999, Tenant may, at Tenant's option,
so advise Landlord in writing no later than September 1, 1999, requesting
that such remaining Tenant Allowance Amounts pertaining to the Limited
Tenant Categories which could otherwise be funded to Tenant be divided
among and allocated equally toward payment of the remaining Basic Rental
payments for the remaining months of the First Extension Period, and
Landlord shall give Tenant credit in such amounts against such remaining
monthly Basic Rental payments; provided, however, that (a) if no such
notice is timely given to Landlord, Tenant shall have no right to any
credit against future monthly installment payments of Basic Rental, and (b)
in no event shall any such credited amounts exceed, in the aggregate,
$1,130,484.60, less all amounts previously disbursed to Tenant as
reimbursements or payments for items of Limited Tenant Categories."
(l) The first sentence of Section 7(d) is amended by deleting the first
word ("All") and substituting therefor the following:
"Subject to the provisions of this Lease regarding Hard
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Construction which is the subject of Reimbursable Tenant Expenditures,
all"
(m) Section 7(f) is hereby deleted in its entirety.
(n) Section 8 is amended by deleting the last portion of the first
sentence beginning with the words "provided, however" through the end of
said sentence, and by inserting such deleted language immediately after the
word "Premises" and prior to the words "(c) within sixty (60) days" in said
first sentence of Section 8.
(o) Section 9(a) is amended as follows:
i) in the fifth sentence after the words "Except to Permitted
Transferees" the words "and except as expressly provided in
clause or (A) in the last sentence of this Section 9a.," are
added; and
ii) the last sentence is amended by adding, after the words
"Notwithstanding anything in this Section 9 to the contrary," the
words (A) so long as no Event of Default exists under this Lease
at the time of the giving of the notice hereinafter described in
this sentence, Tenant shall have the right, from time to time, to
assign or sublet any portion of the Building, up to but not
exceeding 30% of the rentable space thereof after delivering to
Landlord fifteen (15) days' prior written notice of Tenant's
intention to do so, accompanied by (1) a copy of all
documentation to be executed in connection with such assignment
or subletting, (2) such information about the prospective
assignee's or sublessee's business activities and intended use as
Landlord shall reasonably require, (3) an accurate description of
the space which will be affected, and (4) Tenant's written
reconfirmation of Tenant's continued liability and obligations
under this Lease, notwithstanding and unaffected in any way by
such assignment or subletting (any such assignment or subletting
described in this clause (A) not requiring Landlord's consent,
but still constituting a "Transfer" as such term is used in this
Lease), and (B)".
(p) Section 9(b) is amended as follows:
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i) the following words are added immediately after the title of
Section 9(b) and immediately prior to the word "Tenant" in the first
line of said Section 9(b):
"Subject to the last sentence of this Section 9(b),"; and
ii) the following sentence is added to the end of Section 9(b):
"Notwithstanding anything in this Section 9b. to the contrary, so
long as no Event of Default exists under this Lease, in the event
that Tenant requests in writing Landlord's approval of an
assignment or subletting of a portion of the Building,
accompanied by the items described in (1), (2), (3) and (4) of
Section 9a. above, and Landlord, acting in its sole and absolute
discretion and without any limitation on Landlord's right to deny
such approval, delivers to Tenant its written approval of such
proposed sublease or assignment, Tenant may retain twenty-five
percent (25%) of the excess compensation described above in this
Section 9b. and shall be required to pay to Landlord only
seventy-five percent (75%) of such excess compensation for such
Transfer."
(q) Section 10(a) is amended by adding the following sentence as the new
last sentence thereof.
"Notwithstanding the above, at such time as Principal Mutual Life
Insurance Company or any party related to or affiliated with Principal
Mutual Life insurance Company is no longer the "Landlord" under this
Lease, and Tenant is able to obtain the insurance coverage described
above for less than the then current Landlord under this Lease could
obtain such insurance, Tenant shall have the right to obtain its own
coverage of the Premises, so long as such coverage is as described
above."
(r) Section 10(c) is amended by deleting same and substituting therefor
the following:
"INDEMNITY" Subject to Section 10.b, Tenant shall defend, indemnify,
and hold harmless Landlord,
-16-
Landlord's mortgagee, and their agents from and against all claims,
demands, liabilities, causes of action, suits, judgments, and
expenses (including reasonable attorneys' fees and expenses) for any
loss arising from any occurrence on the Premises or from Tenant's
failure to perform its obligations under this Lease (including,
without limitation, the obligations under Section 6 and Section 24
of this Lease), but not if caused by the negligence or fault of
Landlord or its agents. Notwithstanding the above, Tenant does not
indemnify any party with respect to any loss arising from the
willful act or sole or gross negligence of Landlord, Landlord's
mortgagee, or their agents, and Landlord hereby indemnifies Tenant
with respect to any such loss. This indemnity provision shall
survive termination or expiration of this Lease."
(s) Section 11(a) is deleted in its entirety and the following substituted
therefor:
"a. SUBORDINATION. Subject to Landlord obtaining a non-disturbance
and attornment agreement as described below, Tenant shall subordinate
this Lease to any future deed of trust, mortgage or other security
instrument, or any ground lease, master lease or primary lease, that
hereafter covers all or any part of the Premises and runs in favor of
the party granting such nondisturbance (the mortgagee under any such
mortgage, the lessor under any such lease or any other beneficiary
under any of such other instruments is hereinafter referred to as a
"Landlord's Mortgagee".) Tenant shall not be obligated to subordinate
this Lease unless and until a non-disturbance and attornment agreement
containing the following provisions is entered into with Tenant
(Tenant agreeing that Tenant shall not object to the inclusion of any
of the provisions described in (iv) or (v) below):
i) assurance that Tenant's tenancy and its enjoyment of rights
under this Lease shall not be disturbed by any exercise of
rights under or in connection with such superior instrument
to which this Lease is being subordinated;
ii) assurance that Tenant's tenancy may be terminated only in
accordance with the
-17-
default provisions of this Lease;
iii) provisions that any successor to Landlord's interest in this
Lease, upon foreclosure or otherwise, shall assume all of
the Landlord's obligations under this Lease arising after
such party obtains an interest in this Lease;
iv) provisions whereby Tenant agrees to attorn to such successor
of Landlord's interest; and
v) provisions whereby Tenant agrees to provide Landlord's
Mortgagee with commercially reasonable notice and
opportunity to cure periods for any default by Landlord
under this Lease (A reasonable opportunity to cure shall not
extend beyond thirty (30) days unless (A) Landlord's default
cannot be cured within said thirty (30) day period, and (B)
Landlord's mortgagee has proceeded promptly to cure and has
pursued such cure with diligence and continuity, in which
event the cure period shall not exceed one hundred twenty
(120) days.)"
(t) Section 16(a) is deleted in its entirety and the following substituted
therefor.
"a. Tenant's failure to pay any Basic Rental or Additional Rent within
ten (10) days after Landlord has delivered notice to Tenant that the
same is due; provided, however, that (i) an Event of Default shall
occur hereunder without any obligation of Landlord to give any notice
to Tenant if Landlord has previously given Tenant written notice under
this Section 16.a on two (2) occasions in any consecutive twelve (12)
month period, or on eight (8) occasions during the Term, and (ii) no
grace or notice periods in this Section 16a. shall apply to the
accrual of any charge for payment received after its due date;"
(u) Section 16(b) is amended by deleting the words "within such 30-day
period and thereafter diligently pursue such cure without interruption" and
substituting therefor the words "promptly after receipt of written notice
and diligently pursues such cure, without interruption, to completion,".
-18-
(v) Section 17(a) is amended by adding after the words "as reasonably
determined by Landlord" in clause (B) thereof, the words "or, if then the
subject of judicial proceedings, by the court,".
(w) Section 17(b) is amended by deleting the words "Section 18.a" and
substituting therefor the words "Section 19.a"
(x) Section 17 is further amended by adding the following to the end of
the paragraph therein beginning with the word "Additionally" (immediately
after the words "thirty (30) days"):
"The above-described rights of lock out in favor of Landlord shall be
in lieu of lock out rights specified in subsection 93.002(c)(3) of the
Texas Property Code, Landlord hereby waiving any additional lock out
rights as provided in said subsection 93.002(c)(3) of the Texas
Property Code."
(y) Section 18 is amended by inserting "a. LANDLORD'S DEFAULT."
immediately prior to the first word thereof deleting the word "lease" and
replacing it with the word "Lease" in the first line thereof, and adding
the words ", subject to the provisions of Section 18b. below," to the end
of the fourth sentence thereof
(z) Section 18 is further amended by adding thereto the following as a new
subsection 18b.:
"b. TENANT'S REMEDIES. If a "default" by Landlord exists as
described above in Section 18a., including with respect to the
funding of Tenant Allowance Amounts as required by this Lease
(with all notice and grace periods described therein having
expired and no cure having been made), Tenant shall have the
right, after the expiration of such periods and during the
continuance of any such uncured default by Landlord, to the
following remedy as hereinafter provided:
(i) At any time after the expiration of an additional five (5)
days of notice by Tenant to Landlord of Tenant's intention to do
so, Tenant may, in place of Landlord, perform the obligations
which Landlord failed to perform and which caused the then
existing default by Landlord as described
-19-
in Section 18a. and, upon furnishing proof reasonably
satisfactory to Landlord of amounts reasonably and necessarily
expended for such purposes by Tenant, Landlord shall within
forty-five (45) days after such proof is furnished to Landlord,
reimburse Tenant for such expenses. If Landlord shall fail to
reimburse Tenant for such expenses within such 45-day period,
any dispute or disagreement between Landlord and Tenant with
respect to the occurrence or continuance of such default by
Landlord or Tenant's exercise of rights under this Section 18b.
including, without limitation, Tenant's right to reimbursement
for expenditures as above described shall be settled by
arbitration in accordance with the "Expedited Procedures" and
other procedures of the Commercial Arbitration Rules of the
American Arbitration Association (the "AAA"). Any judgment or
award entered as a result of such arbitration may be entered in
any court having jurisdiction thereof. Either Tenant or
Landlord may, immediately after the end of the above-described
45-day period, institute the arbitration procedure in
accordance with the requirements of the AAA, and the "Expedited
Procedures" of the AAA shall be applied to such arbitration
process. Submission of three (3) copies of this Lease by
Landlord or Tenant at any regional office of the AAA shall
constitute three (3) copies of the "arbitration provisions of
the contract" as required by Commercial Arbitration Rules. A
neutral arbitrator shall be appointed by the AAA in accordance
with the Expedited Procedures of the Commercial Arbitration
Rules of the AAA, whether or not the amount in controversy is
less than or exceeds $50,000.00, exclusive of interest and
arbitration costs. Once the arbitration process is commenced
by Landlord or Tenant, the parties shall have no other rights
or remedies at law or in equity with respect to the obligations
which are to be the subject of the arbitration, and the
decision and/or award which is the result of the arbitration
process herein described shall be dispositive as to all rights,
remedies and controversies with respect to such obligations.
Satisfaction of any award shall constitute the sole and
exclusive remedy with respect to the subject matter of the
arbitration,
-20-
all subject to the provisions of subsection (ii) below. The
decision and/or award by the arbitrator shall be final and
binding upon both Landlord and Tenant. The cost and expenses
of each arbitration proceeding shall be borne by or between the
parties as determined by the arbitrator. This agreement to
arbitrate shall be specifically enforceable.
(ii) At all times prior to the end of the ten (10), day period
described below, Tenant shall continue to perform all of its
obligations under this Lease as provided in this Lease,
including, without limitation, those with respect to the payment
of Rent. In the event that the arbitration results in a decision
in favor of Tenant requiring Landlord to reimburse Tenant for
expenditures by Tenant, Landlord shall comply with the
requirements of such arbitration decision within ten (10) days of
the time to do so as specified in the decision. If Landlord
fails to comply within such ten (10) day period with any
arbitration decision in favor of Tenant, Tenant shall have the
right immediately after such ten-day period to offset any such
arbitration award against the next payment of Basic Rental
becoming due and, if such award is greater than the payment of
Basic Rental next becoming due, against each successive payment
of Basic Rental becoming due, until the total of all amounts so
offset against Basic Rental equals the amount of the arbitration
award."
(aa) Section 20 is amended by adding the following words to the next to the
last sentence thereof.
"upon the earlier to occur of (i) the expiration of thirty (30) days
after Landlord's written notice to Tenant to remove same, and (ii)
Landlord's receipt of written notice from Tenant that such items have
been abandoned to Landlord."
(ab) Section 24 is amended by deleting the phrase "(including, without
limitation, those arising from Landlord's joint comparative or concurrent
negligence with any party" and substituting therefor the words "(INCLUDING,
WITHOUT LIMITATION, THOSE ARISING FROM LANDLORDS JOINT,
-21-
COMPARATIVE OR CONCURRENT NEGLIGENCE WITH ANY PARTY."
(ac) The following sections are added:
"27. PARKING. Tenant shall be entitled to the exclusive use of all
parking spaces in the parking garage constituting a portion of the
Premises, free of charge, and shall determine if any spaces shall be
designated and marked as reserved spaces.
28. ROOF RIGHTS AND CONNECTIVITY. Tenant shall have the exclusive
use of the roof of the Building for installation of telecommunications
equipment, such as satellite dish antennae. Tenant may use existing
conduits, shafts and ducts located in the Building and may install
conduit and additional Building entrance links, as necessary to
connect Tenant's telecommunications equipment inside the Building to
other tenants of the Building and to telecommunications facilities
outside the Building, all subject to Landlord's reasonable written
approval of the method of installation thereof."
(ad) The addresses for Landlord as shown beside Landlord's execution are
deleted and replaced with the following:
"▇▇▇▇▇▇▇▇ ▇▇▇▇ Dallas/Fort Worth, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ Click
With a copy to:
Principal Mutual Life Insurance Company
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇"
3. REPRESENTATIONS BY LANDLORD. Landlord hereby represents to Tenant as
follows:
(a) Landlord is the current owner of the Premises, subject to various
easements and other title exceptions; provided, however, that such title
exceptions do not include any mortgages, deeds of trust or other security
instruments pursuant to which Landlord has encumbered the Premises.
-22-
(b) Landlord has the power and authority to execute and deliver this
Amendment and to perform its obligations hereunder, and Landlord has taken
all necessary action to authorize the execution and delivery of this
Amendment. This Amendment has been duly authorized, executed and delivered
by Landlord and does not conflict with, contravene or constitute a default
under or breach of any (i) agreements, contracts or documents to which
Landlord is a party or by which Landlord is bound, or (ii) law, statute,
rule, ordinance, regulation or public or private restriction governing or
pertaining to Landlord. The execution and delivery of this Amendment by
Landlord requires no consent, approval, joinder or action by any other
party or entity (governmental, judicial or private) or by any other
officer, director, or committee or board of Landlord, which has not been
previously and properly obtained.
4. REPRESENTATIONS BY TENANT. Tenant hereby represents to Landlord as
follows:
(a) Neither Tenant nor, to the best of Tenant's knowledge, any portion of
the Premises, is in default with respect to any of the restrictions,
covenants, conditions or requirements of The Las Colinas Association or any
of the restrictions, covenants, conditions or requirements contained in the
Las Colinas Declaration recorded in Volume 73166, Page 1001, ET SEQ., that
certain Correction of Declaration dated August 8, 1977, recorded in Volume
77154, Page 1096, ET SEQ., that certain Second Correction to Declaration
dated June 19, 1979, recorded in Volume 79122, Page 0749, ET SEQ., that
certain Third Correction to Declaration dated March 1, 1982 recorded in
Volume 82071, Page 3244, ET SEQ., or the Supplementary Declaration No. 23
dated November 13, 1980, recorded in Volume 80245, Page 2756, ET SEQ., all
of such references being to the Real Property Records of Dallas County,
Texas. There are no delinquent monetary obligations, assessments or other
fees or amounts owed to the Association which have not been paid.
(b) Tenant has the power and authority to execute and deliver this
Amendment and to perform its obligations hereunder, and Tenant has taken
all necessary action to authorize the execution and delivery of this
Amendment. This Amendment has been duly authorized, executed and delivered
by Tenant and does not conflict with, contravene or constitute a default
under or breach of any (i) agreements, contracts or documents to which
Tenant is a
-23-
party or by which Tenant is bound, (ii) law, statute, rule, ordinance,
regulation or public or private restriction governing or pertaining to
Tenant, or (iii) any litigation or legal or administrative proceedings
affecting Tenant, and is not adversely affected by any litigation or
legal or administrative proceedings affecting Tenant. The execution and
delivery of this Amendment by Tenant requires no consent, approval,
joinder or action by any other party or entity (governmental, judicial or
private) or by any other officer, director, committee or board of Tenant,
which has not been previously and properly obtained.
(c) Tenant is not currently the subject of or involved in, any insolvency
proceeding or bankruptcy case.
5. ADA COMPLIANCE. As of the date of this Amendment, Landlord assumes
the responsibility to evaluate the lobby areas, building access and egress, and
related sidewalks, driveways, ramps and curbs, and parking areas, escalators and
elevators of the Building for compliance with the Americans With Disabilities
Act of 1990 ("ADA") and to bring any of such areas which are not in compliance
with the requirements of the ADA into compliance as provided below. Any work or
alterations required by this Section will be performed by Landlord at Landlord's
sole cost and expense, in phases and at such times and in such manner as may be
reasonably determined by Landlord to be necessary so as to comply with
applicable laws. Notwithstanding anything in this Section to the contrary, (a)
Landlord's obligations hereunder are limited to Landlord's interest in and to
the Premises, (b) Tenant shall be responsible for the compliance with ADA of all
areas of the Premises except for the lobby areas, building access and egress,
and related sidewalks, driveways, ramps and curbs, and parking areas, escalators
and elevators of the Building, and (c) any liability concerning or necessity for
any additional alterations to any portion of the Premises under, the ADA or any
of the rules, regulations or guidelines promulgated thereunder, caused or
created by any alterations or additions to the Premises performed under Section
7b. of the Lease shall be the responsibility of Tenant and any additional
alterations so necessitated shall be the responsibility of and shall be
performed by Tenant, and Tenant agrees to be responsible for all of the costs
and liabilities with respect thereto, arising under the ADA or the rules,
regulations or guidelines promulgated thereunder.
6. BROKER'S FEE. Landlord and Tenant represent to each other that the
only brokers, finders or similar parties involved
-24-
with respect to the execution of this Amendment are The Staubach Company,
representing Tenant, and ▇▇▇▇▇▇▇▇ ▇▇▇▇ Dallas/Fort Worth, Inc., representing
Landlord, and Landlord and Tenant hereby indemnify and hold harmless each
other with respect to any fees or commissions claimed by any other brokers,
finders or similar parties. Landlord shall be responsible for paying to The
Staubach Company within thirty (30) days after the execution of this
Amendment, a fee for all services rendered in connection with the execution
of this Amendment, as specified in and as required by the terms of a separate
agreement pertaining thereto executed between Landlord and The Staubach
Company. In the event that Landlord fails to pay such brokerage commission
to The Staubach Company within said thirty (30) day period in accordance with
the terms of such separate agreement, Tenant shall have the right to pay such
amount to The Staubach Company as payment in full, and, upon Landlord's
receipt from The Staubach Company of written acknowledgment of such payment
in full by Tenant, to receive a credit for such amount paid against the
installment of Basic Rental next becoming due. Except for the fee to be paid
to The Staubach Company as specified in and as required by the terms of the
separate agreement pertaining thereto between Landlord and The Staubach
Company described in this Section 6, no other amounts shall be owed to The
Staubach Company by Landlord or payable out of any of the Tenant Allowance
Amounts in Connection with the execution of this Amendment and/or the other
documents executed contemporaneously herewith.
7. AGREEMENT REGARDING UTILITIES. Tenant hereby reaffirms its
obligations under that certain Agreement Regarding Utilities dated as of
September 17, 1992, originally executed between Landlord, Original Tenant,
and the Trustees of the ▇▇▇▇ Employees Child Care Association Plan and Trust,
as amended by that certain First Amendment to Agreement Regarding Utilities
dated as of even date herewith executed between Landlord, Tenant, as
successor-in-interest of Original Tenant, and the Trustees of the ▇▇▇▇
Employees Child Care Association Plan and Trust (collectively, the "UTILITY
SEPARATION AGREEMENT"), and agrees and confirms that Tenant is responsible
for all obligations, duties and liabilities of Original Tenant thereunder as
if Tenant had been the original signatory to the Utility Separation Agreement
instead of Original Tenant.
8. MISCELLANEOUS.
(a) The terms and conditions hereof may not be modified, amended, altered
or otherwise affected except by instrument in writing executed by Landlord
and Tenant.
-25-
(b) Except as extended and expressly modified hereby, the terms and
conditions of the Original Lease are and will remain in full force and
effect as originally written.
(c) This Amendment may be executed in several counterparts, and all so
executed will constitute one and the same instrument, binding on the
parties hereto, notwithstanding that the parties are not signatories to the
same counterpart.
(d) This Amendment shall be binding upon the parties hereto, their
successors and assigns, and shall inure to the benefit of the parties'
respective legal representatives, successors and assigns.
(e) If any provision of this Amendment is held to be illegal or
unenforceable, such fact shall not affect any other provision of this
Amendment, and this Amendment shall be construed as if such provision had
never been contained herein.
(f) The captions, headings and arrangements used in this Amendment are for
convenience only and do not in any way affect, limit, amplify or otherwise
modify the terms and provisions hereof.
(g) THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES
APPLICABLE TO THE TRANSACTIONS IN TEXAS.
(h) This Amendment, the Original Lease and the Utilities Separation
Agreement, as amended by that certain First Amendment to Agreement
Regarding Utilities dated as of even date herewith, executed by Landlord,
Tenant and Trustees of the ▇▇▇▇ Employees Child Care Association Plan and
Trust, contain the entire agreement between the parties hereto with respect
to the matters set forth herein. No variations, modifications or changes
hereof shall be binding upon any party unless set forth in a document duly
executed by the parties hereto. Except as expressly provided in this
Amendment, this Amendment completely supersedes and replaces all prior
written and oral communications between Landlord and Tenant and their
respective agents and representatives, all such communications being
entirely merged into this Amendment and extinguished for all purposes upon
the execution hereof and being of no further force or effect
-26-
whatsoever.
(i) Contemporaneously with the execution of this Amendment, Landlord and
Tenant will execute and deliver that certain Memorandum of First Amendment
to Lease, dated as of February 2, 1996, to be recorded in the Real Property
Records of Dallas County, Texas, for the purpose of putting all parties on
notice of the existence of this Amendment.
EXECUTED TO BE EFFECTIVE AS OF THE DATE ABOVE FIRST WRITTEN.
TENANT: ▇▇▇▇ DELAWARE, INC.
a Delaware corporation
By: /S/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Title: CHAIRMAN AND CEO
--------------------------
-27-
LANDLORD: PRINCIPAL MUTUAL LIFE INSURANCE COMPANY,
an Iowa corporation
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Title: 2ND VICE PRESIDENT
--------------------------
COMMERCIAL REAL ESTATE LOANS
---------------------------------
By: /S/▇▇▇▇▇ ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
---------------------------
Title: ASSISTANT DIRECTOR
--------------------------
COMMERCIAL REAL ESTATE
---------------------------------
-28-
ATTACHMENT I
Calculation of Basic Rental for Extension
Periods other than the First Extension Period
The Basic Rental to be paid by Tenant per annum for each Extension Period
other than the First Extension Period shall be the "Fair Market Rental Rate"
as hereinafter defined, and determined in accordance with the provisions of
this Attachment I.
The "FAIR MARKET RENTAL RATE" shall mean the market rental rate per annum
for the 5 year extension term for which such determination is being made, for
office space in comparable buildings of comparable age, quality, and
condition, and for space of comparable quality, size, utility, and location
(in the Greater Dallas/Fort Worth metropolitan area), taking into account all
relevant factors applicable to lease transactions in the market, including,
without limitation, parking rates which will be in effect, allowances, the
value of improvements in the premises, special use tenant improvements which
would not be removed at expiration, the basis for payment of taxes, operating
expenses and electricity, the length of term, the creditworthiness of Tenant,
the value attributable to rights of first offer or lack thereof, and all
other factors affecting rent in the market for new lease and lease renewal
transactions, all adjusted so as to reflect such items as of the beginning of
the period of time covered by the subject 5 year extension.
Landlord shall deliver to Tenant notice of the Fair Market Rental Rate
(the "FMR Notice") for the subject Extension Period on or before 18 months
before the expiration of the then current Term. If Landlord shall fail to
deliver to Tenant the FMR Notice 16 months before the expiration of the then
current Term, Tenant shall then also have the right to prepare and deliver
the FMR Notice (the party first delivering the FMR Notice being hereinafter
referred to as the "Notifying Party" and the party receiving such FMR Notice
being hereinafter referred to as the "Notice Recipient"). The FMR Notice
shall specify the Notifying Party's assessment of the Fair Market Rental Rate
for the Premises for the subject Extension Period. The Notifying Party shall
also specify in the FMR Notice the extent to which, if at all, allowances,
concessions or other tenant inducements for the subject Extension Period for
the Premises are included; however, Landlord shall not be required to give
any such allowances, concessions or other tenant inducements, but the
calculation of Fair Market Rental Rate for the Premises shall be
appropriately
-29-
reduced by the value of such tenant inducements to the extent that they are
not included in the FMR Notice, if such tenant inducements would be
customarily granted to a comparable tenant for comparable space (as described
above) during the subject Extension Period.
If the Notice Recipient disagrees with the Notifying Party's assessment
of the Fair Market Rental Rate specified in a FMR Notice, then the Notice
Recipient shall so advise the Notifying Party in writing within 30 days after
delivery of such FMR Notice; otherwise, the rates set forth in such FMR
Notice shall be the Fair Market Rental Rate. If the Notice Recipient timely
delivers to the Notifying Party written notice that it disagrees with the
Notifying Party's assessment of the Fair Market Rental Rate, then Landlord
and Tenant shall meet to attempt to determine the Fair Market Rental Rate.
If Tenant and Landlord are unable to agree in writing on such Fair Market
Rental Rate within 15 business days after the Notice Recipient advises the
Notifying Party of its disagreement with the Notifying Party's assessment of
the Fair Market Rental Rate, then, within 10 days after such 15-day period
expires, Landlord and Tenant shall each appoint an independent MAI real
estate appraiser with at least 5 years commercial real estate appraisal
experience in the Greater Dallas/Fort Worth metropolitan area. The two
appraisers shall then, within 10 days after their designation, select an
independent third appraiser with like qualifications.
If the two appraisers are unable to agree on the third appraiser within
such 10 day period, either Landlord or Tenant, by giving 5 days prior written
notice thereof to the other, may submit the dispute as to the identity of a
third appraiser who meets the qualifications stated above to be settled by
arbitration in accordance with the "Expedited Procedures" and other
procedures of the Commercial Arbitration Rules of the American Arbitration
Association (the "AAA"), and any decision entered as a result of such
arbitration shall be final and binding as to the identity of the third
appraiser. Submission of three (3) copies of this Lease by Landlord or
Tenant at any regional office of the AAA shall constitute three (3) copies of
the "arbitration provisions of the contract" as required by the Commercial
Arbitration Rules. The costs and expenses of any such arbitration proceeding
shall be borne between Landlord and Tenant equally, and this agreement to
arbitrate shall be specifically enforceable.
If either Landlord or Tenant shall fail to timely appoint an appraiser as
provided above, such party shall forfeit its right
-30-
to appoint an appraiser and the Fair Market Rental Rate shall be determined
solely by the qualified appraiser timely appointed by the other party,
without the necessity for any third appraiser being appointed.
If both Landlord and Tenant timely appoint an appraiser as provided
above, then within 30 days after the selection of the third appraiser
(whether by agreement or as a result of the arbitration process described
above), a majority of the appraisers shall determine the Fair Market Rental
Rate based upon the factors described in this Attachment I. If a majority of
the appraisers is unable to agree upon the Fair Market Rental Rate by such
time, the two closest appraisals shall be averaged and the average will be
the Fair Market Rental Rate.
If any appraiser fails to complete his or her appraisal within said
30-day period after selection of the third appraiser so that it may be used
in determining the Fair Market Rental Rate as provided above, the Fair Market
Rental Rate shall be determined by averaging the other two appraisals and no
portion of the uncompleted appraisal shall have any bearing thereon. Tenant
and Landlord shall each bear the entire cost of the appraiser selected by it
and shall share equally the cost of any third appraiser. The Fair Market
Rental Rate determined by the appraisal process described in this ATTACHMENT
I shall be binding upon the parties for all purposes.
-31-
ATTACHMENT II
1. carpet installation
2. painting
3. wallcovering
4. installation and relocation of movable components and equipment which
are not attached to the Building
5. installation of energy efficient light fixtures, which (i) require no
rewiring, and (ii) cause no change in the outward appearance of the
Building
6. replacement of existing restroom and breakroom flooring with material
of the same type and of equal quality as that replaced
-32-
EXHIBIT A
BEING a 15.221 acre tract of land situated in the ▇▇▇▇▇ ▇▇▇▇ Survey, Abstract
No. 729 in the City of Irving, Dallas County, Texas and being a part of a
30.91 acre tract of land conveyed to Zales Corporation by deed recorded in
Volume 80243, Page 2774 of the Deed Records of Dallas County, Texas, and
being more particularly described as follows:
COMMENCING at a 3/8 inch iron rod set at an angle point of the most Easterly
intersection of the North right-of-way line of Walnut Hill Lane (110 feet
wide at tangent) and the East right-of-way line of MacArthur Boulevard (100
feet wide at tangent);
THENCE along the North right-of-way line of said Walnut Hill Lane as follows:
North 89 degrees 39 minutes 20 seconds East a distance of 163.08 feet to a
5/8 inch iron rod set for corner;
South 84 degrees 52 minutes 06 seconds East a distance of 87.02 feet to a
5/8 inch iron rod set for corner;
North 05 degrees 07 minutes 54 seconds East a distance of 11.00 feet to a
3/8 inch iron rod set for corner;
South 84 degrees 32 minutes 06 seconds East a distance of 9.51 feet to a
5/8 inch iron rod set for corner;
North 89 degrees 59 minutes 20 seconds East a distance of 98.78 feet to an
"X" cut in concrete set for the POINT OF BEGINNING of the herein described
tract of land;
THENCE departing the North right-of-way line of said ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇ degrees 04 minutes 27 seconds East a distance of 92.02 feet to a 5/8 inch
iron rod set at the beginning of a curve to the right from which the radius
point bears South 89 degrees 55 minutes 33 seconds East a distance of 344.50
feet;
CONTINUE along said curve to the right through a central angle of 16 degrees
02 minutes 22 seconds and an ac length of 96.44 feet to an "X" cut in
concrete set for corner;
THENCE North 73 degrees 33 minutes 11 seconds West a distance of 32.00 feet
to a 5/8 inch iron rod set in the Southeasterly line of a 1.142 acre tract of
land as recorded in Volume 84065, page 3783 of the Deed Records of Dallas
County, Texas said iron rod
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EXHIBIT A
also being the beginning of a non-tangent curve to the right from which the
radius point bears South 73 degrees 53 minutes 11 seconds East a distance of
376.50 feet;
CONTINUING along said curve to the right through a central angle of 51
degrees 52 minutes 59 seconds and an arc length of 340.93 feet to a 5/8 inch
iron rod set for the most Easterly Southeast corner of said 1.142 acre tract
of land;
THENCE South 22 degrees 00 minutes 12 seconds East a distance of 10.00 feet
to a 5/8 inch iron rod set for corner, said iron rod being at the beginning
of a curve to the right from which the radius point bears South 22 degrees 00
minutes 12 seconds East a distance of 366.50 feet;
CONTINUING along said curve to the right through a central angle of 02
degrees 32 minutes 52 seconds and an arc length of 16.30 feet to an "X" cut
in concrete set for corner;
THENCE North 00 degrees 07 minutes 44 seconds East a distance of 90.04 feet
to a 3/8 inch iron rod set for corner;
THENCE North 89 degrees 46 minutes 23 seconds West a distance of 39.31 feet
to a 3/8 inch iron rod set for corner;
THENCE North 00 degrees 13 minutes 37 seconds East a distance of 181.10 feet
to a 5/8 inch iron rod set at the beginning of a curve to the right from
which the radius point bears North 30 degrees 19 minutes 39 seconds East a
distance of 57.02 feet;
CONTINUING along said curve to the right through a central angle of 59
degrees 57 minutes 30 seconds and an arc length of 39.68 feet to a 5/8 inch
iron rod set at the point of tangency;
THENCE North 00 degrees 17 minutes 27 seconds East a distance of 158.67 feet
to an "X" cut in concrete set for corner;
THENCE North 65 degrees 41 minutes 15 seconds East a distance of 40.61 feet
to an "X" cut in concrete set at the beginning of a curve to the right from
which the radius point bears South 24 degrees 18 minutes 46 seconds East a
distance of 876.50 feet;
CONTINUING along said curve to the right through a central angle of 34
degrees 14 minutes 41 seconds and an arc length of 523.87 feet to a 3/8 inch
iron rod set at the point of tangency;
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EXHIBIT A
THENCE South 80 degrees 04 minutes 03 seconds East a distance of 66.60 feet
to an "X" cut in concrete set for corner;
THENCE South 00 degrees 23 minutes 43 seconds West a distance of 12.00 feet
to an "X" cut in concrete set for corner;
THENCE South 80 degrees 01 minutes 01 seconds East a distance of 36.18 feet
to an "X" cut in concrete set for corner;
THENCE South 00 degrees 10 minutes 45 seconds West a distance of 167.74 feet
to a 3/8 inch iron rod set at the beginning of a curve to the right from
which the radius point bears North 89 degrees 49 minutes 15 seconds West a
distance of 60.17 feet;
CONTINUING along said curve to the right through a central angle of 57
degrees 40 minutes 20 seconds and an arc length of 60.57 feet to a 5/8 inch
iron rod set for corner;
THENCE South 00 degrees 03 minutes 41 seconds West a distance of 381.26 feet
to a 5/8 inch iron rod set for corner;
THENCE South 89 degrees 36 minutes 19 seconds East a distance of 10.37 feet
to a 5/8 inch iron rod set for corner;
THENCE South 00 degrees 03 minutes 41 seconds West a distance of 85.82 feet
to a 5/8 inch iron rod set at the beginning of a curve to the right from
which the radius point bears South 59 degrees 44 minutes 26 seconds West a
distance of 55.79 feet;
CONTINUING along said curve to the right through a central angle of 30
degrees 03 minutes 23 seconds and an arc length of 29.27 feet to a 5/8 inch
iron rod set at the point of tangency;
THENCE South 00 degrees 12 minutes 11 seconds East a distance of 255.72 feet
to an "X" cut in concrete set in the North right-of-way line of said Walnut
Hill Lane;
THENCE along the North right-of-way line of said Walnut Hill Lane as follows:
North 89 degrees 55 minutes 33 seconds West a distance of 204.60 feet to a
5/8 inch iron rod set for corner;
South 00 degrees 04 minutes 27 seconds West a distance of 11.00 feet to an
"X" cut in concrete set for corner;
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EXHIBIT A
North 89 degrees 33 minutes 33 seconds West a distance of 405.00 feet to a
3/8 inch iron rod set for corner;
North 00 degrees 04 minutes 27 seconds East a distance of 11.00 feet to a
5/8 inch iron rod set for corner;
North 89 degrees 33 minutes 33 seconds West a distance of 130.00 feet to a
5/8 inch iron rod set for corner;
South 89 degrees 52 minutes 20 seconds West a distance of 16.83 feet to the
POINT OF BEGINNING and containing within these metes and bounds 15.221
acres of 663,030 square feet of land more or less and being subject to
easements of record.
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