Exhibit 10.01 

 

 

LEASE AGREEMENT

 

BETWEEN

 

 

EPC-IBP 16, LLC

 

AND

 

 

REACHLOCAL, INC.

 

 
 

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BASIC LEASE INFORMATION

 

 

 

Lease Date:

June 17, 2013

  Tenant: REACHLOCAL, INC., a Delaware corporation

  Tenant’s Address: ReachLocal, Inc.     21700 Oxnard Street, Suite 1600    
Woodland Hills, CA 91367     Attn: Adam F. Wergeles, General Counsel          

With a copy to:

    ReachLocal, Inc    

At the address for the Premises

   

Attn: Glynn Patin

  Landlord: EPC-IBP 16, LLC, a Texas limited liability company

  Landlord’s Address: Billingsley Property Services, Inc.     1722 Routh Street,
Suite 1313     Dallas, Texas 75201     Attention: Office Asset Manager    
Telephone: (214) 270-1000          

With a copy to:

   

Billingsley Property Services, Inc.

   

1722 Routh Street, Suite 1313

   

Dallas, Texas 75201

   

Attention: Legal Department

   

Telephone: (214) 270-1000

 

 

Premises: 

That certain space depicted and labeled as “ReachLocal Tenant Space” in EXHIBIT
A-1 hereto, in the building to be constructed by Landlord and to be known as IBP
XVI (the “Building”), to be located on land whose street address is likely to be
6111 W. Plano Parkway, Plano, Texas, as such land is more particularly described
in EXHIBIT A-2 (the “Land”). The Building and Land together comprise the
“Project”. The Premises shall contain approximately 100,000 square feet of
rentable area (“Total Premises Rentable Square Feet,” or singularly “Premises
Rentable Square Foot”). The Building is expected to contain approximately
181,711 of total square feet of rentable area (“Total Building Rentable Square
Feet”).

 

 
 

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Commencement Date: 

The earliest of (a) the date on which Tenant occupies any portion of the
Premises and begins conducting business therein, or (b) the 120th day after the
Premises are tendered to Tenant for the commencement of Tenant’s Work (with
Landlord’s Work complete to a degree that the remaining items of Landlord’s Work
will not materially interfere with Tenant’s Work as jointly determined by
Landlord and Tenant’s Representative designated in EXHIBIT D attached hereto;
which for purposes of clarification is intended to occur approximately 30 days
prior to Substantial Completion of Landlord’s Work), provided that such 120-day
period shall be extended day-for-day for any Landlord Delay Days. Landlord and
Tenant presently anticipate that possession of the Premises will be tendered to
Tenant in the condition required by this Lease on or about April 1, 2014 (the
“Estimated Delivery Date”). The Estimated Delivery Date, as extended day-for-day
for any (i) Tenant Delay Days, (ii) days of force majeure delay to Landlord’s
Work, provided that Landlord delivers written notice of such delay to Tenant
within five (5) days following the occurrence of the delay, and (iii) each day
after March 31, 2013 that elapses until this Lease is fully executed and
delivered, is referred to as the “Adjusted Estimated Delivery Date”. “Tenant
Delay Day” means each day of delay in the performance of Landlord’s Work that
occurs because (a) Tenant fails to attend (either in person or via telephone
conference) any scheduled meeting with Landlord, the Architect, any design
professional, or any contractor, or their respective employees or
representatives, as may be required hereunder in connection with the preparation
or completion of any construction documents, or in connection with the
performance of Landlord's Work, so long as Tenant receives reasonable prior
notice of such meeting (which notice may be electronic), or (b) because a Tenant
Party otherwise delays completion of Landlord’s Work, in either case provided
that Landlord delivers written notice of such delay to Tenant within two
business days following the occurrence of the delay. “Landlord Delay Day” means
each day of the delay in the performance of Tenant’s Work that occurs because
(a) Landlord fails to attend any scheduled meeting with Tenant, the Architect,
any design professional, or any contractor, or their respective employees or
representatives, as may be required hereunder in connection with the preparation
or completion of any construction documents, such as the Space Plans or Working
Drawings, or in connection with the performance of the Work, or (b) because a
Landlord Party otherwise delays completion of Tenant’s Work, in either case
provided that Tenant delivers written notice of such delay to Landlord within
two business days following the occurrence of the delay.

 

 
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Term: 

Commencing on the Commencement Date and ending at 5:00 p.m. on the last day of
the 120th full calendar month thereafter (the “Expiration Date”), subject to
extension as provided in the Lease.

 

Basic Rental:

Period 

Basic Annual Rental Per Square Foot of Rentable Area 

Monthly Basic Rental 

Lease Months 1-12

$14.21 NNN

$118,416.67

Lease Months 13-24

$14.71 NNN

$122,583.33

Lease Months 25-36

$15.21 NNN

$126,750.00

Lease Months 37-48

$15.71 NNN

$130,916.67

Lease Months 49-60

$16.21 NNN

$135,083.33

Lease Months 61-72

$16.71 NNN

$139,250.00

Lease Months 73-84

$17.21 NNN

$143,416.67

Lease Months 85-96

$17.71 NNN

$147,583.33

Lease Months 97-108

$18.21 NNN

$151,750.00

Lease Months 109-120

$18.71 NNN

$155,916.67

  

   

As used herein, the term “Lease Month” means each calendar month during the Term
(and if the Commencement Date does not occur on the first day of a calendar
month, the period from the Commencement Date to the first day of the next
calendar month shall be included in the first Lease Month for purposes of
determining the duration of the Term and the monthly Basic Rental rate
applicable for such partial month).

       

Security Deposit: 

$411,500.00 due upon Commencement of Construction (defined herein).

 

 

Rent: 

Basic Rental, Tenant’s Proportionate Share of Electrical Costs, Tenant’s
Proportionate Share of Basic Cost, and all other sums that Tenant may owe to
Landlord under the Lease.

 

 

Permitted Use: 

General office use any other lawful purpose common to and suitable for
Comparable Buildings.

 

 

Tenant’s

Proportionate Share:

55.0324% (which is the percentage obtained by dividing the Total Premises
Rentable Square Feet by the Total Building Rentable Square Feet. 

 

 
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Construction Allowance: 

$40.00 per Rentable Premises Square Foot, as more particularly described in
EXHIBIT D hereto

 

 

Comparable Buildings: 

As used herein or in the Lease, the term “Comparable Buildings” shall mean those
low-rise suburban, multi-tenant, commercial office buildings completed on or
after January 1, 2008, which are comparable to the Building in size, design,
quality, use, and tenant mix, and which are located in the same market area
(i.e., Plano area North of Frankford, East of I-35E, West of Preston Road and
South of State Hwy. 121).

 

 

Common Area: 

Tenant shall have the non-exclusive right to utilize all areas and facilities
within the Building and within the exterior boundaries of the Project that are
provided by Landlord for the general use and convenience of Tenant and the other
tenants of the Project, including stairways, elevators, driveways, parking
areas, courtyards and walkways as same may exist from time to time (the “Common
Area”).

 

 
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The foregoing Basic Lease Information is incorporated into and made a part of
the related lease (the “Lease”). If any conflict exists between any Basic Lease
Information and the Lease, then the Lease shall control.

 

   

LANDLORD:

            EPC – IBP 16, LLC, a Texas limited liability company     By:

EPC Exchange Corporation, a Washington corporation, its Sole Member

                       By: /s/ Kenneth D.
Mabry                                                                                   
      Name: Kenneth D.
Mabry                                                                                   
      Title:
Manager                                                                                                        
                   

TENANT:

                 

REACHLOCAL, INC.,a Delaware corporation

                            By: /s/ Ross G.
Landsbaum                                                                                          
    Name: Ross G.
Landsbaum                                                                                         
    Title: CFO  

 

 
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THIS LEASE AGREEMENT (this “Lease”) is entered into as of June 17, 2013 between
EPC – IBP 16, LLC, a Texas limited liability company (“Landlord”), and
REACHLOCAL, INC., a Delaware corporation (“Tenant”).

 

1.     Definitions and Basic Provisions. The definitions and basic provisions
set forth in the Basic Lease Information (the “Basic Lease Information”)
executed by Landlord and Tenant contemporaneously herewith are incorporated
herein by reference for all purposes. To the extent of any conflict between the
Basic Lease Information and any provision contained in this Lease, this Lease
shall control.

 

2.     Lease Grant. Subject to the terms of this Lease, Landlord leases to
Tenant, and Tenant leases from Landlord, the Premises. The rights conveyed
herein shall also permit Tenant, at all times during the Term, to use, at no
cost additional or fee to Tenant, its Proportionate Share of all risers,
raceways and plenum areas, for Tenant’s wiring and cabling and any conduit or
connectors associated therewith.

 

3.     Term; Landlord’s Work; Tender of Possession.

 

(a)     Generally. The Term shall commence upon the Commencement Date (as
defined in the Basic Lease Information) and end at 5:00 p.m. on the Expiration
Date, subject to renewal as provided in EXHIBIT E.

 

(b)     Landlord’s Work; Tender of Possession. Landlord shall diligently pursue
Substantial Completion of Landlord’s Work. As used herein, the phrase
“Substantial Completion of Landlord’s Work” (and derivations thereof) means that
Landlord’s construction of the base building improvements in the Premises is
substantially completed (as reasonably determined by Landlord) in substantial
accordance with EXHIBIT I. Substantial Completion of Landlord’s Work shall have
occurred even though minor details of construction, decoration, landscaping and
mechanical adjustments remain to be completed by Landlord, provided that
Landlord and Tenant’s Representative (designated in EXHIBIT D attached hereto)
jointly determine such remaining Landlord’s Work can be (i) performed without
material interruption of Tenant’s Work, and (ii) completed within thirty (30)
days following Substantial Completion of Landlord’s Work subject only to minor
punch-list items which do not materially interfere with the completion of
Tenant’s Work or the use and occupancy of the Premises. Landlord shall use
reasonable efforts to complete any punchlist items within thirty (30) days
following receipt of the punchlist. By occupying the Premises, Tenant shall be
deemed to have accepted the Premises in their condition as of the date of such
occupancy, subject to Landlord’s repair of latent defects and Landlord's
completion of any related punch-list items. Tenant shall execute and deliver to
Landlord, within ten (10) days after Landlord has requested same, a letter
confirming (1) the Commencement Date, (2) the size of the Premises and the
Building, (3) that Tenant has accepted the Premises, and (4) that Landlord has
performed all of its obligations with respect to the Premises.

 

 

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(c)     Abated Rent for Late Delivery of Premises. Landlord hereby covenants and
agrees to complete the construction of Landlord’s Work in a good and workmanlike
manner substantially in accordance with EXHIBIT I, and in compliance with all
applicable legal requirements as such requirements existed the time of delivery
to Tenant. If Landlord fails to achieve Substantial Completion of Landlord’s
Work on or prior to the date that is 30 days after the Adjusted Estimated
Delivery Date, Tenant’s obligation to pay Rent for the Premises shall be abated
one and one-half days for each day after the 30th day after the Adjusted
Estimated Delivery Date that Landlord fails to achieve Substantial Completion of
Landlord’s Work. By way of example, if Landlord achieves Substantial Completion
of the Landlord’s Work on the 35th day after the Adjusted Estimated Delivery
Date, Tenant’s obligation to pay Rent shall be abated for seven and one half
total days (that is, one and one-half days for each of the five days of delay).
Tenant shall have the right to periodically inspect Landlord’s Work to confirm
completion pursuant to the approved plans so long as (i) Tenant provides
Landlord with reasonable prior notice of such inspection, and (ii) such
inspections do not interfere with the performance of Landlord’s Work.

 

(d)     Tenant Termination Right for Late Delivery. If Landlord does not achieve
Substantial Completion of Landlord’s Work on or prior to the date that is 120
days after the Adjusted Estimated Delivery Date, Tenant may terminate this Lease
by delivering written notice to Landlord and Landlord’s Mortgagee within 30 days
following the expiration of such 120-day period and prior to the date upon which
Landlord Substantially Completes Landlord’s Work. Such termination shall be
effective as of the date of Tenant’s termination notice, subject to the
remainder of this Section 3(d). If Tenant fails to timely give such termination
notice, Tenant shall be deemed to have waived its right to terminate this Lease,
time being of the essence with respect thereto. Notwithstanding the foregoing,
if upon the receipt of Tenant’s written election to terminate this Lease as
provided in this Section 3(d), Landlord reasonably believes it can Substantially
Complete Landlord’s Work within 30 days following the receipt of such notice,
Landlord may, in its sole discretion, elect to proceed with such work and,
provided Landlord Substantially Completes Landlord’s Work within such 30-day
period, Tenant’s election to terminate shall be null and void.

 

(e)     Tenant Termination Right for Late Start of Construction. Provided Tenant
has executed this Lease by March 31, 2013 and Commencement of Construction has
not occurred by August 15, 2013, Tenant, at Tenant’s sole discretion, may
terminate this Lease by delivering written notice to Landlord and Landlord’s
Mortgagee within ten days following August 15, 2013. If the Tenant signs the
Lease later than March 31, 2013, the August 15, 2013 date shall be extended on a
day for day basis for every day past March 31, 2013 until this Lease is fully
executed. Such termination shall be effective as of the date of Tenant’s
termination notice. If Tenant fails to timely give such termination notice,
Tenant shall be deemed to have waived its right to terminate this Lease, time
being of the essence with respect thereto.

 

(f)     Measurement. Landlord’s architect shall measure the Building based on
the final approved construction documents used to construct the Building. Said
measurement shall be calculated using the Standard Method for Measuring Floor
Area in Office Buildings, ANSI/BOMA Z65.1-2010. The Basic Lease Information
shall be updated to incorporate the results of such measurement. In connection
with any renewal or extension of the Term hereof, Landlord may elect to again
measure the Premises.

 

 
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(g)     Remeasurement. If either party so requests in writing within ninety (90)
days following Substantial Completion of Landlord’s Work, the area of the
Premises or the Building shall be remeasured, at the requesting party’s cost, by
an engineer or architect reasonably satisfactory to both parties using the
Standard Method for Measuring Floor Area in Office Buildings, ANSI/BOMA
Z65.1-2010. If neither party elects to remeasure the Premises pursuant to this
Section 3(g), the Total Premises Rentable Square Feet stipulated in the Basic
Lease Information (as updated pursuant to Section 3(f)) shall be fully
applicable and binding on the parties.

 

4.     Rent.

 

(a)     Payment. Tenant shall timely pay to Landlord the Rent without deduction
or set off (except as otherwise expressly provided herein), at Landlord's
Address (or such other address as Landlord may from time to time designate in
writing to Tenant). Basic Rental, adjusted as herein provided, shall be payable
monthly in advance. The first full monthly installment of Basic Rental shall be
payable contemporaneously with the execution of this Lease; thereafter, monthly
installments of Basic Rental shall be due on the first day of each succeeding
calendar month during the Term. Basic Rental for any partial month at the
beginning or end of the Term shall be prorated based upon the number of days
within the Term during the partial month multiplied by 1/365 of the then current
annual Basic Rental and shall be due on or before the fifth business day
immediately preceding the Commencement Date, or first day of the last calendar
month of the Term, as applicable.

 

(b)     Electrical Costs. Tenant shall pay to Landlord (collectively, the
“Electrical Costs”): (i) Tenant’s Proportionate Share of the cost of electricity
utilized for the Common Area, (ii) Tenant’s usage of electricity for any portion
of the Premises which includes an entire wing within the Building measured by a
submeter converted to the utility rate set by the applicable utility provider
applicable to such usage; and (iii) with respect to portions of the Premises
within any multi-tenant wing of the Building, Tenant’s Proportionate Share of
the cost of electricity utilized for such wing of the Building. The costs of
electricity used to calculate the electrical costs shall not include the cost of
any electrical use payable by another tenant of the Building on account of that
Tenant’s specific use that is in excess of that Tenant’s Proportionate Share,
nor shall it include any mark-up of such cost by Landlord. Such amount shall be
payable monthly based on Landlord’s reasonable estimate of the amount due for
each month, and shall be due on the Commencement Date and on the first day of
each calendar month thereafter. From time to time, Landlord may estimate and
re-estimate the Electrical Costs to be due by Tenant and deliver a copy of the
estimate or re-estimate to Tenant. Thereafter, the monthly installments of
Electrical Costs payable by Tenant shall be appropriately adjusted in accordance
with the estimations so that, by the end of the calendar year in question,
Tenant shall have paid all of the Electrical Costs as estimated by Landlord.

 

(c)     Annual Electrical Cost Statement. By April 1 of each calendar year, or
as soon thereafter as practicable, Landlord shall furnish to Tenant a statement
of Landlord's actual Electrical Costs (the “Annual Electrical Cost Statement”)
for the previous year, which shall include a reconciliation of the actual amount
Tenant owes for its share of Electrical Costs against the estimated amount
collected from Tenant. If such reconciliation shows that Tenant paid more than
owed, then Landlord shall reimburse Tenant by check or cash for such excess
within thirty (30) days after delivery of the Annual Electrical Cost Statement;
conversely, if Tenant paid less than it owed, then Tenant shall pay Landlord
such deficiency within thirty (30) days after delivery of the Annual Electrical
Cost Statement.

 

 
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(d)     Adjustments to Electrical Costs. With respect to any calendar year or
partial calendar year in which the Building is not occupied to the extent of 95%
of the rentable area thereof, the Electrical Costs for such period shall, for
the purposes hereof, be increased to the amount which would have been incurred
had the Building been occupied to the extent of 95% of the rentable area
thereof; provided, however, that the total electrical charges to be paid by
tenants of the Building shall not exceed the total amount paid by Landlord for
the electricity for the Project.

 

(e)     Delinquent Payment. If any payment required by Tenant under this Lease
is not paid within five (5) business days of when due as to Basic Rental,
Tenant’s Proportionate Share of Electrical Costs, and Tenant’s Proportionate
Share of Basic Cost, and within 30 days following Landlord’s written request
therefor as to all other payments, Landlord may charge Tenant a fee equal to 5%
of the delinquent payment (the “Late Charge”) to reimburse Landlord for its cost
and inconvenience incurred as a consequence of Tenant's delinquency.
Notwithstanding the foregoing, the Late Charge shall not be charged with respect
to the first occurrence during any 12-month period that Tenant fails to make a
payment of Basic Rental, Tenant’s Proportionate Share of Electrical Costs, or
Tenant’s Proportionate Share of Basic Cost when due, unless such payment is not
made within five (5) business days after Landlord delivers written notice of
such delinquency to Tenant.

 

(f)     Taxes. Tenant shall be liable for all taxes levied or assessed against
personal property, furniture, or fixtures placed by Tenant in the Premises. If
any taxes for which Tenant is liable are levied or assessed against Landlord or
Landlord's property then Landlord and Tenant shall work together to ensure the
applicable taxing authority reconciles their records to accurately reflect the
tax liability; provided that if Landlord elects to pay the same, or if the
assessed value of Landlord's property is increased by inclusion of such personal
property, furniture or fixtures and Landlord elects to pay the taxes based on
such increase, then Tenant shall pay to Landlord, within thirty (30) business
days after Tenant receives written demand, that part of such taxes for which
Tenant is primarily liable.

 

(g)     Basic Cost. Tenant shall pay Tenant’s Proportionate Share of Basic Cost,
as defined in EXHIBIT C.

 

5.     Security Deposit. Contemporaneously with Commencement of Construction of
the Building, Tenant shall pay to Landlord, in immediately available funds, the
Security Deposit, which shall be held by Landlord without liability for interest
and as security for performance by Tenant of its obligations under this Lease.
The Security Deposit is not an advance payment of Rent or a measure or limit of
Landlord's damages upon an Event of Default (defined below). Landlord may, from
time to time upon notice to Tenant and without prejudice to any other remedy,
use all or a part of the Security Deposit to perform any obligation which Tenant
was obligated, but failed to perform hereunder following the expiration of any
applicable notice and cure period. Following any such application of the
Security Deposit, Tenant shall pay to Landlord on demand the amount so applied
in order to restore the Security Deposit to its original amount. Within thirty
(30) days after the expiration of the Term, as may have been extended, provided
Tenant has performed all of its obligations hereunder, Landlord shall return to
Tenant the balance of the Security Deposit not applied to satisfy Tenant's
obligations. If Landlord transfers its interest in the Premises, then Landlord
shall assign the Security Deposit to the transferee and if the transferee
provides written notice to Tenant accepting such Security Deposit, Landlord
thereafter shall have no further liability for the return of the Security
Deposit.

 

 
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6.     Landlord’s Obligations.

 

(a)     Services; Maintenance. Landlord shall furnish to Tenant (1) water (hot
and cold) at those points of supply provided for general use of tenants of the
Building; (2) heated and refrigerated air conditioning in accordance with ASHRAE
standards from 7 a.m. to 7 p.m. Monday through Friday and 8 a.m. to 1 p.m. on
Saturday (except for Holidays) sufficient to maintain temperatures during these
hours in the range of from 70 degrees Fahrenheit to 78 degrees Fahrenheit; (3)
janitorial service to the Premises on weekdays other than Holidays (Landlord
reserves the right to bill Tenant separately for extra janitorial service
required for any special improvements installed by or at the request of Tenant)
and such window washing as may from time to time in Landlord's judgment be
reasonably required, such janitorial services to be generally in accordance with
those services described on EXHIBIT G; (4) two (2) non-exclusive elevators for
ingress and egress to the floors on which the Premises are located except that
key card access may be installed at Tenant’s expense for full floors leased by
Tenant (provided that Landlord shall at all times be provided with key cards or
codes necessary to access such floors); (5) replacement of Building-standard
light bulbs and fluorescent tubes within the Premises and Common Areas; and (6)
electrical current (subject to Tenant’s obligation to pay its share of
Electrical Costs as provided herein) pursuant to the specifications set forth in
Section N of EXHIBIT I. If Tenant desires heat and air conditioning at any time
other than times herein designated, such services shall be supplied to Tenant
upon reasonable advance notice (which may be verbal and not less than four (4)
hours in advance of when required) and Tenant shall pay to Landlord its actual
per-hour cost for such service (including equipment depreciation and maintenance
costs but only to the extent such costs are not included in the Basic Cost
pursuant to EXHIBIT C) without mark-up (as reasonably calculated by Landlord),
such amount being payable within thirty (30) days of receipt of an invoice
therefor. Landlord's obligation to furnish services under this Section shall be
subject to the rules, regulations and other conditions or requirements of the
supplier of such services and any applicable governmental entity or agency. As
used herein, the term “Holidays” means New Year’s Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and the day after, Christmas Day,
any Monday following one of the foregoing holidays that occurs on a Sunday, and
any Friday preceding one of the foregoing holidays that occurs on a Saturday.

 

(b)     Maintenance. Landlord shall maintain all shell construction items
(including exterior and structural elements of the Building), Building’s Systems
(defined below), and Building common areas including all common lobby areas,
parking areas and landscaping, in good order and condition as customary for
Comparable Buildings. “Building’s Systems” means all life-safety, electrical,
plumbing, and air conditioning systems within the Building which were included
in the shell construction; but such term shall exclude any improvements below
the ceiling within the Premises (except in Shell Building core areas) including
but not limited to appliances, fixtures and supplemental air systems, and other
items not customary for office tenants in Comparable Buildings.

 

 
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(c)     Excess Electrical Use. Landlord shall use reasonable efforts to furnish
electrical current for computers, electronic data processing equipment, special
lighting, or other equipment that requires more than 120 volts, or other
equipment whose electrical energy consumption exceeds normal office usage,
through any existing feeders and risers serving the Building and the Premises.
Tenant shall not install any electrical equipment requiring special wiring or
requiring voltage in excess of 120 volts or otherwise exceeding the Building
capacity of eight (8) watts per rentable square foot for lighting and equipment
unless approved in advance by Landlord. The use of electricity in the Premises
(excluding electricity for HVAC service) shall not exceed the capacity of
existing feeders and risers to or wiring in the Premises which shall be designed
and built to provide eight (8) watts per rentable square foot. Any risers or
wiring required to meet Tenant's excess electrical requirements (in excess of
eight (8) watts per rentable square foot for lighting and equipment) shall, upon
Tenant's request, be installed by Landlord (unless otherwise agreed by Landlord)
at Tenant's expense, if, in Landlord's reasonable judgment, the same are
necessary and shall not cause permanent damage or injury to the Building or the
Premises, cause or create a dangerous or hazardous condition, entail excessive
or unreasonable alterations, repairs, or expenses, or interfere with or disturb
other tenants of the Building. Landlord may determine the amount of such
additional consumption and potential consumption by any verifiable method,
including installation of a separate meter in the Premises installed,
maintained, and read by Landlord, and Tenant shall reimburse Landlord for the
reasonable cost of installing and maintaining a separate meter within thirty
(30) days after Landlord has delivered to Tenant an invoice therefor. If Tenant
uses machines or equipment (other than general office machines, excluding
computers and electronic data processing equipment) in the Premises which affect
the temperature otherwise maintained by the air conditioning system or otherwise
overload any utility, Landlord may install or require Tenant to install
supplemental air conditioning units or other supplemental equipment in the
Premises, and the cost thereof, including the cost of installation, operation,
use, and maintenance, shall be paid by Tenant. At the time of Tenant’s
submission of plans and specifications for Landlord’s approval pursuant to
Section 7 herein or EXHIBIT D to this Lease, Landlord and Tenant shall cooperate
in good faith to identify any fixtures, equipment and/or appliances to be
installed or placed in the Premises which fixtures, equipment or appliances
would exceed eight (8) watts per rentable square foot of electrical use and
consumption or would affect the temperature otherwise maintained by the air
conditioning system.

 

(d)     Interruption of Services. If Tenant shall be unable to conduct business
from the Premises in a manner reasonably comparable to Tenant’s normal conduct
of business due to any failure or stoppage of critical services provided by
Landlord (and under the control of Landlord) which failure or stoppage continues
for three (3) consecutive business days after written notice from Tenant to
Landlord which notice must be labeled "CONFIDENTIAL/URGENT" and alert Landlord
to the possibility of a rental abatement pursuant to this Paragraph 6, and
provided such unavailability was not caused by (i) Tenant or the employees,
contractors, subcontractors or agents of Tenant, (ii) a governmental directive,
(iii) the interruption of utility service by the local utility provider, or (iv)
a cause outside of Landlord’s reasonable control, then Tenant shall be entitled
to a reasonable abatement of Rent for each consecutive day after the third
business day following Tenant’s notice that Tenant shall continue to unable to
conduct business from the Premises in a manner reasonably comparable to Tenant’s
normal conduct of business.

 

(e)     Intentionally Deleted.

 

 
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(f)     Access. Subject to any Building rules and regulations, necessary repairs
and maintenance, and any events beyond Landlord’s reasonable control which would
prevent access, Tenant shall have access to the Premises twenty-four (24) hours
a day, seven (7) days a week. The Building shall include twenty-four (24) hour
access by security card which cards shall be provided to Tenant upon payment of
a $10 refundable deposit per card.

 

(g)     Security. Landlord shall provide to Tenant all security functions and
services provided to the Building as set forth in EXHIBIT I including, but not
limited to, card key access into the Building and security personnel on-site
within International Business Park.

 

(h)     Tenant’s Security System. Tenant may, at its sole cost and expense,
install an electronic card key system within the Premises, which must tie-in
with Landlord’s access system. Tenant shall furnish Landlord with a copy of all
key codes or access cards and Tenant shall ensure that Landlord shall have
access to the Premises at all times subject to the provisions of Section 21(d)
below. Additionally, Tenant shall ensure that such system shall comply with all
laws, including all fire safety laws, and in no event shall Landlord be liable
for, and Tenant shall defend, indemnify, and hold harmless Landlord and its
representatives and agents from any claims, demands, liabilities, causes of
action, suits, judgments, damages and expenses arising from, such system or the
malfunctioning thereof in accordance with Tenant’s indemnity contained in
Section 10(c) hereof. Sections 7 and 19 of this Lease shall govern the
installation, maintenance and Landlord’s removal rights with respect to such
security system.

 

7.     Improvements; Alterations; Repairs; Maintenance.

 

(a)     Improvements; Alterations. Except as set forth below, no improvements or
alterations in or upon the Premises, including not by limitation paint, wall
coverings, floor coverings, light fixtures, window treatments, signs,
advertising, or promotional lettering or other media, shall be installed or made
by Tenant except in accordance with plans and specifications which have been
previously submitted to and approved in writing by Landlord, which approval
shall not be unreasonably withheld or delayed except that Landlord may withhold
approval of any improvements or alterations which it determines, in its sole but
reasonable opinion, will materially and adversely affect any structural or
aesthetic (only to the extent visible from outside the Premises or common areas)
aspect of the Building or Building’s Systems. Notwithstanding the foregoing,
Tenant shall not be required to obtain Landlord’s consent for repainting,
recarpeting, or other alterations, tenant improvements, alterations or physical
additions to the Premises totaling less than $50,000 in any single instance or
series of related alterations performed within a six-month period (provided that
Tenant shall not perform any improvements, alterations or additions to the
Premises in stages as a means to subvert this provision), in each case provided
that (A) Tenant delivers to Landlord written notice thereof, a list of
contractors and subcontractors to perform the work (and certificates of
insurance for each such party) and any plans and specifications therefor prior
to commencing any such alterations, additions, or improvements (for
informational purposes only so long as no consent is required by Landlord as
required by this Lease), (B) the installation thereof does not require the
issuance of any building permit or other governmental approval, or involve any
core drilling or the configuration or location of any exterior or interior walls
of the Building, and (C) such alterations, additions and improvements will not
affect (i) the Building’s Structure or the Building’s Systems, (ii) the
provision of services to other Building tenants, or (iii) the appearance of the
Building’s common areas or the exterior of the Building. All improvements and
alterations (whether temporary or permanent in character) made in or upon the
Premises, either by Landlord or Tenant, shall (i) comply with all applicable
laws, ordinances, rules and regulations, and (ii) with the exception of trade
fixtures and unattached equipment which may be removed by Tenant, be Landlord's
property at the end of the Term and shall remain on the Premises without
compensation to Tenant unless prior to installation, Tenant provides Landlord
with written notice of all items which may be removed by Tenant and Landlord
consents to such removal in advance. Such consent shall not be unreasonably
withheld provided Landlord may condition such consent as it deems reasonably
necessary including not by limitation requiring Tenant to replace any items upon
removal with similar items comparable to any such items in the Building or, if
not applicable, then Comparable Buildings. Approval by Landlord of any of
Tenant's drawings and plans and specifications prepared in connection with any
improvements in the Premises shall not constitute a representation or warranty
of Landlord as to the adequacy or sufficiency of such drawings, plans and
specifications, or the improvements to which they relate, for any use, purpose,
or condition, but such approval shall merely be the consent of Landlord as
required hereunder. Landlord warrants and agrees that it shall complete
Landlord’s Work in compliance with all then applicable governmental laws, rules
and regulations, including not by limitation the Disabilities Acts and the Texas
Accessibility Standards (“TAS”) Article 9102, Texas Civil Statutes, The
Administrative Rules of the Texas Department of Licensing and Regulation.
Thereafter, notwithstanding anything in this Lease to the contrary, Tenant shall
be responsible for all costs incurred to cause the interior non-structural
elements of the Premises to comply with any such laws, rules or regulations,
including not by limitation the retrofit requirements of TAS, as may be amended.

 

 
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(b)     Tenant Repairs; Maintenance. Except for those janitorial services to be
provided by Landlord as expressly provided in this Lease, Tenant shall maintain
its personal property and all improvements or alterations to the Premises other
than those items included in shell construction (which shall be maintained by
Landlord) in a clean, safe, operable, attractive condition, and shall not permit
or allow to remain any waste or damage to any portion of the Premises, normal
wear and tear and casualty excepted. Tenant shall repair or replace, subject to
Landlord's direction and supervision, any damage to the Project caused by Tenant
or Tenant's agents, contractors, or invitees. If Tenant fails to make such
repairs or replacements within thirty (30) days after receipt by Tenant of a
written demand from Landlord, or if such repairs or replacements cannot
reasonably be made within a period of fifteen (15) days, if Tenant shall not
commence to make such repairs or replacements within such 15-day period and
thereafter diligently prosecute such repairs or replacements to completion, then
Landlord, upon written notice to Tenant, may make the same and Tenant shall
reimburse Landlord for the reasonable costs and expenses incurred by Landlord in
making such repairs or replacements within thirty (30) days after Landlord has
delivered to Tenant written invoices evidencing such costs.

 

(c)     Performance of Work. All work described in this Section 7 shall be
performed only by Landlord or by contractors and subcontractors hired by Tenant
and approved in writing by Landlord which approval may not be unreasonably
withheld, conditioned or delayed. Tenant shall cause all contractors and
subcontractors to procure and maintain insurance coverage against such risks, in
such amounts, and with such companies as Landlord may reasonably require. All
such work shall be performed in accordance with all legal requirements and in a
good and workmanlike manner so as not to damage the Premises, the structure of
the Building, or plumbing, electrical lines, or other utility transmission
facilities or Building mechanical systems. All such work which may affect the
Building’s electrical, mechanical, plumbing or other systems must be approved by
the Building's engineer of record who shall either be located in the Building,
in International Business Park, or work for Landlord’s property management
company, and shall be reasonably available to respond to any approvals.

 

 
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(d)     Mechanic's Liens. Tenant shall not permit any mechanic's liens to be
filed against the Project for any work performed, materials furnished, or
obligation incurred by or at the request of Tenant. If such a lien is filed,
then Tenant shall, within thirty (30) days after Landlord has delivered notice
of the filing to Tenant, either pay the amount of the lien or diligently contest
such lien and deliver to Landlord a bond or other security reasonably
satisfactory to Landlord. If Tenant fails to timely take either such action,
then Landlord may pay the lien claim without inquiry as to the validity thereof,
and any amounts so paid, including expenses and interest, shall be paid by
Tenant to Landlord within thirty (30) days after Landlord has delivered to
Tenant an invoice therefor.

 

8.     Use.

 

(a)     Tenant shall occupy and use the Premises only for the Permitted Use and
shall comply with all laws, orders, rules, and regulations relating to the use,
condition, and occupancy of the Premises.

 

(b)     Landlord and Tenant agree that the population density within the
Premises shall at no time exceed eight persons for each 1,000 square feet of
rentable area located therein. If the population density within the Premises
exceeds seven persons for each 1,000 square feet of rentable area located
therein (the “Baseline Density”) during any calendar quarter during the Term
(other than on a temporary basis for meetings and conferences), then Basic
Rental shall be increased, prospectively, as follows:

 

 

If the population density in the Premises is (each a “Density Band”): 

then the then-applicable Basic Annual Rental Per Square Foot of Rentable Area in
the Premises shall be increased by: 

greater than the Baseline Density but less than seven and one-half persons for
each 1,000 square feet of rentable area

$0.17

equal to or greater than seven and one-half persons for each 1,000 square feet
of rentable area, but less than eight persons for each 1,000 square feet of
rentable area

$0.34

 

On the first day of each calendar quarter during the lease term, an officer of
Tenant shall certify in a written letter to Landlord the then-current population
density in the Premises, and, should such certification indicate a population
density therein greater than the Baseline Density, then Tenant shall pay the
applicable increased Basic Rental during such calendar quarter as set forth
above. Under no circumstances shall Tenant be entitled to a downward adjustment
of Basic Rental during the course of any calendar quarter; provided, however,
that Basic Rental may be adjusted downward based upon the population density
within the Premises as it exists on the first day of a calendar quarter.
Landlord may request reasonable documentation from Tenant substantiating
Tenant’s calculation of the population density within the Premises and may, in
its discretion, verify such calculation using any reasonable method. Nothing in
this Section 8(b) shall increase Landlord’s obligations under the Lease with
respect to parking.

 

 
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(c)     The Premises shall not be used for any use which (i) is demonstrably
disreputable (such that the presence of such use in the Building will have a
negative impact on Landlord’s ability to attract qualified office tenants [as
determined by Landlord in good faith]), (ii) creates extraordinary fire hazards,
(iii) results in an increased rate of insurance on the Building or its contents,
or (iv) the storage of any hazardous materials or substances. If, because of
Tenant's acts, the rate of insurance on the Building or its contents increases,
Tenant shall pay to Landlord the amount of such increase within thirty (30) days
following receipt of written invoices evidencing such cost, and acceptance of
such payment shall not constitute a waiver of any of Landlord's other rights.
Landlord hereby confirms that general office use with customary incidental uses
such as training and sales (by telephone or Internet; but not directly to the
public on site) will not cause the rate of insurance on the Building or its
contents to increase. Tenant shall conduct its business and control its agents,
employees, and invitees in such a manner as not to create any nuisance or
interfere with other tenants or Landlord in its management of the Project.
Notwithstanding anything in this Lease to the contrary, as between Landlord and
Tenant, (a) from and after the date Landlord tenders possession of the Premises
to Tenant, Tenant shall bear the risk of complying with Title III of the
Americans With Disabilities Act of 1990, any state laws governing handicapped
access or architectural barriers, and all rules, regulations, and guidelines
promulgated under such laws, as amended from time to time (the “Disabilities
Acts”) in the Premises, and (b) Landlord shall bear the risk of complying with
the Disabilities Acts in the Common Areas of the Building (other than compliance
that is necessitated by the use of the Premises for other than the Permitted Use
or as a result of any alterations or additions, including any initial tenant
improvement work, made by or on behalf of a Tenant Party [which risk and
responsibility shall be borne by Tenant]).

 

9.     Assignment and Subletting.

 

(a)     Transfers; Consent. Other than permitted transfers as described below,
Tenant shall not, without the prior written consent of Landlord, which consent
shall not be unreasonably withheld, delayed or conditioned: (1) assign,
transfer, or encumber this Lease or any estate or interest herein whether
directly or by operation of law, (2) if Tenant is an entity other than a
corporation whose stock is publicly traded, permit the transfer of an ownership
interest in Tenant so as to result in a change in the current control of Tenant,
(3) sublet any portion of the Premises, (4) grant any license, concession, or
other right of occupancy of any portion of the Premises, or (5) permit the use
of the Premises by any parties other than Tenant (any of the events listed in
Sections 9(a)(1) through 9(a)(5) being a “Transfer”). Tenant shall notify
Landlord in advance of publishing any advertisement that any portion of the
Premises is available for lease; should Tenant fail to provide advance notice to
Landlord of such advertisement, Landlord may require Tenant to withdraw such
advertising for a period not to exceed 30 days (for purposes of clarification,
failure to deliver prior notice to Landlord shall not be an Event of Default
under this Lease, but failure to timely withdraw advertising if so required by
Landlord pursuant to this sentence could mature into an Event of Default
[following applicable notice and cure]). If Tenant requests Landlord's consent
to a Transfer, then Tenant shall provide Landlord with a written description of
all terms and conditions of the proposed Transfer, copies of the proposed
documentation, and the following information about the proposed transferee: name
and address; reasonably satisfactory information about its business and business
history; its proposed use of the Premises; and general references sufficient to
enable Landlord to determine the proposed transferee's reputation and character.
Landlord shall respond in writing to Tenant’s request for a Transfer within ten
(10) business days of receipt of written request therefor. It shall be presumed
to be unreasonable for Landlord to withhold its consent to a proposed Transfer
in the event the proposed transferee or subtenant: (i) has a tangible net worth
(excluding good will) reasonably sufficient to allow for performance of its
obligations following the proposed Transfer, (ii) will use the Premises for the
Permitted Use and not for credit processing or telemarketing and will not use
the Premises in any manner that would conflict with any exclusive use agreement
or other similar agreement entered into by Landlord with any other tenant of the
Building, (iii) will not use the Premises or Building in a manner that would
materially increase the pedestrian or vehicular traffic to the Premises or
Building, (iv) is proven by Tenant to not be in violation of any laws relating
to terrorism or money laundering, and (v) does not have a demonstrably bad
reputation in the business community. Landlord specifically agrees that if a
proposed transferee or sublicensee is already a tenant in the Building or the
International Business Park or is an active prospect for space in another
building in the International Business Park, such fact shall not be a factor
against Landlord’s approval thereof; notwithstanding the foregoing, Landlord may
withhold its consent in its sole and absolute discretion to a proposed Transfer
to an active prospect for a lease in the Building directly from Landlord
(“active prospect” means a prospect with whom Landlord can demonstrate that
negotiations have been ongoing, and the last communication from such prospect to
Landlord was not longer than 120 days prior to the time Tenant proposes such
prospect). Tenant shall reimburse Landlord for its reasonable attorneys' fees
(not to exceed $1,000 per request) and other reasonable expenses incurred in
connection with considering any request for its consent to a Transfer. If
Landlord consents to a proposed Transfer, then the proposed transferee shall
deliver to Landlord a written agreement whereby it expressly assumes the
Tenant's obligations hereunder; however, any transferee of less than all of the
space in the Premises shall be liable only for obligations under this Lease that
are properly allocable to the space subject to the Transfer, and only to the
extent of the rent it has agreed to pay Tenant therefor. Landlord's consent to a
Transfer shall not release Tenant from performing its obligations under this
Lease, but rather Tenant and its transferee shall be jointly and severally
liable therefor. Landlord's consent to any Transfer shall not waive Landlord's
rights as to any subsequent Transfers. If an Event of Default occurs while the
Premises or any part thereof are subject to a Transfer, then Landlord, in
addition to its other remedies, may collect directly from such transferee all
rents becoming due to Tenant and apply such rents against Rent so long as such
Event of Default is continuing. In such case, Tenant authorizes its transferees
to make payments of rent directly to Landlord upon Tenant’s receipt of notice
from Landlord to do so; however, Landlord shall not be obligated to accept
separate Rent payments from any transferees and may require that all Rent be
paid directly by Tenant.

 

 
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(b)     Permitted Transfers. Tenant shall be permitted to periodically sublet
portions of the Premises or to assign its rights to any parent or wholly-owned
subsidiary entity, any organization resulting from a merger or a consolidation
with the Tenant, or any organization succeeding to the business assets of the
Tenant (a “Permitted Transferee”), provided the Premises continue to be used
solely for the Permitted Use, the business and parking requirements of the
subtenant or assignee are substantially the same as Tenant and the net worth of
the subtenant or assignee is equal to or greater than Tenant's at the time of
Lease execution (but in no event shall such tangible net worth be less than
$100,000,000 at the time of the transfer) (“Permitted Transfers”); the foregoing
net worth test shall not apply, however to a Permitted Transfer to an Affiliate,
provided that such Permitted Transfer is not undertaken as part of an effort to
deliberately distance the “Tenant” party hereunder from a creditworthy party.
Tenant shall promptly notify Landlord in writing within fifteen (15) days after
such assignment or subletting. A Permitted Transfer shall not release Tenant
from its obligations under this Lease.

 

(c)     Additional Compensation. Tenant shall pay to Landlord, immediately upon
receipt thereof, fifty percent (50%) of the all net compensation received by
Tenant after deducting reasonable transaction costs such as brokerage
commissions, tenant improvements and legal fees for a Transfer that exceeds the
Rent allocable to the portion of the Premises covered thereby. Tenant shall hold
such amounts in trust for Landlord and pay them to Landlord within ten (10) days
after receipt.

 

(d)     Cancellation. Landlord may, within twenty (20) days after submission of
Tenant’s written request for Landlord’s consent to a Transfer (excluding
Permitted Transfers) of the entire Premises (or 75% or more of the Premises)
which transfer is for the entire remaining term of this Lease, cancel this Lease
as of the date the proposed Transfer was to be effective as to the portion of
the Premises covered by the Transfer. If Landlord cancels this Lease, then this
Lease shall cease for such portion of the Premises and Tenant shall pay to
Landlord all Rent accrued through the cancellation date. Thereafter, Landlord
may lease the Premises to the prospective transferee (or to any other person)
without liability to Tenant.

 

 
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10.     Insurance; Waivers; Subrogation; Indemnity.

 

(a)     Insurance. Effective as of the earlier of (1) the date Tenant enters or
occupies the Premises, or (2) the Commencement Date, and continuing throughout
the Term, Tenant shall maintain the following insurance policies: (A) commercial
general liability insurance in amounts of $1,000,000 per occurrence, $5,000,000
general aggregate, or, following the expiration of the initial Term, such other
amounts as Landlord may from time to time reasonably require, provided that such
requirements are generally consistent with requirements of landlords in the
Comparable Buildings for a similarly situated tenant (and, if the use and
occupancy of the Premises include any activity or matter that is or may be
excluded from coverage under a commercial general liability policy [e.g., the
sale, service or consumption of alcoholic beverages], Tenant shall obtain such
endorsements to the commercial general liability policy or otherwise obtain
insurance to insure all liability arising from such activity or matter in such
amounts as Landlord may reasonably require), insuring Tenant, Landlord,
Landlord's property management company, and, if requested in writing by
Landlord, Landlord's Mortgagee, against all liability for injury to or death of
a person or persons or damage to property arising from the use and occupancy of
the Premises and (without implying any consent by Landlord to the installation
thereof) the installation, operation, maintenance, repair or removal of Tenant's
equipment located outside the Premises, (B) insurance covering the full value of
all alterations and improvements and betterments in the Premises, naming
Landlord and Landlord's Mortgagee as additional loss payees as their interests
may appear, (C) insurance covering the full value of all furniture, trade
fixtures and personal property (including property of Tenant or others) in the
Premises or otherwise placed in the Project by or on behalf of a Tenant Party
(including Tenant's equipment located outside the Premises), (D) contractual
liability insurance sufficient to cover Tenant's indemnity obligations hereunder
(but only if such contractual liability insurance is not already included in
Tenant's commercial general liability insurance policy), (E) worker's
compensation insurance, and (F) business interruption insurance in an amount
reasonably acceptable to Landlord. Tenant's insurance shall provide primary
coverage to Landlord when any policy issued to Landlord provides duplicate or
similar coverage, and in such circumstance Landlord's policy will be excess over
Tenant's policy. The commercial general liability insurance to be maintained by
Tenant may have a deductible of no more than $25,000.00 per occurrence; and the
property insurance to be maintained by Tenant may have a deductible of no more
than $50,000.00 per occurrence. Tenant shall furnish to Landlord certificates of
such insurance and such other evidence satisfactory to Landlord of the
maintenance of all insurance coverages required hereunder at least ten days
prior to the earlier of the Commencement Date or the date Tenant enters or
occupies the Premises, and at least 15 days prior to each renewal of said
insurance, and Tenant shall notify Landlord at least 30 days before cancellation
or a material change of any such insurance policies. All such insurance policies
shall be in form, and issued by companies with a Best's rating of A+:VII or
better, reasonably satisfactory to Landlord. If Tenant fails to comply with the
foregoing insurance requirements or to deliver to Landlord the certificates or
evidence of coverage required herein, and such failure continues for three (3)
business days following written notice to Tenant, Landlord, in addition to any
other remedy available pursuant to this Lease or otherwise, may, but shall not
be obligated to, obtain such insurance and Tenant shall pay to Landlord on
demand the premium costs thereof, plus an administrative fee of 15% of such
cost. Landlord shall at all times during the Term maintain the following
insurance policies: (A) commercial general liability insurance in amounts of not
less than $1,000,000.00 per occurrence, $5,000,000.00 general aggregate, and (B)
property insurance insuring the Building against loss or damage by fire or other
casualty, and (C) contractual liability insurance sufficient to cover Landlord’s
indemnity obligations hereunder (but only if such contractual liability
insurance is not already included in Landlord’s commercial general liability
insurance policy).

 

(b)     Waiver of Claims; No Subrogation. Notwithstanding any provision in this
Lease to the contrary, Landlord, its agents, employees and contractors shall not
be liable to Tenant or to any party claiming by, through or under Tenant for
(and Tenant hereby releases Landlord and its servants, agents, contractors,
employees and invitees from any claim or responsibility for) any damage to or
destruction, loss, or loss of use, or theft of any property of any Tenant Party
located in or about the Project, caused by casualty, theft, fire, third parties
or any other matter or cause, regardless of whether the negligence of any party
caused such loss in whole or in part. Tenant acknowledges that Landlord shall
not carry insurance on, and shall not be responsible for damage to, any property
of any Tenant Party located in or about the Project. LANDLORD AND TENANT EACH
WAIVES ANY CLAIM IT MIGHT HAVE AGAINST THE OTHER FOR ANY DAMAGE TO OR THEFT,
DESTRUCTION, LOSS OR LOSS OF USE OF ANY PROPERTY, TO THE EXTENT THE SAME IS
INSURED AGAINST UNDER ANY INSURANCE POLICY THAT COVERS THE BUILDING, THE
PREMISES, LANDLORD’S OR TENANT’S FIXTURES, PERSONAL PROPERTY, LEASEHOLD
IMPROVEMENTS, OR BUSINESS, OR IS REQUIRED TO BE INSURED AGAINST UNDER THE TERMS
HEREOF, REGARDLESS OF WHETHER THE NEGLIGENCE OR FAULT OF THE OTHER PARTY CAUSED
SUCH LOSS. EACH PARTY SHALL CAUSE ITS INSURANCE CARRIER TO ENDORSE ALL
APPLICABLE POLICIES WAIVING THE CARRIER’S RIGHTS OF RECOVERY UNDER SUBROGATION
OR OTHERWISE AGAINST THE OTHER PARTY.

 

 
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(c)     Indemnity. Subject to Section 10(b), Tenant shall defend, indemnify, and
hold harmless Landlord and its representatives and agents from and against all
claims, demands, liabilities, causes of action, suits, judgments, damages, and
expenses (including reasonable attorneys’ fees) arising from any injury to or
death of any person or the damage to or theft, destruction, loss, or loss of use
of, any property or inconvenience (a “Loss”) (1) occurring in or on the Project
(other than within the Premises) to the extent caused by the negligence or
willful misconduct of any Tenant Party, (2) occurring in the Premises, unless
caused by the gross negligence or willful misconduct of Landlord, its agents,
contractors or employees (each being referred to herein as a “Landlord Party”),
or (3) arising out of the installation, operation, maintenance, repair or
removal of any property of any Tenant Party located in or about the Project,
including Tenant’s property or equipment located outside the Premises. It being
agreed that clauses (2) and (3) of this indemnity are intended to indemnify
Landlord and its agents against the consequences of their own negligence or
fault, even when Landlord or its agents are jointly, comparatively,
contributively, or concurrently negligent with Tenant, and even though any such
claim, cause of action or suit is based upon or alleged to be based upon the
strict liability of Landlord or its agents; however, such indemnity shall not
apply to the sole or gross negligence or willful misconduct of Landlord and its
agents. Subject to Section 10(b), Landlord shall defend, indemnify, and hold
harmless Tenant and its agents from and against all claims, demands,
liabilities, causes of action, suits, judgments, damages, and expenses
(including reasonable attorneys’ fees) for any Loss arising from any occurrence
in or on the Building’s common areas to the extent caused by the negligence or
willful misconduct of Landlord or its agents. The indemnities set forth in this
Lease shall survive termination or expiration of this Lease and shall not
terminate or be waived, diminished or affected in any manner by any abatement or
apportionment of Rent under any provision of this Lease. If any proceeding is
filed for which indemnity is required hereunder, the indemnifying party agrees,
upon request therefor, to defend the indemnified party in such proceeding at its
sole cost utilizing counsel satisfactory to the indemnified party.

 

11.     Subordination; Attornment; Notice To Landlord's Mortgagee.

 

(a)     Subordination. This Lease shall be subordinate to any deed of trust,
mortgage, or other security instrument (a “Mortgage”), or any ground lease,
master lease, or primary lease (a “Primary Lease”), that now or hereafter covers
all or any part of the Premises (the mortgagee under any Mortgage or the lessor
under any     Primary Lease is referred to herein as “Landlord's Mortgagee”),
provided that as a condition precedent to such subordination in each instance,
each Landlord’s Mortgagee shall execute and deliver to Tenant an SNDA. Any
out-of-pocket costs charged by Landlord’s Mortgagee in connection with obtaining
such subordination, non-disturbance and attornment agreement shall be paid by
Tenant within 15 days after Landlord’s written request therefor which shall
include reasonable evidence of such costs.

 

(b)     Attornment. Provided that Tenant and Landlord’s Mortgagee have executed
an SNDA, Tenant shall attorn to any Landlord’s Mortgagee succeeding to
Landlord's interest in the Premises, whether by purchase, foreclosure, deed in
lieu of foreclosure, power of sale, termination of lease, or otherwise, in
accordance with the terms of the SNDA.

 

 
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(c)     Notice to Landlord's Mortgagee. Tenant shall not seek to enforce any
remedy it may have for any default on the part of the Landlord without first
giving written notice by certified mail, return receipt requested, specifying
the default in reasonable detail, to any Landlord's Mortgagee whose address has
been given to Tenant, and affording such Landlord's Mortgagee a period to
perform Landlord's obligations hereunder, which period shall equal the cure
period applicable to Landlord hereunder.

 

(d)     Subordination, Non-Disturbance and Attornment Agreement. Landlord shall
obtain a subordination, non-disturbance and attornment agreement (an “SNDA”)
from the current Landlord’s Mortgagee, and Landlord shall use reasonable efforts
to obtain a subordination, non-disturbance and attornment agreement from any
future Landlord’s Mortgagee, in a form reasonably acceptable to such Landlord’s
Mortgagee or other institutional lenders; however, Landlord’s failure to obtain
such agreement shall not constitute a default by Landlord hereunder or prohibit
the mortgaging of the Building; and further provided that any out-of-pocket
costs charged by Landlord’s Mortgagee in connection with obtaining such
subordination, non-disturbance and attornment agreement shall be paid by Tenant
within 15 days after Landlord’s written request therefor which request shall
include reasonable evidence of such costs. The subordination of Tenant’s rights
hereunder to any future Landlord’s Mortgagee under Section 11(a) shall be
conditioned upon such future Landlord’s Mortgagee’s execution and delivery of a
subordination, non-disturbance and attornment agreement in a form reasonably
acceptable to such Landlord’s Mortgagee or other institutional lenders.
Contemporaneously with execution of this Lease, Tenant, and the fee simple owner
of the Land shall execute a recognition agreement in the form of EXHIBIT O
attached hereto; Landlord and Tenant agree that the form of Recognition
Agreement attached hereto as EXHIBIT O is acceptable for any current or future
Landlord's Mortgagee pursuant to a Primary Lease (i.e., not a Mortgage).

 

12.     Rules and Regulations. Tenant shall comply with the rules and
regulations of the Building which are attached hereto as EXHIBIT B. Landlord
may, from time to time, change such rules and regulations for the safety, care,
or cleanliness of the Building and related facilities, provided that such
changes are applicable to all tenants of the Building and will not unreasonably
interfere with Tenant's use of the Premises; Landlord will provide Tenant
written notice of such changes. Tenant shall be responsible for the compliance
with such rules and regulations by its employees, agents, and invitees. To the
extent of any conflict between the terms and provisions of this Lease and the
rules and regulations, the terms and provisions of this Lease shall control.

 

13.     Condemnation.

 

(a)     Total Taking. If the entire Building or Premises are taken by right of
eminent domain or conveyed in lieu thereof (a “Taking”), this Lease shall
terminate as of the date of the Taking.

 

(b)     Partial Taking - Landlord's Rights. If any material portion, but less
than all, of the Project or related parking becomes subject to a Taking, or if
Landlord is required to pay a material portion of the proceeds received for a
Taking to Landlord's Mortgagee, then this Lease, at the option of Landlord,
exercised by written notice to Tenant within thirty (30) days after such Taking,
shall terminate and Rent shall be apportioned as of the date of such Taking.
Upon the occurrence of a Taking, Rent shall be adjusted on a reasonable basis
from the first day of the Taking until such termination.

 

 
14

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(c)     Partial Taking - Tenant’s Rights. If any part of the Project becomes
subject to a Taking and such Taking will prevent Tenant from conducting on a
permanent basis its business in the Premises in a manner reasonably comparable
to that conducted immediately before such Taking, then Tenant may terminate this
Lease as of the date of such Taking by giving written notice to Landlord within
30 days after the Taking, and Rent shall be apportioned as of the date of such
Taking. If Tenant does not terminate this Lease, then Rent shall be abated on a
reasonable basis.

 

(d)     Award. If any Taking occurs, all proceeds shall belong to and be paid to
Landlord, and Tenant shall not be entitled to any portion thereof except that
Tenant shall have all rights permitted under the laws of the State of Texas to
appear, claim and prove in proceedings relative to such taking (i) the value of
any fixtures, furnishings, and other personal property which are taken but which
under the terms of this Lease Tenant is permitted to remove at the end of the
Term, (ii) the unamortized cost (such costs having been amortized on a
straight-line basis over the Term excluding any renewal terms) of Tenant’s
leasehold improvements which are taken that Tenant is not permitted to remove at
the end of the Term and which were installed solely at Tenant’s expense (i.e.,
not made or paid for by Landlord from the Construction Allowance or otherwise),
and (iii) relocation and moving expenses, but not the value of Tenant’s
leasehold estate created by this Lease and only so long as such claims in no way
diminish the award Landlord is entitled to from the condemning authority as
provided hereunder.

 

14.     Fire or Other Casualty.

 

(a)     Repair Estimate. If the Premises or the Building are damaged by fire or
other casualty (a “Casualty”), Landlord shall, within sixty (60) days after such
Casualty, deliver to Tenant a good faith estimate (the “Damage Notice”) of the
time needed to repair or replace the damage caused by such Casualty.

 

(b)     Tenant’s Rights. If a material portion of the Building is damaged by
Casualty such that Tenant is prevented from conducting its business in the
Premises in a manner reasonably comparable to that conducted immediately before
such Casualty and Landlord reasonably estimates that the damage caused thereby
cannot be repaired within 300 days after the date of the casualty (the “Repair
Period”), then Tenant may terminate this Lease by delivering written notice to
Landlord of its election to terminate within 30 days after the Damage Notice has
been delivered to Tenant.

 

(c)     Landlord's Rights. If a Casualty damages a material portion of the
Building, and if Landlord is required to pay a material portion of insurance
proceeds arising out of the Casualty to Landlord's Mortgagee or the estimated
Repair Period exceeds 270 days, then Landlord may terminate this Lease by giving
written notice of its election to terminate within thirty (30) days after the
Damage Notice has been delivered to Tenant, and Rent hereunder shall be abated
as of the date of the Casualty.

 

 
15

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(d)     Repair Obligation. If neither party elects to terminate this Lease
following a Casualty, then Landlord shall, within a reasonable time after such
Casualty, commence to repair the Building and the Premises and shall proceed
with reasonable diligence to restore the Building and Premises to substantially
the same condition as they existed immediately before such Casualty; however,
Landlord shall not be required to repair or replace any part of the furniture,
equipment, fixtures, and other improvements which may have been placed by, or at
the request of, Tenant or other occupants in the Building or the Premises, and
Landlord's obligation to repair or restore the Building or Premises shall be
limited to the extent of the insurance proceeds actually received by Landlord
for the Casualty in question or the amount Landlord would have received had
Landlord maintained the insurance under Section 10(a) above. Rent shall be
equitably abated during any period of restoration pursuant to this subsection
(d).

 

15.     Events of Default. Each of the following occurrences shall constitute an
“Event of Default” by Tenant:

 

(a)     Tenant's failure to pay Rent, or any other sums due from Tenant to
Landlord under the Lease (or any other lease executed by Tenant for space in the
Building), within five (5) days after written notice of such failure;

 

(b)     Tenant's failure to perform, comply with, or observe any other agreement
or obligation of Tenant under this Lease (or any other lease executed by Tenant
for space in the Building) within thirty (30) days after written notice of such
failure, or such longer period as may be reasonably necessary in order to cure
such default (not to exceed 60 days), provided that Tenant has commenced such
cure within the initial 30 day period and thereafter is diligently pursuing such
cure to completion;

 

(c)     The filing of a petition by or against Tenant (the term “Tenant” shall
include, for the purpose of this Section 15(c), any guarantor of the Tenant's
obligations hereunder) (i) in any bankruptcy or other insolvency proceeding;
(ii) seeking any relief under any state or federal debtor relief law; (iii) for
the appointment of a liquidator or receiver for all or substantially all of
Tenant's property or for Tenant's interest in this Lease; or (iv) for the
reorganization or modification of Tenant's capital structure; and provided that
in the case of any of the foregoing which is filed against Tenant, the same is
not dismissed within ninety (90) days after it is filed; and

 

(d)     The admission by Tenant that it cannot meet its obligations as they
become due or the making by Tenant of an assignment for the benefit of its
creditors.

 

16.     Remedies.

 

(a)     Landlord’s Remedies. Upon any Event of Default by Tenant, Landlord may,
subject to any judicial process and notice to the extent required by Title 4,
Chapter 24 of the Texas Property Code, as may be amended, in addition to all
other rights and remedies afforded Landlord hereunder or by law or equity, take
any of the following actions:

 

 
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(i)     Terminate this Lease by giving Tenant written notice thereof, in which
event, Tenant shall pay to Landlord the sum of (1) all Rent accrued hereunder
through the date of termination, (2) all amounts due under Section 15(a), and
(3) an amount equal to (A) the total Rent that Tenant would have been required
to pay for the remainder of the Term discounted to present value at a per annum
rate equal to the “Prime Rate” as published on the date this Lease is terminated
by The Wall Street Journal, Southwest Edition, in its listing of “Money Rates”,
minus (B) the then present fair rental value of the Premises for such period,
similarly discounted; or

 

(ii)     Terminate Tenant's right to possession of the Premises without
terminating this Lease by giving written notice thereof to Tenant, in which
event Tenant shall pay to Landlord (1) all Rent and other amounts accrued
hereunder to the date of termination of possession, (2) all amounts due from
time to time under Section 15(a), and (3) all Rent and other sums required
hereunder to be paid by Tenant during the remainder of the Term, diminished by
any net sums thereafter received by Landlord through reletting the Premises
during such period. Landlord shall use reasonable efforts to relet the Premises
on such terms and conditions as Landlord in its sole discretion may determine
(including a term different from the Term, rental concessions, and alterations
to, and improvement of , the Premises); however, Landlord shall not be obligated
to relet the Premises before leasing other portions of the Building. Landlord
shall not be liable for, nor shall Tenant's obligations hereunder be diminished
because of, Landlord's failure to relet the Premises or to collect rent due for
such reletting. Tenant shall not be entitled to the excess of any consideration
obtained by reletting over the Rent due hereunder. Re-entry by Landlord in the
Premises shall not affect Tenant's obligations hereunder for the unexpired Term;
rather, Landlord may, from time to time, bring action against Tenant to collect
amounts due by Tenant, without the necessity of Landlord's waiting until the
expiration of the Term. Unless Landlord delivers written notice to Tenant
expressly stating that it has elected to terminate this Lease, all actions taken
by Landlord to exclude or dispossess Tenant of the Premises shall be deemed to
be taken under this Section 16(a)(ii). If Landlord elects to proceed under this
Section 16(a)(ii), it may at any time elect to terminate this Lease under
Section 16(a)(i).

 

(iii)     Notwithstanding anything to the contrary herein, Tenant shall not be
deemed to have waived any requirements of Landlord to mitigate damages upon an
Event of Default as required by law.

 

(b)     Tenant’s Remedies.

 

(i)     If Landlord shall fail to perform any act or acts required of Landlord
by this Lease which results in the cessation of HVAC, sewer, water, electricity
or elevator service to the Premises (provided that (a) the provision of such
services are within Landlord’s reasonable control, and (b) the cessation of such
service materially impairs Tenant’s ability to conduct business from the
Premises), and if such failure continues for fifteen (15) days after receipt of
notice from Tenant (or, if such default cannot reasonably be cured within
fifteen (15) days, Landlord fails to commence to cure the same within fifteen
(15) days of notice and diligently proceed to cure such default) Tenant may,
upon not less than five (5) business days' notice to Landlord (such notice being
the second notice to Landlord of such failure) that Tenant elects to proceed
under this Section 16(b), take such commercially reasonable steps as are
required to cure such default.

 

 
17

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(ii)     Any work performed by or on behalf of Tenant shall be performed in good
and workmanlike manner and compliance with all laws and this Lease. In addition,
Tenant shall reasonably cooperate with Landlord in enforcing any warranties
obtained by Tenant in connection with such work at Landlord's sole cost and
expense. If the obligation to be performed by Tenant will affect the Building’s
heating, venting, air conditioning, life safety, electrical, plumbing, or
sprinkler systems, Tenant shall use only those contractors used by Landlord in
the Building for work on such systems. All other contractors shall be subject to
Landlord’s reasonable approval and Landlord agrees to approve or reject any
contractor proposed to be used by Tenant within 48 hours of receipt of the
second notice from Tenant referenced above. If a proposed contractor is duly
licensed, bonded, is able to satisfy Landlord’s vendor insurance requirements,
then (a) Landlord agrees not to withhold its approval of the proposed
contractor, and (b) if Landlord fails to respond to a request for approval of
such contractor within the 48-hour time period referenced in the preceding
sentence, then Landlord shall be deemed to have approved such contractor.

 

(iii)     Provided that such repairs are completed in a good and workmanlike
manner, Landlord shall reimburse Tenant for its actual, out-of-pocket costs
therefor within 30 days after delivery to Landlord of a reasonably detailed
invoice and, if requested by Landlord, receipts, bills paid affidavits, and
appropriate releases of liens. If Landlord fails to pay to Tenant any amounts
owing pursuant to the preceding sentence, then Tenant shall deliver to Landlord
a second demand for payment that shall include a phrase substantially similar to
the following, in bold all caps language (an “Offset Exercise Notice”): “FAILURE
TO EITHER ISSUE AN OFFSET DISPUTE NOTICE OR PAY SUCH AMOUNTS WITHIN FIVE
BUSINESS DAYS FOLLOWING THIS NOTICE WILL RESULT IN TENANT’S ABILITY TO OFFSET
THE DEMANDED SUMS FROM UPCOMING RENT OBLIGATIONS.” If Landlord fails to respond
timely to an Offset Exercise Notice, Tenant may elect to offset such amounts
against twenty-five percent (25%) of the next due installment of Rent and, to
the extent necessary to fully satisfy such amount, twenty-five percent (25%) of
the next subsequent installments of Rent. In addition, if the remaining Term is
insufficient to allow Tenant to recover any amounts owing Tenant pursuant to
this Section 16(b), Tenant may elect to extend the Term for the period of time
necessary to allow Tenant recover in full any such amounts owing to Tenant.
Notwithstanding the foregoing, in the event that Landlord believes that Tenant
is not entitled to exercise the offset rights described in an Offset Exercise
Notice, Landlord shall have the right to notify Tenant (not later than five (5)
business days following the Offset Exercise Notice) that Landlord has elected to
dispute such exercise by Tenant of its offset rights hereunder (an “Offset
Dispute Notice”) (which Offset Dispute Notice shall describe, with reasonable
specificity, the reason(s) that Landlord believes that Tenant is not entitled to
exercise such offset), in which event Tenant shall not offset the amount in
question, except to the extent that the dispute shall thereafter be resolved in
Tenant's favor, as provided below. In the event that Landlord timely delivers an
Offset Dispute Notice to Tenant as provided above, then Tenant shall have the
right to submit the dispute to arbitration as follows:

 

 
18

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(1)     Tenant must notify Landlord of its election to submit the dispute to
arbitration by delivering written notice of such election within thirty (30)
days following the Offset Dispute Notice. Within seven (7) days after such
election by Tenant, Landlord and Tenant shall select a mutually acceptable
arbitrator (the “Qualified Arbitrator”), who shall be an expert in the subject
matter of such dispute. If the parties fail to agree on the selection of a
Qualified Arbitrator within such 7-day period, then, within a second period of
seven (7) days, each party shall select a Qualified Arbitrator, and within a
third period of seven (7) days thereafter, the two appointed Qualified
Arbitrators shall select a third Qualified Arbitrator and the third Qualified
Arbitrator shall be the arbitrator and shall resolve the subject dispute. If one
party shall fail to make such selection within said third 7-day period, then the
Qualified Arbitrator chosen by the other party shall be the sole arbitrator. If
the two appointed Qualified Arbitrators shall fail to select a third Qualified
Arbitrator, then the third Qualified Arbitrator shall be selected by the
Director of the Dallas Chapter of the American Arbitration Association (or
comparable organization, if the Dallas Chapter of the American Arbitration
Association does not then exist).

 

(2)     Once the Qualified Arbitrator has been selected as provided above, each
of Landlord and Tenant, if it so elects, shall present written evidence and
materials to such Qualified Arbitrator within ten (10) business days following
the engagement of the Qualified Arbitrator, and, as soon thereafter as
practicable, but in any case within twenty (20) business days after such
engagement, the Qualified Arbitrator shall deliver its resolution of the dispute
in question. Any such decision shall include, if applicable, an express
determination of the prevailing party in such dispute. Such decision of the
Qualified Arbitrator shall be submitted in writing to, and be final and binding
on, each of Landlord and Tenant. If the Qualified Arbitrator believes that
expert advice would materially assist him or her, (s)he may retain one or more
qualified persons, including, but not limited to, legal counsel, contractors,
architects, or engineers, to provide such expert advice. All costs and expenses
pertaining to any such arbitration shall be allocated and paid as follows: (a)
the non-prevailing party in the arbitration (as determined by the Qualified
Arbitrator) shall pay the costs of the Qualified Arbitrator and of any experts
retained by the Qualified Arbitrator, (b) any fees of any counsel or expert
engaged directly by Landlord or Tenant and the fees of any appointed Qualified
Arbitrator engaged to select a third Qualified Arbitrator, however, shall be
borne by the party obtaining such counsel, expert, or arbitrator, and (c) if a
compromise of any such dispute is reached between the parties, the cost of the
arbitration shall be equally divided between the parties. Additionally, in the
event that, pursuant to such arbitration procedure: (1) it is determined that
Tenant is entitled to offset all or any portion of the amount set forth in the
Offset Exercise Notice, then Tenant shall have the right to offset such amount
against twenty-five percent (25%) of the next installment(s) of Rent coming due
under this Lease, and Landlord shall have no further defense with respect to
such offset; or (2) it is determined that Tenant is not entitled to offset any
portion of the amount set forth in the Offset Exercise Notice, then Tenant shall
not make any offset of such amount against the payment of Rent, and Tenant shall
have no further claims with respect to costs incurred pursuant to this Section
16(b) (including costs to cure the cited services failure, counsel fees, and
arbitration costs). Notwithstanding anything to the contrary in this Lease, if
Tenant elects to submit a claim hereunder to arbitration as provided in this
Section 16(b), such election shall be Tenant’s sole and exclusive remedy for the
failures cited in the Offset Exercise Notice, and Tenant waives any claims at
law or in equity against Landlord related to the matters set forth in the Offset
Exercise Notice.

 

 
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(iv)     Any amounts owing by Landlord to Tenant under this Section 16(b) shall
include interest on such amounts at the Default Rate from the date incurred by
Tenant until such amounts are paid by Landlord either by payment or by offset
pursuant to the procedures set forth in this Section 16(b).

 

(v)     Tenant’s rights under this Section 16(b) shall automatically terminate
if Tenant fails to lease at least 70% of the initial Total Premises Rentable
Square Feet at the time of Lease execution.

 

17.     Payment; Non-Waiver.

 

(a)     Payment. Upon any Event of Default by Tenant, Tenant shall pay to
Landlord all costs incurred by Landlord (including court costs and reasonable
attorney's fees and expenses) in (1) obtaining possession of the Premises, (2)
removing and storing Tenant's or any other occupant's property, (3) repairing,
restoring, altering, remodeling, or otherwise putting the Premises into
condition acceptable to a new tenant, (4) if Tenant is dispossessed of the
Premises and this Lease is not terminated, reletting all or any part of the
Premises (including brokerage commissions, cost of tenant finish work, and other
costs incidental to such reletting), (5) performing Tenant's obligations which
Tenant failed to perform, and (6) enforcing, or advising Landlord of, its
rights, remedies, and recourses arising out of the Event of Default.

 

(b)     No Waiver. Acceptance or payment of Rent following any Event of Default
shall not waive any rights regarding such Event of Default. No waiver by any
party of any violation or breach of any of the terms contained herein shall
waive any rights regarding any future violation of such term or violation of any
other term.

 

18.     Intentionally Deleted.

 

19.     Surrender of Premises. No act by Landlord shall be deemed an acceptance
of a surrender of the Premises, and no agreement to accept a surrender of the
Premises shall be valid unless the same is made in writing and signed by
Landlord. At the expiration or termination of this Lease, subject to Landlord’s
obligation to maintain the Building, Tenant shall deliver to Landlord the
Premises with all improvements located thereon in good repair and condition,
reasonable wear and tear (and condemnation and fire or other casualty damage not
caused by Tenant, as to which Sections 13 and 14 shall control) excepted, and
shall deliver to Landlord all keys and/or access cards to the Premises. Provided
that Tenant has performed all of its obligations hereunder, Tenant may remove
all unattached trade fixtures, furniture, and personal property placed in the
Premises by Tenant. Additionally, Tenant may remove such additional items as
Landlord may have agreed. Tenant shall repair all damage caused by removal of
any items. All items not so removed shall be deemed to have been abandoned by
Tenant and may be appropriated, sold, stored, destroyed, or otherwise disposed
of by Landlord without notice to Tenant and without any obligation to account
for such items. Tenant upon surrender of the Premises shall be required to
remove any above-ceiling telecommunication wiring installed for Tenant’s use in
the Premises at Tenant’s expense. The provisions of this Section 19 shall
survive the end of the Term.

 

 
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20.     Holding Over.

 

(a)     If Tenant fails to vacate the Premises at the end of the Term, then
Tenant shall be a tenant at will and, in addition to all other damages and
remedies to which Landlord may be entitled for such holding over, Tenant shall
pay, in addition to the other Rent, a daily Basic Rental equal to 150% of the
daily Basic Rental payable during the last month of the Term.

 

(b)     Notwithstanding Section 20(a) above, provided (1) there is no continuing
Event of Default either at the time of election or at the expiration of the
Term, (2) Tenant has provided 12 months’ prior written notice to Landlord (which
notice shall specify the length of the Authorized Holdover Period [defined
below], not to exceed the time periods set forth in the chart below) and (3)
Tenant's occupancy during such Authorized Holdover Period shall be subject to
all terms and conditions of this Lease, Tenant shall have the option to extend
the Term for a period of up to four calendar months as specified in the written
notice to be delivered to Landlord hereunder (the “Authorized Holdover Period”).
If Tenant elects to extend the Term for the Authorized Holdover Period, Tenant
shall pay monthly Basic Rental for the Authorized Holdover Period in accordance
with the following:

 

Number of full Lease

Months of Prior Notice

Given to Landlord (prior to

the then-scheduled

expiration of the Term) 

Number of

Months Available

in Authorized

Holdover Period 

Number of Month in

Authorized Holdover Period

with Basic Rental set at same

level payable during the last

month of the Term 

18 or more

8 months

All 8 months

17

7 months

All 7 months

16

6 months

All 6 months

15

5 months

All 5 months

14

4 months

All 4 months

13

4 months

First 3 months
(125% for 4th month)

12

4 months

First 2 months
(125% for 3rd and 4th months)

Less than 12

0

N/A

 

 

For the entire Authorized Holdover Period, Additional Rent shall continue in the
same manner as provided in this Lease. If Tenant fails to surrender the Premises
to Landlord on or before the expiration of the Authorized Holdover Period, in
accordance with this Lease, the provisions of Section 20(a) herein shall apply
to any such holding over by Tenant with respect to the Premises and Tenant shall
not be released from its obligations, covenants and agreements under the Lease
related to the Premises during such holdover period. Tenant’s rights under this
Section 20(b) may be assigned to a permitted or approved assignee or subtenant
of Tenant, provided that such assignee is occupying less not than 70% of the
initial Total Premises Rentable Square Feet at the time of Lease execution
(except for temporary periods due to casualty or remodeling).

 

 
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21.     Certain Rights Reserved by Landlord. Provided that the exercise of such
rights does not unreasonably interfere with Tenant's occupancy of the Premises,
and upon reasonable advance notice provided by Landlord to Tenant (except in
case of emergency), Landlord shall have the following rights:

 

(a)     to decorate and to make inspections, repairs, alterations, additions,
changes, or improvements, whether structural or otherwise, in and about the
Building, or any part thereof; for such purposes, to enter upon the Premises
and, during the continuance of any such work, to temporarily close doors,
entryways, public space, and corridors in the Building; to interrupt or
temporarily suspend Building services and facilities (Landlord shall use
reasonable efforts to complete any work requiring the suspension of Building
services and facilities during off-business hours when reasonably and
commercially practicable to do so); and to change the arrangement and location
of entrances or passageways, doors, and doorways, corridors, elevators, stairs,
restrooms, or other public parts of the Building;

 

(b)     to take such reasonable measures as Landlord deems advisable for the
security of the Building and its occupants, including without limitation
searching all items entering or leaving the Building; evacuating the Building
for cause, suspected cause, or for drill purposes; temporarily denying access to
the Building; and closing the Building after normal business hours and on
Saturdays, Sundays, and Holidays, subject, however, to Tenant's right to enter
when the Building is closed after normal business hours under such reasonable
regulations as Landlord may prescribe from time to time which may include by way
of example, but not of limitation, that persons entering or leaving the
Building, whether or not during normal business hours, identify themselves to a
security officer by registration or otherwise and that such persons establish
their right to enter or leave the Building;

 

(c)     to change the name by which the Building is designated (but not Tenant’s
signage); and

 

(d)     upon reasonable advance notice (which shall be a minimum of four (4)
hours), to enter the Premises during Tenant’s regular business hours (or at any
time when accompanied by a representative of Tenant) to show the Premises to
prospective purchasers, lenders, or prospective tenants. Except in the event of
an emergency, Tenant shall have an opportunity to have a Tenant representative
accompany Landlord during such entry into the Premises. As used in this Section
21(d), the phrase “Tenant shall have an opportunity to have a Tenant
representative accompany Landlord” shall mean that Landlord shall provide at
least four (4) hours prior advance notice Tenant of Landlord’s intention to
enter the Premises (which notice must be delivered by email communication to the
following email address: facilities@reachlocal.com), at a specified time, for
which entry time Tenant may provide a representative to accompany Landlord
during such entry. However, Landlord shall not be prohibited from entering the
Premises if Tenant fails to provide an escort at the appointed time. Tenant
shall have the right to change the contact address noted above upon written
notice to Landlord.

 

 
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22.     Intentionally Deleted.

 

23.     Miscellaneous.

 

(a)     Landlord Transfer. Landlord may transfer, in whole or in part, the
Project and any of its rights under this Lease. If Landlord assigns its rights
under this Lease and such assignee assumes Landlord’s obligations hereunder,
then Landlord shall thereby be released from any further obligations hereunder.

 

(b)     Landlord's Liability. The liability of Landlord to Tenant for any
default by Landlord under the terms of this Lease shall be limited to Tenant's
actual direct, but not consequential, damages therefor and shall be recoverable
from the interest of Landlord in the Project (including any rents, profits, or
other proceeds therefrom), and Landlord shall not be personally liable for any
deficiency. This section shall not be deemed to limit or deny any remedies which
Tenant may have in the event of default by Landlord hereunder which do not
involve the personal liability of Landlord.

 

(c)     Force Majeure. Other than for Tenant's monetary obligations under this
Lease and obligations which can be cured by the payment of money (e.g.,
maintaining insurance), whenever a period of time is herein prescribed for
action to be taken by either party hereto, such party shall not be liable or
responsible for, and there shall be excluded from the computation for any such
period of time, any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, governmental laws, regulations, or restrictions, or any
other causes of any kind whatsoever which are beyond the control of such party,
excluding financial difficulty.

 

(d)     Brokerage. Landlord and Tenant each warrant to the other that it has not
dealt with any broker or agent in connection with the negotiation or execution
of this Lease, other than Billingsley Property Services, Inc., Peloton
Commercial Real Estate, and Studley, Inc. whose commissions shall be paid by
Landlord. Tenant and Landlord shall each indemnify the other against all costs,
expenses, attorneys' fees, and other liability for commissions or other
compensation claimed by any other broker or agent claiming the same by, through,
or under the indemnifying party.

 

(e)     Estoppel Certificates. From time to time, either Landlord or Tenant
shall furnish, within ten (10) business days after request therefor, a signed
certificate confirming and containing such factual certifications and
representations as to this Lease as the requesting party may reasonably request.

 

(f)     Notices. All notices and other communications given pursuant to this
Lease shall be in writing and shall be (1) mailed by first class, United States
Mail, postage prepaid, certified, with return receipt requested, and addressed
to the parties hereto at the address specified in the Basic Lease Information,
(2) hand delivered to the intended address, or (3) sent by prepaid telegram,
cable, facsimile transmission, or telex followed by a confirmatory letter.
Notice sent by certified mail, postage prepaid, shall be effective three
business days after being deposited in the United States Mail; all other notices
shall be effective upon delivery to the address of the addressee. The parties
hereto may change their addresses by giving notice thereof to the other in
conformity with this provision.

 

 
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(g)     Separability. If any clause or provision of this Lease is illegal,
invalid, or unenforceable under present or future laws, then the remainder of
this Lease shall not be affected thereby and in lieu of such clause or
provision, there shall be added as a part of this Lease a clause or provision as
similar in terms to such illegal, invalid, or unenforceable clause or provision
as may be possible and be legal, valid, and enforceable.

 

(h)     Amendments; and Binding Effect. This Lease may not be amended except by
instrument in writing signed by Landlord and Tenant. No provision of this Lease
shall be deemed to have been waived by Landlord or Tenant unless such waiver is
in writing signed by Landlord or Tenant, and no custom or practice which may
evolve between the parties in the administration of the terms hereof shall waive
or diminish the right of Landlord or Tenant to insist upon the performance by
Landlord or Tenant in strict accordance with the terms hereof. The terms and
conditions contained in this Lease shall inure to the benefit of and be binding
upon the parties hereto, and upon their respective successors in interest and
legal representatives, except as otherwise herein expressly provided. This Lease
is for the sole benefit of Landlord and Tenant, and, other than Landlord's
Mortgagee, no third party shall be deemed a third party beneficiary hereof.

 

(i)     Quiet Enjoyment. Provided Tenant has performed all of the terms and
conditions of this Lease to be performed by Tenant, Tenant shall peaceably and
quietly hold and enjoy the Premises for the Term, without hindrance from
Landlord or any party claiming by, through, or under Landlord, subject to the
terms and conditions of this Lease.

 

(j)     Joint and Several Liability. If there is more than one Tenant, then the
obligations hereunder imposed upon Tenant shall be joint and several. If there
is a guarantor of Tenant's obligations hereunder, then the obligations hereunder
imposed upon Tenant shall be the joint and several obligations of Tenant and
such guarantor, and Landlord need not first proceed against Tenant before
proceeding against such guarantor nor shall any such guarantor be released from
its guaranty for any reason whatsoever.

 

(k)     Captions. The captions contained in this Lease are for convenience of
reference only, and do not limit or enlarge the terms and conditions of this
Lease.

 

(l)     No Merger. There shall be no merger of the leasehold estate hereby
created with the fee estate in the Premises or any part thereof if the same
person acquires or holds, directly or indirectly, this Lease or any interest in
this Lease and the fee estate in the leasehold Premises or any interest in such
fee estate.

 

(m)     No Offer. The submission of this Lease to Tenant shall not be construed
as an offer, nor shall Tenant have any rights under this Lease unless Landlord
executes a copy of this Lease and delivers it to Tenant.

 

 
24

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(n)     Exhibits. The following exhibits hereto are incorporated herein by this
reference:

 

EXHIBIT A-1 - Outline of Premises

EXHIBIT A-2- Legal Description of the Land

EXHIBIT B - Building Rules and Regulations

EXHIBIT C - Operating Expenses

EXHIBIT D - Tenant Finish Work: Allowance

EXHIBIT E - Renewal Option

EXHIBIT F-1 – Parking

EXHIBIT F-2 – Expansion Parking Area

EXHIBIT G - Janitorial Specifications

EXHIBIT H-1 - Signage Criteria

EXHIBIT H-2 – Tenant Logo Signs

EXHIBIT I – Landlord’s Work

EXHIBIT J – Expansion Option

EXHIBIT K – Right of First Refusal

EXHIBIT L – Right of First Offer

EXHIBIT M – Initial List of Competing Businesses

EXHIBIT N – Generator Area

EXHIBIT O – Form of Recognition Agreement

 

(o)     Entire Agreement. This Lease constitutes the entire agreement between
Landlord and Tenant regarding the subject matter hereof and supersedes all oral
statements and prior writings relating thereto. Except for those set forth in
this Lease, no representations, warranties, or agreements have been made by
Landlord or Tenant to the other with respect to this Lease or the obligations of
Landlord or Tenant in connection therewith.

 

(p)     Past Due Rent. Tenant shall pay interest on all past-due rent from the
date due until paid at the maximum lawful rate (the “Default Rate”). In no
event, however, shall the charges permitted under this Section 23.(p) or
elsewhere in this Lease, to the extent they are considered to be interest under
applicable Law, exceed the maximum lawful rate of interest.

 

(q)     Representations and Warranties. Landlord and Tenant each represent and
warrant that the person executing this Lease on its behalf is acting in his or
her capacity as an officer or partner, as applicable, with due authorization and
authority to bind Landlord or Tenant, as applicable, to this Lease. Landlord
represents and warrants that it has good title to the Project so to fully and
properly lease the Premises to Tenant as provided herein. Landlord represents
and warrants that, to Landlord’s knowledge, the Project conforms in all material
respects to all applicable laws, ordinances, rules and regulations generally
applicable to commercial office buildings in Plano, Texas, as of the date hereof
and as of the date Landlord tenders possession of the Premises to Tenant. Other
than any express warranties contained herein, neither Landlord nor Tenant make
any implied warranties of any kind or nature, and the parties hereby waive any
claims upon any such implied warranties.

 

 
25

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(r)     Environmental. Prior to “pulling” a building permit for vertical
construction of the Building (“Commencement of Construction”), Landlord shall
cause to be prepared a Phase I Environmental Report of the Land. Landlord will
provide Tenant with a copy of such environmental report promptly following
Tenant’s written request therefor, which request must be received prior to the
Commencement Date. Landlord represents and warrants that, to Landlord’s
knowledge, the Project contains no hazardous substances as currently defined
under applicable law, except those used in the operation of the Building and
which are being used in compliance with applicable law; the representation and
warranty in this sentence shall be deemed re-made as of the date Landlord
tenders possession of the Premises to Tenant.

 

(s)     Non-Exclusive Remedies; Attorney’s Fees. Except as otherwise
specifically provided in this Lease (and specifically subject to Section 23(b)),
pursuit by either Landlord or Tenant of any of the remedies expressly set forth
in this Lease shall not preclude pursuit of any other remedies provided in this
Lease or any other remedies provided at law or in equity. If either party brings
any legal action under this Lease, then the prevailing party in any such action
shall be entitled to collect its reasonable attorney’s fees and other costs and
expenses incurred by such party from the non-prevailing party.

 

24.     Contraction Option.

 

(a)     Tenant may terminate this Lease as to the part of the Premises specified
by Tenant, but subject to the qualifications in this Section 24 (the
“Surrendered Space”), by giving Landlord at least 365 days written notice (the
“Contraction Notice”) of its election to do so. Such termination shall be
effective as of the last day of the 84th Lease Month (the “Contraction Effective
Date”). For purposes of clarification, the Contraction Notice must be delivered
not later than the last day of the 72nd Lease Month.

 

(b)     The Surrendered Space must meet the following criteria: (i) the
Surrendered Space must not contain any part of the original Premises (i.e., the
Surrendered Space may only be space that Tenant added to the definition of
“Premises” after the Commencement Date); and (ii) the Surrendered Space (1) must
be contiguous, (2) must be in a location and size reasonably acceptable to
Landlord, (3) must be in a configuration that is readily leasable as one or more
suites, as reasonably determined by Landlord, and (4) must comply with local
exit separation requirements and all other laws, all at Tenant’s expense.

 

(c)     In connection with Tenant’s exercise of its contraction option pursuant
to this Section 24, Tenant shall pay a Contraction Fee (defined below) to
Landlord within 30 days following notice of the Contraction Fee Calculation
(defined below) from Landlord. As used herein, the “Contraction Fee” shall equal
the sum of (i) the Rent-Based Contraction Penalty (defined below), and (ii) the
amount that would be outstanding on a hypothetical loan on the date of the
Contraction Notice assuming (1) an original principal balance equal to the
Leasing Costs (defined below), (2) an interest rate of 8% per annum, (3) the
loan is payable in equal monthly installments of principal and interest,
beginning on the first day of the first full calendar month of the Term (as
applicable to the Surrendered Space) and ending on the first day of the last
scheduled month of the initial Term (as applicable to the Surrendered Space),
and (d) all payments were made before the Contraction Notice. The term “Leasing
Costs” means all costs incurred by Landlord in leasing the Surrendered Space to
Tenant (including leasing commissions, allowances, other tenant inducements, and
attorneys’ fees). The “Rent-Based Contraction Penalty” shall be calculated
according to the chart below:

 

Number of full Lease Months

Tenant Will Have Occupied the

Surrendered Space, as of the

Contraction Effective Date 

Rent-Based Contraction Penalty

(Expressed as the Number of Months

of Basic Rental for the Surrendered

Space, based upon the Basic Rental for

month preceding the Contraction

 Effective Date)  

83

3 months

72

4 months

60

5 months

48

6 months

36

7 months

24

8 months

 

 
26

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Promptly following receipt of the Contraction Notice from Tenant, Landlord shall
calculate the Contraction Fee and deliver written notice of the Contraction Fee
to Tenant (the “Contraction Fee Calculation”).

 

(d)     If Tenant fails timely to deliver the Contraction Notice or the
Contraction Fee, then Tenant’s right to contract the Premises under this Section
24 shall expire; time is of the essence with respect thereto. As a condition to
the effectiveness of Tenant’s contraction option, Tenant shall pay to Landlord
prior to the Contraction Effective Date any past-due amounts then outstanding
under the Lease.

 

(e)     At least 15 days before the Contraction Effective Date, for any portion
of the Surrendered Space which is less than a full floor, Tenant will do all
work necessary to separate the Surrendered Space from the balance of the
Premises, including, without limitation, the construction of demising walls, new
building standard entry, properly distributed HVAC, sprinkler, and utilities
such as electricity and telephone, carpet and painting of the Surrendered Space;
all of such work will be performed in accordance with Section 7. At Tenant's
cost Landlord will prepare an amendment to this Lease confirming the effect of
Tenant's exercise of its contraction option, including without limitation: (i)
the Contraction Effective Date; (ii) the remaining Premises; (iii) the Basic
Monthly Rent; (iv) Tenant's Proportionate Share; and (v) other matters that vary
with the size of the Premises. The Basic Monthly Rent will be a continuation of
the Basic Monthly Rent applicable prior to the Contraction Effective Date,
reduced by the Basic Monthly Rent applicable to the Surrendered Space. Landlord
and Tenant will execute the amendment prior to the Contraction Effective Date.
Tenant will perform all of its obligations regarding the Surrendered Space
(including without limitation the payment of Rent allocable to it) through the
Contraction Effective Date. All of the obligations of Tenant with regard to the
Surrendered Space that have accrued prior to the Contraction Effective Date will
survive the Contraction Effective Date.

 

 
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25.     Generator. Tenant may install, operate, and maintain one generator
(provided any above-ground fuel tank associated therewith, together with such
generator, is a single, self-contained, double-wall fuel tank unit and provided
such generator is equipped with a critical silence muffler) along with all
conduit and connections necessary to the Building and Premises (at locations
approved in advance by Landlord) reasonably necessary for Tenant’s business
operations in the Premises for emergency back-up purposes (the “Generator”,
which defined term shall also refer to any associated above-ground fuel tank and
all related equipment) at the location on the Building grounds described in
EXHIBIT N attached hereto or another location acceptable to Landlord, provided
that the installation, maintenance, use, and operation thereof complies with all
laws and architectural guidelines in effect for the area in which the Building
is located as they may be amended from time to time (the “Legal Requirements”),
and Tenant receives all approvals, consents, and permits required under the
Legal Requirements before the installation, maintenance, use, and operation
thereof. Landlord agrees to reasonably cooperate (at no cost to Landlord) with
Tenant in securing any approvals, consents and permits required for the
installation, maintenance, use and operation of the Generator. To the extent
that any permits or registrations are required for the installation or operation
of the Generator, they shall be obtained in Tenant's name. Before beginning the
installation of the Generator, Tenant shall deliver to Landlord final plans and
specifications therefor prepared by a registered professional engineer in the
State of Texas reasonably approved by Landlord and setting forth in detail the
design, location, size, and method of installation (including, without
limitation, separation walls and ventilation system) for Landlord's review and
approval, together with evidence reasonably satisfactory to Landlord that all
Legal Requirements have been satisfied. Landlord's approval of any such plans
and specifications shall not constitute a representation or warranty by Landlord
that such plans and specifications comply with the Legal Requirements; such
compliance shall be the sole responsibility of Tenant. The Generator shall be
installed and screened in a manner reasonably acceptable to Landlord, and no
underground storage tanks may be installed or used in connection therewith.
Additionally, the generator model, size and weight shall be subject in all
respects to Landlord's prior written approval, not to be unreasonably withheld.
Upon approval of the plans and specifications therefor and the size and location
thereof, Tenant may install the Generator provided that such work is coordinated
with Landlord and is performed in a good and workmanlike manner, in accordance
with all Legal Requirements and the plans and specifications therefor and in a
manner so as not to damage the Building or materially interfere with the use of
any portion of the Building while such installation is taking place; thereafter,
Tenant shall use, maintain, and operate the Generator in a good, clean, and safe
condition and in accordance with all Legal Requirements. Tenant shall repair all
damage caused by the installation, use, maintenance, or operation of the
Generator. If Tenant fails to do so within 30 days after Landlord’s request,
Landlord may perform such work and Tenant shall pay to Landlord all reasonable
costs incurred in connection therewith within 30 days after Landlord’s written
request therefor. Upon the earlier of the end of the Term or after Tenant’s
right to possess the Premises has been terminated, Tenant shall remove the
Generator if requested to do so by Landlord and repair all damage caused by such
removal and restore the portion of the Building grounds where it was located to
its condition immediately before the installation thereof. If Tenant fails to do
so within 30 days after Landlord’s request therefor, Landlord may perform such
work and Tenant shall pay to Landlord all reasonable costs incurred in
connection therewith within 30 days after Landlord’s written request therefor or
Landlord may deem the Generator abandoned by Tenant and use such Generator
without compensation to Tenant. Tenant shall properly fuel and immediately
remove from the area surrounding the Generator any spills or other leaks of
fluid from the Generator. Additionally, Tenant shall ensure that the Generator
is properly exhausted at all times so no odors emanate therefrom. The Generator
shall be installed, used, maintained, operated, and removed at Tenant's risk and
expense and Tenant shall maintain insurance in respect thereof reasonably
satisfactory to Landlord, listing Landlord and the Building manager, as
additional insureds. All testing of the Generator shall be performed after
normal business hours and must be coordinated with Landlord. It is the intention
of the parties that Tenant bear all risks relating to the installation, use,
maintenance, operation and removal of the Generator; therefore, Tenant shall
defend, indemnify and hold harmless Landlord, its agents and their respective
affiliates from all losses, claims, costs and liabilities arising in connection
with or relating to the installation, maintenance, use, operation and removal of
the Generator, including, without limitation, that arising from Landlord's
negligence (other than its sole or gross negligence). The term “affiliate” shall
mean any person or entity which, directly or indirectly, controls, is controlled
by, or is under common control with the party in question.

 

 
28

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26.     Signage.

 

(a)     Subject to (i) Landlord's prior approval of the location, design, size,
color, material composition, and plans and specifications therefor, which
approval may not be unreasonably withheld, conditioned or delayed if such plans
and specifications comply with the Sign Requirements, and (ii) compliance with
Landlord’s written signage criteria, Tenant may, at its sole risk and expense,
construct building fascia signage on the southern, northern, and western façades
of the Building (the “Signs”). If Landlord grants its approval, Tenant shall
erect the Signs in accordance with the approved plans and specifications, in a
good and workmanlike manner, in accordance with all laws, regulations,
restrictions (governmental or otherwise), and architectural guidelines in effect
for the area in which the Building is located and has received all requisite
approvals thereunder (the “Sign Requirements”), and in a manner so as not to
unreasonably interfere with the use of the Building grounds while such
construction is taking place; thereafter, Tenant shall maintain the Signs in a
good, clean, and safe condition in accordance with the Sign Requirements. After
the end of the Term or after Tenant's right to possess the Premises has been
terminated, Landlord may require that Tenant remove the Signs by delivering to
Tenant written notice thereof within 30 days after the end of the Term. Upon the
earlier of the end of the Term or after Tenant’s right to possess the Premises
has been terminated, Tenant shall remove the Signs, repair all damage caused
thereby, and restore the Building to its condition before the installation of
the Signs. If Tenant fails to timely do so, Landlord may, at Tenant's expense,
remove the Signs, perform the related restoration and repair work and dispose of
the Signs in any manner Landlord deems appropriate. Notwithstanding anything to
the contrary set forth above, Landlord hereby consents to use of the
prototypical logos for ReachLocal and ClubLocal including font, style, and color
described in EXHIBIT H-2 attached hereto so long as such logos are in compliance
with applicable legal requirements and are otherwise in compliance with the Sign
Requirements. Any future changes to such approved prototypical logos shall
require Landlord’s consent thereto prior to incorporation into the Signs, which
consent shall not be unreasonably withheld, conditioned, or delayed.

 

(b)     Landlord will install, at Tenant’s expense, a sign panel (the “Sign
Panel”) displaying Tenant’s name on Landlord’s monument sign situated on the
grounds of the Building, which monument sign is to be constructed by Landlord at
Landlord’s sole cost and expense. Upon the earlier of the end of the Term or
after Tenant’s right to possess the Premises has been terminated, Tenant shall
remove the Sign Panel, repair all damage caused thereby, and restore the grounds
on which the Sign Panel was located to their condition before the installation
of the Sign Panel within ten days after Landlord’s request therefor. If Tenant
fails to timely do so, Landlord may, without compensation to Tenant and at
Tenant’s expense, remove the Sign Panel, perform the related restoration and
repair work and dispose of the Sign Panel in any manner Landlord deems
appropriate.

 

 
29

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(c)     Provided (1) no Event of Default has occurred hereunder beyond
applicable notice and cure periods unless such Event of Default has been cured
to the satisfaction of Landlord, and (2) Tenant or a Permitted Transferee is
then currently occupying (meaning the Tenant or a Permitted Transferee is
actually occupying such space, and has not sublet or assigned such space) not
less than 50% of the Total Building Rentable Square Feet for the Permitted Use
and conducting business therein (except for temporary periods due to casualty or
remodeling), Landlord will not permit any other tenant signage on the Building
fascia. Landlord may request Tenant’s consent for first-floor exterior Building
signage for a tenant occupying not less than 25,000 square feet in the Building;
Tenant shall not unreasonably withhold its consent to such request.

 

(d)     The rights granted to Tenant under this Section 26 are personal to
ReachLocal, Inc., may not be assigned to any party other than a Permitted
Transfer, and may be revoked by Landlord if Tenant ceases to occupy at least 50%
of the Total Building Rentable Square Feet.

 

(e)     It is the intention of the parties that Tenant bear all risks relating
to the installation, use, maintenance, operation and removal of the Signs and
the Sign Panel; therefore, Tenant shall defend, indemnify and hold harmless
Landlord, its agents and their respective affiliates from all losses, claims,
costs and liabilities arising in connection with or relating to the
installation, maintenance, use, operation and removal of the Signs and the Sign
Panel, including, without limitation, that arising from Landlord's negligence
(other than its sole or gross negligence).

 

(f)     Landlord, at Landlord’s sole cost and expense, shall install a directory
(which may be electronic at Landlord’s sole discretion) in the lobby naming
Tenant and suite entry signage.

 

27.     Rooftop Communication Devices. Provided that Tenant complies with the
terms of this Section 27, Tenant may, at its risk and expense, install up to
four satellite dishes, up to four antennas, and related wiring (collectively,
the “Rooftop Communication Devices”) on the roof of the Building at a location
approved by Landlord. Before installing any Rooftop Communication Devices,
Tenant shall submit to Landlord for its approval (which approval shall be in
Landlord’s sole discretion) plans and specifications which (a) specify in detail
the design, location, size, and frequency of the Rooftop Communication Devices
and (b) are sufficiently detailed to allow for the installation of the Rooftop
Communication Devices in a good and workmanlike manner and in accordance with
all laws. If Landlord approves of such plans, Tenant shall install (in a good
and workmanlike manner), maintain and use the Rooftop Communication Devices in
accordance with all laws and shall obtain all permits required for the
installation and operation thereof; copies of all such permits must be submitted
to Landlord before Tenant begins to install the any of the Rooftop Communication
Devices. Tenant shall thereafter maintain all permits necessary for the
maintenance and operation of the Rooftop Communication Devices while they are on
the Building and operate and maintain the Rooftop Communication Devices in such
a manner so as not to unreasonably interfere with any other satellite, antennae,
or other transmission facility on the Building's roof or in the Building.
Landlord may require that Tenant screen the Rooftop Communication Devices with a
parapet wall or other screening device acceptable to Landlord. Tenant shall
maintain the Rooftop Communication Devices and the screening therefor in good
repair and condition. Tenant may only use the Rooftop Communication Devices in
connection with Tenant's business. Tenant shall not allow any third party to use
such equipment, whether by sublease, license, occupancy agreement or otherwise.
Tenant shall, at its risk and expense, remove the Rooftop Communication Devices,
within five days after the occurrence of any of the following events: (i) the
termination of Tenant's right to possess the Premises; (ii) the termination of
the Lease; (iii) the expiration of the Term; or (iv) Tenant's permanently
vacating the Premises. If Tenant fails to do so, Landlord may remove the Rooftop
Communication Devices and store or dispose of it in any manner Landlord deems
appropriate without liability to Tenant; Tenant shall reimburse Landlord for all
costs incurred by Landlord in connection therewith within ten days after
Landlord's request therefor. Tenant shall repair any damage to the Building
caused by or relating to the Rooftop Communication Devices, including that which
is caused by its installation, maintenance, use, or removal. All work relating
to the Rooftop Communication Devices shall, at Tenant's expense, be coordinated
with Landlord's roofing contractor so as not to affect any warranty for the
Building's roof. It is the intention of the parties that Tenant bear all risks
relating to the installation, use, maintenance, operation and removal of the
Rooftop Communication Devices; therefore, Tenant shall defend, indemnify and
hold harmless Landlord, its agents and their respective affiliates from all
losses, claims, costs and liabilities arising in connection with or relating to
the installation, maintenance, use, operation and removal of the Rooftop
Communication Devices, including, without limitation, that arising from
Landlord's negligence (other than its sole or gross negligence). Tenant’s rights
under this Section 27 shall terminate if the Premises are reduced to less than
40,000 rentable square feet.

 

 
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28.     Restrictive Covenant/Competing Tenants. Provided (1) no Event of Default
has occurred hereunder beyond applicable notice and cure periods unless such
Event of Default has been cured to the satisfaction of Landlord, and (2) Tenant
or a Permitted Transferee (who is engaged in the same business sector as
ReachLocal, Inc.) is then currently occupying (meaning the Tenant or a Permitted
Transferee is actually occupying such space, and has not sublet or assigned such
space) at least 50% of the Total Building Rentable Square Feet for the Permitted
Use and conducting business therein (except for temporary periods due to
casualty or remodeling), Landlord will not execute any lease or consent to any
assignment, sublease, license or other occupancy agreement for space within the
Building with any of the companies identified in EXHIBIT L (the “Identified
Competitors”). Tenant may provide an updated list of Identified Competitors to
Landlord, not more often than twice in any 12-month period. Any new business
names added to the list of Identified Competitors must specialize in online, web
marketing services. The active list of Identified Competitors shall never exceed
20 names. This Section 28 shall not apply to any new business identified by
Tenant for inclusion as an Identified Competitor if, at the time Landlord
receives such updated list, Landlord has entered into an executed letter of
intent with such business and is diligently pursuing a transaction therewith. If
Landlord incurs any liability, claim or damage because of this Section (whether
under a claim of antitrust, restraint of trade [or other similar claim] or
otherwise), Tenant shall indemnify, defend and hold Landlord harmless for all
such liabilities, claims or damages, including reasonable attorneys’ fees and
expenses.

 

 
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29.     Expansion within International Business Park.

 

(a)     Landlord agrees to not sell or develop (other than for parking) the
approximately nine-acre portion of the parcel immediately adjacent to the Land
to the north (as such portion is depicted in EXHIBIT M hereto, the “Expansion
Land”) before the fifth anniversary of the Lease Date (the “Expansion
Reservation Period”). The provisions of this Section 29(a) shall not restrict or
in any way limit Landlord’s ability to enter into transactions for the Expansion
Land with affiliates, provided that any such affiliates shall be subject to the
restrictions set forth in this Section 29(a).

 

(b)     During the Term, Landlord agrees to negotiate in good faith with Tenant
regarding Tenant’s future expansion needs within any other building within the
International Business Park then owned by Landlord.

 

30.     Lease Dependent Upon Construction Financing. Tenant acknowledges that,
although Landlord owns the Property, Landlord has not yet received binding
financing commitments for the construction of the Building. Landlord agrees to
diligently pursue construction financing on commercially reasonable terms (the
“Project Financing”). If Landlord is unable, despite diligent efforts, to secure
a binding commitment for the Project Financing within 180 days following the
Lease Date, then Landlord may terminate this Lease by written notice to Tenant.
Tenant agrees to reasonably cooperate with Landlord’s efforts to secure the
Project Financing (including, by way of example, providing Tenant’s financial
information if requested by a potential provider of the Project Financing),
although Tenant shall have no obligation to expend funds to do so.

 

31.     Vending Machines. Tenant may install vending machines in the Premises
provided that such machines (1) are in locations not visible from the Common
Areas, (2) do not draw electrical usage in excess of a standard vending machine
for food or beverages or consume more than building standard electricity, and
(3) are for the sole use of Tenant and its employees and invitees and are not
used for vending to others.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

 

 
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DATED as of the date first above written.

 

  LANDLORD:             EPC – IBP 16, LLC, a Texas limited liability company    
By:

EPC Exchange Corporation, a Washington corporation, its Sole Member

                       By: /s/ Kenneth D.
Mabry                                                                          
    Name: Kenneth D.
Mabry                                                                           
    Title:
Manager                                                                                             
                   

TENANT: 

                 

REACHLOCAL, INC., a Delaware corporation   

                            By: /s/ Ross G.
Landsbaum                                                                                        
    Name: Ross G.
Landsbaum                                                                                         
    Title:
CFO                                                                                                
 

 

 
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 EXHIBIT A-1

 

OUTLINE OF THE PREMISES

 

[pic1.jpg]

 

 

 
A-1

--------------------------------------------------------------------------------

 

 

[pic2.jpg]

 

 

 
A-2

--------------------------------------------------------------------------------

 

 

 

EXHIBIT A-2

 

LEGAL DESCRIPTION OF THE LAND

 

BEING a tract of land situated in the M. Taylor Survey, Abstract No. 897, City
of Plano, Collin County, Texas, the subject tract being a portion of a tract of
land conveyed to Crow-Billingsley #17, Ltd. according to the deed recorded in
Volume 1771, Page 658 of the Deed Records, Collin County, Texas (DRCCT), a
portion of a tract of land conveyed to Crow-Billingsley #17, Ltd. according to
the deed recorded in Volume 1461, Page 554 DRCCT, and a portion of a tract of
land conveyed to The Residences of Austin Ranch No. 1, according to the deed
recorded in Document No. 20130205000162920 DRCCT, the subject tract being more
particularly described as follows;

 

BEGINNING at a 1/2" iron rod found on the north line of West Plano Parkway (a
110 foot right-of-way) for the most southerly southeast corner of said
Crow-Billingsley #17 tract, and being the southwest corner of Lot 1, Block A,
CMS Addition, an addition recorded in Cabinet M, Page 637, Plat Records, Collin
County, Texas (PRCCT);

 

THENCE along the north and east line of West Plano Parkway, the following:

 

N 64°43'06" W, 118.18 feet;

 

Around a tangent curve to the right having a central angle of 31°31'49", a
radius of 1145.00 feet, a chord of N 48°57'11" W - 622.18 feet, an arc length of
630.10 feet;

 

Around a non-tangent curve to the right having a central angle of 11°05'57", a
radius of 1127.63 feet, a chord of N 27°38'14" W - 218.10 feet, an arc length of
218.44 feet;

 

And around a non-tangent curve to the right having a central angle of 15°50'55",
a radius of 1138.39 feet, a chord of N 14°18'28" W – 313.88 feet, an arc length
of 314.89 feet;

 

THENCE N 89°06'41" E, 1127.92 feet departing said right-of-way, to the west line
of a tract conveyed to Sewell Village Cadillac, recorded in Volume 5837, Page
709 DRCCT;

 

THENCE S 00°34'19" E, 311.14 feet along the west line thereof, and along the
west line of a tract conveyed to UH Storage, LP, recorded in Volume 5669, Page
4336 DRCCT, to the southwest corner thereof, and being on the north line of Lot
2, Block A, CMS Addition, an addition recorded in Cabinet M, Page 374 PRCCT;

 

THENCE S 89°25'41" W, 384.05 feet along the north line of Lots 2 and 1, CMS
Addition, to a 1/2" iron rod found;

 

THENCE S 00°41'35" E, 658.99 feet along the west line of said Lot 1, CMS
Addition, to the PLACE OF BEGINNING with the subject tract containing 619,998
square feet or 14.233 acres of land.

 

 
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EXHIBIT B

 

BUILDING RULES AND REGULATIONS

 

 

The following rules and regulations shall apply to the Project and the
appurtenances thereto:

 

 

1.

Sidewalks, doorways, vestibules, halls, stairways, and other similar areas shall
not be obstructed by tenants or used by any tenant for purposes other than
ingress and egress to and from their respective leased premises and for going
from one to another part of the Building.

 

 

2.

Plumbing, fixtures and appliances shall be used only for the purposes for which
designed, and no sweepings, rubbish, rags or other unsuitable material shall be
thrown or deposited therein. Damage resulting to any such fixtures or appliances
from misuse by a tenant or its agents, employees or invitees, shall be paid by
such tenant.

 

 

3.

No signs, advertisements or notices shall be painted or affixed on or to any
windows or doors or other part of the Building without the prior written consent
of Landlord. No nails, hooks or screws (other than those which are necessary to
hang paintings, prints, pictures, or other similar items on the Premises'
interior walls) shall be driven or inserted in any part of the Building except
by Building maintenance personnel. No curtains or other window treatments shall
be placed between the glass and any Building standard window treatments.

 

 

4.

Landlord shall provide and maintain an alphabetical directory for all tenants in
the main lobby of the Building.

 

 

5.

Landlord shall provide all door locks in each tenant's leased premises, at the
cost of such tenant, and no tenant shall place any additional door locks in its
leased premises without Landlord's prior written consent. Landlord shall furnish
to each tenant three keys to such tenant's leased premises free of charge, with
additional keys provided at such tenant's cost, and no tenant shall make a
duplicate thereof. Security Building access cards shall be provided by Landlord
to tenants after receipt of a $10.00 deposit per card.

 

 

6.

Movement in or out of the Building of furniture or office equipment, or dispatch
or receipt by tenants of any bulky material, merchandise or materials which
require use of elevators or stairways, or movement through the Building
entrances or lobby, shall be conducted so not to unreasonably interfere with the
use of the Building by Landlord and other tenants, and if reasonably required by
Landlord, under its supervision and control. Tenant assumes all risks of and
shall be liable for all damage to articles moved and injury to persons or public
engaged or not engaged in such movement, including equipment, property and
personnel of Landlord if damaged or injured as a result of acts in connection
with carrying out this service for such tenant.

 

 
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7.

All damage to the Building caused by the installation, placement, or removal of
any property of a tenant, or done by a tenant's property while in the Building,
shall be repaired at the expense of such tenant. No tenant shall be liable for
any damage resulting solely from the weight of any items placed in the Building
by such tenant provided such items do not, in the aggregate, exceed the building
weight loads specified by Landlord.

 

 

8.

Corridor doors, when not in use, shall be kept closed. Nothing shall be swept or
thrown into the corridors, halls, elevator shafts or stairways. No birds or
animals other than animals assisting the disabled shall be brought into or kept
in, on or about any tenant's leased premises. No portion of any tenant's leased
premises shall at any time be used or occupied as sleeping or lodging quarters.

 

 

9.

Tenant shall cooperate with Landlord's employees in keeping the Building and its
leased premises neat and clean. Except in connection with Tenant’s break area,
Tenant shall not employ any person for the purpose of such cleaning other than
the Building's cleaning and maintenance personnel.

 

 

10.

To ensure orderly operation of the Building, no regular deliveries of ice,
mineral or other water, towels, newspapers, etc. shall be delivered to any
leased area except by persons demonstrating appropriate insurance coverage to
Landlord. Periodic deliveries from restaurants, caterers, UPS, Federal Express
and similar deliveries shall not be subject to the foregoing requirement.

 

 

11.

Tenant shall not make or permit any improper, objectionable or unpleasant noises
or odors in the Building or otherwise interfere in any way with other tenants or
persons having business with them.

 

 

12.

No machinery of any kind (other than normal office equipment, office training
equipment and kitchen equipment in break area) shall be operated by any tenant
on its leased area without Landlord's prior written consent, nor shall any
tenant use or keep in the Building any flammable or explosive fluid or substance
not approved in writing in advance by Landlord, except for normal office
supplies and cleaning solvents.

 

 

13.

Landlord will not be responsible for lost or stolen personal property, money or
jewelry from tenant's leased premises or public or common areas regardless of
whether such loss occurs when the area is locked against entry or not.

 

 

14.

Any vending machines contained in any leased premises shall be for the sole use
of the applicable tenant, its employees and guests.

 

 

15.

All mail chutes located in the Building shall be available for use by Landlord
and all tenants of the Building according to the rules of the United States
Postal Service.

 

 

16.

No smoking of any type is permitted in any portion of the Building, including
any portion thereof leased by tenants. Landlord shall designate smoking areas
outside of the Building.

 

 

17.

No firearms or weapons of any type are permitted upon the Land or within the
Project.

 

 
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18.

While at the Project, Tenant, its employees, agents and guests shall behave in a
manner consistent with that expected in a Class A office building located in
North Dallas.

 

 

19.

Tenant shall notify Landlord before holding an event in a Common Area of the
Project or serving alcohol in the Common Area.

 

 

20.

In order to maintain and operate the parking areas in an orderly manner,
Landlord reserves the right to establish any reasonable system of parking
monitoring, including the issuance of vehicle identification stickers, and all
persons parking in the parking areas shall comply with such system. Tenant and
Tenant’s employees shall park their cars only in those portions of the parking
areas that are from time to time designated for that purpose by Landlord.
Landlord shall have the right from time to time to relocate parking areas within
the Project for use by Tenant. Tenant shall furnish in writing the make, model,
color and state automobile license number (automobile license numbers to be
submitted on a yearly basis) assigned to Tenant’s cars within thirty (30) days
after taking possession of the Premises and shall thereafter notify Landlord in
writing of any changes within five (5) days. In the event Tenant or its
employees, agents or licensees fail to park their cars in the parking areas so
designated from time to time by Landlord, then any requirements in the Lease
regarding prior notice to Tenant or the expiration of any grace period, or both,
shall not apply and Landlord at its option shall have the following right and
option, but only after first placing one prior written notice of violation on
vehicles that are parked in violation of these parking rules and regulations, to
tow such vehicles away each at Tenant’s or the vehicle owner’s cost and expense.
Parking areas shall be used only for parking vehicles no longer than full-size
passenger automobiles, SUV’s or ½ ton pick-up trucks. The maintenance, washing,
waxing or cleaning of vehicles in the parking structure or elsewhere in the
Project is prohibited. Such parking use as is herein provided is intended merely
as a license only and no bailment is intended or shall be created hereby.

 

 

21.

Tenant shall provide Landlord forty-eight (48) hour notice if it intends to
operate any form of shuttle or bus service (whether on a recurring basis or for
a one-time special event). In order to maintain and operate the parking areas in
an orderly manner and provide for the safety of the tenants, Landlord reserves
the right to designate drop-off and pick-up locations and traffic flow patterns.

 

 
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 EXHIBIT C

OPERATING EXPENSES

 

1.     Tenant shall pay Tenant’s Proportionate Share of Basic Cost (defined
below). Landlord shall make and notify Tenant of its good faith estimate of
Tenant’s Proportionate Share of Basic Cost for the applicable calendar year (or
part thereof), whereafter, Tenant shall pay to Landlord, in advance, concurrent
with the monthly payment of Basic Rental, an amount equal to Tenant’s
Proportionate Share of Basic Cost for the year divided by 12 (or such lesser
number of months as applicable). Landlord shall furnish to Tenant a written
statement (the “Annual Operating Statement”) reflecting the Basic Cost for the
calendar year (as may be adjusted as provided herein). Said statement shall be
furnished by April 1 immediately following the applicable calendar year, or as
soon thereafter as practicable. From time to time during any calendar year,
Landlord may re-estimate the Basic Cost for that calendar year and the monthly
installments of Basic Cost payable by Tenant shall be adjusted accordingly so
that, by the end of the calendar year in question, Tenant shall have paid the
full Tenant’s Proportionate Share of Basic Cost as estimated by Landlord for
such year. The Basic Cost shall be prorated for any portion of the Term which is
less than a full calendar year.

 

2.     The term “Basic Cost” shall mean all expenses and disbursements of every
kind (subject to the limitations set forth below) which Landlord incurs, pays or
becomes obligated to pay in connection with the ownership, operation, and
maintenance of the Project (including the associated parking facilities),
determined in accordance with modified federal income tax basis accounting
consistently applied, including but not limited to the following:

 

(a)     Wages and salaries of all employees engaged on-site in the Project in
the operation, repair, replacement, maintenance, landscaping and security of the
Project, including taxes, insurance and benefits relating thereto, such costs to
be allocated based on the relative rentable square footage of the buildings
directly managed by these personnel if they are providing services to multiple
buildings and/or projects;

 

(b)     All supplies and materials used in the operation, maintenance,
landscaping, repair, replacement, and security of the Project;

 

(c)     Annual cost of all capital improvements made to the Project which
although capital in nature can reasonably be expected to reduce the normal
operating costs of the Project, provided that in no event may such cost of such
improvements exceed the anticipated cumulative reduction in operating costs
resulting from such improvement, as well as all capital improvements made in
order to comply with any law hereafter promulgated by any governmental
authority, in each case as amortized over the useful economic life of such
improvements as determined in accordance with modified federal income tax basis
accounting consistently applied;

 

(d)     Cost of all utilities, other than the cost of utilities paid directly by
Tenant or actually reimbursed to Landlord by Tenant or other Building tenants
(including Tenant under Section 4 (b) of the Lease);

 

 
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(e)     Cost of any insurance or insurance related expense applicable to the
Project and Landlord's personal property used in connection therewith;

 

(f)     All taxes and assessments and governmental charges whether federal,
state, county or municipal, and whether they be by taxing or management
districts or authorities presently taxing or by others, subsequently created or
otherwise, and any other taxes and assessments attributable to the Project (or
its operation), excluding, however, federal and state taxes on income
(collectively, “Taxes”) (and Landlord shall make reasonable and diligent
efforts, as deemed necessary or appropriate in Landlord’s reasonable discretion,
to contest property valuations and otherwise minimize Taxes which may include
retaining a tax consultant to assist in determining the fair tax valuation of
the Project and protesting any unfair valuations, with all associated costs
being a Basic Cost). For avoidance and doubt, Taxes shall include any margin tax
and/or any other business tax under Texas Tax Code Chapter 171 and/or any
successor statutory provision for reports due under any such provision to the
extent attributable to rent and additional rent, provided that (i) if the
Landlord owns more property than the Project, Landlord shall calculate such
margin tax liability assuming that the Project was the only asset owned by
Landlord, and (ii) Taxes shall not include any margin tax attributable to a sale
of all or a portion of the Project or other capital events such as a refinancing
or a sale of ownership interests. Notwithstanding the above, if the present
method of taxation changes so that in lieu of the whole or any part of any Taxes
levied on the Project, there is levied on Landlord a capital tax directly on the
rents received therefrom or a franchise tax, assessment, or charge based, in
whole or in part, upon such rents for the Building, then all such taxes,
assessments, or charges, or the part thereof so based, shall be deemed to be
included within the term “Taxes” for the purposes hereof;

 

(g)     Cost of repairs, replacements, and general maintenance of the Project,
other than replacement of the Building Systems that is capital in nature (unless
such replacement is a permitted capital expenditure pursuant to subsection (c)
above), roof, foundation and exterior walls of the Building;

 

(h)     Cost of service or maintenance contracts with independent contractors
for the operation, maintenance, landscaping, repair, replacement, or security of
the Project (including, without limitation, alarm service, window cleaning, and
elevator maintenance);

 

(i)     A management fee, which may be paid to Landlord or any affiliates
thereof, not to exceed 4% of the gross scheduled rent of the Building (Tenant’s
Proportionate Share of such management fee shall not exceed 4% of Basic Rental
payable with respect to the Premises);

 

(j)     Costs for landscaping and maintaining the medians within the Park, such
costs to be allocated based on a fraction of which the numerator is the linear
footage of frontage of the Project to International Parkway and the denominator
which is the total linear footage of frontage in the Park bounded by the
medians; and

 

 
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(k)     Security for the Project, such costs to be allocated to each building
based on relative rentable square footage when multiple buildings are covered by
one contract.

 

Any Basic Cost incurred in connection with any work performed, or services
provided, to or for the benefit of one or more of the buildings located in the
office park of which the Project is a part and commonly referred to as the
International Business Park (the “Park”) shall be allocated between all such
buildings, including the Building, on a per square foot of rentable area basis.

 

There are specifically excluded from the definition of the term “Basic Cost”
costs (1) for capital improvements made to the Project, other than capital
improvements described in Section 2.(c) above and except for items which, though
capital for accounting purposes, are properly considered maintenance and repair
items, such as painting of common areas, replacement of carpet in elevator
lobbies, and the like; (2) for repair, replacements and general maintenance paid
by proceeds of insurance or by Tenant or other third parties, and alterations
attributable solely to tenants of the Building other than Tenant; (3) for
interest, amortization or other payments on loans to Landlord or any other costs
associated with any such loans; (4) for depreciation of the Building; (5) for
leasing commissions, marketing or advertising expenses; (6) for legal expenses,
other than those incurred for the general benefit of the Building's tenants
(e.g., tax disputes); (7) for renovating or otherwise improving space for
occupants of the Building or vacant space in the Building; (8) for correcting
defects in the construction of the Building; (9) for overtime or other expenses
of Landlord in curing defaults or performing work expressly provided in this
Lease to be borne at Landlord's expense; (10) for federal income taxes imposed
on or measured by the income of Landlord from the operation of the Project; (11)
any costs, expenses, repairs or replacements necessitated by Landlord’s gross
negligence or willful misconduct or the gross negligence or willful misconduct
of Landlord’s vendors or contractors or other tenants in the Project; (12)
amounts reimbursed to Landlord pursuant to any warranty or by any other tenant
or third party; (13) reserves for future expenses; (14) late charges or
penalties incurred as a result of Landlord’s failure to pay any bills or charges
when due; (15) salaries of officers and executives of Landlord and general
overhead of Landlord (not including any goods or services used or provided
directly for the benefit of the Project); (16) amounts incurred to remediate any
hazardous substances as defined by applicable environmental law unless caused in
whole or in part by Tenant, its officers, employees, agents, contractors or
customers; and (17) for rent or other payment due under any ground lease for any
or all the Land; (18) costs, fines, penalties or legal fees incurred due to the
late payment of any Basic Cost; (19) any amounts paid to any subsidiary or
affiliate of Landlord for goods and/or services in connection with the Project
to the extent the same exceed the cost of such services rendered by unaffiliated
third parties of comparable skill and competence. There shall be no duplication
of any Basic Cost. Basic Cost shall be “net” only, and for that purpose shall be
reduced by the amounts of any cash discounts, reimbursements, abatements,
refunds or credits actually received by Landlord (net of the reasonable costs
and expenses of obtaining the same, if any) with respect to any item of cost
that is included in Basic Cost. Landlord acknowledges and agrees that Tenant has
obtained an abatement agreement from the applicable taxing authorities which is
based in part on the number of employees maintained by Tenant at the Premises
(the “ReachLocal/City of Plano Property Tax Abatement”). Landlord hereby
covenants and agrees that Tenant shall receive the 100% of the benefit actually
derived from the ReachLoach/City of Plano Property Tax Abatement, subject to the
remainder of this section. Accordingly, notwithstanding anything to the contrary
set forth herein, Tenant’s Proportionate Share of Taxes shall be based on (i)
the Taxes that would have been payable with respect to the Project then assessed
Taxes without the benefit of the ReachLocal/City of Plano Property Tax
Abatement, less (ii) the total amount of the abatement or credit received by
Landlord with respect to the Project under the terms of the ReachLocal/City of
Plano Property Tax Abatement. Tenant shall bear full responsibility for ensuring
compliance with the ReachLocal/City of Plano Property Tax Abatement and shall
indemnify and hold harmless Landlord from any loss or cost incurred as a result
of the ReachLocal/City of Plano Property Tax Abatement (it being specifically
agreed and understood that the foregoing indemnity is intended to indemnify
Landlord against the consequences of its own negligence). Any retroactive
recoupment of abated taxes under the ReachLocal/City of Plano Property Tax
Abatement shall be paid by Tenant. Tenant acknowledges that, notwithstanding
anything to the contrary in the ReachLocal/City of Plano Property Tax Abatement,
Tenant may not pursue its own appeal of the Building’s taxable value.

 

 
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The Annual Operating Statement shall include (i) a statement of Landlord's
actual Basic Cost for the previous year adjusted as provided in Section 1 of
this Exhibit and (ii) a copy of all Tax bills for the previous year together
with a calculation of Tenant's Proportionate Share of such Taxes and the amount
of any abatements, discounts or credits applicable to such Taxes. If the Annual
Operating Statement reveals that Tenant paid more for Basic Cost than the actual
Tenant’s Proportionate Share of Basic Cost in the year for which such statement
was prepared, then Landlord shall credit or reimburse Tenant for such excess
within thirty (30) days after delivery of the Annual Operating Statement;
conversely, if Tenant paid less than the actual Tenant’s Proportionate Share of
Basic Cost, then Tenant shall pay Landlord such deficiency within thirty (30)
days after delivery of the Annual Operating Statement.

 

With respect to any calendar year or partial calendar year in which the Building
is not occupied to the extent of 95% of the rentable area thereof, the Variable
Basic Costs (defined below) for such period shall, for the purposes hereof, be
increased to the amount which would have been incurred had the Building been
occupied to the extent of 95% of the rentable area thereof; provided, however
that the total Basic Costs to be paid by tenants of the Building shall not
exceed the total amount paid by Landlord for the Basic Costs for the Project. As
used herein, “Variable Basic Costs” means any Basic Cost that is variable in
correlation with the level of occupancy of the Building.

 

Landlord shall maintain books and records reflecting the Basic Cost in
accordance with sound accounting and management practices, consistently applied,
applying the modified federal income tax basis method of accounting. Upon
receipt of the Annual Operating Statement, Tenant, at its expense, shall have
the right, upon thirty (30) days written notice to Landlord, to audit or cause
to be audited the financial records for the Project (including, without
limitation, Landlord’s paid tax receipts) for the period reflected in such
statement and for the two (2) years prior to the period reflected in such
statement. Such audit must be completed during normal business hours in the
property manager’s office or other location reasonably designated by Landlord in
the Dallas metropolitan area and within one hundred eighty (180) days of
Tenant’s receipt of such statement. In the event such audit reflects that Tenant
has been overcharged for Tenant’s Proportionate Share of Basic Cost by 5% or
more, Landlord shall pay to Tenant the reasonable cost of the audit within
thirty (30) days following receipt by Landlord of written demand. Landlord shall
credit any overpayment determined by the final approved audit report against the
next Basic Rental due and owing by Tenant or, if no further Rent is due, refund
such overpayment directly to Tenant within thirty (30) days of determination.
Likewise, Tenant shall pay Landlord any underpayment determined by the final
approved audit report within thirty (30) days of determination. The foregoing
obligations shall survive the Expiration Date.

 

For purposes of calculating Tenant’s Proportionate Share of Basic Cost, the
maximum increase in the amount of Controllable Basic Cost (defined below) that
may be included in calculating such Tenant’s Proportionate Share of Basic Cost
for each calendar year after the third full calendar year of the Term shall be
limited to 5% per calendar year on a cumulative, compounded basis; for example,
the maximum amount of Controllable Basic Cost that may be included in Tenant’s
Proportionate Share of Basic Cost for each calendar year after the third full
calendar year of the Term shall equal the product of the Controllable Basic Cost
for the third full calendar year of the Term and the following percentages for
the following calendar years: 105% for the fourth full calendar year of the
Term; 110.25% for the fifth full calendar year of the Term; etc. “Controllable
Basic Cost” means all Basic Cost which are within the reasonable control of
Landlord; thus, excluding taxes, insurance, utilities, snow removal costs, and
costs incurred to comply with governmental requirements.

 

 
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 EXHIBIT D

 

TENANT FINISH-WORK: ALLOWANCE

 

1.     Acceptance of Premises. Except as set forth in this Exhibit or as
required by Landlord’s Work, Tenant will accept the Premises in accordance with
Section 3(b) of the Lease.

 

2.     Space Plans.

 

(a)     Preparation and Delivery. On or before December 16, 2013 (the “Space
Plans Delivery Deadline”), Tenant shall deliver to Landlord a space plan
prepared by Merriman Associates/Architects, Inc. or another design consultant
reasonably acceptable to Landlord (the “Architect”) depicting improvements to be
installed in the Premises (the “Space Plans”).

 

(b)     Approval Process. Landlord shall notify Tenant whether it approves of
the submitted Space Plans within five business days after Tenant’s submission
thereof. If Landlord disapproves of such Space Plans, then Landlord shall notify
Tenant thereof specifying in reasonable detail the reasons for such disapproval,
in which case Tenant shall, within five business days after such notice, revise
such Space Plans in accordance with Landlord’s objections and submit to Landlord
for its review and approval. Landlord shall notify Tenant in writing whether it
approves of the resubmitted Space Plans within three business days after its
receipt thereof. This process shall be repeated until the Space Plans have been
finally approved by Landlord and Tenant. If Landlord fails to notify Tenant that
it disapproves of the initial Space Plans within five business days (or, in the
case of resubmitted Space Plans, within three business days) after the
submission thereof, then Landlord shall be deemed to have approved the Space
Plans in question.

 

3.     Working Drawings.

 

(a)     Preparation and Delivery. On or before the 60th day following the date
on which the Space Plans are approved (or deemed approved) by Landlord and
Tenant (the “Working Drawings Delivery Deadline”), Tenant shall provide to
Landlord for its approval final working drawings, prepared by the Architect, of
all improvements that Tenant proposes to install in the Premises which approval
may not be unreasonably withheld, conditioned or delayed; such working drawings
shall include the partition layout, ceiling plan, electrical outlets and
switches, telephone outlets, drawings for any modifications to the mechanical
and plumbing systems of the Building, and detailed plans and specifications for
the construction of the improvements called for under this Exhibit in accordance
with all applicable laws.

 

(b)     Approval Process. Landlord shall notify Tenant whether it approves of
the submitted working drawings within five business days after Tenant’s
submission thereof. If Landlord disapproves of such working drawings, then
Landlord shall notify Tenant thereof specifying in reasonable detail the reasons
for such disapproval, in which case Tenant shall, within seven business days
after such notice, revise such working drawings in accordance with Landlord’s
objections and submit the revised working drawings to Landlord for its review
and approval. Landlord shall notify Tenant in writing whether it approves of the
resubmitted working drawings within five business days after its receipt
thereof. This process shall be repeated until the working drawings have been
finally approved by Tenant and Landlord. If Landlord fails to notify Tenant that
it disapproves of the initial working drawings within ten business days (or, in
the case of resubmitted working drawings, within five business days) after the
submission thereof, then Landlord shall be deemed to have approved the working
drawings in question.

 

 
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(c)     Landlord’s Approval; Performance of Work. If any of Tenant’s proposed
construction work will affect the Building’s Structure or the Building’s
Systems, then the working drawings pertaining thereto must be approved by the
Building’s engineer of record. Landlord’s approval of such working drawings
shall not be unreasonably withheld, provided that (1) they comply with all laws,
(2) the improvements depicted thereon do not adversely affect (in the reasonable
discretion of Landlord) the Building’s Structure or the Building’s Systems
(including the Building’s restrooms or mechanical rooms), the exterior
appearance of the Building, or the appearance of the Building’s common areas or
elevator lobby areas, and (3) such working drawings are sufficiently detailed to
allow construction of the improvements in a good and workmanlike manner. As used
herein, “Working Drawings” means the final working drawings approved by
Landlord, as amended from time to time by any approved changes thereto;
“Tenant’s Work” means all improvements to be constructed in accordance with and
as indicated on the Working Drawings, together with any work required by
governmental authorities to be made to other areas of the Building as a result
of the improvements indicated by the Working Drawings; and “Building’s
Structure” means the Building’s exterior walls, roof, elevator shafts, footings,
foundations, structural portions of load-bearing walls, structural floors and
subfloors, and structural columns and beams. Landlord’s approval of the Working
Drawings shall not be a representation or warranty of Landlord that such
drawings are adequate for any use or comply with any Law, but shall merely be
the consent of Landlord thereto. Tenant shall, at Landlord’s request, sign the
Working Drawings to evidence its review and approval thereof. After the Working
Drawings have been approved, Tenant shall cause Tenant’s Work to be performed in
accordance with the Working Drawings.

 

4.     Contractors; Performance of Work. The Tenant’s Work shall be performed
only by licensed contractors and subcontractors approved in writing by Landlord,
which approval shall not be unreasonably withheld. All contractors and
subcontractors shall be required to procure and maintain insurance against such
risks, in such amounts, and with such companies as Landlord may reasonably
require. Certificates of such insurance, with paid receipts therefor, must be
received by Landlord before Tenant’s Work is commenced. The Tenant’s Work shall
be performed in a good and workmanlike manner free of defects, shall
substantially conform with the Working Drawings, and shall be performed in such
a manner and at such times as and not to interfere with or delay Landlord’s
other contractors, the operation of the Building, and the occupancy thereof by
other tenants. All contractors and subcontractors shall contact Landlord and
schedule time periods during which they may use Building facilities in
connection with Tenant’s Work (e.g., elevators, excess electricity, etc.), and
Landlord shall not unreasonably withhold its consent to any requested
scheduling.

 

 
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5.     Construction Contracts.

 

(a)     Tenant’s General Contractor. Tenant shall enter into a construction
contract with a general contractor selected by Tenant and approved by Landlord
in a form acceptable to Tenant’s representative for Tenant’s Work, which shall
comply with the provisions of this Section 5 and provide for, among other
things, (1) a one-year warranty for all defective Work; (2) a requirement that
Tenant’s Contractor maintain general commercial liability insurance of not less
than a combined single limit of $5,000,000, naming Landlord, Landlord’s property
management company, Landlord’s asset management company, Landlord’s Mortgagee,
Tenant, and each of their respective Affiliates as additional insureds; (3) a
requirement that the contractor perform Tenant’s Work in substantial accordance
with the Space Plans and the Working Drawings and in a good and workmanlike
manner; (4) a requirement that the contractor is responsible for daily cleanup
work and final clean up (including removal of debris); and (5) those items
described in Section 5(b) below (collectively, the “Approval Criteria”).
Landlord shall have three business days to notify Tenant whether it approves the
proposed construction agreements. If Landlord disapproves of the proposed
construction agreements, then it shall specify in reasonable detail the reasons
for such disapproval, in which case Tenant shall revise the proposed
construction agreements to correct the objections and resubmit them to Landlord
within two business days after Landlord notifies Tenant of its objections
thereto, following which Landlord shall have two business days to notify Tenant
whether it approves the revised construction agreements. If Landlord fails to
notify Tenant that it disapproves of the construction agreements within three
business days after the initial construction agreements or two business days
after the revised construction agreements (as the case may be) are delivered to
Landlord, then Landlord shall be deemed to have approved the construction
agreements.

 

(b)     All Construction Contracts. Unless otherwise agreed in writing by
Landlord and Tenant, each of Tenant’s construction contracts shall: (1) provide
a schedule and sequence of construction activities and completion reasonably
acceptable to Landlord, (2) be in a contract form that satisfies the Approval
Criteria, (3) require the contractor and each subcontractor to name Landlord,
Landlord’s property management company, Landlord’s asset management company, and
Tenant as additional insured on such contractor’s insurance maintained in
connection with the construction of the Work, (4) be assignable following an
Event of Default by Tenant under the Lease to Landlord and Landlord’s
Mortgagees, and (5) contain at least a one-year warranty for all workmanship and
materials.

 

6.     Change Orders. Tenant may initiate changes in Tenant’s Work. Each such
change must receive the prior written approval of Landlord, such approval not to
be unreasonably withheld or delayed; however, if such requested change would
adversely affect (in the reasonable discretion of Landlord) (1) the Building’s
Structure or the Building’s Systems (including the Building’s restrooms or
mechanical rooms), (2) the exterior appearance of the Building, (3) the
appearance of the Building’s common areas or elevator lobby areas, or (4) the
timeline for the substantial completion of Landlord’s Work. If no event will any
change order requested by Tenant extend the 120-day construction period set
forth in the definition of the Commencement Date, Landlord may withhold its
consent in its sole and absolute discretion. Tenant shall, upon completion of
the Work, furnish Landlord with an accurate architectural “as-built” plan of
Tenant’s Work as constructed, which plan shall be incorporated into this
Exhibit D by this reference for all purposes. If Tenant requests any changes to
Tenant’s Work described in the Space Plans or the Working Drawings, then such
increased costs and any additional design costs incurred in connection therewith
as the result of any such change shall be added to the Total Construction Costs.

 

 
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7.     Definitions. As used in this Exhibit “Substantial Completion,”
“Substantially Completed,” and any derivations thereof mean Tenant’s Work in the
Premises is completed (as reasonably determined by Landlord’s architect) in
substantially accordance with the Working Drawings. Substantial Completion shall
have occurred even though minor details of construction, decoration, landscaping
and mechanical adjustments remain to be completed.

 

8.     Walk-Through; Punchlist. When Tenant considers Tenant’s Work in the
Premises to be Substantially Completed, Tenant will notify Landlord and within
three business days thereafter, Landlord’s representative and Tenant’s
representative shall conduct a walk-through of the Premises and identify any
necessary touch-up work, repairs and minor completion items that are necessary
for final completion of Tenant’s Work. Neither Landlord’s representative nor
Tenant’s representative shall unreasonably withhold his or her agreement on
punchlist items. Tenant shall use reasonable efforts to cause the contractor
performing Tenant’s Work to complete all punchlist items within 30 days after
agreement thereon.

 

9.     Excess Costs. The entire cost of performing Tenant’s Work (including
design of and space planning for Tenant’s Work and preparation of the Working
Drawings and the final “as-built” plan of Tenant’s Work, costs of construction
labor and materials, electrical usage during construction outside of the normal
business hours set forth in Section 6(a) of the Lease, additional janitorial
services, general tenant signage, related taxes and insurance costs, licenses,
permits, certifications, surveys and other approvals required by Law, and the
construction supervision fee referenced in Section 11 of this Exhibit, all of
which costs are herein collectively called the “Total Construction Costs”) in
excess of the Construction Allowance (hereinafter defined) shall be paid to the
contractor by Tenant prior to any Construction Allowance draw requests. Upon
approval of the Working Drawings and selection of a contractor, Tenant shall
promptly execute a work order agreement which identifies such drawings and
itemizes the Total Construction Costs and sets forth the Construction Allowance.
Landlord shall provide utilities to the Premises during the construction of
Tenant’s Work, at no cost to Tenant except as otherwise set forth above.

 

 
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10.     Construction Allowance. Landlord shall provide to Tenant a construction
allowance equal to $40.00 per rentable square foot in the Premises (the
“Construction Allowance”) to be applied toward the Total Construction Costs, as
adjusted for any changes to Tenant’s Work. No advance of the Construction
Allowance shall be made by Landlord until Tenant has first paid to the
contractor from its own funds (and provided reasonable evidence thereof to
Landlord) 50% of the anticipated amount by which the projected Total
Construction Costs exceed the amount of the Construction Allowance. Total
Construction Costs shall include architectural and design fees and expenses,
structural engineering fees and expenses, mechanical, electrical and plumbing
fees and expenses, Landlord’s construction management fee, Tenant’s construction
and project management fees and expenses, municipal fees and charges and any
related taxes. Landlord shall pay to Tenant’s vendors the Construction Allowance
in multiple disbursements (but not more than once in any calendar month)
following the receipt by Landlord of the following items: (a) a request for
payment, (b) final or partial lien waivers, as the case may be, from all persons
performing work or supplying or fabricating materials for Tenant’s Work, fully
executed, acknowledged and in recordable form, and (c) the Architect’s
certification that Tenant’s Work for which reimbursement has been requested has
been completed, including (with respect to the last application for payment
only) any punch-list items, on the appropriate AIA form or another form approved
by Landlord, and, with respect to the disbursement of the last 10% of the
Construction Allowance: (1) the permanent certificate of occupancy issued for
the Premises, (2) Tenant’s occupancy of the Premises, (3) delivery of the
architectural “as-built” plan for Tenant’s Work as constructed (and as set forth
above) to Landlord’s construction representative (set forth below), and (4) an
estoppel certificate confirming such factual matters as Landlord or Landlord’s
Mortgagee may reasonably request (collectively, a “Completed Application for
Payment”). Landlord shall pay the amount requested in the applicable Completed
Application for Payment to Tenant’s designated vendor(s) within 30 days
following Tenant’s submission of the Completed Application for Payment. If,
however, the Completed Application for Payment is incomplete or incorrect,
Landlord’s payment of such request shall be deferred until 30 days following
Landlord’s receipt of the Completed Application for Payment. Notwithstanding
anything to the contrary contained in this Exhibit, Landlord shall not be
obligated to make any disbursement of the Construction Allowance during the
pendency of any of the following: (A) Landlord has received written notice of
any unpaid claims relating to any portion of Tenant’s Work or materials in
connection therewith, other than claims which will be paid in full from such
disbursement, (B) there is an unbonded lien outstanding against the Building or
the Premises or Tenant’s interest therein by reason of work done, or claimed to
have been done, or materials supplied or specifically fabricated, claimed to
have been supplied or specifically fabricated, to or for Tenant or the Premises,
(C) the conditions to the advance of the Construction Allowance are not
satisfied, or (D) an Event of Default by Tenant exists. If the Total
Construction Costs are more than the Construction Allowance, Landlord shall, at
Tenant’s election, increase the Construction Allowance by up to $5.00 per
rentable square foot in the Premises (the “Additional Construction Allowance”).
The amount of the Additional Construction Allowance actually utilized by Tenant
shall be amortized as additional Basic Rental over the initial Term at 8% per
annum, in the same manner as a loan having equal monthly payments with full
repayment over the initial Term. Tenant’s election to use all or a portion of
the Additional Construction Allowance shall be made by written notice to
Landlord given no later than the date which is 180 days after the date the
Premises are delivered to Tenant. Within ten (10) days after Landlord’s request
therefor, Tenant shall execute and return an amendment modifying the Basic
Rental accordingly. After the final completion of Tenant’s Work and a
reconciliation by Landlord, Landlord shall calculate any remaining balance of
the Construction Allowance by deducting the Total Construction Costs from the
Construction Allowance (the “Excess Construction Allowance”), and Tenant may use
any Excess Construction Allowance towards the cost of Tenant’s installation of
telephone and data networks, and cabling, furniture, fixtures and equipment,
other specialty trade fixtures including security, and other move related costs,
and the costs of the Signs. If Tenant fails timely (i) to make its election
regarding utilization of the Additional Construction Allowance or (ii) to
execute and return the required Lease amendment, then Landlord shall
automatically be released from its obligation to contribute the Additional
Construction Allowance. Following Landlord’s payment in full of the Construction
Allowance (including the Additional Construction Allowance, if applicable),
Tenant shall bear the remaining Total Construction Costs; any liens that may
arise thereafter from the TI Work shall be governed by Section 7(d) of the
Lease. The Construction Allowance must be used (that is, Tenant’s Work must be
fully complete and the Construction Allowance disbursed) within six months
following the Commencement Date or shall be deemed forfeited with no further
obligation by Landlord with respect thereto, time being of the essence with
respect thereto.

 

 
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11.     Construction Management. Landlord or its Affiliate or agent shall
supervise Tenant’s Work and coordinate the relationship between Tenant’s Work,
the Building and the Building’s Systems. In consideration for Landlord’s
construction supervision services, Tenant shall pay to Landlord a construction
supervision fee of $30,000.

 

12.     Construction Representatives. Landlord’s and Tenant’s representatives
for coordination of construction and approval of change orders will be as
follows, provided that either party may change its representative upon written
notice to the other:

 

Landlord’s Representative:

Tony Cummings
c/o Billingsley
1722 Routh Street, Suite 1313
Dallas, Texas 75201
Telephone: 214-270-0942
Telecopy: 214-270-0992

 

Tenant’s Representative: 

Charles Suh
c/o Studley Project Management Services
19100 Von Karman Avenue, 10th Floor
Irvine, California 92612
Telephone: 949-660-3554
Telecopy: 949-660-3556

 

13.     Miscellaneous. To the extent not inconsistent with this Exhibit,
Sections 7(a) and 19 of this Lease shall govern the performance of Tenant’s Work
and Landlord’s and Tenant’s respective rights and obligations regarding the
improvements installed pursuant thereto.

 

14.     Landlord’s Approvals. If Landlord fails to respond timely to a
properly-delivered request for approval or consent as required by this Exhibit
D, Tenant shall deliver to Landlord a second written request stating the
following, in bold, all caps type: “FAILURE TO RESPOND TO THE ENCLOSED REQUEST
WITHIN THREE BUSINESS DAYS FOLLOWING THE EFFECTIVE DATE OF THIS NOTICE MAY
RESULT IN THIS REQUEST BEING DEEMED APPROVED BY LANDLORD.” If Tenant fails to
respond timely to such second request, the request shall be deemed approved.

 

 
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EXHIBIT E

 

RENEWAL OPTION

 

1.     Provided no Event of Default exists, Tenant may renew this Lease for two
(2) additional periods of five (5) years each for all of the Premises or a
portion thereof not less than 70% of the initial Total Premises Rentable Square
Feet (at the time of Lease execution), on the same terms provided in this Lease
(except as set forth below), by delivering written notice of the exercise
thereof to Landlord not earlier than eighteen (18) months and not later than
twelve (12) months before the expiration of the initial Term. If Tenant’s
written notice indicates that Tenant intends to renew this Lease for less than
the entire Premises, Tenant’s notice shall also indicate those portions of the
Premises to be surrendered. The configuration and location of that portion of
the Premises proposed for surrender shall be subject to Landlord’s approval,
which shall not be unreasonably withheld provided that such surrendered space
is: (a) a contiguous whole, (b) easily accessible from the Common Areas, and (c)
in a reasonably leasable configuration. Within 30 days after receipt of Tenant’s
notice to renew, Landlord shall deliver to Tenant written notice of the
Prevailing Rental Rate and shall advise Tenant of the required adjustment to
Basic Rental, if any, and the other terms and conditions offered. Tenant shall,
within ten business days after receipt of Landlord’s notice, notify Landlord in
writing whether Tenant accepts or rejects Landlord’s determination of the
Prevailing Rental Rate. If Tenant timely notifies Landlord that Tenant accepts
Landlord’s determination of the Prevailing Rental Rate, then, on or before the
commencement of the extended Term, Landlord and Tenant shall execute an
amendment to this Lease extending the Term on the same terms provided in this
Lease, except as follows:

 

a.     The Basic Rental payable for each month during each such extended Term
shall be at the Prevailing Rental Rate;

 

b.     The Premises shall be appropriately re-defined if this Lease is renewed
for less than the entire Premises;

 

c.     Following Tenant’s exercise of its second renewal option hereunder,
Tenant shall have no further renewal options unless expressly granted by
Landlord in writing;

 

d.     If (i) the named Tenant exercising the renewal option is not the original
named Tenant or an Affiliate thereof (i.e., is an unaffiliated third party
assignee of the original named Tenant), or (ii) Tenant notifies Landlord that
Tenant has assigned to a subtenant subleasing not less than 70% of the initial
Total Premises Rentable Square Feet (at the time of Lease execution) the sole
right to exercise the renewal option, then the amendment (or direct lease as to
a subtenant) shall also release the original named Tenant from liabilities
accruing under the Lease from and after the effective date of such renewal. In
the event a subtenant subleasing not less than 70% of the initial Total Premises
Rentable Square Feet (at the time of Lease execution) exercises a renewal
option, Landlord hereby covenants and agrees to enter into a direct lease with
such subtenant on the same terms and provisions as the Lease and the renewal
option which shall be effective as of the date of such renewal; and

 

 
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e.     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
unless included in the Prevailing Rental Rate.

 

If Tenant rejects Landlord’s determination of the Prevailing Rental Rate, and
timely notifies Landlord thereof, Tenant and Landlord shall attempt to negotiate
a mutually acceptable Prevailing Rental Rate within fifteen (15) business days.
In the event Landlord and Tenant are unable to agree on a mutually acceptable
Prevailing Rental Rate, then Tenant may, in its notice to Landlord, require that
the determination of the Prevailing Rental Rate be made by brokers (and if
Tenant makes such election, Tenant shall be deemed to have irrevocably renewed
the Term, subject only to the determination of the Prevailing Rental Rate as
provided below). In such event, within ten days thereafter, each party shall
select a qualified commercial real estate broker with at least ten years’
experience in leasing office property and office buildings in the city or
submarket in which the Premises are located. The two brokers shall give their
opinion of prevailing rental rates within 20 days after their retention. In the
event the opinions of the two brokers differ and, after good faith efforts over
the succeeding 20-day period, they cannot mutually agree, the brokers shall
immediately and jointly appoint a third broker with the qualifications specified
above. This third broker shall immediately (within ten days) choose either the
determination of Landlord’s broker or Tenant’s broker and such choice of this
third broker shall be final and binding on Landlord and Tenant. Each party shall
pay its own costs for its real estate broker. Following the determination of the
Prevailing Rental Rate by the brokers, the parties shall equally share the costs
of any third broker. The parties shall immediately execute an amendment as set
forth above. If Tenant fails to timely notify Landlord in writing that Tenant
accepts or rejects Landlord’s determination of the Prevailing Rental Rate,
Landlord shall provide one additional written notice to Tenant and if Tenant
fails to respond within three (3) business days following receipt of such second
notice, time being of the essence with respect thereto, Tenant’s rights under
this Exhibit shall terminate and Tenant shall have no right to renew this Lease.

 

2.     “Prevailing Rental Rate” means the then-prevailing market rate for leases
then being renewed or for new leases of second generation space then being
entered into of equivalent quality, size, utility and location in Comparable
Buildings, with the length of the extended Term, and the credit standing of the
Tenant, taken into account and shall include allowances and adjustments for any
tenant concessions (e.g., Tenant Improvement Allowances and free rent).

 

3.     Tenant's rights under this Exhibit shall terminate if (a) this Lease or
Tenant's right to possession of the Premises is terminated, (b) Tenant
wrongfully assigns any of its interest in this Lease or wrongfully sublets any
portion of the Premises, (c) Tenant fails to timely exercise its option under
this Exhibit, time being of the essence with respect to Tenant's exercise
thereof, (d) Tenant has assigned this Lease and such assignee is occupying less
than 70% of the initial Total Premises Rentable Square Feet (at the time of
Lease execution) (except for temporary periods due to casualty or remodeling),
or (e) the size of the Premises has been reduced to less than 70% of the initial
Total Premises Rentable Square Feet (at the time of Lease execution).

 

4.     If Tenant assigns or sublets this Lease as to a portion (but less than
all) of the Premises, only one party may exercise rights under this Exhibit
(i.e., this Exhibit shall never be split among multiple parties).

 

 
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 EXHIBIT F-1

 

PARKING

 

Landlord shall provide and Tenant (and Tenant’s employees, clients, vendors and
guests) shall be permitted the non-exclusive use of six parking spaces for every
1,000 square feet of the initial Total Premises Rentable Square Feet (as of the
Lease Date) during the Term at no cost (except as provided below). If the
Premises are expanded in excess of the initial Total Premises Rentable Square
Feet, the parking allocation for such additional space shall be five spaces for
every 1,000 square feet of additional space. All such parking shall be located
in the parking area associated with the Project (the “Parking Area”) and shall
be unassigned (except as otherwise provided in this EXHIBIT F-1). Landlord shall
not be responsible for enforcing Tenant's parking rights against any third
parties.

 

Out of the parking allotment stated above up to 65 of such spaces shall be
reserved for Tenant’s use. Tenant may elect which (if any) of such reserved
spaces shall be covered “carport” spaces. Tenant agrees to pay (a) $25.00 per
month per space for reserved uncovered spaces, plus applicable taxes, for the
entire Term and (b) $50.00 per month per space for any reserved covered spaces,
plus applicable taxes, for the entire Term.

 

Tenant may elect to require Landlord to construct an expansion to the Parking
Area to allow for an additional one parking space for every 1,000 square feet of
Total Premises Rentable Square Feet within the area shown on EXHIBIT F-2
attached hereto by delivering written notice of such election to Landlord on or
before the last day of the 60th Lease Month. Landlord’s reasonably documented
actual costs incurred in constructing such expanded Parking Area (provided land
costs may not exceed Landlord’s per-square-foot cost at such time) shall be
amortized as additional Basic Rental over the remaining portion of the initial
Term (commencing upon Landlord’s delivery of such additional parking spaces to
Tenant) at 8% per annum, in the same manner as a loan having equal monthly
payments with full repayment over such remaining portion of the initial Term.
Landlord confirms the current cost for the Parking Area land is $7.15 per square
foot.

 

Landlord shall designate a minimum of twelve (12) parking spaces for short term
visitor parking for the Building adjacent to the Building.

 

 
F-1-1

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EXHIBIT F-2

 

EXPANSION PARKING AREA

 

[pic3.jpg]

 

 

 
F-2-1

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EXHIBIT G

 

JANITORIAL SPECIFICATIONS

 

1.      JANITORIAL SERVICE SPECIFICATIONS FOR TENANT SUITES, COMMON AREAS ON
TENANT-OCCUPIED FLOORS AND TENANT COMPUTER ROOMS.

 

Services listed below shall be provided in a manner that is consistent with the
operation of Comparable Buildings.

 

A.     Nightly Services     

 

 

i.

All surface areas, desks, file cabinets, counter tops, book shelves, credenzas,
computer screens and other equipment will be dusted. Desk tops will be wiped
down but no papers will be moved.

 

ii.

All glass top desks, glass doors, partitions, light switches and walls will be
spot cleaned to remove smudges and fingerprints.

 

iii.

All carpeted areas will be vacuumed. All hard surface floors will be swept with
a dust mop then damp mopped.

 

iv.

All trash receptacles and ash urns (exterior) will be emptied and cleaned.
Liners will be changed whenever necessary. Trash/recycle will be taken to the
designated areas for trash removal.

 

v.

All stairwells will be vacuumed and swept as well as dusted.

 

vi.

The elevator will be vacuumed and fingerprints removed from wall surfaces.

 

vii.

All kitchen countertops, tables and cupboard doors in break rooms will be
cleaned and disinfected. Hand prints and smudges will be removed from the
exterior of the refrigerator as well as any other appliances. Sinks and other
chrome areas will be cleaned and polished.

 

viii.

All fixtures and appliances in the restrooms will be cleaned and sanitized. All
chrome and mirrors will be cleaned and polished. All toilet paper, soap, towels
and other supplies shall be re-stocked.

 

ix.

All commodes and urinals will be cleaned with a germicidal disinfectant. The use
of an emulsion bowl cleaner will be used whenever necessary.

 

x.

Restroom floors will be cleaned using a germicidal disinfectant.

 

B.     Weekly Services         

 

i.

All pictures and door frames will be dusted.

 

ii.

Partitions and walls in the restrooms will be completely wiped down with a
germicidal disinfectant, unless needed more frequently (in which event, any
costs associated with such additional service shall be at Tenant's sole cost and
expense).

 

iii.

All VCT floors will be buffed and carpets will be spot cleaned where needed.

 

C.     Monthly Services    

 

i.

All mini-blinds and A/C vents will be dusted.

 

ii.

Sanitize all telephones.

 

iii.

Clean entire interior glass partitions and doors.

  iv. All VCT floors will be waxed (more often as necessary) and baseboards
polished.

     

D.     Annual/Biannual Services      

 

i.

The interior of all exterior windows will be cleaned at least once per year, and
the exterior of all exterior windows will be cleaned at least twice per year.

 

 
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EXHIBIT H

 

SIGNAGE CRITERIA

 

 

SIGN CRITERIA

 

General: The purpose of these sign criteria is to create a graphic environment
that expresses a distinctive identity for the Tenant in a way that is compatible
with other signs on this and future buildings within International Business
Park. Graphics should project quality, professionalism and a positive business
image. Lettering shall be well proportioned and its proper spacing and
legibility are important considerations. The names, logos or decals of
manufacturers or installers shall not be visible except for information (if any)
required by governing authorities.

 

Rights to Signage and Location: Tenant may have identification on the building
directory. Each Tenant may also have a corridor mounted sign, provided by the
Landlord at Tenant’s cost, indicating the tenant’s name and suite number.
Requests for additional tenant identification or non-standard signage will be
reviewed by the Landlord. The Landlord reserves the right to reject requests for
additional or non-standard tenant signage without qualification.

 

Exterior building-mounted and site monument-mounted space is reserved for
Tenants that have negotiated such rights in their respective Lease Agreements.
Location rights for signage on the building and ground-mounted monuments will be
determined by the Landlord. Sign locations facing International Parkway/Midway
Road/Plano Parkway, and placement of graphics on monument signs will be reserved
for tenants leasing larger spaces.

 

Signage Requirements: The following requirements apply to the design of your
sign; however, in all cases, written approval must be obtained from the Landlord
prior to the manufacture or installation of any signage. The Landlord reserves
the sole right to make all determinations concerning interpretation of this sign
policy.

 

Written approval by the Landlord and conformance with these criteria does not
imply conformance with any applicable sign ordinances. The signage subcontractor
is responsible for verifying with local authorities to ensure compliance with
all applicable codes and ordinances. All permits and approvals are to be
forwarded to the Landlord prior to sign fabrication.

 

 
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Prior to awarding a contract for fabrication and installation, the Tenant is
required to submit three (3) sets of drawings for final review and approval to:

 

 

BillingsleyDevelopmentCorporation

 

1722 Routh Street, Suite 1313

 

Dallas, TX 75201

 

Specific submittal requirements appear under each signage type.

 

Disallowed Signage:     The following signage is not allowed:

   

  1 Secondary entry signs.   2 Roof signs or box signs.   3 Cloth signs.   4
Exposed seam tubing.   5 Animated or moving components.   6 Intermittent or
flashing illumination.   7 Iridescent painted signs.   8 Letters mounted or
painted on illuminated panels.  

9

Signs or letters painted directly on any surface except as herein provided.

  10    Temporary Signage.

   

 

Sign Type Specifications

 

Monument Sign Design Specifications (EXHIBIT A): Subject to the terms and
conditions of the Lease and as stipulated in this section, monument signs shall
conform to and the following criteria:

 

Submittal to Landlord: Tenant submittals shall include requested company title.

 

Signage Design: At all buildings, Universe 67 font shall be used. All signage
shall match the existing style for the building as indicated below:

 

Type

Type A

Type B

Sample

Monument Sign

 [pic4.jpg]

  [pic5.jpg]

Buildings

4000,4100,4120,6400,6404,6500, and 6504 International, and 4100 Midway

6100 Plano Parkway

Lettering

Specifications

6”; Metal; Universe 67; ALL CAPS; PMS Black 7C; Baked-on gloss finish.

10”; Metal; Universe 67; ALL CAPS; PMS Black 7C; Baked-on gloss finish.

 

 
H-1-2

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Logos will not be allowed. Signage must be approved in advance by the Landlord.

 

Tombstone Sign Design Specifications: Subject to the terms and conditions of the
Lease and as stipulated in this section, tombstone/secondary monument signs
shall conform to Exhibit __ and the following criteria:

 

Submittal to Landlord: Tenant submittals shall include requested company title.

 

Signage Design: At all buildings, Universe 67 font shall be used. All tombstone
signage shall match the style specifications below:

 

Type

Tombstone

Sample Tombstone Sign

 [pic6.jpg]

Maximum Sign Size

36” x 36” x 8”

Lettering Specifications

6”; Metal; Universe 67; ALL CAPS; PMS Black 7C; Baked-on gloss finish.

 

 

 

Logos will not be allowed. Signage must be approved in advance by the Landlord.

 

Exterior Building Mounted Signage: Subject to the terms and conditions of the
Lease and as stipulated in this section, building mounted signage shall conform
to Exhibit __ and the following criteria:

 

Submittal to Landlord: Tenant submittals shall include an elevation of the
affected building facade and proposed sign drawn to a minimum scale of 1/4" =
1'-0". Drawings must include a cross-section showing electrical connections and
proposed methods of attachment to building. Tenant’s sign contractor shall visit
the site to verify existing conditions prior to preparation of shop drawings and
to obtain information needed to prepare these submittals.

 

Signage Design: Universe 67 All Caps is the required font. Size and location are
subject to approval of the Landlord. Logos will not be permitted. Box type signs
are not permitted.

 

 
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Sign Construction: Exterior building mounted signs shall be internally
illuminated acrylic faced individual letters mechanically attached to the
non-glass portion of the building face. Letters shall appear black when not
illuminated, white when illuminated. Letters shall be constructed of 3M
perforated or equal blacking overlaid on translucent white acrylic faces with
minimum .063 gauge aluminum returns and minimum .080 gauge aluminum backs.
Aluminum joints are to be fully welded. Mechanical joining is not allowed. No
armor plate or wood may be used in the manufactured returns. Returns are to be
painted flat black. The trim cap is to be one inch (1") flat black “Jewel Lite.”

 

Signage Size/Length/Area: Height of letters shall not exceed thirty inches
(30"). Multiple rows of lettering are not to exceed thirty inches (30") in
height including spaces between rows. The minimum letter size is twelve inches
(12"). The individual letter depth is Five inches (5") minimum, or as required
to diffuse LED for uniform appearance. The maximum allowable signage length and
area will be determined by the Landlord.

 

Illumination and Wiring: All signs must be UL labeled and be installed according
to all applicable codes and the National Electrical Code. Lamps shall be true
white LED lighting. Quantity and placement of LED shall be adequate to provide
uniform lighting across the entire width and length of each letter. Transformers
and secondary wiring are to be concealed behind parapets or within the ceiling
plenum. Electrical power shall be brought to the required location at Tenant’s
sole expense. Conduit, wiring and similar components shall not be visible from
the ground. Final electrical connection of sign to transformer box must be
performed by a licensed electrician approved by Landlord. Timer controls for all
signs are to be set per Landlord requirements.

 

Signage Installation: Letters are to be located on the building as determined by
the Landlord. Attachment of the sign is to be made using non-corrosive
mechanical fasteners into nominal 8” thick reinforced concrete tilt-wall panels.
Tenant will be responsible for all damage to the building incurred during sign
installation or removal. Upon removal of the sign, the Tenant will be
responsible for repair and refinishing of all affected building surfaces.

 

Interior Signs: Interior signs identifying fixed building elements, suite
numbers and a building directory identifying tenant names and suite numbers will
be provided by the Landlord at Tenant expense. Tenant Identification signs
(Tenant name, logo) for suite entries are to be provided by each tenant. Sign
size and location shall comply with all local codes and ordinances, as well as
ADA/TAS. Shell Building Interior signage comprises:

 

1     Building directory (lobby)

2     Tenant suite number identification

3     Stair identification

4     Restroom identification

5     Mechanical spaces

6     Emergency egress directions

 

 
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Tenant signs within the lease space are allowed, and will be provided by tenant.
Size, color and configuration shall be compatible with the building standard
graphics. Content of the signs shall be at the tenant’s option subject to
approval by the Landlord.

 

Interior Signage Design and Construction:

 

Building Directory comprises a 24” X 30” thermoplastic plate with raised
Universe 65 text. Tenant name and suite numbers are silk-screened onto
thermoplastic plate.

 

Tenant Suite Identification (Corridor Frontage) signs are 6” x 6” thermoplastic
plate, with a coated background, and black faced raised text. Tenant Logo/Font
is allowed. Braille characters are raised and coated to match the sign color.

 

Tenant Suite Identification (Lobby Frontage) signs are 6” x 6” thermoplastic
plate, with a coated background, and black faced raised text. Text is Universe
65, black. Braille characters are raised and coated in black.

 

Stair, Restroom, Mechanical and Emergency Egress Identification signs are 4” x
6” thick thermoplastic plate, and black faced raised text. Text is Universe 65.
Braille characters are raised magnesium. Raised black pictograms are provided
for Men’s Room, Women’s Room, and Stairs.

 

Tenant Identification Signage (Corridor Frontage):      Tenants utilizing
corridor frontage signage may also have signage inside their space in compliance
with the guidelines below for Lobby Frontage Tenant Identification Signage.
Lobby Frontage Tenant Identification Signs are signs that are located on the
following:

 

 

●

Wall inside tenant’s lobby space

 

Corridor Frontage Tenant Identification Signage may be of any letter style or
design, provided they are sized and located according to the following
requirements.

 

Submittal to Landlord: Submittals for Tenant Identification shall include a
dimensioned elevation of the sign and the affected surrounding architectural
elements drawn to a minimum 1/4" = 1'-0" scale. Drawing shall indicate the type,
color and thickness of sign materials and the proposed mounting method. Tenant
shall submit a sample of all sign materials in the finishes and colors specified
on the drawings. All such signs shall be mounted on glass doors or glass
sidelights. Sign submittals shall include samples of the glass if other than
clear glass. Tenant’s sign contractor shall visit the site to verify existing
conditions prior to preparation of shop drawings.

 

Signage Design and Construction: Signs may be text or graphic designs or a
combination of both, subject to the size and placement requirements outlined
below. Signs may be of any sign material and color subject to written approval
from the Landlord. Illuminated Tenant Identification signage is prohibited.

 

Signage Size: No Tenant Identification sign may exceed twenty-four inches (24”)
high maximum, forty-eight inches (48”) wide maximum and four (4) square feet in
area, as defined by a rectangle surrounding a regularly shaped sign, or as
defined in the case of an irregularly shaped sign by a rectilinear perimeter of
not more than eight (8) straight lines enclosing the extreme limits of any
figure or character.

 

 
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Tenant Identification Signage (Lobby Frontage): Tenants utilizing lobby frontage
signage may also have signage inside their space in compliance with the
guidelines above for Corridor Frontage Tenant Identification Signage. Lobby
Frontage Tenant Identification Signs are signs that are located on the
following:

 

  1  Glass on tenant door (all tenant doors are to be glass) *  

2

Glass on tenant entry sidelight or other glass tenant lobby frontage areas (all
tenant entries are to include glass sidelight – space permitting)*

 

*All tenants with lobby frontage space are limited to two Lobby Frontage sign.

 

Lobby Frontage Tenant Identification Signage may be of any letter style or
design, provided they are sized and located according to the following
requirements.

 

Submittal to Landlord: Submittals for Tenant Identification shall include a
dimensioned elevation of the sign and the affected surrounding architectural
elements (doors, glass etc.) drawn to a minimum 1/4" = 1'-0" scale. Drawing
shall indicate the type and medium (clear or frosted). All such signs shall be
mounted on glass doors or glass sidelights. Tenant’s sign contractor shall visit
the site to verify existing conditions prior to preparation of shop drawings.

 

Signage Design and Construction: Signs may be text or graphic designs or a
combination of both, subject to the size and placement requirements outlined
below. Signs are subject to written approval from the Landlord. Signs located on
glass are restricted to painted, vinyl or screened lettering or graphics
matching the existing clear and frosted glass conditions and not projecting more
than 1/32” from the glass surface. Illuminated Tenant Identification signage is
prohibited.

 

Signage Size: No Tenant Identification sign may exceed the signage band of 36”
in height, and the signage band shall begin at 60” above the floor and extend to
96” above the floor of any glass piece, as depicted below.

 

 
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Sample approved layouts:

 

[pic7.jpg]

 

 
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EXHIBIT A to Signage Criteria

 

[pic8.jpg]

 

 
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EXHIBIT I

 

LANDLORD’S WORK

 

 

Design and construction of the shell and core of the Building (collectively
referred to in this Lease as “Landlord’s Work”). The Building Core and Shell
Work shall all be designed and constructed at a standard equivalent to the
buildings in International Business Park and shall include the following:

 

A.

Landlord shall cause the site and the buildings to be designed, engineered and
constructed in substantial conformance to these Landlord Delivery Conditions
(“Outline Specifications”).

 

B.

Details of architecture shall be in substantial conformance with details of the
conceptual design that was presented to Tenant in late February as mutually
agreed upon by tenant and Landlord and reflected on plans that have been
approved by Tenant.

 

C.

All areas of the Building shall be fully permitted and constructed by Landlord
and shall be in complete compliance with the most recent version of applicable
local, state and federal building codes and regulations including the Americans
with Disabilities Act, necessary for occupancy.

 

D.

At time of delivery Landlord shall provide all areas within the Premises in
broom clean condition and all systems serving the Premises or within the
Premises shall be in good working order.

 

E.

Site Work:

 

 

1)

Design, construction and installation of all site work, parking lots and
landscaping, site drainage, roads, off-site work and other requirements to serve
the project (the “Site Work”). The Site Work shall include the following:

 

 

a)

All landscaping, together with a sprinkler system to serve the same. Final
landscape design to be mutually agreed upon by Tenant & Landlord within
Landlord's budget;

 

 

b)

All parking areas, including striping, directional signs and markings,
handicapped markings and signage, and all sidewalks, walkways, driveways and
street connections, including walkways to be provided to every entry/exit door
to new building;

 

 

c)

All parking lot lighting, driveway lighting and landscape lighting;

 

 

d)

Trash enclosures;

 

 
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e)

Underground utilities connections from the main lines of the purveyors to the
Buildings. Landlord to provide empty conduit lines from the property line to the
main electrical room in the Building; the transformer pad, and the empty conduit
for dual feed to the Building's electrical room is part of the base building.

 

 

f)

All required mass grading and detention basins required for storm water;

 

 

g)

All streets and offsite work required of the site development;

 

 

h)

Provide an enclosure on site for tenant’s generator. Generator size shall be
approximately 200kVA;

 

 

i)

Provide a shared outdoor seating area with sunshade. Location to be mutually
determined by Landlord and Tenant.

 

 

j)

The building will be designed to accommodate the delivery, loading and unloading
of tenant's fixtures, furniture and equipment.

 

 

2)

The landlord to ensure that all site and infrastructure requirements are
substantially complete prior to commencement of tenant improvement construction.

 

F.

Building structure:

 

 

1)

Building structure shall be steel frame and load bearing exterior tilt-up
concrete panels. Typical bay span to be 30'x40' with 100 lb/SF live load +20
lb/SF for partitions on the first floor and 60 lb/SF live load +20 lb/SF for
partitions on the second and third floors. Any High density files or heavy loads
shall be placed on the ground floor per structural engineer recommendations.

 

 

2)

Foundations shall be straight shafted drilled piers to rock of per geotechnical
engineer's report and recommendations.

 

 

3)

Each floor of the building shall accommodate a minimum 10'0” finished ceiling
height throughout and adequate plenum space to accommodate Tenant's light
fixtures, main and secondary HVAC distribution, data/telecom cabling, fire
protection and other requirements that the tenant has within the ceiling plenum.

 

 

4)

Ground floor concrete floor slab to be 5” reinforced concrete slab over
engineered sub grade. Upper floor slabs to be concrete with minimum thickness of
2.5” over 1.5” metal deck (4” total). Floor flatness and levelness tolerances
shall meet overall values of FF=25 and FL=20.

 

 

 
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5)

The building floor to floor heights shall be no less than 15'0” for all floors
to accommodate the required finish ceiling height.

 

 

6)

The fire exit stairs shall be pan-filled metal stairs. The main lobby stair
shall be an open stair plan with a bridge per Landlord's typical, if applicable.

 

 

7)

All fire-sating required by code between floors, if applicable.

 

 

8)

All miscellaneous metals, lintels and connection details as required for the
complete structural system.

 

 

G.

Exterior Building:

 

 

1)

Exterior walls to be 8.5” thick concrete tilt-wall panels with 0.75” reveal for
9.25” total thickness and curtain wall with 7” deep clear anodized aluminum
frames.

 

 

2)

Exterior windows shall be on average 7.5'x10' punched openings with 5” deep
clear anodized aluminum frames. Glazing head height shall be 10'0”. The glazing
ratio used in the skin will be a minimum of 40% of the skin area (including
parapet). Glazing sections shall be commercial grade 1” thermally broke double
glazing units with a minimum of low e coating.

 

 

3)

Provide manual roller shade window coverings at all exterior windows. Landlord
is preparing alternate pricing for this request. The Tenant Improvement
Allowance may be used to pay the actual costs of this alternative.

 

 

4)

All required insulation at the exterior walls and roof areas compliant with
codes.

 

 

5)

Main building entrance to be full height glass and include a two story lobby
area that meets Tenant's security and image requirements.

 

H.

Roofing:

 

 

1)

Landlord shall utilize the best materials and engineering practices available
and include a 15-year warranty. The roof shall comply with similar
specifications of a Class A building subject to Tenant's reasonable review and
approval.

 

 

2)

The design of the roof and materials specified shall incorporate R-19 insulation
with TPO single ply membrane. The roof loads will be designed per minimum local
jurisdiction requirements.

 

 

3)

The roof finish shall meet “cool roof' requirements.

 

 

4)

Provide walkway pads to base building mechanical equipment. Provide areas for
Tenant's after hours and 24-hour HVAC equipment.

 

 
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I.

Common Area:

 

 

1)

Men's and women's toilet rooms on each floor of the Building, per local codes,
including the Americans with Disabilities Act and life safety issues. Provide a
minimum one restroom plumbing fixture for every three thousand square feet of
rentable area. Toilet rooms shall be to a finished condition with tile walls (on
wet walls only) and floor, Drywall ceilings, floor mounted toilet partitions,
wall mounted urinals, floor mounted toilets and under-mounted sinks. Other
finishes to be mutually selected by Landlord and Tenant to match Tenant's Work;

 

 

2)

Minimum of one (1) main electric room located on the first floor of the building
to accommodate switch gear and electrical equipment as required to service the
building and a minimum of two (2) supplemental Electrical/telephone rooms
(IDF's) per floor, ( approx. 8'x10'), no greater than 280' apart on each floor.
All the electrical rooms to have installed code compliant transformers,
distribution panels and subpanels with breakers installed ready for Tenant's
distribution and use.

 

 

3)

Provide a Main Distribution Facility room (MDF), approximate size to be 10x12,
located centrally on the 1st floor of the Building to terminate all external
telecommunication facilities, conduits and equipment as required of the telecom
service providers from MDF to all IDF's

 

 

4)

Building stairways for exiting that are required by code, with base building
finishes on all walls, ceiling and stairs and a j-box only at each stairwell
door for Tenant's use to install a card access system. The Tenant Improvement
Allowance may be used to pay the actual costs of this alternative. Mechanical
equipment rooms as required for the Building;

 

 

5)

Drywall on all core walls (including elevator lobby) and stairwells and shafts
as required,

 

 

6)

All doors and frames (minimum 3'-0”xB'-0”) for common area rooms meeting all
rating requirements per code. All interior doors shall be Quartered Maple wood
veneer solid core doors with clear finish per tenant request. Frames shall be
clear anodized Raco aluminum frames or equal;

 

 

7)

Smooth and level (1/4” deflection over ten (10) foot span) concrete floor on
each floor in accordance with industry standards

 

 

8)

Provide two (2) Finished Elevators for the Building meeting applicable building
code requirements. Minimum of one full-time passenger elevator and one
passenger/service elevator. All elevators shall be equipped with card access
system and have finishes on walls and ceiling; The cost for the card access
system is included in the cost for 1.4 above.

 

 
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9)

Noise levels found in all occupied office space within the Premises created or
dispersed by equipment and ductwork shall be measured and achieve a minimum
noise coefficient as follows:

 

 

a.

The maximum acceptable noise levels shall conform to the following:

 

 

i.

Adjacent to the building core and extending out a distance of 10 feet ii. NC40.

       

ii.

General office areas NC35

 

 

iii.

Lobbies, toilets, commercial area NC40

 

 

iv.

Perimeter offices NC35

 

 

v.

Adjacent to roof penetrations and HVAC supply NC35

 

J.

Fire Protection:

 

 

 

1)

Provide completed fire sprinkler system including mains and drops as required
for all restrooms, lobby, stairwells and all other rooms such as MDF and IDF's
with semi recessed chrome heads;

 

 

2)

Temporary protection consisting of mains, laterals and uprights, installed
throughout the building according to applicable codes. All finished common areas
and stairwells shall be fitted with complete fire sprinkler systems and fire
alarm system as required by code upon occupancy;

 

 

3)

Deleted.

 

 

4)

Provide required flow tamper switch and pressure switches;

 

 

5)

Fire protection alarm and communications system installed according to NFPA 13
and all applicable code;

 

 

6)

Provide recessed fire extinguisher cabinets located on each floor to comply with
local fire code;

 

K.

Plumbing:

 

 

 

1)

Provide all sanitary waste, vent stacks and domestic water required to service
all common area restrooms and janitor closets;

 

 

2)

Provide men's and women's showers at one restroom location on the ground floor
with three (3) shower stalls in each. The Tenant Improvement Allowance may be
used to pay the actual costs of this alternative. Provide a minimum of two
points of access for domestic cold and hot water, sanitary waste and vent for
Tenants distribution, on each floor of the building;

 

 

3)

Provide domestic/potable water service including backflow preventers and
pressure reducing valves to the building. Extend water lines to each floor of
Tenant's space. Water and sewer points of connection will be provided at the
restrooms. Extensions for future connections will be at Tenant’s expense;

 

 
I-5

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4)

Provide hot water heater(s) for;

 

 

a.

all core restrooms and janitor rooms, and

 

 

b.

stubbed to Tenants space on each floor for future use;

 

 

5)

Provide stub outs for all first floor underground waste and water required for
Tenant's food service and interior improvements;

 

L.

Gas:

 

 

1)

Provide gas service to each building which capacity shall be mutually agreed
upon by Tenant and Landlord; The building will not have natural gas service.

  

M.            HVAC systems:

 

1)

HVAC base building system to be designed and delivered to accommodate Tenants
required cooling loads. The cooling system can be designed as “Air Cooled”
custom package unit or chilled water system with all associated piping to
service the facility.

   

The system shall include DDC controls on all units and be zoned to
utilize/control half the floor on an after-hours operational basis. The base
building shell shall include the installation of the medium pressure duct loop
for Tenant Improvements.

   

The base building design for cooling shall be sized to accommodate a 1 person
per 150 square foot average density exclusive of equipment and lighting loads.
The estimated delivery tonnages for the office portion shall be approx. 460 tons
for the two floors excluding any supplemental cooling required of the Data
Center and 24-hour operation.

 

 

2)

Provide cooling to all base building common areas including lobby, restrooms,
electrical rooms, elevator machine rooms, and janitor closets as required;

 

 

3)

Provide exhaust systems as required for all common areas and restrooms;

 

 

4)

Acoustical sound attenuation for all base building mechanical systems;

   

N.

Electrical:

   

 

1)

Landlord to provide enclosure for the generator and underground conduit lines
which will be stubbed into the Building’s main electrical room.

 

 

2)

Landlord to provide the main power service from the utility provider to the
entry point in the building (MPOE). Service shall be a TXU Electric Pad Mount
transformer, 277/480 Volt 3-Phase, 2,500 Amps, on the site and distributed into
the building to the main electric room.

 

 

3)

All power and lighting for common area interior spaces;

 

 

4)

Tenant lighting to be 2'x4' recessed direct/indirect light fixtures provided at
a ratio of 1:100 square feet;

 

 
I-6

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5)

Provide block-outs and conduit stubs under first floor slab for Tenant's floor
feeds for power and tele/data cabling. Tenant must identify the location no
later than August 1, of 2013. The cost is to be determined based on the Tenant
defined scope. The Tenant Improvement Allowance may be used to pay the actual
costs of this alternative.

 

 

6)

Provide code required Fire Alarm system for all floors and common area;

 

 

7)

Provide lightning protection system at each building and allowance for Tenant to
connect critical items to the system;

 

 

8)

Required electrical power (including panels, breakers, transformers and switch
gear) to be provided for Tenant's lighting, HVAC, office and equipment usage
with the following estimated capacities;

 

 

a.

Power and equipment - 7 watts per rentable square feet. Landlord will provide 8
watts per rentable square foot in the quoted rental rate.

 

 

b.

Lighting - 1 watts per rentable square feet. Code only allows 1 watt per square
foot for lighting.

 

0.

Telephone Service:

 

 

1)

Provide four each 4” conduits from public street to building MDF room on the
first floor. Two each conduits shall be installed in an independent trench &
path from the other two;

 

 

2)

Landlord to provide location and distances to redundant stations of service
providers;

 

P.

Security:

 

1)

Provide base building card access system with card reader at each building entry
door and at elevator cabs;

 

 

2)

Provide j-box for card readers and electric locking hardware at all stairwell
doors that lead directly into Tenant's space. The cost for the j-boxes is
included in the cost for 1.4 above.

 

 

3)

Provide all electric/magnetic locking hardware as required for card readers. The
cost for the access system locking hardware is included in the cost for 1.4
above.

 

 
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 [pic9.jpg]

 

 
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[pic13.jpg]

 

 
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[pic11.jpg]

 

 
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EXHIBIT J

 

EXPANSION OPTION

 

Provided no Event of Default exists at the time of such election, Tenant may
lease up to one (1) wing of space (between 25,000 – 32,000 rentable square feet
subject to final Building plans) of the space in the Building designated on
EXHIBIT J-1 (the “Expansion Space”), by delivering to Landlord, not later than
the last day of the 60th Lease Month, written notice of Tenant’s election to
include such space in the Premises. In the event Tenant exercises the right to
expand in less than the entire Expansion Space, the size and configuration of
such Expansion Space shall be subject to Landlord’s approval, which shall not be
unreasonably withheld. If Tenant timely exercises its option, then (a)
possession of the Expansion Space shall be delivered to Tenant in a broom clean
condition with (if Tenant is the first occupant of such space) Landlord’s Work
substantially complete as to the Expansion Space, and otherwise in an “AS-IS”
condition as soon as practicable following such notice but in any event on or
before the first day of the 72nd Lease Month, and (b) Tenant and Landlord shall
execute an amendment to this Lease including the Expansion Space in the Premises
on the same terms as this Lease, except as follows:

 

 

1.

the Total Premises Rentable Square Feet of the Premises shall be increased by
the rentable square feet in the Expansion Space;

 

 

2.

the Basic Rental for the Expansion Space shall be the same as applicable to the
existing Premises (with any increase in the Construction Allowance over $40.00
per rentable square foot as utilized for the Expansion Space to be amortized as
additional Basic Rental for the Expansion Space over the initial Term of the
Expansion Space at 8% per annum, in the same manner as a loan having equal
monthly payments with full repayment over the initial Term of the Expansion
Space);

 

 

3.

the lease term for the Expansion Space shall commence upon the earlier to occur
of (i) the date Tenant occupies the Expansion Space for any purpose other than
actively pursuing improvements therein or commences business operations from any
portion of the Expansion Space, or (ii) the first day of the 76th Lease Month
and shall expire upon the expiration of the Term, subject to the renewal options
set forth in EXHIBIT E;

 

 
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  4. Tenant shall be provided with a construction allowance calculated by
multiplying (a) $40.00 (to be increased by any Additional Construction Allowance
utilized by Tenant pursuant to EXHIBIT D) by, (b) a fraction, the numerator of
which is sixty (60), the denominator being the total number of Lease Months in
the initial Term, and then multiplying such product by (c) the number of
rentable square feet in the Expansion Space;

  5. Such amendment shall include a work letter exhibit substantially similar to
EXHIBIT D attached hereto (excluding, however any ability of Tenant to increase
the Allowance above that identified in the preceding sentence); and

  6. Landlord shall not provide to Tenant any other tenant inducements.

       

If Tenant fails or is unable to timely exercise its right hereunder, such right
shall lapse, time being of the essence with respect to the exercise thereof (it
being understood that Tenant’s right hereunder is a one-time right only), and
Landlord may lease all or a portion of the Expansion Space to third parties on
such terms as Landlord may elect. Tenant’s rights under this Exhibit shall
terminate if (i) this Lease or Tenant’s right to possession of the Premises is
terminated, (ii) the size of the Premises has been reduced to less than 70% of
the initial Total Premises Rentable Square Feet (at the time of Lease
execution).

 

If Landlord enters into a lease covering any portion of the Expansion Space
following the rejection by Tenant of the right of first refusal evidenced by
EXHIBIT K with respect to such space, Landlord must reserve appropriate
relocation rights in any lease covering such space so as to assure the
availability of such space to Tenant upon the exercise of the expansion option
with respect to such space pursuant to this EXHIBIT J.

 

The rights of Tenant under this EXHIBIT J may be assigned to any permitted or
approved assignee or permitted or approved subtenant, provided that as to any
subtenant, such subtenant must occupy at least 70% of the Premises (except for
temporary periods due to casualty or remodeling) and must meet Landlord’s
reasonable criteria concerning creditworthiness, use and character. If Tenant
assigns or sublets this Lease as to a portion (but less than all) of the
Premises, only one party may exercise rights under this Exhibit (i.e., this
Exhibit shall never be split among multiple parties).

 

 
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EXHIBIT K

  

RIGHT OF FIRST REFUSAL

 

 

1.

Provided no Event of Default then exists, if Landlord receives a bona fide offer
from a third party (the “Third Party Offer”) to lease any other space in the
Building (the “Refusal Space”) and Landlord is willing to accept the terms of
such Third Party Offer, Landlord shall offer to lease to Tenant the Refusal
Space on the same terms and conditions as the Third Party Offer; such offer
shall be in writing, specify the rent to be paid for the Refusal Space, contain
the basic terms and conditions of the Third Party Offer and the date on which
the Refusal Space shall be included in the Premises (the “Refusal Notice”). The
Refusal Notice shall be substantially similar to the Refusal Notice attached to
this Exhibit. Tenant shall notify Landlord in writing whether Tenant elects to
lease the entire portion of the Refusal Space subject to the Third Party Offer
on the same terms and conditions as the Third Party Offer in the Refusal Notice,
within five days after Landlord delivers to Tenant the Refusal Notice.

 

 

2.

If Tenant timely elects to lease the Refusal Space within such five-day period,
then Landlord and Tenant shall execute an amendment to this Lease, effective as
of the date the Refusal Space is to be included in the Premises, which amendment
shall be on the same terms as this Lease except as follows:

 

 

a.

if Tenant is obligated to commence paying rent with respect to the Refusal Space
within 12 months from the Commencement Date of this Lease (which shall be no
later than the proposed rent start date contained in the Third Party Offer),
then (1) the Basic Rental shall be the same Basic Rental rate then in effect
under the Lease (net of any increase which has based on any Additional
Construction Allowance utilized by Tenant pursuant to EXHIBIT D) and will
thereafter increase when and in the same amount per rentable square foot as
Basic Rental increases under the Lease, (2) Tenant shall lease the Refusal Space
in an “AS-IS” condition, Landlord shall not be required to perform any work
therein, and Landlord shall not provide to Tenant any allowances (e.g., moving
allowance, construction allowance, and the like) other than the construction
allowance described in the following sentence, and (4) other terms set forth in
the Lease which are inconsistent with the terms of the Refusal Notice shall be
modified accordingly. Landlord shall provide to Tenant a construction allowance
equal to the product of (A) $40.00 per rentable square feet in the Refusal
Space, and (B) a fraction whose numerator is the number of months remaining in
the initial Term after Tenant begins paying Basic Rental for the Refusal Space
and whose denominator is the number of months in the initial Term.

 

 

b.

if Tenant is obligated to commence paying rent with respect to the Refusal Space
on or before the first day of the 61st Lease Month, then the term for the
Refusal Space shall be the remaining Term under this Lease; otherwise, the term
for the Refusal Space shall be as contained in the Refusal Notice.

 

 

c.

if Tenant is obligated to commence paying rent with respect to the Refusal Space
following 12 months from the Commencement Date of this Lease (which shall be no
later than the proposed rent start date contained in the Third Party Offer),
then (1) the Basic Rental, expense stop (if any) and other material terms with
respect to the Refusal Space shall be as contained in the Refusal Notice, and
(2) Tenant shall accept the Offer Space in an “AS-IS” condition and Landlord
shall not be obligated to provide to Tenant any allowances (e.g., moving
allowance, construction allowance, and the like) except as expressly contained
in the Refusal Notice.

 

 
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3.

If Tenant fails or is unable to timely exercise its right hereunder, then such
right shall lapse, time being of the essence with respect to the exercise
thereof, and Landlord may lease all or a substantial portion of the Refusal
Space (“substantial portion” meaning greater than 90%) to third parties on terms
not materially less favorable to Landlord than the terms set forth in the
Refusal Notice. If Landlord does not enter into a lease for the Refusal Space
within 180 days following Tenant’s rejection or deemed rejection of the Refusal
Notice on substantially the same or better (for Landlord) economic terms as
those set forth in the Refusal Notice (with a change in terms resulting in
greater than a five percent (5%) reduction in the rentals payable being deemed a
substantial change), or after entering into a lease for the Refusal Space, such
lease expires or is terminated, Tenant’s right of first refusal shall once again
apply to such Refusal Space. Tenant may not exercise its rights under this
Exhibit if an Event of Default exists. For purposes hereof, if an Refusal Notice
is delivered for less than all of the Refusal Space but such notice provides for
an expansion, right of first refusal, or other preferential right to lease some
of the remaining portion of the Refusal Space, then so long as such preferential
rights remain in effect, such remaining portion of the Refusal Space shall
thereafter be excluded from the provisions of this Exhibit.

 

 

4.

Tenant’s rights under this Exhibit shall terminate if (a) this Lease or Tenant’s
right to possession of the Premises is terminated, (b) the size of the Premises
has been reduced to less than 70% of the initial Total Premises Rentable Square
Feet (at the time of Lease execution), or (c) less than two full calendar years
remain in the initial Term of this Lease.

 

 

5.

The rights of Tenant under this EXHIBIT K may be assigned to any permitted or
approved assignee or permitted or approved subtenant, provided that as to any
subtenant such subtenant must occupy at least 70% of the Premises (except for
temporary periods due to casualty or remodeling) and must meet Landlord’s
reasonable criteria concerning creditworthiness, use and character. If Tenant
assigns or sublets this Lease as to a portion (but less than all) of the
Premises, only one party may exercise rights under this Exhibit (i.e., this
Exhibit shall never be split among multiple parties).

 

 
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FORM OF REFUSAL NOTICE

 

 

[Insert Date of Notice]

 

 

 

 

BY TELECOPY AND FEDERAL EXPRESS

   

 

 

 

[TENANT’S ADDRESS]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Re:

Lease Agreement (the “Lease”) dated _____________, 20___, between
[_____________________], a Texas [__________________________] (“Landlord”), and
_____________________, a ___________________ (“Tenant”). Capitalized terms used
herein but not defined shall be given the meanings assigned to them in the
Lease.

 

Ladies and Gentlemen:

 

Pursuant to the Right of First Refusal attached to the Lease, this is a Refusal
Notice on Suite ______. The basic terms and conditions are as follows:

 

 LOCATION:

 

 

 

 

 

 SIZE:

                                  rentable square feet

 

 

 

 

 BASIC RENTAL

$                                per month

 

 

 

 

 TERM: 

 

 

 

 

 

 IMPROVEMENTS:  

 

 

 

 

 

 COMMENCEMENT:

 

 

 

 

 

 PARKING TERMS: 

 

 

 

 

 

 OTHER MATERIAL TERMS:

 

 

 

Under the terms of the Right of First Refusal, you must exercise your rights, if
at all, as to the Designated Refusal Space on the depiction attached to this
Refusal Notice within ______ days after Landlord delivers such Refusal Notice.
Accordingly, you have until 5:00 p.m. local time on _______________, 20__, to
exercise your rights under the Right of First Refusal and accept the terms as
contained herein, failing which your rights under the Right of First Refusal
shall terminate and Landlord shall be free to lease the Designated Refusal Space
to any third party. If possible, any earlier response would be appreciated.
Please note that your acceptance of this Refusal Notice shall be irrevocable and
may not be rescinded.

 

Upon receipt of your acceptance herein, Landlord and Tenant shall execute an
amendment to the Lease memorializing the terms of this Refusal Notice including
the inclusion of the Designated Refusal Space in the Premises; provided,
however, that the failure by Landlord and Tenant to execute such amendment shall
not affect the inclusion of such Designated Refusal Space in the Premises in
accordance with this Refusal Notice.

 

 
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THE FAILURE TO ACCEPT THIS REFUSAL NOTICE BY (1) DESIGNATING THE “ACCEPTED” BOX,
AND (2) EXECUTING AND RETURNING THIS REFUSAL NOTICE TO LANDLORD WITHOUT
MODIFICATION WITHIN SUCH TIME PERIOD SHALL BE DEEMED A WAIVER OF TENANT’S RIGHTS
UNDER THE RIGHT OF FIRST REFUSAL AS TO THE OFFER SET FORTH IN THIS REFUSAL
NOTICE. THE FAILURE TO EXECUTE THIS LETTER WITHIN SUCH TIME PERIOD SHALL BE
DEEMED A WAIVER OF THIS REFUSAL NOTICE.

 

Should you have any questions, do not hesitate to call.

 

Sincerely,

 

 

 

 

 

 

 

 

 

[please check appropriate box] 

 

ACCEPTED

☐

REJECTED

☐

 

[TENANT’S SIGNATURE BLOCK]   

 

 By:

 

 

 

 Name:

 

 

 Title: 

 

 

 Date:

 

 

 

Enclosure [attach depiction of Designated Refusal Space]

 

 
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EXHIBIT L

 

RIGHT OF FIRST OFFER

 

Provided no Event of Default then exists, Landlord shall, prior to offering any
of the space in the Building (the “Offer Space”) to any party, first offer to
lease to Tenant the Offer Space; such offer shall (a) be in writing, (b) specify
the part of the Offer Space being offered to Tenant hereunder (the “Designated
Offer Space”), and (c) specify the lease terms for the Designated Offer Space,
including the rent to be paid for the Designated Offer Space and the date on
which the Designated Offer Space shall be included in the Premises (the “ROFO
Notice”). Notwithstanding the foregoing, if the ROFO Notice is delivered on or
before the last day of the 12th Lease Month, then (i) the economic terms for the
Designated Offer Space shall be the same as applicable to the existing Premises
(net of any increase to the Base Rental based on any Additional Construction
Allowance utilized by Tenant pursuant to EXHIBIT D), and (ii) Landlord shall
provide to Tenant a construction allowance equal to the product of (A) $40.00
per rentable square feet in the Designated Offer Space, and (B) a fraction whose
numerator is the number of months remaining in the initial Term after Tenant
begins paying Basic Rental for the Designated Offer Space and whose denominator
is the number of months in the initial Term.

 

Landlord and Tenant shall negotiate in good faith for a period of fifteen days
from delivery of the Offer Notice in an attempt to agree on all terms and
provisions of the lease for such Designated Offer Space, provided that in any
event the term for such space shall be co-terminous with the Lease. If Landlord
and Tenant have not reached agreement on the terms of a lease for such
Designated Offer Space within the fifteen-day period referenced above, then
Landlord shall have the right to market the Designated Offer Space subject to
Tenant’s on-going right of first refusal set forth in EXHIBIT K.

 

Tenant’s rights under this Exhibit shall terminate if (a) this Lease or Tenant’s
right to possession of the Premises is terminated, (b) the size of the Premises
has been reduced to less than 70% of the initial Total Premises Rentable Square
Feet (at the time of Lease execution), or (c) less than two full calendar years
remain in the initial Term of this Lease. The right of first offer evidenced by
this Exhibit is an on-going right. Accordingly, if Tenant fails to timely
exercise its option as to any portion of the Offer Space, and Landlord enters
into a lease with a third party for such portion of the Offer Space, if such
portion of the Offer Space once again becomes available to lease, such space
shall be subject to the right of first offer evidenced by this Exhibit (unless
Tenant’s rights under this Exhibit terminate pursuant to the first sentence of
this paragraph).

 

The rights of Tenant under this EXHIBIT K may be assigned to any permitted or
approved assignee or permitted or approved subtenant, provided that as to any
subtenant such subtenant must occupy at least 70% of the Premises (except for
temporary periods due to casualty or remodeling) and must meet Landlord’s
reasonable criteria concerning creditworthiness, use and character. If Tenant
assigns or sublets this Lease as to a portion (but less than all) of the
Premises, only one party may exercise rights under this Exhibit (i.e., this
Exhibit shall never be split among multiple parties).

 

 
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EXHIBIT N

 

GENERATOR AREA

 

[pic12.jpg]

 

 
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 EXHIBIT O

 

FORM OF RECOGNITION AGREEMENT

 

THIS AGREEMENT, made as                                      , 201      ,
between [                    ] LAND, LP, a Texas limited partnership having an
address of ____________________________________, with a copy to
_________________________________ ("Fee Owner"), lessor under that certain lease
(the "Prime Lease") more fully described on Exhibit A hereto affecting premises
located in and more fully described on Exhibit B hereto (the "Premises"), and
__________________, a _________________ having an address of
___________________________, with a copy to __________________________
("Tenant"), tenant under a lease with _____________, LLC, a Texas limited
liability company, as landlord, dated ___________, 201___ affecting a portion of
the Premises (the "Sublease").

 

Fee Owner and Tenant hereby agree as follows:

 

1.     Fee Owner hereby represents that it is the fee owner of the Premises.

 

2.     The Prime Lease is unmodified except as set forth in Exhibit A, and the
Prime Lease as modified is in full force and effect.

 

3.     That the tenant under the Prime Lease is not in default in the
performance of the obligations and covenants thereunder.

 

4.     That no rent or other sums payable under the Prime Lease have been paid
more than 30 days in advance.

 

5.     Provided the Sublease is then in full force and effect, and Tenant is not
in default under the Sublease beyond any grace period thereunder, all rights of
Tenant under the Sublease and Tenant's possession of the Premises under the
Sublease shall not be affected or disturbed by Fee Owner.

 

6.     In the event of the termination of the Prime Lease, Tenant shall attorn
to Fee Owner or to any successor to Fee Owner's interest in the Premises, and
said termination shall be subject to all rights of Tenant under the Sublease,
which Sublease shall continue for the remaining term of the Sublease in
accordance with its terms, without the necessity of executing a new lease, as a
direct Sublease between Tenant and Fee Owner or such successor.

 

7.     Fee Owner or such successor shall not be bound by any payment of rent or
additional rent made by Tenant to Landlord under the Sublease for more than 30
days in advance.

 

8.     The Sublease shall be subject and subordinate to the Prime Lease and to
all the terms, conditions, and provisions of the Prime Lease and to any
renewals, extensions, modifications, or replacements thereof or supplements
thereto.

 

 
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                  9.     Any notices or communications given under this
Agreement shall be in writing and shall be given by registered or certified
mail, return receipt requested, postage prepaid: (a) if to Fee Owner, at the
address of Fee Owner as hereinabove set forth or at such other address as Fee
Owner may designate by written notice, or (b) if to Tenant, at the address of
Tenant as hereinabove set forth or at such other address as Tenant may designate
by written notice.

 

10.     This Agreement shall inure to the benefit of, and be binding upon, the
parties hereto and their successors and assigns.

 

 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

 

          FEE OWNER:                                     
By:                                                                                                                               
     
Name:                                                                                                                          
     
 Title:                                                                                                                           
             

TENANT: 

                                     
By:                                                                                                                               
     
Name:                                                                                                                          
     
Title:                                                                                                                           
 

 

 

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