EXHIBIT 10.40
LEASE AGREEMENT
WITH THE COCA-COLA COMPANY
FOR THE CINEMARK BUILDING
--------------------------------------------------------------------------------
0000 Xxxxxx Xxxxxxx
Xxxxx, Xxxxx
OFFICE BUILDING LEASE
BETWEEN
CINEMARK USA, INC.,
a Texas corporation
AS LANDLORD
AND
THE COCA-COLA COMPANY,
a Delaware corporation
AS TENANT
--------------------------------------------------------------------------------
PART ONE
BASIC LEASE PROVISIONS............................................................................... 1
1. Tenant....................................................................................... 1
------
2. Premises..................................................................................... 1
--------
3. Term......................................................................................... 1
----
4. Base Rent.................................................................................... 1
---------
5. Expense Stop................................................................................. 1
------------
6. Security Deposit............................................................................. 1
----------------
7. Prepaid Rent................................................................................. 1
------------
8. Premises Use................................................................................. 1
------------
9. Tenant's Insurance........................................................................... 1
------------------
10. Addresses For Notices and Payment of Rent and Other Charges ................................. 2
-----------------------------------------------------------
11. Brokers...................................................................................... 2
-------
12. Parking Spaces............................................................................... 2
--------------
13. Exhibits and Riders.......................................................................... 2
-------------------
14. Incorporation of Other Provisions............................................................ 2
---------------------------------
PART TWO
GENERAL LEASE PROVISIONS.............................................................................. 1
1. PREMISES, COMMON AREAS, SERVICE AREAS........................................................ 1
-------------------------------------
1.1 Building............................................................................ 1
--------
1.2 Computation of Rentable Area........................................................ 1
----------------------------
1.3 Variations in Rentable Area......................................................... 1
---------------------------
1.4 Ceilings, Walls, Floors............................................................. 1
-----------------------
1.5 Condition of Premises............................................................... 1
---------------------
1.6 Common and Service Areas............................................................ 1
------------------------
2. TERM......................................................................................... 1
----
2.1 Term................................................................................ 1
----
2.2 Delay in Commencement............................................................... 1
---------------------
2.3 Early Occupancy..................................................................... 2
---------------
2.4 Holding Over........................................................................ 2
------------
3. MONETARY PROVISIONS.......................................................................... 2
-------------------
3.1 Base Rent.......................................................................... 2
----------
3.2 Tenant's Share of Certain Costs..................................................... 2
-------------------------------
3.3 Personal Property Taxes............................................................. 4
-----------------------
3.4 Prepaid Rent........................................................................ 4
------------
3.5 Security Deposit.................................................................... 4
----------------
3.6 Late Payments....................................................................... 4
-------------
3.7 Interest............................................................................ 4
--------
3.8 Administrative Reimbursement........................................................ 4
----------------------------
3.9 Additional Rent..................................................................... 4
---------------
4. CONSTRUCTION................................................................................. 4
------------
5. SERVICES AND UTILITIES....................................................................... 4
----------------------
5.1 Services by Landlord................................................................ 4
--------------------
5.2 Tenant's Obligations................................................................ 5
--------------------
5.3 Tenant's Additional Service Requirements............................................ 5
----------------------------------------
5.4 Interruption of Utility Service..................................................... 6
-------------------------------
6. OCCUPANCY AND CONTROL........................................................................ 6
---------------------
6.1 Use................................................................................. 6
---
6.2 Access to the Building and Premises; Telephone System ............................. 6
-----------------------------------------------------
6.3 Rules and Regulations............................................................... 6
---------------------
6.4 Additional Covenants of Tenant...................................................... 7
------------------------------
6.5 Access by Landlord.................................................................. 7
------------------
6.6 Control of Project.................................................................. 7
------------------
6.7 Minimization of Disruption.......................................................... 7
--------------------------
7. REPAIRS, MAINTENANCE AND ALTERATIONS......................................................... 8
------------------------------------
7.1 Landlord's Repair Obligations....................................................... 8
-----------------------------
7.2 Tenant's Repair Obligations......................................................... 8
---------------------------
7.3 Rights of Landlord.................................................................. 8
------------------
7.4 Surrender........................................................................... 8
---------
7.5 Alterations by Tenant............................................................... 8
---------------------
7.6 Common Area Displays................................................................ 9
--------------------
7.7 Liens............................................................................... 9
-----
8. INSURANCE.................................................................................... 9
---------
8.1 Insurance Required of Tenant........................................................ 9
----------------------------
8.2 Landlord's Insurance................................................................ 10
--------------------
8.3 Form of Policies and Additional Requirements........................................ 10
--------------------------------------------
8.4 Waiver of Subrogation............................................................... 10
---------------------
8.5 Increase of Premiums................................................................ 10
--------------------
9. DAMAGE OR DESTRUCTION........................................................................ 11
---------------------
9.1 Repair by Landlord.................................................................. 11
------------------
9.2 Landlord's Rights Upon The Occurrence of
----------------------------------------
Certain Casualties......................................................... 11
------------------
9.3 Tenant's Rights Upon The Occurrence of
--------------------------------------
Certain Casualties......................................................... 11
------------------
9.4 Repairs by Tenant................................................................... 11
-----------------
9.5 Determination or Period Required for Rebuilding..................................... 12
-----------------------------------------------
10. EMINENT DOMAIN............................................................................... 12
--------------
10.1 Total Taking........................................................................ 12
------------
10.2 Partial Taking...................................................................... 12
--------------
10.3 Award............................................................................... 12
-----
11. ASSIGNMENT AND SUBLETTING.................................................................... 12
-------------------------
11.1 Consent............................................................................. 12
-------
11.2 Landlord's Option................................................................... 13
-----------------
11.3 Definition of Assignment............................................................ 13
------------------------
12. DEFAULT; REMEDIES............................................................................ 13
-----------------
12.1 Defaults by Tenant.................................................................. 13
------------------
12.2 Remedies............................................................................ 14
--------
12.3 Mitigation of Damages; Remedies Cumulative.......................................... 15
------------------------------------------
12.4 Default by Landlord................................................................. 15
-------------------
12.5 Attorneys' Fees..................................................................... 15
---------------
12.6 Waiver.............................................................................. 15
------
12.7 Force Majeure....................................................................... 15
-------------
13. ESTOPPEL CERTIFICATES........................................................................ 15
---------------------
13.1 Acknowledgment of Commencement Date................................................. 15
-----------------------------------
13.2 Certificates........................................................................ 15
------------
13.3 Financial Statements................................................................ 15
--------------------
14. SUBORDINATION AND ATTORNMENT................................................................. 16
----------------------------
14.1 Subordination....................................................................... 16
-------------
14.2 Successor Landlord.................................................................. 16
------------------
15. LANDLORD'S INTEREST.......................................................................... 16
-------------------
15.1 Liability of Landlord............................................................... 16
---------------------
15.2 Sale of Project..................................................................... 16
---------------
16. NOTICES...................................................................................... 16
-------
17. BROKERS...................................................................................... 16
-------
18. INDEMNITIES AND WAIVERS...................................................................... 16
-----------------------
18.1 Indemnities by Tenant............................................................... 16
---------------------
18.2 Indemnities by Landlord............................................................. 16
-----------------------
18.3 Waivers by Tenant................................................................... 17
-----------------
18.4 Waivers by Landlord................................................................. 17
-------------------
18.5 Definitions......................................................................... 17
-----------
18.6 Scope of Waivers.................................................................... 17
----------------
18.7 Obligations Independent of Insurance................................................ 17
------------------------------------
18.8 Survival............................................................................ 17
--------
18.9 Duty to Defend...................................................................... 17
--------------
19. PARKING...................................................................................... 18
-------
19.1 Parking Spaces...................................................................... 18
--------------
19.2 Control of Parking.................................................................. 18
------------------
19.3 Landlord's Liability................................................................ 18
--------------------
19.4 Remedies for Parking Violations..................................................... 18
-------------------------------
20. HAZARDOUS SUBSTANCES; REPRESENTATIONS........................................................ 18
-------------------------------------
20.1 Tenant' Operations.................................................................. 18
------------------
20.2 Representation by Landlord......................................................... 19
--------------------------
21. INTERPRETATIVE............................................................................... 19
--------------
21.1 Captions............................................................................ 19
--------
21.2 Section Numbers..................................................................... 19
---------------
21.3 Attachments......................................................................... 19
-----------
21.4 Number, Gender, Defined Terms....................................................... 19
-----------------------------
21.5 Entire Agreement.................................................................... 19
----------------
21.6 Amendment........................................................................... 19
---------
21.7 Severability........................................................................ 19
------------
21.8 Time of Essence..................................................................... 19
---------------
21.9 Best Efforts........................................................................ 19
------------
21.10 Binding Effect...................................................................... 19
--------------
21.11 Subtenancies........................................................................ 19
------------
21.12 No Reservation...................................................................... 19
--------------
21.13 Consents............................................................................ 19
--------
21.14 Choice of Law....................................................................... 20
-------------
21.15 Non-Merger.......................................................................... 20
----------
21.16 Representations of Landlord......................................................... 20
---------------------------
21.17 Jointly Prepared Document........................................................... 20
-------------------------
21.18 Waiver of Trial by Jury............................................................. 20
-----------------------
21.19 Independent Covenants............................................................... 20
---------------------
21.20 Execution on Behalf of Tenant....................................................... 20
-----------------------------
21.21 Quiet Enjoyment..................................................................... 20
---------------
21.22 Beverage Exclusivity................................................................ 20
--------------------
21.23 Conflict with Rules and Regulations................................................. 20
-----------------------------------
21.24 Press Releases...................................................................... 20
--------------
21.25 Storage Space....................................................................... 20
-------------
Exhibit A: Legal Description of Project
Exhibit B: Floor Plans
Exhibit C: Operating Costs
Exhibit D: Rules and Regulations
Exhibit E: Subordination, Non-Disturbance and Attornment Agreement
Rider 1: Work Letter
Rider 2: Signage
Rider 3: Renewal Option
OFFICE BUILDING LEASE
---------------------
In consideration of the mutual covenants and upon the terms and conditions
set forth in Part One "Basic Lease Provisions", Part Two "General Lease
Provisions", and other attachments and exhibits numerated in the Table of
Contents to this Office Building Lease ("Lease"), Cinemark USA, Inc., a Texas
corporation ("Landlord"), hereby leases to the Tenant named below and Tenant
hereby leases from Landlord, certain premises described below.
PART ONE
BASIC LEASE PROVISIONS
1. Tenant: The Coca-Cola Company, a corporation organized under the laws
------
of the State of Delaware, acting by and through its Coca-Cola USA division.
2. Premises: The premises outlined and crosshatched on Exhibit B hereof
-------- ---------
and containing approximately 52,084 square feet of Rentable Area on the first,
second and portions of the third floors of the Building. (Part Two, Article 1)
3. Term: Beginning on December 1, 1999 (the "Commencement Date") and
----
ending on November 30, 2006 (the "Expiration Date"). (Part Two, Article 2)
4. Base Rent (Part Two, Section 3.1): Base Rent shall be as follows:
---------
Year Rent P.S.F. Annual Rent Monthly Installment
---- ----------- ----------- -------------------
1 $24.00 $1,250,016 $104,168.00
2 $25.00 $1,302,100 $108,508.33
3 $26.00 $1,354,184 $112,848.66
4 $27.00 $1,406,268 $117,189.00
5 $28.00 $1,458,352 $121,529.33
6 $29.00 $1,510,436 $125,869.66
7 $30.00 $1,562,520 $130,210.00
5. Expense Stop: $4.00 per square foot of Rentable Area of the Premises
------------
[Part Two, Section 3.2(c)(ii)]
6. Security Deposit: None (Part Two, Section 3.5)
----------------
7. Prepaid Rent: $104,168.00, applicable to the Base Rent for the first
------------
month of the Term. (Part Two, Section 3.4)
8. Premises Use: Office space. (Part Two, Article 6)
------------
9. Tenant's Insurance (Part Two, Article 8):
------------------
Commercial General Liability: $2,000,000
Workers' Compensation: Statutory Limit
Employers' Liability: $1,000,000
All Risk Property: Full Replacement Value
Business Interruption/Excess Expense: 12 months' coverage
Part One-Page 1
10. Addresses For Notices and Payment of Rent and Other Charges (Part Two,
-----------------------------------------------------------
Article 16):
TO TENANT: TO LANDLORD:
The Coca-Cola Company Cinemark USA, Inc.
Attention: Manager, Leasing Services Attention:
P.O. Drawer 1734 0000 Xxxxxx Xxxxxxx,
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000 Xxxxx, Xxxxx 00000
11. Brokers (Part Two, Article 17): None
-------
12. Parking Spaces (Part Two, Article 19): Number of parking spaces:
--------------
One space per 400 square feet of Rentable Area of the Premises. As part of the
parking spaces provided to Tenant pursuant to the preceding sentence, Tenant may
license up to twelve (12) reserved parking spaces, the monthly charge for which
shall be $75.00 per reserved parking space. There shall be no charge for the
other parking spaces made available to Tenant under the terms of this Lease.
13. Exhibits and Riders: The following numbered Riders are attached to
-------------------
this Lease and made of a part of this Lease for all purposes:
Exhibit A: Legal Description of Project
Exhibit B: Floor Plans
Exhibit C: Operating Costs
Exhibit D: Rules and Regulations
Exhibit E: Subordination, Non-Disturbance and Attornment Agreement
Rider 1: Work Letter
Rider 2: Signage
Rider 3: Renewal Option
14. Incorporation of Other Provisions: All of the provisions, covenants
---------------------------------
and conditions set forth in Part Two and all other exhibits and riders described
in the attached Table of Contents and the preceding paragraph, are by this
reference incorporated into the Basic Lease Provisions as fully as if the same
were set forth at length in the Basic Lease Provisions. Each reference in Part
Two and exhibits and riders to any provision in the Basic Lease Provisions will
be construed to incorporate all of the terms provided under the referenced
provision in the Basic Lease Provisions. In the event of any conflict between a
provision in the Basic Lease Provisions, on the one hand, and a provision in
Part Two or exhibits or riders, on the other hand, the latter will control.
This Lease has been executed by Landlord and Tenant as of the 27/th/ day of
April, 1999.
TENANT: LANDLORD:
THE COCA-COLA COMPANY, CINEMARK USA, INC.
acting by and through its Coca-Cola
USA division
By: Xxxxxxxx X. Xxxxxx By: Xxxxxx Xxxxxxx
--------------------- -------------------
Name: Xxxxxxxx X. Xxxxxx Name: Xxxxxx Xxxxxxx
------------------- ----------------
Title: Vice President Title: Vice President
------------------ ----------------
Attest: Xxxxx X. Xxxx
------------------
Name: Xxxxx X. Xxxx
-------------------
Title: Secreatary
------------------
Part One-Page 2
PART TWO
GENERAL LEASE PROVISIONS
1. PREMISES, COMMON AREAS, SERVICE AREAS
-------------------------------------
1.1 Building. The term "Building" in this Lease will refer to the office
--------
building situated on a tract of land ("Land") in the City of Plano and County of
Collin, Texas, described in Exhibit A of this Lease, and having a postal address
---------
of 0000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxx, Xxxxx 00000. The Land, Building,
Garage and any other improvements situated on the Land are sometimes referred to
collectively as the "Project".
1.2 Computation of Rentable Area. The "Rentable Area" of the Premises
----------------------------
shall be calculated in accordance with the American National Standard Method for
Measuring Floor Area in Office Buildings of the Building Owners and Managers
Association International ("BOMA") (ANSI Z65.1 - 1980, reaffirmed in 1989).
1.3 Variations in Rentable Area. The Rentable Area of the Premises
---------------------------
contained in the Basic Lease Provisions has been calculated in accordance with
the foregoing standard and is agreed to be the Rentable Area of the Premises
regardless of minor variations resulting from construction of the Building
and/or tenant improvements. Notwithstanding the preceding sentence, after
completion of the tenant improvements and within thirty (30) days after the
Commencement Date, Landlord or Tenant may, at its sole expense, cause the
Rentable Area of the Premises to be measured by an architect mutually acceptable
to Landlord and Tenant, and if such measurement determines that the Rentable
Area of the Premises differs from the Rentable Area set forth in the Basic Lease
Provisions, then the Rentable Area of the Premises (and the amount of Base Rent)
shall be adjusted in accordance with such measurement.
1.4 Ceilings, Walls, Floors. Tenant acknowledges that pipes, ducts,
-----------------------
conduits, wires and equipment serving other parts of the Building may be located
above acoustical ceiling surfaces, below floor surfaces or within walls in the
Premises.
1.5 Condition of Premises. The taking of possession of the Premises by
---------------------
Tenant will establish conclusively that the Premises and the Project were at
such time in satisfactory order and condition except for (i) minor matters of
structural, mechanical and electrical adjustment in the Premises (commonly
referred to as "punchlist items") specified in reasonable detail on a list
delivered by Tenant to Landlord within thirty (30) days after the date on which
Tenant takes possession of the Premises and (ii) defects not discoverable upon
inspection and about which Tenant notifies Landlord within one (1) year after
taking possession of the Premises.
1.6 Common and Service Areas. Tenant is hereby granted a nonexclusive
------------------------
right to use the Common Areas during the term of this Lease for their intended
purposes, in common with others, subject to the terms and conditions of this
Lease, including, without limitation, the provisions of Section 19 pertaining to
use of the parking areas and the Rules and Regulations.
(a) Common Areas. "Common Areas" will mean all areas, spaces,
------------
facilities, and equipment in the Project made available by Landlord for the
common and joint use of Landlord, Tenant and others, including, but not limited
to, sidewalks, parking areas, driveways, landscaped areas, loading areas, public
corridors, public restrooms, Building lobbies, stairs and elevators, drinking
fountains and such other areas and facilities, if any, as are designated by
Landlord from time to time as Common Areas.
(b) Service Areas. "Service Areas" will refer to areas, spaces,
-------------
facilities and equipment serving the Project but to which Tenant and other
occupants of the Building will not have access, including, but not limited to,
mechanical, telephone, electrical and similar rooms, and air and water
refrigeration equipment.
2. TERM
----
2.1 Term. The Term of this Lease will commence on the Commencement Date
----
set forth in the Basic Lease Provisions and will terminate on the Expiration
Date set forth in the Basic Lease Provisions, unless sooner terminated in
accordance with the provisions of this Lease.
2.2 Delay in Commencement. Tenant acknowledges that Tenant is responsible
---------------------
for completing all Leasehold Improvements (as defined in Rider 1) in the
Premises, other than the Landlord Improvements (as defined in Rider 1).
Accordingly, the obligation of Tenant to commence paying rent shall begin on the
Commencement Date, unless Tenant is delayed in occupying the Premises solely as
the result of delay caused by Landlord. If Tenant is unable to occupy the
Premises on the Commencement Date solely as the result of delay caused by
Landlord, then (a) Landlord will be liable to Tenant for any direct (but not any
consequential) damages resulting to Tenant from the delay, (b) the validity of
this Lease will not be affected, and (c) the term of this Lease will not be
extended.
Part Two-Page 1
2.3 Early Occupancy. Except as expressly permitted under the terms of this
---------------
Lease, Tenant may not enter or occupy the Premises prior to the Commencement
Date without Landlord's express written consent (any such early entry or
occupancy to be subject to the terms of this Lease). Landlord shall permit
Tenant to enter the Premises prior to the Commencement Date (without being
required to pay Base Rent or Operating Costs) for the purpose of constructing
the Leasehold Improvements (as defined in Rider 1) and installing telephones,
equipment, furniture and similar items in preparation for Tenant's occupancy of
the Premises. Furthermore, notwithstanding anything to the contrary contained in
this Lease, Tenant shall have the right to occupy the Premises prior to the
Commencement Date (but in no event prior to July 1, 1999) under the terms and
conditions set forth hereinafter in this Section 2.3. No such occupancy shall be
permitted unless Tenant has obtained a certificate of occupancy and other
requisite governmental approvals with respect to the Premises. If Tenant elects
to occupy the Premises prior to the Commencement Date, Tenant shall send written
notice thereof to Landlord at least three (3) days prior to such occupancy.
Occupancy by Tenant prior to the Commencement Date ("Early Occupancy") shall be
subject to all the terms and conditions of this Lease (including, without
limitation, the provisions of this Lease requiring Tenant to pay its Pro Rata
Share of Electricity Costs and Operating Costs); provided, however, that Base
Rent during such period of Early Occupancy shall be as follows: (a) no Base Rent
shall be payable for occupancy of the Premises during the month of July, 1999;
(b) Base Rent for occupancy during the months of August, 1999, September, 1999,
and October, 1999, shall be fifty percent (50%) of the monthly Base Rent payable
during the first year of the Term; and (c) Base Rent for occupancy during the
month of November, 1999, shall be seventy-five percent (75%) of the monthly Base
Rent payable during the first year of the Term. Occupancy of the Premises by
Tenant prior to the Commencement Date shall not alter the Commencement Date or
the Expiration Date.
2.4 Holding Over. If Tenant, or any party claiming rights to the Premises
------------
through Tenant, retains possession of the Premises without the written consent
of Landlord after the Expiration Date or earlier termination of this Lease, such
possession will constitute a tenancy at will, subject, however, to all the terms
and provisions of this Lease, except for (i) the Term and (ii) the annual Base
Rent, which annual Base Rent will become an amount equal to one hundred fifty
percent (150%) of the highest amount set forth in this Lease as annual Base
Annual, plus any adjustments which have previously occurred. No holding over by
Tenant, and no acceptance of rental payments by Landlord during a holdover
period, whether with or without the consent of Landlord, will operate to extend
this Lease.
3. MONETARY PROVISIONS
-------------------
3.1 Base Rent. Subject to the prepaid rent provisions of Section 3.4,
--------- -----------
Tenant will pay as the monthly installment of "Base Rent" for each month of the
Term, the sum set forth in the Basic Lease Provisions, in advance on or before
the first day of each calendar month of the Term, without deduction, offset,
prior notice, or demand, and in lawful money of the United States. If the
Commencement Date is not the first day of a calendar month, Tenant will pay to
Landlord on the Commencement Date a portion of the monthly installment of Base
Rent prorated on the basis of a thirty (30) day month. Further, if Tenant
occupies the Premises prior to the Commencement Date, then Tenant shall make
payments of Base Rent on or before the first day of each calendar month during
such period of Early Occupancy in accordance with Section 2.3.
3.2 Tenant's Share of Certain Costs. In addition to all other sums due
-------------------------------
under this Lease, Tenant will pay to Landlord as additional monthly rent, in the
manner and at the times set forth below, (1) Tenant's Pro-rata Share of
Electricity Costs as calculated in accordance with Section 3.2(c)(i) below for
each calendar year or partial calendar year, and (2) Tenant's Pro-Rata Share of
Operating Costs as calculated in accordance with Section 3.2(c)(ii) for each
calendar year or partial calendar year.
(a) Electricity Costs. "Electricity Costs" shall mean the costs
-----------------
incurred by Landlord for (i) electricity utilized in connection with the
operation, maintenance, and use of the Project, and (ii) sales, use, excise and
other taxes assessed by governmental authorities on electricity.
(b) Operating Costs. "Operating Costs" will mean all costs, charges,
---------------
and expenses incurred by Landlord (excluding Electricity Costs) in connection
with owning, operating, maintaining, repairing, insuring and managing the
Project, provided that such Operating Costs are substantially consistent with
Operating Costs incurred by owners of other first-class office buildings in the
Plano, Texas area. Operating Costs shall be computed on an accrual basis and
shall include, without limitation, costs, charges and expenses incurred with
respect to the items enumerated as "Operating Cost Examples" in Paragraph 2 of
-----------
Exhibit C to this Lease. Operating Costs will not include those items enumerated
---------
as "Operating Cost Exclusions" in Paragraph 1 of Exhibit C to this Lease. Tenant
----------- ---------
waives all rights to protest or appeal the appraised value of the Premises, as
well as the Project and Building, and all rights to receive notices of
reappraisement as set forth in Sections 41.413 and 42.015 of the Texas Tax Code.
(c) Pro Rata Share Computation.
--------------------------
(i) "Tenant's Pro Rata Share of Electricity Costs" will be
computed by multiplying (i) the Electricity Costs
Part Two-Page 2
per square foot of Rentable Area in the Building times (ii) the number of square
feet of Rentable Area in the Premises. Notwithstanding the preceding sentence,
if Landlord or Tenant elects to have a separate meter installed to measure the
electricity consumed within the Premises pursuant to Section 5.3(b)(ii), then
Tenant's Pro Rata Share of Electricity Costs will be the sum of (A) the costs of
electricity consumed within the Premises, as measured by the separate meter, and
(B) the costs of electricity consumed in connection with the operation of the
Common Areas, as reasonably determined by Landlord, multiplied by a fraction,
the numerator of which is the number of square feet of Rentable Area in the
Premises and the denominator of which is the number of square feet of Rentable
Area in the Building.
(ii) "Tenant's Pro Rata Share of Operating Costs" will be
computed by multiplying (A) the amount, if any, by which the Operating Costs per
square foot of Rentable Area in the Building exceed the Expense Stop, times (B)
the number of square feet of Rentable Area in the Premises.
(d) Estimated Costs. Tenant's Pro Rata Share of Electricity Costs and
---------------
Tenant's Pro Rata Share of Operating Costs for the remainder of the first
calendar year (whether full or partial) and for each subsequent calendar year of
the Term will be estimated by Landlord, and notice of such estimated amounts
will be given to Tenant at least thirty (30) days prior to the Commencement Date
or the beginning of each calendar year, as the case may be. If the Commencement
Date does not occur on January 1, for the partial calendar year after the
Commencement Date, Tenant will pay to Landlord each month, at the same time as
the monthly installment of Base Rent is due, an amount equal to Tenant's
estimated Pro Rata Share of Electricity Costs and Pro Rata Share of Operating
Costs for the remainder of such calendar year divided by the number of full
months remaining in such year. For each full calendar year of the Term, Tenant
will pay to Landlord each month, at the same time as the monthly installment of
Base Rent is due, an amount equal to one-twelfth (1/12) of Tenant's estimated
Pro Rata Share of Electricity Costs and Pro Rata Share of Operating Costs due
for such calendar year. If the Expiration Date does not occur on December 31,
for the partial calendar year preceding the Expiration Date, Tenant will pay to
Landlord, each month, at the same time as the monthly installment of Base Rent
is due, an amount equal to the amount of Tenant's estimated Pro Rata Share of
Electricity Costs and Pro Rata Share of Operating Costs for such partial
calendar year divided by the number of full calendar months of such partial
calendar year.
(e) Estimate Revisions. At any time and from time to time during the
------------------
Term, Landlord will have the right, by notice to Tenant, to change the monthly
amount then payable by Tenant for Tenant's estimated Pro Rata Share of
Electricity Costs or Pro Rata Share of Operating Costs to reflect more
accurately, in the reasonable judgment of Landlord, the actual amount of such
costs payable by Tenant for the then current calendar year. Tenant will begin
paying the revised estimated amount together with the next monthly payment of
Base Rent due after receipt by Tenant of Landlord's notice.
(f) Annual Adjustments. On or before April 1 of each calendar year,
------------------
Landlord will prepare and deliver to Tenant a statement setting forth the
calculation of Tenant's actual Pro Rata Share of Electricity Costs and Pro Rata
Share of Operating Costs for the previous calendar year. Within thirty (30) days
after receipt of such statement, Tenant will pay to Landlord, or Landlord will
credit against the next rental or other payment or payments due from Tenant, as
the case may be, the difference between Tenant's actual Pro Rata Share of
Electricity Cost and Pro Rata Share of Operating Costs for the preceding
calendar year and Tenant's estimated Pro Rata Share of Electricity Costs and Pro
Rata Share of Operating Costs paid by Tenant during such year. Tenant shall have
the right to conduct an audit ("Tenant's Audit") of the Electricity Costs and
the Operating Costs in respect of a calendar year provided that all the
following conditions are met in strict accordance with their terms: (i) such
audit is conducted within one (1) year after Landlord delivers to Tenant the
calculation of Tenant's actual Pro Rata Share of Electricity Costs or Pro Rata
Share of Operating Costs, as the case may be, for such calendar year (time being
of the essence with respect thereto); and (ii) such audit is conducted at hours
reasonably designated by Landlord by auditors who are employees of Tenant or by
an accounting firm of national standing retained by Tenant. The results of
Tenant's Audit shall be made available to Landlord. The result of Tenant's Audit
shall be binding upon the parties unless Landlord, during the thirty (30) day
period after receipt of Tenant's Audit, requests that another audit of the
relevant costs be performed. If such request is timely made, Landlord and Tenant
shall retain a mutually acceptable accounting firm to conduct such audit (the
"Mutual Audit"), the results of which shall be binding upon the parties. The
cost of the Mutual Audit shall be borne equally by Landlord and Tenant. Tenant
shall pay the cost of Tenant's Audit; provided, however, that if Tenant's Audit
(or, in the alternative, the Mutual Audit if one is conducted) determines that
Landlord's calculation of the aggregate total of Electricity Costs and Operating
Expenses was overstated by more than five percent (5%), then Landlord shall
reimburse Tenant for the cost of Tenant's Audit. If Tenant's Audit (or, in the
alternative, the Mutual Audit if one is conducted) determines that Landlord has
charged, and Tenant has paid, Electricity Costs or Operating Costs in excess of
such costs required to be paid by Tenant under the terms of this Lease, Landlord
shall, at Landlord's election (notice of which election shall be sent to Tenant
within twenty (20) days after the amount of any such excess has been finally
determined), either (A) promptly reimburse Tenant the amount of such excess, or
Part Two-Page 3
(B) credit the entire amount of such excess against the next installment of rent
becoming due under this Lease.
(g) Final Partial Year. If the Term will expire or this Lease has
------------------
been terminated prior to a final determination of Tenant's actual Pro Rata Share
of Electricity Costs or Pro Rata Share of Operating Costs, the amount of
adjustment between Tenant's estimated pro rata share of such costs and Tenant's
actual pro rata share of such costs payable for the preceding calendar year
and/or the final partial calendar year of the Term will be projected by the
Landlord based upon the best data available to Landlord at the time of the
estimate. Within thirty (30) days after receipt of a statement from Landlord
setting forth Landlord's projections, Tenant will pay to Landlord, or Landlord
will pay to Tenant, as the case may be, the difference between Tenant's
projected actual Pro Rata Share of Electricity Costs and Pro Rata Share of
Operating Costs for the period in question and Tenant's estimated Pro Rata Share
of Electricity Costs and Pro Rata Share of Operating Costs paid by Tenant for
the period in question. The obligations set forth in the preceding sentence will
survive the Expiration Date or earlier termination of this Lease.
(h) Adjustment for Occupancy. During any calendar year in which the
------------------------
Building has less than full occupancy, Operating Costs will be computed as
though the Building had been completely occupied for the entire calendar year.
3.3 Personal Property Taxes. Tenant agrees to pay, before delinquency, all
-----------------------
taxes, fees or charges, rates, duties and assessments, imposed, levied or
assessed directly against Tenant, or indirectly through Landlord, and payable
during the Term hereof, upon Tenant's equipment, furniture, movable trade
fixtures and other personal property located in the Premises. Tenant will also
pay, before delinquency, business and other taxes, fees or charges, rates,
duties and assessments imposed, levied or assessed because of the Tenant's
occupancy of the Premises or upon the business or income of the Tenant generated
from the Premises.
3.4 Prepaid Rent. Upon written notice from Landlord (which notice shall be
------------
given no earlier than thirty (30) days before Landlord tenders possession of the
Premises to Tenant), Tenant will pay to Landlord the sum specified in Paragraph
---------
7 of the Basic Lease Provisions as "Prepaid Rent" which sum will be credited to
-
Base Rent in the manner set forth in the Basic Lease Provisions.
3.5 Security Deposit. Intentionally omitted.
----------------
3.6 Late Payments. Should Tenant fail to pay any installment of Base Rent
-------------
on or before the tenth (10th) day of each calendar month, Interest (as
hereinafter defined) will accrue from the date on which such sum is due and such
Interest, together with a "Late Charge" (herein so called) in an amount equal to
five percent (5%) of the installment then due, will be paid by Tenant to
Landlord at the time of payment of the delinquent sum. The Late Charge is agreed
by Landlord and Tenant to be a reasonable estimate of the extra administrative
expenses incurred by Landlord in handling such delinquency.
3.7 Interest. Whenever reference is made in this Lease to the accrual of
--------
interest on sums due Landlord or whenever any amount owed to Landlord is not
paid when due, such sum will bear interest ("Interest") at an annual rate equal
to the lesser of (i) two percent (2%) over the "base" or "prime" rate published
from time to time by Nations Bank, N.A., or (ii) the maximum lawful rate.
3.8 Administrative Reimbursement. In the event Landlord performs
----------------------------
construction, maintenance, or repairs for Tenant under Sections 7.3, 8.5 or 12.2
------------ --- ----
of Part Two of this Lease, Tenant will reimburse Landlord within ten (10) days
after receipt of an invoice from Landlord for the cost of such construction,
maintenance or repairs plus an amount equal to ten percent (10%) of such costs
("Administrative Reimbursement") to reimburse Landlord for administration and
overhead.
3.9 Additional Rent. Any payments to be made by Tenant to Landlord under
---------------
this Lease in addition to the Base Rent, whether or not denominated as rent,
will be deemed to be additional rent under this Lease for the purpose of
securing their collection and will constitute rent for purposes of Section 502
of the Bankruptcy Code. Landlord will have the same rights and remedies upon
Tenant's failure to make such payments as for the nonpayment of Base Rent.
4. CONSTRUCTION
------------
In the event any construction of tenant improvements is necessary for the
Premises, such construction will be accomplished and the cost of such
construction will be borne by Landlord and/or Tenant in accordance with a
separate Rider to this Lease ("Work Letter") between Landlord and Tenant. Except
as expressly provided in this Lease or in the Work Letter, if any, Tenant
acknowledges that Landlord has not undertaken to perform any modification,
alteration or improvement to the Premises.
5. SERVICES AND UTILITIES
----------------------
5.1 Services by Landlord. Provided Tenant is not in default under this
--------------------
Lease, and subject to the conditions and standards set forth in this Lease and
to standards, limitations and guidelines imposed by governmental authorities and
utility companies, Landlord will furnish or cause to be furnished the
Part Two-Page 4
following services and utilities: (i) heat and air conditioning to the Premises
during "Normal Business Hours" (as defined in the Rules and Regulations), at
such temperatures and in such quantities as Landlord determines are reasonably
necessary for the comfortable use and occupancy of the Premises for general
office purposes and as is consistent with the operation of a first class office
building in the Dallas/Fort Worth metropolitan area; (ii) water at the normal
temperature of the supply of water to the Building for lavatory and drinking
purposes through fixtures installed by Landlord or by Tenant with Landlord's
consent; (iii) janitorial cleaning services to those portions of the Premises
which are used for office purposes five (5) days per week (except on holidays
observed by the Building); (iv) cleaning of the carpet in the Premises at least
two (2) times each calendar year; (v) twenty-four (24) hour, nonexclusive
passenger elevator service and, when scheduled through the Building management,
nonexclusive freight elevator service to the floor(s) on which the Premises are
located; (vi) routine maintenance in the Common Areas; (vii) replacement of
standard light bulbs, fluorescent tubes, and ballasts in the Premises; and
(viii) electric current to the Premises for standard office lighting and office
machines which consume electric current within the parameters set forth in
Section 5.3(a)(i) of this Lease. All services referred to in this Section 5.1
-----------------
shall be provided by Landlord and (subject to the provisions of Exhibit C) paid
for by Tenant as part of Tenant's payment of Tenant's Pro Rate Share of
Electrical Costs and Pro Rata Share of Operating Costs.
5.2 Tenant's Obligations. Tenant will pay for, prior to delinquency, all
--------------------
telephone charges and all other materials and services not expressly the
obligation of Landlord that are furnished to or used on or about the Premises
during the Term of this Lease.
5.3 Tenant's Additional Service Requirements.
----------------------------------------
(a) Additional Services Requiring Landlord Consent. Tenant will not,
----------------------------------------------
without Landlord's prior written consent, do the following: (i) install or use
special lighting beyond Building standard, or any equipment, machinery, or
device in the Premises which requires a nominal voltage of more than one hundred
twenty (120) volts single phase, or which in Landlord's reasonable opinion
exceeds the capacity of existing feeders, conductors, risers, or wiring in or to
the Premises or Building, or which requires amounts of water in excess of that
usually furnished or supplied for use in office space, or which will decrease
the amount or pressure of water or the amperage or voltage of electricity
Landlord can furnish to other occupants of the Building; (ii) install or use any
heat or cold-generating equipment, machinery or device which affects the
temperature otherwise maintainable by the heat or air conditioning system of the
Building; (iii) use portions of the Premises for special purposes requiring
greater or more difficult cleaning work than office areas, such as, but not
limited to, interior glass partitions, and non-Building standard materials or
finishes; or (iv) accumulate refuse or rubbish (A) in excess of that ordinarily
accumulated in business office occupancy or (B) at times other than the
Building's standard cleaning times.
(b) Providing Additional Services. If, in the reasonable opinion of
-----------------------------
Landlord, additional services to Tenant are necessary, Landlord will have the
following rights:
(i) Removal by Tenant. Landlord may require that Tenant cease
-----------------
the activity or remove the item (or refuse to permit the activity or
installation of the item), causing (or which will cause) the need for such
additional service, if Landlord and Tenant are not able to agree upon a mutually
satisfactory method for providing such additional services or, in the reasonable
opinion of Landlord, providing such additional service is not operationally or
economically feasible.
(ii) Separate Metering. Landlord may, at Landlord's expense,
-----------------
install and maintain separate metering devices. Landlord agrees that it will, at
the request of Tenant, cause separate metering devices to be installed to
monitor electricity usage in the Premises, and in such event the cost of such
meters and their installation, maintenance and repair shall be the obligation of
Tenant. Landlord may also cause periodic usage surveys to be prepared by an
engineer employed by Landlord for such purpose, the cost of which shall be
included in Operating Costs.
(iii) Additional HVAC. With respect to heat or cold generating
---------------
equipment, Landlord may furnish additional heat or air conditioning to the
Premises, or install supplementary heating or air conditioning units in the
Premises or elsewhere in the Building, or modify the existing heating or air
conditioning system in the Premises. The actual cost of additional heat or air
conditioning, supplementary units, or modifications to the existing system will
be the obligation of Tenant.
(iv) Replacement Bulbs. With respect to lighting beyond standard
-----------------
lighting used throughout the Building, Landlord may purchase and replace, at the
expense of Tenant, light bulbs and ballasts and/or fixtures.
(v) Additional Janitorial Services. With respect to additional
------------------------------
cleaning work, Landlord may instruct Landlord's janitorial contractor to provide
such services and the cost of such service will be the obligation of Tenant.
(vi) Substitution of Cleaning Contractors. In the event that
------------------------------------
Tenant, in its reasonable judgement, is dissatisfied with the janitorial service
provided in the Premises by Landlord's cleaning contractor, Tenant shall send
written notice thereof (a "Janitorial Complaint Notice") to Landlord
Part Two-Page 5
stating with particularity the basis for such dissatisfaction. If Landlord fails
to cure the cited problem with the janitorial service to Tenant's reasonable
satisfaction within fifteen (15) days after receiving a Janitorial Complaint
Notice, then Landlord shall allow Tenant to contract directly with a cleaning
company reasonably acceptable to Landlord for the provision of janitorial
services to the Premises. In such event, Tenant shall pay the cost of janitorial
services to the Premises and the cost of janitorial services included in
Operating Costs under this Lease shall be limited to the cost of janitorial
services in the Common Areas.
(c) After Hours Heat or Air Conditioning. Landlord will use
------------------------------------
reasonable efforts to provide after hours heat or air conditioning, at the cost
of Tenant, upon request from Tenant received no later than 3:00 p.m. on a week
day for service required the same night (or prior to business hours of the
following day) or 3:00 p.m. of the last business day before a weekend or a
holiday for service required on a weekend or holiday. The cost of after hours
heat or air conditioning charged to Tenant will equal the actual cost to
Landlord of providing such after hours heat or air conditioning.
(d) Payment. Tenant will pay to Landlord the cost of any additional
-------
service and any other cost for which Tenant is obligated under Section 5.3(b) or
--------------
(c) within thirty (30) days after receipt of an invoice with respect to same
from Landlord.
5.4 Interruption of Utility Service. Landlord will use Landlord's best
-------------------------------
efforts to provide the services required of Landlord under this Lease. However,
Landlord reserves the right, without any liability to Tenant and without
affecting Tenant's covenants and obligations under this Lease, to stop or
interrupt or reduce any of the services listed in Section 5.1 or to stop or
-----------
interrupt or reduce any other services required of Landlord under this Lease,
whenever and for so long as may be necessary (provided that Landlord shall use
its best efforts to minimize any disruption of or interference with Tenant's use
and occupancy of the Premises, with the additional expense thereof to be
included in Operating Costs) by reason of (i) accidents or emergencies, (ii) the
making of repairs or changes which Landlord in good xxxxx xxxxx necessary or is
required or is permitted by this Lease or by law to make, (iii) difficulty in
securing proper supplies of fuel, water, electricity, labor or supplies, (iv)
the compliance by Landlord with governmental, quasi-governmental or utility
company energy conservation measures, or (v) the exercise by Landlord of any
right under Section 6.5. Landlord will, in the event of an interruption of a
-----------
utility service, use Landlord's best efforts to cause such service to be
resumed. However, no interruption or stoppage of any of such services will ever
be construed as an eviction of Tenant nor will such interruption or stoppage
cause any abatement of the rent payable under this Lease or in any manner
relieve Tenant from any of Tenant's obligations under this Lease.
Notwithstanding the preceding sentence, however, if any interruption of
electrical or water service to the Premises results from the negligence of
Landlord and continues for five (5) consecutive days, Tenant shall be entitled
to an abatement of Base Rent beginning upon the sixth (6th) day of such
interruption and ending at such time as electrical or water service, as the case
may be, is restored to the Premises.
6. OCCUPANCY AND CONTROL
---------------------
6.1 Use. The Premises will be used and occupied by Tenant for general
---
office purposes and for no other purposes. In no event will the term "general
office purposes" be construed to include an educational facility or school, a
telemarketing operation or a personnel agency.
6.2 Access to the Building and Premises; Telephone System.
-----------------------------------------------------
(a) Landlord shall furnish Tenant, at no cost to Tenant, one (1) card
key to the Premises for each employee of Tenant working in the Premises;
however, Tenant shall be required to pay a reasonable fee determined by Landlord
for any replacement card keys.
(b) Notwithstanding anything to the contrary contained in the Rules
and Regulations (as hereinafter defined), Tenant shall have the right, at its
sole cost and expense, to control access to the Premises through the use of
locks, card key or other access systems; provided, however, that Landlord shall
have the right to approve the design and installation of such system (which
approval shall not be unreasonably withheld) and provided further that Landlord
shall always be furnished with such keys, electronic keys, key cards, access
codes, or similar access devices as are necessary to provide Landlord with
access to the Premises.
(c) Tenant shall have the right, at its sole cost and expense, to
install its own telephone system in the Premises; provided, however, that
Landlord shall have the right to approve the design and installation of such
system (which approval shall not be unreasonably withheld).
6.3 Rules and Regulations. Tenant's use of the Premises and the Common
---------------------
Areas will be subject at all times during the Term to the "Rules and
Regulations" attached to the Lease as Exhibit D and to any modifications of such
---------
Rules and Regulations and any additional Rules and Regulations from time to time
promulgated by Landlord in Landlord's reasonable discretion (the "Rules and
---------
Regulations"). Additional Rules and Regulations will not become effective and a
-----------
part of this Lease until a copy of same has been delivered to Tenant. The
inability of Landlord to cause another occupant of the Building to comply with
the Rules and Regulations will neither excuse Tenant's
Part Two-Page 6
obligation to comply with such Rules and Regulations or any other obligation of
Tenant under this Lease nor cause the Landlord to be liable to Tenant for any
damage resulting to Tenant. Tenant will cause Tenant's employees, servants and
agents to comply with the Rules and Regulations.
6.4 Additional Covenants of Tenant.
------------------------------
(a) Laws, Statutes. As respects all of the Leasehold Improvements (as
--------------
defined in Rider 1) other than the Landlord Improvements (as defined in Rider
1), Tenant will, at Tenant's sole cost, promptly comply with (i) all laws,
orders, regulations, and other government requirements now in force or hereafter
enacted relating to the use, condition, or occupancy of the Premises, including
without limitation, (A) Title III of The Americans with Disabilities Act of
1990, all regulations issued thereunder, and the Accessibility Guidelines for
Buildings and Facilities issued pursuant thereto, and the Texas Architectural
Barriers Act, as the same are in effect on the date of this Lease and as
hereafter amended ("Disabilities Acts"), and (B) all applicable laws,
ordinances, and regulations (including consent orders and administrative orders)
relating to public health and safety and protection of the environment and
regulation of "Hazardous Substances", as such term is defined in Article 21 of
----------
the General Lease Provisions ("Environmental Laws"), and (ii) all rules, orders,
mandates, directives, regulations and requirements pertaining to the use of the
Premises and the conduct of Tenant's business imposed by Landlord's insurers,
American Insurance Association (formerly known as "National Board of Fire
Underwriters") or insurance service office, any utility company serving the
Building or any other similar body having jurisdiction over the Building, any
related parking areas, and the Premises. The foregoing provisions of this
Section 6.4(a) shall in no event be construed to require Tenant to make any
--------------
modifications to the Building or any improvements other than the Leasehold
Improvements (excluding the Landlord Improvements) which may be required by
applicable laws, orders, regulations and other governmental requirements, it
being agreed that Landlord shall be responsible for such modifications subject
to the provisions of Article 3 and Exhibit C.
(b) Nuisance. Tenant will not do or permit anything to be done in or
--------
about the Premises which will in any way obstruct or interfere with the
operation of the Project or with the rights of other tenants or occupants of the
Project or injure, disturb or annoy other tenants or occupants of the Project.
(c) Building Reputation. Tenant will not use or permit the Premises
-------------------
to be used for any objectionable purpose or any purpose which, in the reasonable
opinion of the Landlord, xxxxx or tends to harm the business or reputation of
the Landlord or Building or reflects unfavorably on the Building, or any part of
the Building, or deceives or defrauds the public.
(d) Recording. Neither Landlord nor Tenant will record this Lease or
---------
any memorandum of this Lease without the prior written consent of the other
party. Either Landlord or Tenant will, upon request of the other party, execute,
acknowledge and deliver to the other party a short form or memorandum of this
Lease for recording purposes.
6.5 Access by Landlord. Landlord reserves the right for Landlord and
------------------
Landlord's agents to enter the Premises at any reasonable time, upon reasonable
prior notice to Tenant: (a) to inspect the Premises (which inspections shall be
conducted during business hours except in the event of an emergency), (b) to
supply janitorial service or other services to be provided by Landlord to Tenant
under this Lease, (c) to show the Premises to prospective lenders or purchasers,
(d) to alter, improve, maintain or repair the Premises or any other portion of
the Building abutting the Premises, (e) to install, maintain, repair, replace or
relocate any pipe, duct, conduit, wire or equipment serving other portions of
the Building but located in the ceiling, wall or floor of the Premises, (f) to
perform any other obligation of Tenant after Tenant's failure to perform same,
or (g) upon default by Tenant under this Lease. Furthermore, during the last six
(6) months of the Term, Landlord and Landlord's agents shall have the right to
enter the Premises at any reasonable time, upon reasonable prior notice to
Tenant, to show the Premises to prospective tenants. If Landlord enters the
Premises for the purpose of performing work, Landlord may erect scaffolding and
store tools, material, and equipment in the Premises when required by the
character of the work to be performed.
6.6 Control of Project. The Building and Common Areas will be at all times
------------------
under the exclusive control, management and operation of the Landlord. Landlord
hereby reserves the right from time to time (a) to alter or redecorate the
Project, or any part thereof, or construct additional facilities adjoining or
proximate to the Project; (b) to close temporarily doors, entry ways, public
spaces and corridors and to interrupt or suspend temporarily Building services
and facilities in order to perform any redecorating or alteration or in order to
prevent the public from acquiring prescriptive rights in the Common Areas; and
(c) to change the name of the Building. Landlord agrees that the number of
parking spaces available to tenants of the Project shall in all events comply
with applicable parking ordinances.
6.7 Minimization of Disruption. Landlord will attempt not to disrupt
--------------------------
Tenant's operations in the Premises during the exercise of Landlord's rights or
the performance by Landlord of Landlord's obligations under this Lease, but will
not be required to incur extra expenses in order to minimize such disruption. No
exercise by Landlord of any right or the performance by
Part Two-Page 7
Landlord of Landlord's obligations under this Lease will constitute actual or
constructive eviction or a breach of any express of implied covenant for quiet
enjoyment.
7. REPAIRS, MAINTENANCE AND ALTERATIONS
------------------------------------
7.1 Landlord's Repair Obligations. Landlord will, subject to the casualty
-----------------------------
provisions of Article 9, maintain (a) the Common Areas and Service Areas, (b)
---------
roof, foundation, exterior windows and load bearing items of the Building; (c)
exterior surfaces of walls; (d) plumbing, pipes and conduits located in the
Common Areas or Service Areas of the Building, and (e) the Building central
heating, ventilation and air conditioning, electrical, mechanical and plumbing
systems. Landlord will not be required to make any repair in connection with or
resulting from (i) any alteration or modification to the Premises or to Building
equipment performed by or on behalf of Tenant or to special equipment or systems
installed by or on behalf of Tenant, (2) the installation, use or operation of
Tenant's property, fixtures and equipment, (3) the moving of Tenant's property
in or out of the Building or in and about the Premises, (4) Tenant's use or
occupancy of the Premises in violation of Article 6 or in a manner not
---------
contemplated by the parties at the time of execution of this Lease (e.g.,
subsequent installation of special use rooms), (5) the acts or omissions of
Tenant and Tenant's employees, agents, invitees, subtenants, licensees or
contractors, (6) fire or other casualty, except as provided in Article 9, or (7)
---------
condemnation, except as provided in Article 10. Depending upon the nature of
----------
repairs undertaken by Landlord, the cost of such repairs will be borne solely by
Landlord or reimbursed to Landlord either by a particular tenant or tenants or
by all tenants as an Operating Cost as provided in this Lease.
7.2 Tenant's Repair Obligations. Except for janitorial services provided
----------------------------
by Landlord, Tenant, at Tenant's expense, will maintain the Premises in good
order, condition and repair including, without limitation, the interior surfaces
of the windows, walls and ceilings; floors; wall and floor coverings; window
coverings; doors; interior windows; and all switches, fixtures and equipment in
the Premises. Upon receipt of reasonable notice from Tenant, Landlord will
perform, at the expense of Tenant, all repairs and maintenance to plumbing,
pipes and electrical wiring located within walls, above ceiling surfaces and
below floor surfaces resulting from the use of the Premises by Tenant. In no
event will Tenant be responsible for any plumbing, pipes and electrical wiring,
switches, fixtures and equipment located in the Premises but serving another
tenant or for portions of the central heat, ventilation and air conditioning,
electrical, mechanical and plumbing systems of the Building which are located in
the Premises, except for (i) repairs resulting from the acts of Tenant and
Tenant's employees, agents, invitees, subtenants, licensees or contractors, (ii)
modifications made to such systems by or on behalf of Tenant, and (iii) special
equipment installed by or on behalf of Tenant.
7.3 Rights of Landlord. In the event Tenant fails, in the reasonable
------------------
judgment of Landlord, to maintain the Premises in good order, condition and
repair, Landlord will have the right to perform such maintenance, repairs,
refurbishing or repairing at Tenant's expense.
7.4 Surrender. Upon the expiration or earlier termination of this Lease,
---------
or upon the exercise by Landlord of Landlord's right to re-enter the Premises
without terminating this Lease, Tenant will surrender the Premises in the same
condition as received or as subsequently improved by Landlord or Tenant, except
for (i) ordinary wear and tear and (ii) damage by fire, earthquake, acts of God
or the elements, and will deliver to Landlord all keys for the Premises and
Garage and combinations to safes located in the Premises. Tenant will, at
Landlord's option, remove, or cause to be removed, from the Premises or the
Building, at Tenant's expense and as of the Expiration Date or earlier
termination of this Lease, all signs (including any signs located on the
Premises, i.e., monument signs), notices, displays, and trade fixtures of
Tenant. Tenant agrees to repair, at Tenant's expense, any damage to the Premises
or any other part of the Project resulting from the removal of any articles of
personal property, movable business or trade fixtures, machinery, equipment,
furniture or movable partitions, including without limitation, repairing the
floor and patching and painting the walls where required by Landlord. Tenant's
obligations under this Section 7.4 will survive the expiration or earlier
-----------
termination of this Lease. If Tenant fails to remove any item of property
permitted or required to be removed at the expiration or earlier termination of
the Term, Landlord, may, at Landlord's option, (a) remove such property from the
Premises at the expense of Tenant and sell or dispose of same in such manner as
Landlord deems advisable, or (b) place such property in storage at the expense
of Tenant. Any property of Tenant remaining in the Premises ten (10) days after
the Expiration Date or earlier termination of this Lease will be deemed to have
been abandoned by Tenant.
7.5 Alterations by Tenant.
---------------------
(a) Approval Required. Tenant will not make, or cause or permit to be
-----------------
made, any additions, alterations, installations or improvements in or to the
Premises (collectively, "Alterations"), without the prior written consent of
Landlord. In the case of non-structural Alterations proposed by Tenant, Landlord
shall not unreasonably withhold, condition or delay its consent. Unless Landlord
has waived such requirement in writing, together with Tenant's request for
approval of any Alteration, Tenant must also submit details with respect to the
proposed source of funds for the payment of the cost of the Alteration by
Tenant, design concept, plans and specifications, names of proposed contractors,
and financial and other pertinent information about such contractors (including
without limitation, the labor organization affiliation or lack of affiliation
Part Two-Page 8
of any contractors), certificates of insurance to be maintained by Tenant's
contractors, hours of construction, proposed construction methods, details with
respect to the quality of the proposed work and evidence of security (such as
payment and performance bonds) to assure timely completion of the work by the
contractor and payment by the contractor of all costs of the work. With respect
to any Alteration which is visible from outside the Premises, such proposed
Alteration must, in the opinion of Landlord, also be architecturally and
aesthetically harmonious with the remainder of the Building.
(b) Complex Alterations. If the nature, volume or complexity of any
-------------------
proposed Alterations, causes Landlord to consult with an independent architect,
engineer or other consultant, Tenant will reimburse Landlord for the fees and
expenses incurred by Landlord. If any improvements will affect the basic heat,
ventilation and air conditioning or other Building systems or the Building,
Landlord may require that such work be designed by consultants designated by
Landlord and be performed by Landlord or Landlord's contractors.
(c) Standard of Work. All work to be performed by or for Tenant
----------------
pursuant hereto will be performed diligently and in a first-class, workmanlike
manner, and in compliance with all applicable laws, ordinances, regulations and
rules of any public authority having jurisdiction over the Project and/or
Tenant, including, without limitation, the Disabilities Acts, Environmental
Laws, and Landlord's insurance carriers. Landlord will have the right, but not
the obligation, to inspect periodically the work on the Premises and may require
changes in the method or quality of the work.
(d) Ownership of Alterations. All Alterations made by or for Tenant
------------------------
(other than Tenant's trade fixtures) will immediately become the property of
Landlord, without compensation to Tenant; provided, however, Landlord will have
no obligation to repair, maintain or insure such Alterations. Carpeting and
cabinetry will be deemed improvements of the Premises and not trade fixtures,
regardless of how or where affixed. Such Alterations will not be removed by
Tenant from the Premises either during or at the expiration or earlier
termination of the Term and will be surrendered as a part of the Premises unless
Landlord has requested that Tenant remove such Alterations.
7.6 Common Area Displays. The parties acknowledge that Tenant may, with
--------------------
the approval of Landlord (to be given or withheld in Landlord's sole
discretion), place artwork or other displays in the lobby of the Building or in
other Common Areas ("Common Area Displays"). In the event that Common Area
Displays are placed in the lobby of the Building or other Common Areas, such
Common Area Displays shall not be removed by Tenant prior to the expiration or
termination of this Lease unless the prior written approval of Landlord is
obtained; provided, however, that Tenant shall have the right to remove the
Common Area Displays, at Tenant's expense, without the consent of Landlord in
the event that (a) Tenant no longer occupies the Premises or any portion
thereof, and (b) Cinemark USA, Inc. and Tenant have no contractual arrangement
whereby Cinemark USA, Inc. serves the products of Tenant in the movie theaters
operated by Cinemark USA, Inc. Upon the expiration or termination of this Lease,
Tenant shall remove the Common Area Displays at the sole expense of Tenant.
7.7 Liens. Tenant will keep the Premises and the Building free from any
-----
liens arising out of work performed, materials furnished, or obligations
incurred by or on behalf of or for the benefit of Tenant. If Tenant does not,
within ten (10) days following notice of the imposition of any such lien, cause
such lien to be released of record by payment or posting of a proper bond or
other security, Landlord will have, in addition to all other remedies provided
in this Lease and by law, the option, to cause the same to be released by such
means as Landlord deems proper, including payment of the claim giving rise to
such lien. All sums paid and expenses incurred by Landlord in connection
therewith, including attorneys' fees and a reasonable amount for Landlord's
administrative time, will be payable to Landlord by Tenant on demand with
Interest from the date such sums are expended.
8. INSURANCE
---------
8.1 Insurance Required of Tenant. Tenant will, at Tenant's sole expense,
----------------------------
procure and maintain the coverages required by this Section 8.1.
-----------
(a) Commercial General Liability Insurance. Tenant will procure and
--------------------------------------
maintain commercial general liability insurance ("Liability Insurance") written
on an "occurrence" policy form, covering bodily injury, property damage and
personal injury arising out of or relating, directly or indirectly, to Tenant's
business operations, conduct, assumed liabilities or use or occupancy of the
Premises or any other part of the Project. Tenant will cause Landlord and any
lender of Landlord as to which Tenant has been provided notice to be named as
"additional insureds." The minimum acceptable limits for Tenant's Liability
Insurance are set forth in Paragraph 9 of the Basic Lease Provisions.
-----------
(b) Workers' Compensation and Employer Liability Coverage. Tenant
-----------------------------------------------------
will procure and maintain workers' compensation insurance as required by law and
employer's liability insurance with limits of no less than the amount set forth
in Paragraph 9 of the Basic Lease Provisions.
-----------
(c) Property Insurance. Tenant will procure and maintain property
------------------
insurance coverage ("Property Insurance") for the following: (i) all office
furniture, trade fixtures, office
Part Two-Page 9
equipment, merchandise and all other items of Tenant's personal property in, on,
at or about the Premises or any other part of the Project; and (ii) all
leasehold improvements to the Premises constructed pursuant to the Work Letter,
if any, attached to this Lease, and other improvements, betterments, and
Alterations to the Premises. Tenant's Property Insurance must be written on an
"all-risk" (special-causes-of-loss) policy form or an equivalent form, include
an agreed-amount endorsement for no less than one hundred percent (100%) of the
full replacement cost (new without deduction for depreciation) of the covered
items and property; be written in amounts of coverage that meet any coinsurance
requirements of the policy or policies, and include vandalism and malicious
mischief coverage, and sprinkler leakage coverage. Landlord must be named as an
"insured as its interest may appear" under Tenant's Property Insurance.
(d) Business Income and Extra Expense Coverage. Tenant will also
------------------------------------------
procure and maintain business income /business interruption insurance and extra
expense coverage (collectively, "Interruption Insurance") with coverage amounts
that will reimburse Tenant for all direct or indirect loss of income and charges
and costs incurred arising out of all perils insured against by Tenant's
Property Insurance coverage, including prevention of, or denial of use of or
access to, all or part of the Premises or the Building, as a result of those
perils. The Interruption Insurance coverage must provide coverage for no less
than twelve (12) months of the loss of income, charges, and costs contemplated
under the Lease.
8.2 Landlord's Insurance. Landlord will, during the Term of this Lease,
--------------------
procure and continue in force the following insurance: (a) liability insurance
written on an "occurrence" policy form, covering bodily injury, property damage
and personal injury arising out of or relating, directly or indirectly, to
Landlord's business operations, conduct, assumed liability or use or occupancy
of the Project, with a combined single limit of not less than Two Million
Dollars ($2,000,000), it being agreed that Landlord will cause Tenant to be
named as an "additional insured"; and (b) property insurance covering the
Building and all personal property located in the Building and all machinery,
equipment and other personal property used in connection with the Building (but
not property owned by any tenant of the Building or for which any tenant of the
Building is legally liable, or alterations, leasehold improvements, or
betterments made, installed or purchased by or on behalf of any tenant of the
Building), which property insurance must be written on an "all-risk"
(special-causes-of-loss) policy from or an equivalent form, include an
agreed-amount endorsement for no less than one hundred percent (100%) of the
full replacement cost (new without deduction for depreciation) of the covered
items and property; be written in amounts of coverage to meet any coinsurance
requirements of the policy or policies, and include vandalism and malicious
mischief coverage, and sprinkler leakage coverage. Landlord shall also procure
and maintain workers' compensation insurance as required by law and employer's
liability insurance with limits of not less than One Million Dollars
($1,000,000).
8.3 Form of Policies and Additional Requirements. The insurance
--------------------------------------------
requirements set forth in Section 8.1 and Section 8.2 are independent of the
waiver, indemnification, and other obligations of Tenant and Landlord under this
Lease and will not be construed or interpreted in any way to restrict, limit or
modify Tenant's or Landlord's waiver, indemnification and other obligations or
to in any way limit Tenant's or Landlord's liability under this Lease. In
addition to the requirements set forth in Section 8.1 and Section 8.2, the
----------- -----------
insurance required of Tenant and Landlord under this Article 8 must (a) be
---------
issued by an insurance company with a rating of no less than A-VIII in the
current Best's Insurance Guide, or that is otherwise reasonably acceptable to
Landlord as to Tenant's insurance or to Tenant as to Landlord's insurance, and
admitted to engage in the business of insurance in the State of Texas; and (b)
provide that insurance may not be canceled, nonrenewed or the subject of
material change in coverage or available limits of coverage, except, in the case
of Tenant's insurance, upon thirty (30) days' prior written notice to Landlord
and any lender of Landlord as to which Tenant has been provided notice, and, in
the case of Landlord's insurance, upon thirty (30) days' prior written notice to
Tenant. Tenant and Landlord will each deliver to the other a certificate of
insurance on all policies procured by Tenant or Landlord, as the case may be, in
compliance with such party's obligations under this Lease, together with
evidence of the payment of the premiums therefor, on or before the Lease
Commencement Date, and at least thirty (30) days before the expiration date of
any policy and upon the renewal of any policy. Landlord or Tenant may comply
with its insurance coverage requirements through a blanket policy.
8.4 Waiver of Subrogation. Landlord and Tenant agree to cause the
---------------------
insurance companies issuing their respective property insurance policies to
waive any subrogation rights that those companies may have against Tenant or
Landlord. It is the intent of the parties that with respect to any loss from a
peril required to be covered by property insurance, the parties will look solely
to their insurance companies for recovery. Landlord and Tenant will each deliver
notice of this Section 8.4 to its insurance carriers.
8.5 Increase of Premiums. If Tenant's specific business operations,
--------------------
conduct or use of the Premises or any other part of the Project causes an
increase in the premium for any insurance policy carried by Landlord, Tenant
will, within ten (10) days after receipt of notice from Landlord, reimburse
Landlord for the entire increase.
Page Two-Page 10
9. DAMAGE OR DESTRUCTION
---------------------
9.1 Repair by Landlord. Tenant will immediately notify Landlord of fire or
------------------
other casualty in the Premises. If the Premises are damaged by fire or other
casualty and unless this Lease is terminated as hereinafter provided, Landlord
will proceed with reasonable diligence to repair the so-called "shell" of the
Premises and any leasehold improvements originally installed by Landlord.
Landlord's obligation to repair is subject to (a) delays which may arise by
reason of adjustment of loss under insurance policies, including, without
limitation, Tenant's policy for leasehold improvements and betterments described
in Section 8.1 of this Lease, and (b) other delays beyond Landlord's reasonable
control. Landlord's obligation to repair will be limited to the extent of
insurance proceeds actually available to Landlord for repairs after the election
by the holder of any mortgage against the Building to apply a portion or all of
the proceeds against the debt owing to such holder. Until Landlord's repairs to
the Premises are completed, the Base Rent and additional rent will xxxxx in
proportion to the part of the Premises, if any, that is rendered untenantable.
9.2 Landlord's Rights Upon The Occurrence of Certain Casualties. In the
-----------------------------------------------------------
event: (a) either the Premises or the Building (whether or not the Premises are
affected) is totally or partially destroyed or damaged by fire or other casualty
and repairs cannot be completed within two hundred seventy (270) days after the
occurrence of such damage without the payment by Landlord of overtime or other
premiums; (b) fifty percent (50%) or more of the Rentable Area of the Building
(wherever located) is damaged or destroyed by fire or other casualty (whether or
not the Premises are affected thereby); (c) damage is otherwise so great that
Landlord, in Landlord's absolute discretion, decides to demolish the Building,
in whole or in substantial part; (d) insurance proceeds remaining after payment
of any proceeds required to be paid to the holder of any mortgage affecting the
Project are insufficient to repair or restore the damage or destruction; (e) the
Building or the Premises are damaged or destroyed as a result of any cause other
than the perils covered by Landlord's property insurance; or (f) the Premises
are materially damaged, in Landlord's judgment, by fire or other casualty during
the last twenty-four (24) months of the Term; then Landlord may elect (i) to the
extent of the insurance proceeds actually received by Landlord, to proceed to
repair, restore or rebuild the Building or the Premises, in which event this
Lease will continue in effect (subject to Tenant's right to terminate the Lease
as set forth in Section 9.3), or (ii) to terminate this Lease (effective as of
-----------
the event of destruction) upon thirty (30) days' prior notice to Tenant, which
notice will be given, if at all, within sixty (60) days following the date of
the occurrence of the destruction. In repairing or restoring the Building or any
part thereof, Landlord may use designs, plans and specifications other than
those used in the original construction of the Building, and the Landlord may
alter or relocate, or both, any or all buildings, facilities and improvements,
including the Premises, provided that the Premises as altered or relocated will
be substantially the same size and will be in all material respects reasonably
comparable to the Premises. Upon any such termination of this Lease, Tenant will
surrender to Landlord the Premises and deliver to Landlord all proceeds from
Tenant's insurance attributable to tenant improvements and other additions,
improvements, and property items which Tenant has no right to remove. Tenant
will pay Base Rent and all other sums payable under this Lease prorated through
the effective date of such termination and Landlord and Tenant will be free and
discharged from all obligations under this Lease arising after the effective
date of such termination, except those obligations expressly stated in this
Lease to survive the termination of this Lease.
9.3 Tenant's Rights Upon The Occurrence of Certain Casualties. In the
---------------------------------------------------------
event that the Premises or any portion thereof is destroyed or damaged by fire
or other casualty and repairs cannot be completed within two hundred seventy
(270) days after the occurrence of such damage without the payment by Landlord
of overtime or other premiums, then Tenant may elect to terminate this Lease
(effective as of the event of destruction) upon thirty (30) days' prior notice
to Landlord, which notice will be given, if at all, within sixty (60) days
following the date of the occurrence of the destruction. Furthermore, in the
event that this Lease remains in effect after destruction or damage to the
Premises and Landlord fails to complete the repair of such destruction or damage
in accordance with Section 9.1 within two hundred seventy (270) days after the
occurrence of such destruction or damage (subject to extension by reason of the
delays described in the third sentence of said Section 9.1) (the "Landlord
Repair Period"), then Tenant may, as its sole and exclusive remedy, terminate
this Lease (effective as of the expiration of the Landlord Repair Period) by
sending written notice to Landlord, which notice will be given, if at all,
within thirty (30) days after the expiration of the Landlord Repair Period.
9.4 Repairs by Tenant. Landlord will not be required to repair any injury
-----------------
or damage by fire or other cause, to restore or replace or to reimburse Tenant
for damage to any of the Tenant's property or any leasehold improvements
installed in the Premises by Tenant. Landlord's obligations to repair leasehold
improvements originally installed by Landlord will be subject to, and limited to
the extent of, receipt of adequate proceeds from Landlord's and/or Tenant's
insurance under Sections 8.1(c) and 8.4. Tenant will be required to repair any
--------------- ---
injury or damage to the Premises or to the contents of the Premises which
Landlord is not responsible for repairing. Except for abatement, if any, of Base
Rent and additional rent in accordance with the provisions of this Lease, Tenant
will not be entitled to any allowance, compensation or damages from Landlord for
loss of use of all or any part of the Premises or
Part Two-Page 11
Tenant's property or for any inconvenience, annoyance, disturbance or loss or
interruption of business, or otherwise, arising from any damage to the Premises
or any other part of the Project by fire or any other cause, or arising from any
repairs, reconstruction or restoration, nor will Tenant have the right to
terminate this Lease except as specifically set forth in Section 9.3.
-----------
9.5 Determination or Period Required for Rebuilding. The determination of
-----------------------------------------------
whether the repair of damage caused by fire or other casualty can be completed
within the two hundred seventy (270) period referred to in Section 9.2 and
-----------
Section 9.3 shall initially be made by Landlord, in Landlord's reasonable
-----------
judgement, and notice of such determination shall be sent by Landlord to Tenant
within twenty (20) days after the occurrence of such damage. Tenant shall be
deemed to have accepted the determination made by Landlord unless Tenant sends
written notice disputing such determination within ten (10) days after receiving
notice of same. If Tenant timely objects to Landlord's determination, the
parties shall, within ten (10) days thereafter, agree in good faith upon a
mutually acceptable architect to make the determination of whether repair can be
completed within the two hundred seventy (270) day period referred to in Section
-------
9.2 and Section 9.3, which determination shall be made within ten (10) days
--- -----------
after the selection of such architect and shall be binding upon the parties.
10. EMINENT DOMAIN
------- ------
10.1 Total Taking. If all of the Project is taken or appropriated for
------------
public or quasi-public use by right of eminent domain or transferred by
agreement with such public or quasi-public agency, this Lease will terminate as
of the date possession is taken by the condemning authority. If less than all of
the Premises or Project is taken or appropriated but, in Landlord's reasonable
judgment, the balance will be rendered untenantable, such taking will constitute
a total taking for purposes of this Section 10.1. Landlord will notify Tenant of
------------
Landlord's decision that the remainder is untenantable within thirty (30) days
of Landlord's receipt of notice of the taking or appropriation and this Lease
will terminate as of the date possession is taken by the condemning authority.
10.2 Partial Taking. If only part of the Project (whether or not such part
--------------
includes the Premises) is taken or appropriated by a public or quasi-public
agency under the right of eminent domain or conveyed in agreement with a public
or quasi-public agency (whether or not the Premises are affected thereby) and,
(i) in Landlord's reasonable judgment, substantial alteration or reconstruction
of the Project is necessary as a result of such taking or conveyance, or (ii) if
Landlord decides to demolish or discontinue operating the Project as a result of
such taking or conveyance, or (iii) twenty-five percent (25%) or more of the
Rentable Area of the Building is so taken or conveyed or, in the reasonable
judgment of Landlord, the Building is rendered untenable as a result, or (iv)
proceeds from such taking or conveyance remaining after payment of any such
proceeds required to be paid to the holder of any mortgage affecting the Project
are insufficient to restore the Project and the Premises to an architectural
whole, then, in any of such events, Landlord may, at Landlord's option,
terminate this Lease by giving Tenant notice of termination within thirty (30)
days after such taking or conveyance. In the event that the Premises or a
portion thereof is taken or appropriated by a public or quasi-public agency
under the right of eminent domain or conveyed in agreement with a public or
quasi-public agency, then Tenant may, at Tenant's option, terminate this Lease
by giving Landlord notice of termination within thirty (30) days after such
taking or conveyance. In the event this Lease is not terminated, Landlord will,
to the extent of proceeds actually received after the exercise by any mortgagee
of the Project of an option to apply such proceeds against Landlord's debt to
such mortgagee, restore the Project to an architectural whole.
10.3 Award. Any award for or proceeds from any partial or entire taking or
-----
conveyance to a public or quasi-public agency will be the property of Landlord,
including, without limitation, any award or proceeds based on value of the
leasehold interest of Tenant. Nothing contained in this Section 10.3 will be
------------
deemed to give Landlord any interest in or to preclude Tenant from seeking and
recovering for Tenant's account a separate award from the condemning authority
(but only to the extent such separate award does not reduce any award to
Landlord) for the taking of personal property and fixtures removable by Tenant,
for the interruption of or damage to Tenant's business or for Tenant's
unamortized cost of leasehold improvements paid for by Tenant. In the event of a
partial taking which does not result in a termination of this Lease, Base Rent
and additional rent will be abated in the proportion which the Rentable Area of
the Premises rendered unusable bears to the total Rentable Area of the Premises.
No temporary taking of Tenant's Premises and/or of Tenant's rights therein or
under this Lease will terminate this Lease or give Tenant any right to any
abatement of Base Rent or additional rent under this Lease. Any award made to
Tenant by reason of any temporary taking will belong entirely to Tenant and
Landlord will not be entitled to share in such award.
11. ASSIGNMENT AND SUBLETTING
-------------------------
11.1 Consent. Tenant will not assign this Lease or sublet all or any
-------
portion of the Premises without the prior written consent of the Landlord, which
consent may be given or withheld in the sole discretion of Landlord.
Notwithstanding the preceding sentence, however, Landlord shall not unreasonably
withhold its consent to an assignment of this Lease or a subletting of the
Premises during the last four (4) years of the Term. For purposes of the
preceding sentence, in
Part Two-Page 12
determining whether to consent to a proposed assignment or subletting, Landlord
will be deemed to be reasonable in taking into consideration, among other
factors, (a) the credit standing and financial wherewithal of the proposed
assignee or sublessee; (b) whether the use of the Premises by the proposed
assignee or sublessee will be consistent with the operation of a first-class
office building in the Plano, Texas area; and (c) whether the business or public
image of the proposed assignee or sublessee is consistent with the family values
promoted by Landlord (it being specifically agreed, without limitation, that
Landlord shall be deemed to be acting reasonably if it withholds its consent to
a proposed assignment or subletting to a person or entity engaged in a business
related to tobacco products, alcoholic beverages or sexually explicit material).
If consent to any assignment or subletting is given by Landlord, such consent
will not relieve the Tenant or any guarantor of this Lease from any obligation
or liability under this Lease. If this Lease is assigned or any part of the
Premises is occupied by any person other than Tenant without the consent of
Landlord, then Landlord may nevertheless collect Base Rent and additional rent
from the assignee or occupant, and apply the net amount collected to the Base
Rent and other amounts payable under this Lease, but in no event will such
collection be construed as a waiver of this covenant.
11.2 Landlord's Option. If the Tenant desires to assign this Lease or
-----------------
sublet all or part of the Premises, Tenant will notify Landlord at least sixty
(60) days in advance of the date on which Tenant desires to make such assignment
or enter into such sublease. Tenant will provide Landlord with a copy of the
proposed assignment or sublease, and sufficient information concerning the
proposed sublessee or assignee to allow Landlord to make informed judgments as
to the financial condition, reputation, operations and general desirability of
the proposed assignee or subtenant. Within fifteen (15) days after Landlord's
receipt of Tenant's proposed assignment or sublease and all required information
concerning the proposed subtenant(s) or assignee, Landlord will have the option
to: (a) consent to the proposed assignment or sublease; or (b) subject to the
provisions of Section 11.1, refuse to consent to the proposed assignment or
------------
sublease but allow Tenant to continue in the search for an assignee or sublessee
that will be acceptable to Landlord. If Landlord consents to a proposed
assignment or subletting, and if the rent due and payable by any assignee or
sublessee under any such permitted assignment or sublease (or a combination of
the rent payable under such assignment or sublease plus any bonus or any other
consideration for the assignment or sublease or any payment incident to the
assignment or sublease) exceeds the rent payable under the Lease for such space,
Tenant will pay to Landlord fifty percent (50%) of such excess rent and other
excess consideration (net of brokerage commissions and all other out-of-pocket
expenses incident to such assignment or subletting). If such excess rent or
excess consideration is paid to Tenant in the form of rent pursuant to a
sublease, Tenant shall pay Landlord's share thereof together with the
installment of Base Rent next becoming due under this Lease; otherwise, Tenant
shall pay Landlord's share of such excess rent or excess consideration to
Landlord within five (5) days following Tenant's receipt thereof. If the
Leasehold Improvements in the Premises must be altered in connection with a
permitted assignment or subletting in order to comply with the Disabilities Act,
same shall be performed without cost to Landlord, and Tenant shall submit plans
and specifications for such alterations to Landlord for informational purposes;
provided, however, that in no event shall any structural alterations be made
without the prior written consent of Landlord.
11.3 Definition of Assignment. The use of the words "assignment",
------------------------
"subletting", "assign", or "assigned" or "sublet" in this Article 11 will
----------
include (a) the pledging, mortgaging or encumbering of Tenant's interest in this
Lease, or the Premises or any part thereof; (b) the total or partial occupancy
of all or any part of the Premises by any person, firm, partnership, or
corporation, or any groups of persons, firms, partnerships, or corporations, or
any combination thereof, other than Tenant; (c) an assignment or transfer by
operation of law; and (d) if Tenant is a business entity, any sale, assignment
or other transfer of the ownership interests in such entity that, singularly or
in the aggregate, results in a change in the present effective voting control of
Tenant; provided, however, that the foregoing clause (d) shall not be applicable
to any corporation the stock of which is publicly traded on a United States
stock exchange. Tenant shall deliver to Landlord copies of all documents
executed in connection with any permitted assignment or sublease, which
documents (i) in the case of a permitted assignment, shall require such assignee
to assume performance of all terms of this Lease on Tenant's part to be
performed, and (ii) in the case of a permitted subletting, shall require such
sublessee to comply with all terms of this Lease on Tenant's part to be
performed. In no event shall any assignment, sublease or transfer, whether or
not with Landlord's consent, relieve Tenant of its primary liability under this
Lease for the entire Term, and Tenant shall in no way be released from the full
and complete performance of all the terms hereof. No acceptance by Landlord of
any rent or any other sum of money from any assignee, sublessee or other
category of transferee shall be deemed to constitute Landlord's consent to any
assignment, sublease, or transfer.
12. DEFAULT; REMEDIES
-----------------
12.1 Defaults by Tenant. The occurrence of any of the following will
------------------
constitute a default under this Lease by Tenant: (a) any failure by Tenant to
pay an installment of Base Rent or to make any other payment required under this
Lease when due, where such failure continues for ten (10) days after notice by
Landlord to Tenant, except that Landlord shall in no event be
Part Two-Page 13
required to give more than two (2) notices of a recurring failure during each
calendar year; (b) any failure by Tenant to observe and perform any other
provision of this Lease to be observed and performed by Tenant, where such
failure continues for thirty (30) days after notice by Landlord to Tenant
(provided, however, that if the cure of such act or omission requires, despite
the use of diligent efforts, a period in excess of thirty (30) days, then such
thirty (30) day period shall be extended for so long as Tenant pursues the cure
thereof with reasonable diligence), except that Landlord shall in no event be
required to give more than two (2) notices of a recurring failure during each
calendar year; (c) Tenant's interest in this Lease or in all or a part of the
Premises is taken by process of law directed against Tenant, or becomes subject
to any attachment at the instance of any creditor of or claimant against Tenant,
and such attachment is not discharged within ten (10) days; (d) Tenant: (i) is
unable to pay such party's debts generally as they become due; (ii) makes an
assignment of all or a substantial part of such party's property for the benefit
of creditors; (iii) convenes or attends a meeting of such party's creditors, or
any class thereof, for purposes of effecting a moratorium upon or extension or
composition of such party's debts; (iv) applies for or consents to or acquiesces
in the appointment of a receiver, trustee, liquidator, or custodian of such
party or of all or a substantial part of such party's property or of the
Premises or of Tenant's interest in this Lease; or (v) files a voluntary
petition in bankruptcy or a petition or an answer seeking reorganization under
the Bankruptcy Code or any other law relating to bankruptcy, insolvency,
reorganization or relief of debtors or an arrangement with creditors, or takes
advantage of any insolvency law or files an answer admitting the material
allegations of a petition filed against such party in any bankruptcy, relief,
reorganization or insolvency proceedings; (e) Tenant takes any corporate action
to authorize any of the actions set forth in Section 12.1(d); or (f) the entry
---------------
of a court order, judgment or decree against Tenant, without the application,
approval or consent of Tenant, approving a petition seeking reorganization of
Tenant or relief of debtors under the Bankruptcy Code or any other law relating
to bankruptcy, insolvency, reorganization, or relief of debtors or granting an
order for relief against it as debtor or appointing a receiver, trustee,
liquidator, or custodian of such party or of all or a substantial part of
Tenant's property or of the Premises or of Tenant's interest in this Lease, or
adjudicating such party bankrupt or insolvent, and such order, judgment or
decree will not be vacated, set aside or dismissed within ninety (90) days from
the date of entry.
12.2 Remedies. Upon the occurrence of any event of default enumerated in
--------
Section 12.1, Landlord will have the option of (a) terminating this Lease by
------------
notice thereof to Tenant or (b) continuing this Lease in full force and effect
and/or (c) performing the obligation of Tenant and/or (d) changing locks.
(a) Termination of Lease. In the event Landlord elects to terminate
--------------------
this Lease, upon notice to Tenant this Lease will end as to Tenant and all
persons holding under Tenant, and all of Tenant's rights will be forfeited and
lapsed, as fully as if this Lease had expired by lapse of time, and there will
be recoverable from Tenant: (i) the cost of restoring the Premises to good
condition, normal wear and tear excepted, (ii) all accrued, unpaid sums, plus
Interest and late charges, if in arrears, under the terms of this Lease up to
the date of termination, (iii) Landlord's reasonable costs of recovering
possession of the Premises, and (iv) if Tenant remains in possession of the
Premises subsequent to the date of termination, rent and other sums accruing
subsequent to the date of termination pursuant to the holdover provisions of
Section 2.3. The Landlord will at once have all the rights of re-entry upon the
-----------
Premises, without becoming liable for damages, or guilty of a trespass.
(b) Continuation of Lease. In the event that Landlord elects to
---------------------
continue this Lease in full force and effect, Tenant will continue to be liable
for all rents. Landlord will nevertheless have all the rights of re-entry upon
the Premises without becoming liable for damages, or guilty of a trespass.
Landlord, after re-entry, may relet all or a part of the Premises to a
substitute tenant or tenants, for a period of time equal to or less or greater
than the remainder of the Term on whatever terms and conditions Landlord, at
Landlord's sole discretion, deems advisable. Against the rents and sums due from
Tenant to Landlord during the remainder of the Term, credit will be given Tenant
in the net amount of rent received from the new tenant after deduction by
Landlord for: (i) the reasonable costs incurred by Landlord in reletting the
Premises (including, without limitation, remodeling costs, brokerage fees, and
the like), (ii) the accrued sums, plus Interest and late charges if in arrears,
under the terms of this Lease, (iii) Landlord's cost of recovering possession of
the Premises, and (iv) if Landlord elects to store Tenant's property in
accordance with Section 7.4, the cost of storing any of Tenant's property left
-----------
on the Premises after re-entry. Notwithstanding any provision in this Section
-------
12.2(b) to the contrary, upon the default of any substitute tenant or upon the
------
expiration of the term of such substitute tenant before the expiration of the
Term hereof, Landlord may, at Landlord's election, either relet to another
substitute tenant, or terminate this Lease and exercise Landlord's rights under
Section 12.2(a) of this Lease.
--------------
(c) Performance for Tenant. In the event that Landlord elects to
----------------------
perform the obligation(s) of Tenant, all reasonable sums expended by Landlord
effecting such performance (including Administrative Reimbursement under Section
-------
3.8), plus Interest thereon, will be due and payable with the next monthly
---
installment of Base Rent. Such sum will constitute additional rental under this
Lease, and failure to pay
Part Two-Page 14
such sums when due will enable Landlord to exercise all of Landlord's remedies
under this Lease.
(d) Changing Locks. Additionally, without notice, Landlord may alter
--------------
locks or other security devices at the Premises to deprive Tenant of access to
the Premises, and Landlord will not be required to provide a new key or rights
of access to Tenant.
12.3 Mitigation of Damages; Remedies Cumulative. Upon the occurrence of an
------------------------------------------
event of default by Tenant, Landlord shall use reasonable efforts to mitigate
its damages. All rights and remedies of Landlord under this Lease will be
nonexclusive of and in addition to any other remedies available to Landlord at
law or in equity.
12.4 Default by Landlord. The failure of Landlord to observe and perform
-------------------
any provision of this Lease to be observed and performed by Landlord, where such
failure continues for thirty (30) days after notice by Tenant to Landlord
(provided, however, that if the cure of such failure requires, despite the use
of diligent efforts, a period in excess of thirty (30) days, then such thirty
(30) day period shall be extended for so long as Landlord pursues the cure
thereof with reasonable diligence) shall constitute a default under this Lease
by Landlord. Upon the occurrence of a default by Landlord, Tenant may pursue any
remedy provided under this Lease or by law, subject to any provisions of this
Lease limiting Tenant's remedies (including, without limitation, the provisions
of Section 15.1). Without limiting the remedies otherwise conferred upon Tenant,
------------
if Landlord fails to perform a repair which it is obligated to perform under
this Lease and such failure continues for fifteen (15) days after notice by
Tenant to Landlord (provided, however, that if the cure of such failure
requires, despite the use of diligent efforts, a period in excess of fifteen
(15) days, then such fifteen (15) day period shall be extended for so long as
Landlord pursues the cure thereof with reasonable diligence), then Tenant shall
have the right (but not the obligation) to perform such repair on Landlord's
behalf and any reasonable amount which Tenant spends in performing such repair
shall be repaid by Landlord within thirty (30) days after delivery to Landlord
of a copy of the invoice for such repair together with proof of payment thereof.
12.5 Attorneys' Fees. If legal action is necessary in order to enforce or
---------------
interpret this Lease, the prevailing party will be entitled to reasonable
attorneys' fees, costs and disbursements in addition to any other relief to
which such party is entitled.
12.6 Waiver. No covenant, term or condition or the breach thereof will be
------
deemed waived, except by written consent of the party against whom the waiver is
claimed and any waiver of the breach of any covenant, term or condition will not
be deemed to be a waiver of any preceding or succeeding breach of the same or
any other covenant, term or condition. Acceptance by Landlord of any performance
by Tenant after the time the same was due will not constitute a waiver by
Landlord of the breach or default of any covenant, term or condition unless
otherwise expressly agreed to by Landlord in writing.
12.7 Force Majeure. Whenever a period of time is herein prescribed for the
-------------
taking of any action by either Landlord or Tenant (other than the payment
obligations of Landlord or Tenant hereunder), the performing party shall not be
liable or responsible for, and there shall be excluded from the computation of
such period of time, any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, governmental laws, regulations or restrictions, or any
act, omission, delay, or neglect of the other party or any employees or agents
of the other party, or any other cause whatsoever beyond the control of the
performing party.
13. ESTOPPEL CERTIFICATES
---------------------
13.1 Acknowledgment of Commencement Date. Upon tender of possession of the
-----------------------------------
Premises to the Tenant and as often thereafter as may be reasonably requested by
Landlord, Tenant will, within twenty (20) days after receipt of a request from
Landlord, execute, acknowledge and deliver to Landlord a statement will (a) set
forth the actual Commencement Date and Expiration Date of the Term, and (b)
contain acknowledgments that Tenant has accepted the Premises and that the
Premises and Building are satisfactory in all respects.
13.2 Certificates. Tenant will, within twenty (20) days after receipt of a
------------
request from Landlord or any mortgagee of Landlord, execute, acknowledge and
deliver to Landlord or such mortgagee either a statement in writing or three
party agreement among Landlord, Tenant and such mortgagee (a) certifying that
this Lease is unmodified and in full force and effect (or, if modified, stating
the nature of such modification and certifying that this Lease, as so modified,
is in full force and effect) and the date to which Base Rent and other charges
are paid in advance, if any; (b) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord under this Lease, or
specifying such defaults if any are claimed, and (c) specifying any further
information and agreeing to such notice provisions and other matters reasonably
requested by Landlord or such mortgagee. Any such statement may be conclusively
relied upon by a prospective purchaser or mortgagee of the Premises. Tenant's
failure to deliver such statement within twenty (20) days will constitute a
default under this Lease.
13.3 Financial Statements. Unless Tenant is a corporation the stock of
--------------------
which is publicly traded on a United States stock exchange (in which case the
provisions of this Section 13.3 shall not be applicable), Landlord will have the
------------
Part Two-Page 15
right to request financial statements from Tenant for purposes of selling,
financing or refinancing the Building. Tenant will, within ten (10) days after
receipt of a request from Landlord setting forth the purposes for which such
financial statement will be used, deliver to Landlord a current financial
statement certified by Tenant's chief financial officer to be true and correct
and to fairly express Tenant's current financial condition. All such financial
statements will be received by Landlord in confidence and used only for the
purpose set forth in the request.
14. SUBORDINATION AND ATTORNMENT
----------------------------
14.1 Subordination. This Lease is subject and subordinate to, in addition
-------------
to matters currently of record: (a) all applicable ordinances of any
governmental authority having jurisdiction over the Project, relating to
easements, franchises, and other interests or rights upon, across, or
appurtenant to the Project; (b) restrictive covenants affecting the Project, as
same may be amended; and (c) all utility easements and agreements, now or
hereafter created for the benefit of the Project.
14.2 Successor Landlord. Upon demand, Tenant shall execute, acknowledge,
------------------
and deliver to Landlord and any proposed mortgagee of the Building a
Subordination, Non-Disturbance and Attornment Agreement in the form of Exhibit E
---------
attached hereto and made a part hereof.
15. LANDLORD'S INTEREST
-------------------
15.1 Liability of Landlord. If Landlord defaults under this Lease and, if
---------------------
as a consequence of such default, Tenant recovers a money judgment against
Landlord, such judgment will be satisfied only out of the right, title and
interest of Landlord in the Project and Landlord will not be liable for any
deficiency. In no event will Tenant have the right to levy execution against any
property of Landlord or Landlord's partners other than Landlord's interest in
the Project. In no event will Landlord be liable to Tenant for consequential or
special damages.
15.2 Sale of Project. The term "Landlord" will mean only the owner at the
---------------
time in question of the fee title or a tenant's interest in a ground lease of
the Project, provided that the successor to Landlord assumes the obligations of
Landlord under this Lease. The obligations contained in this Lease to be
performed by Landlord will be binding on Landlord and Landlord's successors and
assigns only as to their respective periods of ownership. In the event of a sale
of the Project or assignment of this Lease by Landlord, Landlord will have the
right to transfer the Security Deposit to Landlord's vendee or assignee, subject
to Tenant's rights therein, and Landlord will thereafter be released from any
liability to Tenant with respect to the return of the Security Deposit to
Tenant. In the event of a sale of the Project or assignment of this Lease by
Landlord, the purchaser of the Project or the assignee of this Lease, as the
case may be, shall be deemed to have assumed the obligations of Landlord
hereunder during its period of ownership.
16. NOTICES
-------
Wherever in this Lease it is required or permitted that a request,
notice or demand be given or served or consent be obtained by either party to,
on, or from the other, such request, notice, demand, or consent must be in
writing and (a) personally delivered, or (b) mailed by certified or registered
United States mail, postage prepaid, or (c) sent by Federal Express Corporation
or other nationally recognized overnight carrier for next day delivery, to the
addresses of the parties specified in the Basic Lease Provisions. Any notice
which is mailed shall be deemed to have been given on the date of receipt
thereof, and any notice sent by overnight courier will be deemed to have been
given on the regular business day next following the date of deposit of such
notice in a depository of the overnight courier. Either party may change such
address by notice to the other. Base Rent and other charges will be paid to
Landlord at Landlord's address as set forth in the Basic Lease Provisions, or as
changed pursuant to a notice delivered to Tenant in the manner specified above.
17. BROKERS
-------
Each of Landlord and Tenant represents and warrants that it has had
no dealings with any broker or agent in connection with the negotiation or
execution of this Lease.
18. INDEMNITIES AND WAIVERS
-----------------------
18.1 INDEMNITIES BY TENANT. To the fullest extent permitted by law, and
---------------------
except to the extent caused by the willful or negligent acts of any Landlord
Party, Tenant will, at Tenant's sole cost and expense, Indemnify Landlord
Parties against all Claims arising from (a) any Personal Injury, Bodily Injury
or Property Damage whatsoever occurring in or at the Premises, except for such
Claims asserted by an employee of a Landlord Party arising out of and in the
course of employment of such employee; (b) all Claims arising from any Bodily
Injury to an employee of a Tenant Party arising out of and in the course of
employment of the employee and occurring anywhere in the Project; (c) any liens
or encumbrances arising out of any work performed or materials furnished by or
for Tenant; or (d) commissions or other compensation or charges claimed by any
real estate broker or agent with respect to this Lease by, through, or under
Tenant.
18.2 INDEMNITIES BY LANDLORD. To the fullest extent permitted by law (but
-----------------------
subject to the limitations on Landlord's liability set forth in Section 15.1),
------------
and except to the extent caused by the willful or negligent acts of any Tenant
Part Two-Page 16
Party, Landlord will, at Landlord's sole cost and expense, Indemnify Tenant
Parties against all Claims arising from (a) any Personal Injury, Bodily Injury
or Property Damage whatsoever occurring in the Common Areas, except for such
Claims asserted by an employee of a Tenant Party arising out of and in the
course of employment of such employee; (b) any Bodily Injury to an employee of a
Landlord Party arising out of and in the course of employment of the employee
and occurring anywhere in the Project; (c) any liens or encumbrances against any
Tenant Party or its property arising out of any work performed or materials
furnished by or for Landlord; or (d) commissions or other compensation or
charges claimed by any real estate broker or agent with respect to this Lease
by, through, or under Landlord.
18.3 WAIVERS BY TENANT. Tenant, on behalf of all Tenant Parties, waives
-----------------
all claims against Landlord Parties arising from the following: (a) any Personal
Injury, Bodily Injury, or Property Damage to any Tenant Party resulting from
interruption or stoppage of utility services (subject to Tenant's rights under
Section 5.4) or caused by the other lessees of the Project, parties not
-----------
occupying space in the Project, occupants of property adjacent to the Project,
or the public or by the construction of any private, public, or quasi-public
work occurring either in the Premises or elsewhere in the Project; or (b) any
Bodily Injury to an employee of a Tenant Party arising out of and in the course
of employment of the employee and occurring anywhere in the Project.
18.4 WAIVERS BY LANDLORD. Landlord, on behalf of all Landlord Parties,
-------------------
waives all claims against Tenant Parties arising from the following: (a) any
Personal Injury, Bodily Injury, or Property Damage to any Landlord Party
resulting from interruption or stoppage of utility services or caused by lessees
of the Project other than Tenant, parties not occupying space in the Project,
occupants of property adjacent to the Project, or the public or by the
construction of any private, public or quasi-public work occurring either in the
Premises or elsewhere in the Project; or (b) Bodily Injury to an employee of a
Landlord Party arising out of and in the course of employment of the employee
and occurring anywhere in the Project.
18.5 DEFINITIONS. For purposes of the foregoing provisions of this Article
----------- -------
18: (a) the term "Tenant Parties" means Tenant, and Tenant's officers, members,
--
partners, agents, employees, sublessees, licensees, invitees and independent
contractors, and all persons and entities claiming through any of these persons
or entities; (b) the term "Landlord Parties" means Landlord and the partners,
venturers, trustees and ancillary trustees of Landlord and the respective
officers, directors, shareholders, members, parents, subsidiaries and any other
affiliated entities, personal representatives, executors, heirs, assigns,
licensees, invitees, beneficiaries, agents, servants, employees and independent
contractors of these persons or entities; (c) the term "Indemnify" means
indemnify, defend (with counsel reasonably acceptable to the indemnified party)
and hold free and harmless from and against; (d) the term "Claims" means all
liabilities, claims, damages (including consequential damages), losses,
penalties, litigation, demands, causes of action (whether in tort or contract,
in law or at equity or otherwise), suits, proceedings, judgments, disbursements,
charges, assessments, and expenses (including attorneys' and experts' fees and
expenses and expenses incurred in investigating, defending, or prosecuting any
litigation, claim, or proceeding); (e) the term "Waives" means that the waiving
party waives and knowingly and voluntarily assumes the risk of; and (f) the
terms "Bodily Injury", "Personal Injury" and "Property Damage" will have the
same meanings as in the form of commercial general insurance policy issued by
Insurance Services Office, Inc. most recently prior to the date of the injury or
loss in question.
18.6 SCOPE OF WAIVERS. The waivers contained in Section 18.3 and Section
---------------- ------------ -------
18.4 will apply regardless of the active or passive negligence or sole, joint,
----
concurrent, or comparative negligence of any of the Landlord Parties or Tenant
Parties, as the case may be.
18.7 OBLIGATIONS INDEPENDENT OF INSURANCE. The indemnification provided in
------------------------------------
Section 18.1 may not be construed or interpreted as in any way restricting,
------------
limiting or modifying Tenant's insurance or other obligations under this Lease,
and the provisions of Section 18.1 are independent of Tenant's insurance and
------------
other obligations. Tenant's compliance with the insurance requirements and other
obligations under this Lease does not in any way restrict, limit or modify
Tenant's indemnification obligations under this Lease. Conversely, The
indemnification provided in Section 18.2 may not be construed or interpreted as
------------
in any way restricting, limiting or modifying Landlord's insurance or other
obligations under this Lease, and the provisions of Section 18.2 are independent
------------
of Landlord's insurance and other obligations. Landlord's compliance with the
insurance requirements and other obligations under this Lease does not in any
way restrict, limit or modify Landlord's indemnification obligations under this
Lease.
18.8 SURVIVAL. The provisions of this Article 18 will survive the
-------- ----------
expiration or earlier termination of this Lease until all claims against
Landlord Parties involving any of the indemnified or waived matters are fully
and finally barred by the applicable statutes of limitations.
18.9 DUTY TO DEFEND. The duty of an indemnifying party to defend is
--------------
separate and independent of such party's duty to Indemnify. The duty of an
indemnifying party to defend includes Claims for which the indemnified party may
be liable without fault or may be strictly liable. The duty of an indemnifying
party to defend applies regardless of whether the issues of negligence,
liability, fault, default or other obligation on the part of the indemnifying
party have been determined. The duty of an
Part Two-Page 17
indemnifying party to defend applies immediately, regardless of whether the
indemnified party has paid any sums or incurred any detriment arising out of or
relating, directly or indirectly, to any Claims. It is the express intention of
Landlord and Tenant that the indemnified party will be entitled to obtain
summary adjudication regarding the indemnifying party's duty to defend the
indemnified party at any stage of any Claim within the scope of this Article 18.
----------
19. PARKING
-------
19.1 Parking Spaces. Landlord hereby grants to Tenant and persons
--------------
designated by Tenant ("Tenant's Designated Parkers") a license to use the number
of reserved parking spaces set forth in Paragraph 12 of the Basic Lease
------------
Provisions in that certain parking structure constructed on the Land ("Garage"),
subject to payment of the charge therefor set forth in Paragraph 12 of the Basic
------------
Lease Provisions. Prior to the Commencement Date, Landlord and Tenant shall
agree in good faith upon the location of the reserved parking spaces to be
allocated to Tenant's Designated Parkers as of the Commencement Date, it being
understood and agreed that such reserved parking spaces shall be contiguous
parking spaces located on the second or third level of the Parking Garage and
shall be reasonably convenient to the entrances to the Building. Landlord shall
have the right, upon thirty (30) days' written notice to Tenant, to relocate
such reserved spaces, provided that such reserved spaces shall remain contiguous
parking spaces located on the second or third level of the Parking Garage and
shall be reasonably convenient to the entrances to the Building. The term of
such license will commence on the Commencement Date and will continue until the
earliest to occur of the Expiration Date, termination of the Lease, or Tenant's
abandonment of the Premises. During the term of this license, Tenant will pay
Landlord the monthly charge for such reserved spaces in the Garage in advance,
with Tenant's payment of each monthly installment of Base Rent. No deductions
from the monthly charge will be made for days on which the Garage are not used
by Tenant. However, Tenant may reduce the number of parking spaces hereunder
(whether reserved or unreserved), at any time, by providing at least thirty (30)
days' advance written notice to Landlord, accompanied by any key-card, sticker
or other identification or entrance system provided by Landlord or its parking
contractor. Tenant's reduction of the number of parking spaces will be
irrevocable. The remaining parking spaces which Tenant shall have a license to
use pursuant to Paragraph 12 of the Basic Lease Provisions shall be unreserved
------------
(as determined by Landlord from time to time) parking spaces in the Garage and
in the surface parking lot located on the north side of the Building, it being
understood and agreed that Tenant's use of such parking spaces shall be on a
non-exclusive basis.
19.2 Control of Parking. Landlord reserves the right from time to time to
------------------
adopt, modify and enforce reasonable rules governing the use of the Garage,
including any key-card, sticker or other identification or entrance system, and
hours of operation. Landlord may refuse to permit any person who violates such
rules to park in the Garage. Except for paid reserved spaces specified in
Paragraph 12 of the Basic Lease Provisions, the parking spaces hereunder will be
provided on an unreserved "first-come, first-served" basis. Landlord reserves
the right to assign specific spaces, and to reserve spaces for visitors, small
cars, handicapped persons and for other lessees, guests of other lessees, or
other parties, and Tenant and Tenant's Designated Parkers will not park in any
such assigned or reserved spaces. Landlord also reserves the right to close all
or any portion of the Garage in order to make repairs or perform maintenance
services, or to alter, modify, restripe or renovate the Garage, or if required
by casualty, strike, condemnation, act of God, governmental law or requirement
or other reason beyond Landlord's reasonable control.
19.3 Landlord's Liability. If, for any reason beyond Landlord's reasonable
--------------------
control, Tenant, or Tenant's Designated Parkers, are denied access to the Garage
and Tenant or such persons have complied with this Section 19, Landlord's
----------
liability will be limited to parking charges (excluding tickets for parking
violations) incurred by Tenant or such persons in utilizing alternative parking,
which amount Landlord will pay upon presentation of documentation supporting
Tenant's claims in connection therewith.
19.4 Remedies for Parking Violations. If Tenant or any of its designated
-------------------------------
parkers violate the rules applicable to the parking areas, Landlord will have
the right to remove from the Garage any vehicles which are involved or are owned
or driven by parties involved in the violation.
20. HAZARDOUS SUBSTANCES; REPRESENTATIONS
-------------------------------------
20.1 Tenant' Operations. The term "Hazardous Substances", as used in this
------------------
Lease will mean pollutants, contaminants, toxic or hazardous wastes, or any
other substances, the removal of which is required or the use of which is
regulated, restricted, prohibited or penalized by any Environmental Law. Tenant
hereby agrees that (i) no activity will be conducted on the Premises that will
produce any Hazardous Substances, except for such activities that are part of
the ordinary course of Tenant's business activities ("Permitted Activities")
provided the Permitted Activities are conducted in accordance with all
Environmental Laws; (ii) the Premises will not be used in any manner for the
storage of any Hazardous Substances except for any temporary storage of such
materials
Part Two-Page 18
that are used in the ordinary course of Tenant's business ("Permitted
Materials"), provided such Permitted Materials are properly stored in a manner
and location meeting all Environmental Laws; (iii) Tenant will not permit any
Hazardous Substances to be brought onto the Premises, except for the Permitted
Materials, and if so brought or found thereon, the same shall be immediately
removed, with proper disposal, and all required cleanup procedures shall be
diligently undertaken pursuant to all Environmental Laws. If any Hazardous
Substance is discovered outside the Premises and such Hazardous Substance was
brought into the Building or parking areas by Tenant or Tenant's employees or
contractors, Tenant, at Tenant's sole cost and expense, will immediately take
such action as is necessary to detain the spread of and remove the Hazardous
Substance to the satisfaction of Landlord.
20.2 Representation by Landlord. Landlord represents that, to the best of
--------------------------
Landlord's knowledge, as of the date of this Lease the Project is in compliance
with all currently applicable laws, rules and regulations, including, but not
limited to, environmental laws and the Americans with Disabilities Act. Landlord
also represents that the mechanical systems in the Building are "Year 2000
Compliant" (i.e., the computer applications in such systems have the ability to
recognize correctly and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999).
21. INTERPRETATIVE
--------------
21.1 Captions. The captions of the Articles and Sections of this Lease are
--------
for convenience only and will not affect the interpretation or construction of
any provision of this Lease.
21.2 Section Numbers. All references to section numbers contained in the
---------------
Basic Lease Provisions, the General Lease Provisions, Exhibit C or the Work
---------
Letter, if any, are to sections in the General Lease Provisions, unless
expressly provided to the contrary.
21.3 Attachments. Exhibits, addenda, schedules and riders attached hereto
-----------
and listed in the Basic Lease Provisions (and no other exhibits, addendums,
schedules and riders) are deemed by attachment to constitute part of this Lease
and are incorporated into this Lease.
21.4 Number, Gender, Defined Terms. The words "Landlord" and "Tenant", as
-----------------------------
used in this Lease, will include the plural as well as the singular. Words used
in the neuter gender include the masculine and feminine and words in the
masculine or feminine gender include the other and the neuter. If more than one
person or entity constitutes Tenant, the obligations under this Lease imposed
upon Tenant will be joint and several.
21.5 Entire Agreement. This Lease, including any exhibits and attachments
----------------
hereto listed in the Basic Lease Provisions, constitutes the entire agreement
between Landlord and Tenant relative to the Premises. Landlord and Tenant agree
hereby that all prior or contemporaneous oral and written agreements between and
among themselves or their agents, including any leasing agent, and
representatives relative to the leasing of the Premises are merged in or revoked
by this Lease.
21.6 Amendment. This Lease and the exhibits and attachments may be
---------
altered, amended or revoked only by an instrument in writing signed by both
Landlord and Tenant.
21.7 Severability. If any term or provision of this Lease is, to any
------------
extent, determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Lease will not be affected thereby, and
each remaining term and provision of this Lease will be valid and be enforceable
to the fullest extent permitted by law.
21.8 Time of Essence. Time is of the essence of this Lease and each and
---------------
every provision of this Lease.
21.9 Best Efforts. Whenever in this Lease or the Work Letter, if any,
------------
there is imposed upon either party the obligation to use the best efforts of a
party or reasonable efforts or diligence, such party will be required to exert
such efforts or diligence only to the extent the same are economically feasible
and will not impose upon such party extraordinary financial or other burdens.
21.10 Binding Effect. Subject to any provisions of this Lease restricting
--------------
assignment or subletting by Tenant and releasing Landlord upon sale of the
Building, all of the provisions of this Lease will bind and inure to the benefit
of the parties to this Lease and their respective heirs, legal representatives,
successors and assigns.
21.11 Subtenancies. The voluntary or other surrender of this Lease by
------------
Tenant, or a mutual cancellation thereof, will not work a merger of estates and
will, at the option of Landlord, operate as an assignment to Landlord of any or
all subleases or subtenancies.
21.12 No Reservation. Submission by Landlord of this instrument to Tenant
--------------
for examination or signature does not constitute a reservation of or option for
lease. This Lease will be effective as a lease or otherwise only upon execution
and delivery by both Landlord and Tenant.
21.13 Consents. If Tenant requests Landlord's consent under any provision
--------
of this Lease and Landlord fails or refuses to give such consent, Tenant's sole
remedy will be an action for specific performance or injunction.
Part Two-Page 19
21.14 Choice of Law. This Lease will be construed under, governed by and
-------------
enforced in accordance with the laws of the State of Texas.
21.15. Non-Merger. There shall be no merger of this Lease with any ground
----------
leasehold interest or the fee estate in the Project or any part thereof by
reason of the fact that the same person may acquire or hold, directly or
indirectly, this Lease or any interest in this Lease as well as any ground
leasehold interest or fee estate in the Project or any interest in such fee
estate.
21.16. Representations of Landlord. Except as expressly set forth in this
---------------------------
Lease, neither Landlord nor Landlord's agents or brokers have made any
representations or promises with respect to the Premises, the Building, or any
other part of the Project. Unless otherwise expressly provided in this Lease, to
the extent permitted by applicable law, Landlord and Tenant expressly disclaim
any implied warranty that the Premises are suitable for Tenant's intended
commercial purpose.
21.17. Jointly Prepared Document. Should any provision of this Lease
-------------------------
require judicial interpretation, Landlord and Tenant hereby agree and stipulate
that the court interpreting or considering same shall not apply the presumption
that the terms hereof shall be more strictly construed against a party by reason
of any rule or conclusion that a document should be construed more strictly
against the party who itself or through its agents prepared the same, it being
agreed that all parties hereto have participated in the preparation of this
Lease and that each party had full opportunity to consult legal counsel of its
choice before the execution of this Lease.
21.18. Waiver of Trial by Jury. Landlord and Tenant hereby waive trial by
-----------------------
jury in any action, proceeding or counterclaim brought by either party hereto in
respect of any matter arising out of or in any way connected with this Lease or
Tenant's use or occupancy of the Premises. Under no circumstances whatsoever
shall Landlord or Tenant be liable to the other for consequential damages or
special damages.
21.19 Independent Covenants. The obligations of Tenant to pay rent
---------------------
hereunder is not dependent upon the condition of the Premises or the performance
by Landlord of its obligations hereunder, and, except as otherwise expressly
provided herein, Tenant shall continue to pay rent, without abatement, setoff,
or deduction notwithstanding any claim that Landlord has breached its
obligations hereunder. Tenant waives and relinquishes all rights which Tenant
may have (including specifically, without limitation, all rights under Section
91.004 of the Texas Property Code) to claim any lien against any property of
Landlord or to withhold, deduct or offset rent hereunder.
21.20 Execution on Behalf of Tenant. The parties have agreed that The
-----------------------------
Coca-Cola Company, a Delaware corporation, is the Tenant hereunder, and the
person executing this Lease on behalf of Tenant, by his execution hereof,
represents to Landlord that he has the authority to bind such Tenant to the
terms of this Lease.
21.21 Quiet Enjoyment. Landlord represents and warrants that it has full
---------------
right and authority to enter into this Lease and that Tenant, so long as Tenant
is paying the rent due under this Lease as same becomes due and is performing
its other covenants and agreements set forth herein, shall peaceably and quietly
have, hold and enjoy the Premises for the Term, subject to the terms and
provisions of this Lease.
21.22 Beverage Exclusivity. Landlord agrees that so long as (a) this Lease
--------------------
remains in effect, and (b) Cinemark USA, Inc. and Tenant have a contractual
arrangement whereby Cinemark USA, Inc. serves the products of Tenant in the
movie theaters operated by Cinemark USA, Inc., the only carbonated beverages
that shall be sold in the Building will be the products of The Coca-Cola Company
and Xx Xxxxxx (including Diet Xx Xxxxxx). It is expressly agreed that the
preceding sentence shall not be applicable to non-carbonated beverages or to
other beverages such as water, dairy products, fruit juices, tea, coffee and the
like.
21.23 Conflict with Rules and Regulations. In the event of any conflict
-----------------------------------
between the terms of this Lease (including the exhibits hereto other than the
exhibit containing the Rules and Regulations) and the Rules and Regulations, the
terms of this Lease shall govern.
21.24 Press Releases. Neither Landlord nor Tenant (nor any broker retained
--------------
by Landlord or Tenant) shall issue a press release or announcement to the public
with respect to this Lease unless the approval thereof by the other party to
this Lease has been obtained.
21.25 Storage Space. Landlord and Tenant will endeavor in good faith to
-------------
agree upon terms whereby Landlord will provide to Tenant, at a fair rental for
storage space of the same type in the Dallas/Plano area, up to 2,000 square feet
of storage space at a location outside the Project.
Part Two-Page 20
RIDER 3
TO OFFICE LEASE AGREEMENT
BETWEEN
CINEMARK USA, INC.
AND
THE COCA-COLA COMPANY
RENEWAL OPTION
Provided no default by Tenant exists and Tenant is occupying the entire
Premises at the time of such election, Tenant may renew this Lease for one (1)
additional period of five (5) years on the same terms provided in this Lease
(except as set forth below), by delivering written notice of the exercise
thereof to Landlord not later than one hundred eighty (180) days before the
expiration of the Term. Tenant shall notify Landlord of whether it is interested
in renewing the Term (the "Interest Notice") at least two hundred forty (240)
---------------
days before the expiration of the Term. Within thirty (30) days after the
Interest Notice has been delivered to Landlord, Landlord shall notify Tenant of
the Base Rent which shall be payable for each month during the renewal Term (the
"Rental Notice"). Landlord's calculation of such Base Rent shall be based on the
-------------
prevailing rental rates in the Building for space of similar quality, size,
utility, the location of the Premises, the amount of any allowance provided to
Tenant by Landlord, the length of the renewal Term and the credit standing of
Tenant. Tenant shall notify Landlord whether it intends to renew the Term by
delivering written notice thereof to Landlord not later than thirty (30) days
after Landlord has delivered to Tenant the Rental Notice.
On or before the commencement date of the renewal term, Landlord and
Tenant shall execute an amendment to this Lease extending the term hereof on the
same terms provided in this Lease, except as follows:
(a) The Base Rent payable for each month during each such
extended term shall be the rent specified in the Rental Notice;
(b) Tenant shall have no further renewal options unless
expressly granted by Landlord in writing; and
(c) Landlord shall lease to Tenant the Premises in their
then-current condition, and Landlord shall not provide to Tenant any
allowances (e.g., moving allowance, construction allowance, and the
like) or other tenant inducements.
Tenant's rights under this Rider shall terminate if (i) this Lease or
Tenant's right to possession of the Premises is terminated, (ii) Tenant assigns
any of its interest in this Lease or sublets any portion of the Premises, or
(iii) Tenant fails to timely exercise its option under this Rider, time being of
the essence with respect to Tenant's exercise thereof.
Rider 3, page 1
EXHIBIT C
OPERATING COST COMPUTATION
1. Operating Cost Exclusions. The following are, without limitation,
-------------------------
examples of costs that, notwithstanding anything to the contrary set forth in
this Lease (including Section 2 of this Exhibit C), shall be excluded from the
computation of Operating Costs:
(a) leasing commissions, attorneys' fees, costs and disbursement and
other expenses incurred in connection with leasing, renovating or improving
space for tenants or prospective tenants of the Project;
(b) costs incurred by Landlord in the discharge of its obligations
under the Work Letter;
(c) costs (including permit, license and inspection fees) incurred
in renovating or otherwise improving or decorating, painting or redecorating
space for tenants or vacant space;
(d) Landlord's costs of any services sold to tenants for which
Landlord is entitled to be reimbursed by such tenants as an additional charge or
rental over and above the Base Rent and Operating Costs payable under the lease
with such tenant or other occupant;
(e) any depreciation and amortization on the Project except as
expressly permitted herein;
(f) costs incurred due to violation by Landlord of any of the terms
and conditions of this Lease or any other lease relating to the Project;
(g) interest on debt or amortization payments on any mortgages or
deeds of trust or any other debt for borrowed money;
(h) all items and services for which Tenant reimburses Landlord
outside of Operating Costs or pays third persons or which Landlord provides
selectively to one or more tenants or occupants of the Project (other than
Tenant) without reimbursement;
(i) advertising and promotional expenditures;
(j) repairs or other work occasioned by fire, windstorm or other
casualty, or by condemnation, or other work paid for through insurance or
condemnation proceeds;
(k) repairs resulting from any defect in the original design or
construction of the Project;
(l) amortization of the costs of improvements to the Project which
are capital in nature, except to the extent set forth in Section 2(p) of this
-----------
Exhibit C;
---------
(m) federal, state and local income taxes, inheritance taxes, estate
taxes, gift taxes and franchise taxes paid by Landlord;
(n) rents paid under any ground lease in respect of the Land or the
Building;
(o) any interest, fines, penalties and related expenses (including
attorneys' fees) incurred by Landlord as a result of (i) Landlord's violation of
any governmental rule, statute or authority (including specifically, without
limitation, the failure of Landlord to pay timely real estate taxes or
assessments in respect of the Project), (ii) default by Landlord under any
mortgage encumbering the Project, or (iii) default by Landlord under this Lease;
(p) losses of rent, bad debts or any damages or settlements paid to
any other tenant, prospective tenant or occupant of the Building; or
(q) costs representing an amount paid to an affiliate of Landlord
which is in excess of the amount which would have been paid in the absence of
such relationship;
Exhibit C, page 1
(r) costs incurred to test, survey, clean up, contain, xxxxx, remove
or otherwise remedy any Hazardous Substances from the Project placed thereon by
Landlord.
2. Operating Cost Examples. The following are, without limitation,
-----------------------
examples of costs included within the computation of Operating Costs:
(a) garbage and waste disposal;
(b) janitorial service and window cleaning for the Project (including
materials, supplies, light bulbs and ballasts standard to the Building,
equipment and tools therefor and rental and depreciation costs related to any of
the foregoing) or contracts with third parties to provide same;
(c) security;
(d) insurance premiums (including, without limitation, property,
rental value, liability and any other types of insurance carried by Landlord
with respect to the Project, the costs of which may include an allocation of a
portion of the premium of a blanket insurance policy maintained by Landlord);
(e) business or excise taxes payable on account of Landlord's
ownership or operation of the Project (including, without limitation, any state
tax imposed upon Landlord as a substitute in whole or in part for, or in
addition to, real property taxes assessed against the Premises as of the date of
this Lease);
(f) real estate taxes, assessments, excises, and any other
governmental levies and charges of every kind and nature whatsoever, general and
special, extraordinary and ordinary, foreseen and unforeseen, which may during
the Term be levied or assessed against, or arising in connection with the use,
occupancy, operation or possession of, the Project, or any part thereof, or
substituted, in whole or in part, for a real estate tax, assessment, excise or
governmental charge or levy previously in existence, by any authority having the
direct or indirect power to tax, including interest on installment payments and
all costs and fees (including attorneys' fees) incurred by Landlord in
contesting or negotiating with taxing authorities as to same; provided, however,
that Landlord will pay all such taxes and assessments over the longest period of
time permitted by the applicable taxing authority;
(g) water and sewer charges and any add-ons;
(h) operation, maintenance, and repair (to include replacement of
components) of the Project, including but not limited to all floor, wall and
window coverings and personal property in the Common Areas, Building systems
such as heat, ventilation and air conditioning system, elevators, escalators,
and all other mechanical or electrical systems serving the Building and the
Common Areas and Service Areas and service agreements for all such systems and
equipment;
(i) charges for any easement maintained for the benefit of the
Project;
(j) license, permit and inspection fees;
(k) compliance with any fire safety or other governmental rules,
regulations, laws, statutes, ordinances or requirements imposed by any
governmental authority or insurance company with respect to the Project during
the Term hereof;
(l) wages, salaries, employee benefits and taxes (or an allocation
of the foregoing) for personnel working full or part time in connection with the
operation, maintenance and management of the Project;
(m) accounting and legal services (but excluding legal services in
connection with negotiations and disputes with specific tenants unless the
matter involved affects all tenants of the Project);
(n) administrative and management fees for the Project and Landlord's
overhead expenses directly attributable to Project management;
Exhibit C, page 2
(o) indoor or outdoor landscaping;
(p) depreciation (or amortization) of Required Capital Improvements
and Cost Savings Improvements. "Required Capital Improvements" will mean capital
improvements or replacements made in or to the Building in order to conform to
any future law, ordinance, rule, regulation or order of any governmental
authority not existing as of the date of this Lease having jurisdiction over the
Project, including, without limitations, The Disabilities Acts. "Cost Savings
Improvements" will mean any capital improvements or replacements which are
intended to reduce, stabilize or limit increases in Operating Costs. The cost of
Required Capital Improvements, Cost Savings Improvements and depreciable (or
amortizable) maintenance and repair items (e.g., painting of Common Areas,
replacement of carpet in elevator lobbies), will be amortized over the useful
life of the applicable item in accordance with generally accepted accounting
principles.
(q) expenses and fees (including attorneys' fees) incurred contesting
of the validity or applicability of any governmental enactments which may affect
Operating Costs.
3. Landlord will credit against Operating Costs any refunds received as a
result of tax contests, after deduction for Landlord's costs in connection with
same.
4. The foregoing provisions of this Exhibit C will not be deemed to
---------
require Landlord to furnish or cause to be furnished any service or facility not
otherwise required to be furnished by Landlord pursuant to the provisions of
this Lease, although Landlord, in Landlord's absolute discretion, may choose to
do so from time to time.
Exhibit C, page 3
