**Exhibit10.22**

 

**BASIC LEASE INFORMATION**

 
| Lease Date:               |   | March 7, 2008                                                                                                                                                                                                                                                                                                                                                                                 |
|---------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                      |   |                                                                                                                                                                                                                                                                                                                                                                                               |
| Tenant:                   |   | ENTECH, Inc., a Delaware corporation                                                                                                                                                                                                                                                                                                                                                          |
|                      |   |                                                                                                                                                                                                                                                                                                                                                                                               |
| Tenant’s Address:    |   | 1077 Chisolm Trail,                                                                                                                                                                                                                                                                                                                                                                                |
|                      |   | Keller, Texas 76248                                                                                                                                                                                                                                                                                                                                                                                |
|                      |   |                                                                                                                                                                                                                                                                                                                                                                                               |
| Contact:                  |   | Scott Albertson; Telephone:                                                                                                                                                                                                                                                                                                                                                                        | (757) 784-3460 |
|                      |   |                                                                                                                                                                                                                                                                                                                                                                                               |
| Guarantor:                |   | WorldWater & Solar Technologies Corp.,                                                                                                                                                                                                                                                                                                                                                    |
|                      |   | a Delaware corporation                                                                                                                                                                                                                                                                                                                                                                             |
|                      |   |                                                                                                                                                                                                                                                                                                                                                                                               |
| Guarantor’s Address: |   | 200 Ludlow  Drive,                                                                                                                                                                                                                                                                                                                                                                                 |
|                      |   | Ewing, NJ 08638                                                                                                                                                                                                                                                                                                                                                                                    |
|                      |   |                                                                                                                                                                                                                                                                                                                                                                                               |
| Contact:                  |   | Larry L. Crawford; Telephone:                                                                                                                                                                                                                                                                                                                                                                      | (609) 808-0700 ext. 18 |
|                      |   |                                                                                                                                                                                                                                                                                                                                                                                               |
| Landlord:                 |   | Alliance Gateway No. 23, Ltd.                                                                                                                                                                                                                                                                                                                                                                 |
|                      |   |                                                                                                                                                                                                                                                                                                                                                                                               |
| Landlord’s Address:  |   | c/o Hillwood Development Company, LLC                                                                                                                                                                                                                                                                                                                                                              |
|                      |   | 13600 Heritage Parkway, Suite 200                                                                                                                                                                                                                                                                                                                                                             |
|                      |   | Fort Worth, Texas 76177                                                                                                                                                                                                                                                                                                                                                                            |
|                      |   | Attn:                                                                                                                                                                                                                                                                                                                                                                                              | Bill Burton |
|                      |   |                                                                                                                                                                                                                                                                                                                                                                                               |
| With copy to:             |   | Hillwood Development Company, LLC                                                                                                                                                                                                                                                                                                                                                                  |
|                      |   | Three Lincoln Centre                                                                                                                                                                                                                                                                                                                                                                               |
|                      |   | 5430 LBJ Freeway, Suite 800                                                                                                                                                                                                                                                                                                                                                                   |
|                      |   | Dallas, Texas 75240                                                                                                                                                                                                                                                                                                                                                                                |
|                      |   | Attn:                                                                                                                                                                                                                                                                                                                                                                                              | Tom Mason |
|                      |   |                                                                                                                                                                                                                                                                                                                                                                                               |
| Contact:                  |   | Bill Burton; Telephone:                                                                                                                                                                                                                                                                                                                                                                            | (817) 224-6000 |
|                      |   |                                                                                                                                                                                                                                                                                                                                                                                               |
| Premises:                 |   | Approximately 71,250 square feet, as indicated by the cross-hatched  area on Exhibit “A” attached to the Lease, situated in the  building commonly known, or to be known, as Alliance Gateway No. 23 (the  “Building”) located or to be located on the land more particularly  described on Exhibit “B” attached to the Lease (the “Land”). |
|                      |   |                                                                                                                                                                                                                                                                                                                                                                                               |
| Project:                  |   | Collectively, the Land, the Building and all other buildings, structures  and improvements situated on the Land at any time during the Term.                                                                                                                                                                                                                                                       |
|                           |        |                                                                                                                                                                                                                                                                                                                                                                                                    |  |  |  |  |

 

 

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| Term:                                                                                  |   | 120 months, commencing on the Commencement Date and ending at  5:00 p.m. on the last day of the one hundred and twentieth (120th)  full month following the Commencement Date, subject to adjustment and earlier  termination as provided in the Lease. |
|----------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                   |   |                                                                                                                                                                                                                                                         |
| Base Rent:                                                                             |   | Months                                                                                                                                                                                                                                                       |   | MonthlyBase Rent |   | AnnualBase Rent |   | Per Square Foot   Per Annum |
|                                                                                   |   |                                                                                                                                                                                                                                                         |   |   |   |   |   |   |
|                                                                                   |   | 1-60                                                                                                                                                                                                                                                         |   | $31,646.88 |   | $379,762.50 |   | $5.33 |
|                                                                                   |   |                                                                                                                                                                                                                                                         |   |   |   |   |   |   |
|                                                                                   |   | 61-120                                                                                                                                                                                                                                                       |   | $35,981.25 |   | $431,775.00 |   | $6.06 |
|                                                                                   |   |                                                                                                                                                                                                                                                         |   |   |   |   |   |   |
|                                                                                   |   | (Subject to adjustment as  provided in the Lease)                                                                                                                                                                                                            |
|                                                                                   |   |                                                                                                                                                                                                                                                         |
| Initial Tenant’s  proportionate  share of Taxes:                                  |   | $8,075.00 per month                                                                                                                                                                                                                                          |
|                                                                                   |   |                                                                                                                                                                                                                                                         |
| Initial Tenant’s  proportionate  share of cost of insurance  under Paragraph 10A: |   | $356.25 per month                                                                                                                                                                                                                                            |
|                                                                                   |   |                                                                                                                                                                                                                                                         |
| Initial Tenant’s  proportionate  share of Common Area Charges:                    |   | $1,983.13 per month                                                                                                                                                                                                                                          |
|                                                                                   |   |                                                                                                                                                                                                                                                         |
| Security Deposit:                                                                      |   | $100,000.00                                                                                                                                                                                                                                                  |
|                                                                                   |   |                                                                                                                                                                                                                                                         |
| Tenant’s Proportionate  Share:                                                    |   | 50% which is the percentage obtained by dividing (i) the  approximately 71,250 square feet of area in the Premises by (ii) the  142,500 square feet of area in the Building.                                                                       |
|                                                                                   |   |                                                                                                                                                                                                                                                         |
| Landlord’s Broker or Agent:                                                       |   | Hillwood Realty Services  Partnership                                                                                                                                                                                                                        |
|                                                                                        |        |                                                                                                                                                                                                                                                              |  |  |  |  |  |  |  |  |

 

 

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**TABLE OF CONTENTS**

 
| 1.     |   | PREMISES AND TERM                               |
|--------|--------|-------------------------------------------------|
|   |   |                                            |
| 2.     |   | BASE RENT, SECURITY DEPOSIT AND ESCROW PAYMENTS |
|   |   |                                            |
| 3.     |   | COMMON AREA CHARGES                             |
|   |   |                                            |
| 4.     |   | TAXES                                           |
|   |   |                                            |
| 5.     |   | LANDLORD’S REPAIRS                         |
|   |   |                                            |
| 6.     |   | TENANT’S REPAIRS AND MAINTENANCE           |
|   |   |                                            |
| 7.     |   | ALTERATIONS                                     |
|   |   |                                            |
| 8.     |   | SIGNS                                           |
|   |   |                                            |
| 9.     |   | UTILITIES                                       |
|   |   |                                            |
| 10.    |   | INSURANCE                                       |
|   |   |                                            |
| 11.    |   | FIRE AND CASUALTY DAMAGE                        |
|   |   |                                            |
| 12.    |   | LIABILITY AND INDEMNIFICATION                   |
|   |   |                                            |
| 13.    |   | USE                                             |
|   |   |                                            |
| 14.    |   | INSPECTION                                      |
|   |   |                                            |
| 15.    |   | ASSIGNMENT AND SUBLETTING                       |
|   |   |                                            |
| 16.    |   | CONDEMNATION                                    |
|   |   |                                            |
| 17.    |   | HOLDING OVER                                    |
|   |   |                                            |
| 18.    |   | QUIET ENJOYMENT                                 |
|   |   |                                            |
| 19.    |   | EVENTS OF DEFAULT                               |
|   |   |                                            |
| 20.    |   | REMEDIES                                        |
|   |   |                                            |
| 21.    |   | MORTGAGES                                       |

 

 

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| 22.    |   | MECHANIC’S LIENS   |
|--------|--------|-------------------------|
|   |   |                    |
| 23.    |   | HAZARDOUS MATERIALS     |
|   |   |                    |
| 24.    |   | MISCELLANEOUS           |
|   |   |                    |
| 25.    |   | NOTICES                 |
|   |   |                    |
| 26.    |   | [INTENTIONALLY OMITTED] |
|   |   |                    |
| 27.    |   | SECURITY SERVICE        |
|   |   |                    |
| 28.    |   | GUARANTY OF LEASE       |
|   |   |                    |
| 29.    |   | ADDITIONAL PROVISIONS   |

 
| EXHIBIT “A” — PREMISES                             |
|-------------------------------------------------------------------|
|                                                              |
| EXHIBIT “B” — LAND                                 |
|                                                              |
| EXHIBIT “C” — LEASEHOLD IMPROVEMENTS               |
|                                                              |
| EXHIBIT “D” — MEMORANDUM OF ACCEPTANCE OF PREMISES |
|                                                              |
| EXHIBIT “E” — [INTENTIONALLY OMITTED]              |
|                                                              |
| EXHIBIT “F” — RENEWAL OPTIONS                      |
|                                                              |
| EXHIBIT “G” — [INTENTIONALLY OMITTED]              |
|                                                              |
| EXHIBIT “H” — FORM OF SNDA                    |

 

 

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**LEASEAGREEMENT**

 

                THIS LEASEAGREEMENT, made and entered into by Alliance Gateway No. 23, Ltd., a Texaslimited partnership (“Landlord”) and ENTECH, Inc., a Delawarecorporation (“Tenant”);

 

WITNESSETH:

 

                1.             PREMISES AND TERM.  In consideration of the mutual obligations ofLandlord and Tenant set forth herein, Landlord leases to Tenant, and Tenanthereby takes from Landlord, the Premises situated within the County of Tarrant,State of Texas, more particularly described and indicated by the cross-hatchedarea on Exhibit “A” attached hereto and incorporated herein byreference (the “Premises”) which Premises are to constitute a portion ofthe Building that has been constructed on the Land (defined below), togetherwith all rights, privileges, easements, appurtenances, and amenities belongingto or in any way pertaining to the Premises, to have and to hold, subject tothe terms, covenants and conditions in this Lease.  Tenant’s rights under this Lease shall besubject to all matters of public record, including, without limitation, alleasements, deed restrictions, covenants, conditions and restrictions, as mayexist from time to time (provided that any amendments to such deedrestrictions, restrictive covenants and other covenants, conditions andrestrictions as well as amendments to the “Alliance Development Guidelines”shall not materially adversely interfere with the Permitted Use).  The term of this Lease (“Term”) shallcommence on the Commencement Date (hereinafter defined) and shall end on thelast day of the month that is one hundred and twenty (120) months after theCommencement Date.  The Premises aresituated in the Building located on the “Land” described on Exhibit “B”attached hereto and made a part hereof.

 

                A.            The “Commencement Date” shallbe the date that is the earlier of (i) the date on which Tenant firstoccupies the Premises for the purpose of conducting its business or (ii) thedate upon which the Leasehold Improvements (hereinafter defined) to be erectedin accordance with the Working Drawings (hereinafter defined) described on Exhibit “C”attached hereto and incorporated herein by reference have been substantiallycompleted and notice that a temporary or permanent Certificate of Occupancy hasbeen issued for the Premises (subject to Tenant’s obligation to installfixtures if required by local ordinance) has been given to Tenant.  As used herein, the term “substantiallycompleted” shall mean that, in the opinion of Landlord or the architectresponsible for the Work (hereinafter defined), such improvements have beencompleted in accordance with the Working Drawings and the Premises are in goodand satisfactory condition, subject only to completion of minor punch listitems that do not prevent Tenant from using the Premises for its intended use.  As soon as such improvements have beensubstantially completed, Tenant shall notify Landlord in writing that theCommencement Date has occurred.  To theextent that Tenant, its employees, agents or contractors cause construction ofsuch improvements to be delayed, the Commencement Date shall be deemed to bethe date that, in the commercially reasonable opinion of Landlord, substantialcompletion would have occurred if such delays had not taken place.  After the Commencement Date, Tenant shall,upon demand, execute and deliver to Landlord a memorandum of acceptance ofdelivery of the Premises in the form attached hereto as Exhibit “D”.

 

 

 

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                B.            Notwithstanding the fact that theTerm of this Lease and Tenant’s obligation to pay rent does not commence untilthe Commencement Date, this Lease shall nevertheless be binding upon theparties in accordance with its terms when executed by Landlord and Tenant.

 

                C.            Landlord shall provide Tenantvehicular parking spaces on the surface parking lot (the “Parking Lot”)constructed on the Land as generally depicted on the site plan attached as Exhibit “A”.  During the Term of this Lease, Tenant shallbe permitted to use Tenant’s Proportionate Share of all of the vehicular parkingspaces located on the Parking Lot, subject to such terms, conditions andregulations as are from time to time applicable to patrons of the ParkingLot.  The parking spaces in the ParkingLot shall be made available to Tenant on a first-come first-served basis, itbeing agreed that Landlord shall have no obligation to patrol, police, ormonitor the Parking Lot or to take any other actions to ensure that Tenant hasthe use of all such parking spaces; provided, upon notice from Tenant that suchspaces are not available to Tenant, Landlord shall reasonably cooperate, at nocost to Landlord, with the tenants of the Building in an endeavor to resolveany such situation.

 

                2.             BASE RENT, SECURITY DEPOSIT ANDESCROW PAYMENTS.

 

                A.            Tenant agrees to pay to Landlordbase rent (“Base Rent”) for the Premises, in advance, without demand,deduction or set off, at the following rates and amounts during the Termhereof:

 

| ** ** | ** ** | **Monthly**   | ** ** | **Annual**    | ** ** | **Per Square Foot** |
|------------|------------|---------------|------------|---------------|------------|---------------------|
| **Months** | ** ** | **Base Rent** | ** ** | **Base Rent** | ** ** | **Per Annum**       |
| 1-60       |       | $31,646.88    |       | $379,762.50   |       | $5.33               |
| 61-120     |       | $35,981.25    |       | $431,775.00   |       | $6.06               |

 

                The first monthlyinstallment of Base Rent, plus the other monthly charges set forth in Paragraph 2Cbelow, shall be due and payable on the date hereof and subsequent monthlyinstallments shall be due and payable on or before the first day of eachcalendar month succeeding the Commencement Date, except that all payments duehereunder for any fractional calendar month shall be prorated.

 

                B.            In addition, Tenant agrees todeposit with Landlord on the date hereof the sum of One Hundred Thousand andNo/100 Dollars ($100,000.00), which shall be held by Landlord as security forthe performance of Tenant’s obligations under this Lease, it being expresslyunderstood and agreed that this security deposit is not an advance rentaldeposit or a measure of Landlord’s damages in case of Tenant’s default.  Upon each occurrence of an Event of Default(hereinafter defined), Landlord may use all or part of the security deposit topay past due rent or other payments due Landlord under this Lease, and the costof any other damage, injury, expense or liability caused by such Event ofDefault without prejudice to any other remedy provided herein or provided bylaw.  On demand, Tenant shall payLandlord the amount that will restore the security deposit to its originalamount.  The security deposit shall bedeemed the property of 

 

 

 

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Landlord, but any remaining balance of such security deposit shall bereturned by Landlord to Tenant when Tenant’s obligations under this Lease havebeen fulfilled. Tenant acknowledges that Landlord’s obligation respecting theSecurity Deposit is not that of a trustee and that no interest shall accruethereon.

 

                C.            In addition to Base Rent and Tenant’sother obligations hereunder, Tenant agrees to pay its proportionate share (asdefined in the Basic Lease Information) of the following costs and expenses(collectively, the “Reimbursable Expenses”):  (i) Taxes (hereinafter defined) payableby Landlord pursuant to Paragraph 4A below, (ii) the cost ofjointly metered utilities payable pursuant to Paragraph 9 below, (iii) thecost of maintaining insurance pursuant to Paragraph 10A below, (iv) CommonArea Charges (hereinafter defined) payable by Tenant in accordance with Paragraph 3below, and (v) the cost of any repair, replacement, or capitalexpenditures required under any governmental law or regulation that was notapplicable to the Building at the Commencement Date.  During each month of the Term of this Lease,on the same day that Base Rent is due hereunder, Tenant shall escrow withLandlord an amount equal to 1/12th of Tenant’s proportionate share of suchReimbursable Expenses, as estimated by Landlord.  Tenant authorizes Landlord to use the funds depositedwith Landlord under this Paragraph 2C to pay such ReimbursableExpenses.  Landlord shall be entitled torevise its projection of such Reimbursable Expenses at any time and if Landlordso revises such projection, Tenant shall pay to Landlord, on the same day asBase Rent is due hereunder, an amount equal to 1/12th of Tenant’s proportionateshare of such Reimbursable Expenses pursuant to Landlord’s revised estimatethereof.  By April 30 of eachcalendar year (or as soon thereafter as may be practicable) during the Termhereof Landlord shall determine the actual Reimbursable Expenses for thepreceding calendar year and shall notify Tenant thereof.  If Tenant’s total escrow payments are lessthan Tenant’s actual proportionate share of all such Reimbursable Expenses,Tenant shall pay the difference to Landlord within thirty (30) days afterreceipt of invoices and appropriate supporting documentation.  If the total escrow payments of Tenant aremore than Tenant’s actual proportionate share of all such ReimbursableExpenses, Landlord shall retain such excess and credit it against Tenant’s nextannual escrow payments.

 

                D.            With respect to the cost ofreplacements or capital expenditures (as opposed to repairs) (i) requiredunder governmental law or regulation pursuant to Paragraph 2C(v) above,it is agreed that if the replacement or expenditure is applicable to buildingowners generally (and is not necessitated due to Tenant’s conduct of businessor particular operations from the Premises), or (ii) performed pursuant toParagraph 2C(iv) above, then the cost of any such item shall beamortized over its useful life (at a per annum interest rate equal to the primerate of interest announced from time to time by JPMorgan Chase Bank, N.A., plustwo percentage points) in accordance with generally accepted accountingprinciples and the portion of the cost that shall be included within Paragraph2(C)(v) above shall be equal to the product of (i) the actualcost of such item (together with such interest), multiplied by (ii) afraction the numerator of which is the number of years (including partialyears) remaining in the Term of this Lease as of the date of such replacementor expenditure including the number of years in any renewal term under Exhibit “F”attached hereto if the renewal option therefor has been exercised by Tenantprior to the replacement or expenditure (up to but not greater than thefollowing described denominator), and the denominator of which is the usefullife of the item in question; provided that if subsequent to any suchreplacement or expenditure Tenant exercises any renewal option, the 

 

 

 

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portion of the cost included within Paragraph 2(C)(v) aboveunder this sentence shall be recalculated to include the length of the renewalterm in question.  Notwithstandinganything to the contrary contained herein, it is agreed that the cost of anyreplacement or capital expenditure under Paragraph 2(C)(v) abovethat is necessitated due to Tenant’s use of the Premises shall not be soamortized, or be allocated to Tenant based upon its proportionate share, butshall, instead, be paid for in full by Tenant upon Landlord’s demand therefor.

 

Landlord agrees to keep and maintain booksand records reflecting the Reimbursable Expenses in accordance with soundaccounting principles consistently applied. Tenant shall have the right, upon atleast ten (10) days advance written notice to Landlord (“Audit Notice”)and at Tenant’s sole expense, to audit Landlord’s books and records in order toverify actual Reimbursable Expenses.  Anysuch audit shall be performed during Landlord’s normal business hours.  Landlord shall have the right to dispute theresult of any such audit by Tenant.  IfLandlord so disputes such audit, and if Landlord and Tenant are unable toresolve such dispute within thirty (30) days, then the dispute shall besubmitted to a reputable independent accounting firm reasonably acceptable toLandlord and Tenant (“Firm”) for resolution.  The reasonable determination of the Firmshall be binding on Landlord and Tenant. If the parties’ mutual agreement as to the Reimbursable Expenses inquestion, or the determination of the Firm (as applicable), establishes thatTenant underpaid or overpaid its proportionate share of Reimbursable Expenses(as required pursuant to this Lease), then Landlord shall refund to Tenant anysuch overpayment, or Tenant shall pay to Landlord any such underpayment (asapplicable), promptly upon the agreement of the parties or conclusion of  such determination (as the case may be).  In addition, if the Firm is engaged asprovided hereinabove and the determination of such Firm establishes: (i) thatTenant overpaid or underpaid its proportionate share of Reimbursable Expensesby five percent (5%) or more, then (A) Landlord shall pay all costs ofengaging the Firm and Tenant’s reasonable expenses in connection with suchaudit in case of any such overpayment (provided that Landlord’s obligation topay such costs and expenses shall not apply to any overpayment made withrespect to the first year of the Term of this Lease in which case Tenant shallpay all such costs and expenses), and (B) Tenant shall pay all costs ofengaging the Firm and Landlord’s reasonable expenses in connection with suchaudit in case of any such underpayment; or (ii) that the variance was lessthan five percent (5%), Tenant shall pay the entire cost of engaging the Firmand Landlord’s reasonable expenses in connection with such audit.  In all other circumstances (other than thoseprovided in the immediately preceding sentence) each party shall pay its ownexpenses in connection with any such audit. Notwithstanding anything to the contrary contained herein, Tenant’sobligation to pay all amounts, and to perform all of its other obligations,under this Lease shall not be abated, suspended or otherwise affected duringthe pendency of the audit, dispute, reconciliation and determination procedureset forth above.  Notwithstanding the foregoing, Tenant shall have the right to auditLandlord’s books and records only with respect to the Reimbursable Expenses forthe calendar year immediately preceding the year in which Tenant gives theAudit Notice (but in no event with respect to periods prior to the CommencementDate).  Payment by Tenant ofReimbursable Expenses shall not be deemed to constitute a waiver by Tenant ofits rights to audit Reimbursable Expenses.

 

                3.             COMMON AREA CHARGES.  In addition to other amounts required to bepaid by Tenant hereunder, Tenant shall pay to Landlord Tenant’s proportionateshare of the following costs and expenses (collectively, the “Common AreaCharges”):

 

 

 

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                A.            The cost of repair, maintenance andreplacement of:  (i) the roof of theBuilding (except as otherwise provided in Paragraph 5); (ii) theexterior of the Building (including painting), other than those structuralrepairs and replacements for which Landlord is responsible pursuant to Paragraph 5;(iii) all mechanical, electrical, plumbing, sewer, sprinkler and otherlife-safety equipment and systems forming a part of the Building or the Projectof which the Building forms a part (other than the cost of repair, replacementand maintenance of the items which are Tenant’s responsibility pursuant to Paragraph 6which shall be paid entirely by Tenant as provided in Paragraph 6);(iv) [intentionally omitted]; and (v) all other common areas andfacilities constituting a part of the Building or the Project of which theBuilding forms a part (including, but not limited to, all paved areas in andabout the Building).

 

                B.            The cost of maintenance andreplacement of the grass, shrubbery and other landscaping in and about theBuilding and/or the Project.

 

                C.            The cost of operating andmaintaining in a good, neat, clean and sanitary condition all parking areas,driveways, alleys and grounds in and about the Building (including trashremoval).

 

                D.            The cost of assessments under anyapplicable Declaration of Covenants, Restrictions and Easements (as may be amendedfrom time to time) which are assessed by the applicable property ownersassociation.

 

                E.             Security services (if furnished byLandlord), and the cost of operating and maintaining any property, facilitiesor services provided for the common use of Tenant and other lessees of theBuilding or the Project, which costs shall include, without limitation,management fees (or if no management company is engaged by Landlord for themanagement of the Project, wages and employee benefits payable to employees ofLandlord or affiliates of Landlord whose duties are connected with theoperation and maintenance of the Building); provided, however, such managementfees (or if no management company is engaged by Landlord, such wages andbenefits) shall not exceed an amount equal to three percent (3%) of the BaseRent payable under this Lease.

 

                F.             As used herein, the term “Common Area Charges” shall specifically excludeeach of the following items:

 

(1)           Leasingcommissions, attorneys’ fees, costs and disbursements and other expensesincurred in connection with negotiations for leases with tenants and/or otheroccupants of the Project and similar costs incurred in connection with disputesbetween Landlord and other tenants of the Project as well as cost ofadvertising and public relations associated with the Building or Project;

 

(2)           Costs of renovating,decorating or redecorating space for tenants, other occupants or prospectivetenant or occupants of the Building;

 

 

 

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(3)           Interest on debt or amortization payments on any mortgageor mortgages and rental under any ground or underlying leases or lease (exceptto the extent the same may be made to pay or reimburse, or may be measured by,ad valorem taxes);

 

(4)           Any charge for depreciation or amortization of the Land orBuilding, except as otherwise permitted hereunder;

 

(5)           Amounts paid to any affiliate of Landlord for services,goods or labor to the extent that same exceeds the cost of such services, goodsor labor rendered by unaffiliated third parties on a competitive basis in aFort Worth office/warehouse building comparable to the Building;

 

(6)           Costs or expenses of utilities directly metered to tenantsof the Building and paid separately by such tenants;

 

(7)           Cost incurred to remedy violations by Landlord or anyother tenant of building codes, statutes, laws or ordinances, and any interest,fines or penalties resulting therefrom, that arise by reason of the failure ofthe Building or Project to comply with any building codes, statutes, laws orordinances in effect on the Commencement Date;

 

(8)           The costs or expenses of any repair work made by Landlord,the cost of which shall have been reimbursed by insurance, warranties(including, without limitation roof warranties), or condemnation proceeds, orother tenants of the Building;

 

(9)           Except as provided in Paragraphs 2D, 3A-E and 6Ahereof, any other capital repairs or replacements, other than those made inorder to reduce or minimize an increase in Common Area Charges (the cost ofwhich will be amortized in the same manner as provided in Paragraph 2Eabove);

 

(10)         Income and franchise taxes of the Landlord which areprohibited from being charged to Tenant as Taxes hereunder, unless such areimposed, wholly or partially, in lieu of real property taxes or ad valoremassessments against the Land, Building and/or Premises or as a sales tax onrents;

 

(11)         Legal fees associated with the financing, refinancing orsale of the Building;

 

(12)         Costs of repairing latent construction defects in theBuilding;

 

(13)         Costs or expenses incurred in connection with negotiationsor disputes with other tenants, other occupants (if any) or prospectivetenants;

 

(14)         Costs or expenses solely attributable to a breach byLandlord of its covenants, conditions, obligations and duties hereunder thatwould not have been incurred at all, but for such breach by Landlord;

 

 

 

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(15)         Cost paid or incurred in connection with the removal,replacement, enclosure and capsulation or other treatment of any hazardousmaterials brought into the Premises prior to the Commencement Date or that werebrought onto the Premises by Landlord or any other tenant subsequent to theCommencement Date;

 

(16)         Salaries of Landlord’s employees above the position ofBuilding manager, including, but not limited to, administrative, executive andpartner wages and salaries;

 

(17)         Costs of any charitable or political contributions made byLandlord;

 

(18)         Cost of acquiring, leasing, restoring, removing or replacingsculpture, paintings or other objects of art;

 

(19)         To the extent any cost includable in Common Area Charges areincurred with respect to both the Building and other properties, there shall beexcluded from the Common Area Charges a fair and reasonable percentage thereofwhich is properly allocable to such other properties;

 

(20)         Cost of the original construction of the Building, “tap fees”or water, gas or sewer connection fees payable in connection with the originalconstruction of the Building; and

 

(21)         All costs and expenses incurred by Landlord in connectionwith the formation, and maintaining in good standing, of any corporate or otherlegal entity that constitutes Landlord.

 

 

 

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                4.             TAXES.

 

                A.            Landlord agrees to pay all taxes,assessments and governmental charges of any kind and nature (collectivelyreferred to herein as “Taxes”) that accrue against the Premises, and/orthe Land and/or improvements of which the Premises are a part.  (For purposes of this Lease, the term “Taxes”shall include the amount of any taxes that would otherwise be imposed but forthe provisions of any tax abatement agreement with respect to which Landlord isa party which is entered into pursuant to chapter 312 of the Texas Tax Code;and for purposes of this Lease, such abated taxes shall be deemed to be payableby Landlord.)  Except as provided in thefollowing sentence, Taxes shall exclude franchise, inheritance, gift, grossreceipts or income tax, transfer or successor tax or other similar tax.  If at any time during the Term of this Lease,there shall be levied, assessed or imposed on Landlord a capital levy or othertax directly on the rents received herefrom and/or a franchise tax, assessment,levy or charge measured by or based, in whole or in part, upon such rents fromthe Premises and/or the Land and improvements of which the Premises are a part(including, without limitation, any and all taxes assessed against Landlord andattributable to taxable margin levied pursuant to Chapter 171 of the Texas TaxCode or any amendment, adjustment or replacement thereof), then all such taxes,assessments, levies or charges, or the part thereof so measured or based, shallbe deemed to be included within the term “Taxes” for the purposes hereof.  Landlord shall have the right to employ a taxconsulting firm to attempt to assure a fair tax burden on the building andgrounds within the applicable taxing jurisdiction.  Tenant agrees to pay its proportionate share(which shall not exceed $2,500 per calendar year) of the cost of suchconsultant.

 

                B.            Tenant shall be liable for all taxeslevied or assessed against any personal property or fixtures placed in thePremises.  If any such taxes are leviedor assessed against Landlord or Landlord’s property and (i) Landlord paysthe same or (ii) the assessed value of Landlord’s property is increased byinclusion of such personal property and fixtures and Landlord pays theincreased taxes, then, upon demand Tenant shall pay to Landlord suchtaxes.  In addition, if the Building is amultiple occupancy building and the cost of any improvements constructed toTenant’s Premises is disproportionately higher than the cost of improvementsconstructed to the premises of other tenants of the Building, then upon demandTenant shall pay the amount of Taxes attributable to such disproportionatelymore expensive improvements, in addition to Tenant’s proportionate share ofTaxes.

 

C.            Tenantshall have the right (unless Landlord shall in good faith agree to contest, atTenant’s sole expense, such tax increase) to contest or resist, in good faith,diligently and by appropriate proceedings, the validity of the amount or rateof any increase or proposed increase in the Taxes, all at Tenant’s sole expense.  If Landlord shall agree to contest suchTaxes, Landlord shall do so at Tenant’s expense (the cost of which contest, ifinvolving the property of Landlord in addition to the Premises, shall beallocated to Tenant on a reasonable and equitable basis but subject to the lastsentence of Paragraph 4A), under the direction and control of Landlord(which shall make all decisions in connection therewith, subject to Tenant’sright to monitor Landlord’s conduct of such contest proceeding); if Landlordelects not to contest such Taxes or, having elected to contest such Taxes,fails to contest such Taxes diligently and in good faith, and such failurecontinues uncured beyond a reasonable time following written notice from Tenantto Landlord, or if Tenant reasonably determines that Landlord is not pursuingan 

 

 

 

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adequately aggressive position with respect to such tax contest andLandlord fails to comply with Tenant’s reasonable request with respect thereto,Tenant shall have the right to itself contest such Taxes.  It shall be a condition precedent to Tenant’sright to contest any such Taxes that Tenant provide Landlord with security (ina form reasonably acceptable to Landlord and Landlord’s mortgagee) in an amountreasonably necessary to assure full payment of such Taxes being contested,together with all penalties, fines and interest and other fees and amounts thatcould be collected by the taxing authority in case the contest is unsuccessful(but in any event not less than the amount reasonably required by Landlord’smortgagee in connection with such contest of Taxes).  In determining the security required pursuantto the immediately preceding sentence, due regard shall be given to Tenant’scontractual obligations with respect to Taxes pursuant to Paragraph 2(C) above.  Tenant shall in all events pay all suchcontested Taxes (together with all penalties, fines, interest and such otherfees and amounts) at least thirty (30) days prior to the date on which the Premises(or any portion thereof) are scheduled for any unstayed foreclosure on accountof nonpayment thereof.  Tenant shallindemnify and hold harmless Landlord from and against any and all expenses,liabilities and claims (including but not limited to attorneys’ fees) incurredby or asserted against Landlord or the Project arising as a result of any suchcontest by Tenant.  Landlord and Tenantagree to reasonably cooperate with one another in connection with all contestsof Taxes under this Lease.

 

                5.             LANDLORD’S REPAIRS.

 

                A.            Tenant understands and agrees thatLandlord’s maintenance, repair and replacement obligations are limited to thoseexpressly set forth in this Paragraph 5. Landlord, at its own cost and expense, shall be responsible only forrepair and replacement of the foundation (below slab on grade) and thestructural members of the roof (including the roof membrane and metal deckingto the extent covered by any existing warranties, but subject to anypenetrations performed by or at the request of Tenant [other than the LeaseholdImprovements] which shall be Tenant’s responsibility if performed bya Tenant engaged contractor not certified by the manufacturer or otherwise byTenant or its contractors in a manner that would void any applicable warranty) and exteriorwalls of the Building, reasonable wear and tear excluded.  The term “walls” as used herein shall notinclude windows, glass or plate glass, doors, special store fronts or officeentries.  Tenant shall immediately giveLandlord written notice of defect or need for repairs after which Landlordshall have reasonable opportunity to repair same or cure such defect.  In addition to the foregoing, Landlord shall,at its sole expense (not subject to reimbursement as a Common Area Charge),repair any damage to the Premises or the Building caused by the negligent orintentional acts or omissions of Landlord or Landlord’s employees, agents orinvitees, or caused by Landlord’s default hereunder.

 

                B.            Additionally, Landlord shall repair,maintain and replace (subject to Tenant’s reimbursement obligations pursuant toArticle 2) those items listed in Paragraphs 3A - 3C (otherthan the repair, replacement and maintenance of the items which are Tenant’sresponsibility pursuant to Paragraph 6) in a commerciallyreasonable manner consistent with the manner in which projects of a similartype, character and location are maintained. Landlord shall promptly commence and diligently pursue to completion theperformance of all repairs or maintenance that are the responsibility ofLandlord under the Lease and in performing such shall use commerciallyreasonable efforts to avoid material interference with Tenant’s operations inthe 

 

 

 

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Premises.  Further, Landlord agreesto use commercially reasonable efforts, consistent with the Landlord’s usualpractices, to enforce warranties available to Landlord with respect to anyrepairs required of Landlord under this Lease.

 

                6.             TENANT’S REPAIRS AND MAINTENANCE.

 

                A.            Subject to the provisions of Article 5above and Article 11 below, Tenant, at its own cost and expense,shall (i) maintain all parts of the Premises (including, but not limitedto, the floor slab of the Premises and the mechanical, electrical, plumbing,sewer, sprinkler and other life-safety equipment, fixtures and systems forminga part of the Premises), in good, neat, clean, sanitary and operable conditionand (ii) promptly make all necessary repairs and replacements to thePremises in a good and workmanlike manner. In addition to the foregoing, Tenant shall, at its sole expense, repairany damage to the Premises or the Building caused by the negligent orintentional acts or omissions of Tenant or Tenant’s employees, agents orinvitees, or caused by Tenant’s default hereunder.

 

                B.            In addition to Tenant’s otherobligations hereunder, Tenant, at its own cost and expense, shall enter into aregularly scheduled preventive maintenance/service contract with a maintenancecontractor approved by Landlord for servicing all hot water, heating and airconditioning and elevator systems and equipment within or serving thePremises.  The service contract mustinclude all services suggested by the equipment manufacturer in itsoperations/maintenance manual (to  be provided to Tenant at the time ofsubstantial completion of the Leasehold Improvements) and an executed copy ofsuch contract must be provided to Landlord prior to the date Tenant takespossession of the Premises.

 

                C.            Tenant’s obligations with respect tothe “floor slab” of the Premises pursuant to Paragraph 6A(i) above(i) shall be construed as referring to the slab on grade of the Premisesand not the foundation of the Building, and (ii) shall apply only to theextent that the repair and maintenance of the floor slab is not caused by thefailure of the foundation of the Building or by a defect in materials orworkmanship in the initial pouring of such slab.

 

                7.             ALTERATIONS.

 

A.            Tenantshall not make any alterations, additions or improvements to the Premiseswithout the prior written consent of Landlord provided, however, Tenant may,without Landlord’s consent, make alterations which are non-structural incharacter, do not affect the Building systems, and the cost of which does notexceed $10,000.00 during the Term of this Lease (“Permitted Non-StructuralAlterations”).  Tenant, at its owncost and expense, may erect such shelves, racks, bins, machinery and tradefixtures as it desires.  Notwithstandingthe foregoing, the installation of such shelves, racks, bins, machinery, tradefixtures and Permitted Non-Structural Alterations shall be subject to theconditions that:  (i) such items donot alter the basic character of the Premises or the Building and/orimprovements of which the Premises are a part; (ii) such items do notoverload or damage the Premises, the Building or such improvements; (iii) suchitems may be removed without injury to the Premises; and (iv) theconstruction, erection or installation thereof complies with all applicablegovernmental laws, ordinances, regulations and with Landlord’s specificationsand requirements.  All alterations,additions, 

 

 

 

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improvements and partitions erected by Tenant shall be and remain theproperty of Tenant during the Term of this Lease.  All Permitted Non-Structural Alterations,shelves, racks, bins, machinery and trade fixtures installed by Tenant shall beremoved on or before the earlier to occur of the date of termination of thisLease or vacating of the Premises by Tenant, at which time, subject to Paragraph11, Tenant shall restore the Premises to their original condition,reasonable wear and tear excepted; notwithstanding the foregoing, Tenant shallnot be required to remove (i) any Permitted Non-Structural Alterations, ifprior to installation, Tenant obtains Landlord’s express written consent forsuch alterations to remain after termination; and (ii) the skylights andassociated ductwork shown on the Plans (as defined in Exhibit “C”),if, prior to lease termination, Landlord provides Tenant with express, writtenconsent to leave such in place.  Allalterations, installations, removals and restoration shall be performed in agood and workmanlike manner so as not to damage or alter the primary structureor structural qualities of the Building and other improvements situated on thePremises or of which the Premises are a part. Notwithstanding anything to the contrary contained herein, it is agreedthat the use of and access to the roof of the Building is expressly reserved toLandlord and is expressly denied to Tenant. Tenant shall not penetrate the roof of the Building in any manner, norinstall or construct any alterations, additions or improvements thereon, norotherwise use or occupy the roof at any time during the Term hereof, withoutthe Landlord’s prior written consent, which may be withheld in Landlord’s solediscretion.

 

B.            Tenantand AIL Investment, L.P., an affiliate of Landlord, have entered into thatcertain License Agreement dated on or about the date hereof (“Solar License”),regarding Tenant’s right to install and operate a solar photovoltaic system onproperty situated near the Building.  Anydefault by Tenant under that Solar License shall be an Event of Defaulthereunder.

 

                8.             SIGNS.  Any signage, decorations, advertising media,blinds, draperies, window treatments, bars, and security installations Tenantdesires for the Premises shall be subject to Landlord’s prior written approvaland shall be submitted to Landlord prior to the Commencement Date.  Tenant shall repair, paint, and/or replacethe Building facia surface to which its signs are attached upon vacation of thePremises, or the removal or alteration of its signage, all at Tenant’s solecost and expense.  Tenant shall not (i) makeany changes to the exterior of the Premises, (ii) install any exteriorlights, decorations, balloons, flags, pennants, banners or painting, or (iii) erector install any signs, windows or door lettering, placards, decorations oradvertising media of any type which can be viewed from the exterior of thePremises, without Landlord’s prior written consent.  All signs, decorations, advertising media,blinds, draperies and other window treatment or bars or other securityinstallations visible from outside the Premises shall conform in all respectsto the criteria established by Landlord and to the requirements of allcovenants, conditions and restrictions applicable to the Premises and theBuilding (including, but not limited to, approval by the Development Review Board).

 

                9.             UTILITIES.  Tenant shall timely pay for all separatelymetered or sub-metered water, gas, heat, light, power, telephone, sewer,sprinkler charges and other utilities and services used on or at the Premises,together with any taxes, penalties, deposits, surcharges or the like pertainingto Tenant’s use of the Premises, and any maintenance charges forutilities.  Other than costs described inParagraph 3F(20), Tenant shall pay all impact or other fees associatedwith 

 

 

 

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utility hook-ups, meter installations or services to the Premises.  Landlord shall have the right to cause any ofsaid services to be separately metered to Tenant at Tenant’s expense.  Tenant shall pay its proportionate share ofall usage charges for jointly metered utilities (including, but not limited tothe cost of utilities consumed in connection with providing electrical powerfor the Building’s canopy lighting, the lighting of the parking facilities andother common areas and facilities associated with the Building, the Building’sfire pump room and irrigation system, as well as other electricity gauged bythe “house meter”).  Landlord shall notbe liable for any interruption or failure of utility service on the Premisesunless caused by Landlord’s negligence or willful misconduct in which caseLandlord shall promptly cause such service to be restored.

 

                10.           INSURANCE.

 

                A.            Landlord shall maintain insurancecovering the Building of which the Premises are a part (including the LeaseholdImprovements to be installed by Landlord pursuant to Exhibit “C”)in an amount not less than the “replacement cost” thereof insuring against theperils and costs of Fire, Lightning, Extended Coverage, Vandalism and MaliciousMischief and such other insurance as Landlord shall deem necessary.

 

                B.            Tenant, at its own expense, shallmaintain during the Term of this Lease a policy or policies of worker’scompensation and commercial general liability insurance, including personalinjury and property damage, with contractual liability coverage, in the amountof Two Million Dollars ($2,000,000.00) for property damage and Two MillionDollars ($2,000,000.00) per occurrence for personal injuries or deaths ofpersons occurring in or about the Premises. Tenant, at its own expense, also shall maintain during the Term of thisLease (i) “All Risks” or “Special Causes of Loss” property insurancecovering the replacement cost of all alterations, additions, partitions andimprovements installed or placed on the Premises by Tenant or by Landlord onbehalf of Tenant (other than the Leasehold Improvements to be installed byLandlord pursuant to Exhibit “C”), and all of Tenant’s personalproperty contained within the Premises and (ii) business interruptioninsurance insuring loss of profits in the event of an insured peril damagingthe Premises.  Said policies shall (i) nameLandlord and Landlord’s property manager (currently, Hillwood AllianceServices, LLC) as additional insureds and insure Landlord’s and Landlord’sproperty manager’s contingent liability under this Lease (except for the worker’scompensation policy, which instead shall include a waiver of subrogationendorsement in favor of Landlord and Landlord’s property manager), (ii) beissued by an insurance company which is acceptable to Landlord, but in no eventwith a carrier having an A. M. Best rating lower than A-VII, (iii) providethat said insurance shall not be cancelled unless thirty (30) days priorwritten notice shall have been given to Landlord, and (iv) include awaiver of subrogation in favor of Landlord, Landlord’s property manager, andLandlord’s mortgagee.  In addition, suchinsurance provided by Tenant shall be primary coverage for Landlord (andLandlord’s property manager, if applicable) when any policy issued to Landlord(and Landlord’s property manager, if applicable) is similar or duplicate incoverage, and Landlord’s policy shall be excess over Tenant’s policies.  All insurance policies carried by Tenanthereunder shall expressly provide (by endorsement or otherwise) that Landlord’srights thereunder shall be assignable to Landlord’s mortgagee who shall beshown as an additional insured thereon. Said policy or policies or certificates thereof shall be delivered toLandlord by Tenant upon commencement of the Term of the Lease and upon eachrenewal of said insurance.

 

 

 

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                C.            Tenantwill not permit the Premises to be used for any purpose or in any manner thatwould (i) void the insurance thereon, (ii) increase the insurancerisk, or (iii) cause the disallowance of any sprinkler credits, includingwithout limitation, use of the Premises for the receipt, storage or handling ofany product, material or merchandise that is explosive or highlyinflammable.  If any increase in the costof any insurance on the Premises or the Building of which the Premises are apart is caused by Tenant’s use of the Premises, or because Tenant, in defaulthereof, vacates the Premises prior to the expiration of this Lease, then Tenantshall pay the amount of such increase to Landlord.

 

                11.           FIRE AND CASUALTY DAMAGE.

 

                A.            If the Premises or the Building ofwhich the Premises are a part should be damaged or destroyed by fire or otherperil, Tenant immediately shall give written notice to Landlord.  If the Building of which the Premises are apart should be totally destroyed by any peril which would be covered by theinsurance which Landlord is required to maintain under Paragraph 10Aabove, or if they should be so damaged thereby that, in Landlord’s estimation,rebuilding or repairs cannot be completed within one hundred eighty (180) daysafter Landlord’s receipt of all insurance proceeds with respect to such damageand receipt of permits and licenses required to commence reconstruction, thisLease shall terminate and the rent shall be abated during the unexpired portionof this Lease, effective upon the date of the occurrence of such damage.

 

                B.            If the Building of which thePremises are a part should be damaged by any peril which would be covered bythe insurance which Landlord is required to maintain under Paragraph 10Aabove, and in Landlord’s estimation, rebuilding or repairs can be substantiallycompleted within one hundred eighty (180) days after the date of Landlord’sreceipt of all insurance proceeds with respect to such damage and receipt ofpermits and licenses required to commence reconstruction, this Lease shall notterminate, and Landlord shall restore the Premises to substantially itsprevious condition, except that Landlord shall not be required to rebuild,repair or replace any part of the partitions, fixtures, additions and otherimprovements that may have been constructed, erected or installed in, or aboutthe Premises for the benefit of, or by or for Tenant, other than the LeaseholdImprovements described in Exhibit “C.” Effective upon the date of the occurrence of such damage and ending uponsubstantial completion, if the Premises are untenantable in whole or partduring such period, the rent shall be reduced to such extent as may be fair andreasonable under all of the circumstances. If such repairs and rebuilding have not been substantially completedwithin one hundred eighty (180) days after the date of Landlord’s receipt ofall insurance proceeds and receipt of permits and licenses required to commencereconstruction (subject to Force Majeure Delays [hereinafter defined] and anydelays caused by Tenant or its employees, agents or contractors), Tenant, asTenant’s exclusive remedy, may terminate this Lease by delivering writtennotice of termination to Landlord in which event the rights and obligationshereunder shall cease and terminate (except as expressly provided to thecontrary herein).

 

                C.            Notwithstanding anything herein tothe contrary (i) in no event shall Landlord be required to expend a sumgreater than the net insurance proceeds actually received by Landlord 

 

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with respect to the damage in question in connection with Landlord’srepair and restoration obligations hereunder, and (ii) in the event theholder of any indebtedness secured by a mortgage or deed of trust covering thePremises requires that the insurance proceeds be applied to such indebtedness,then Landlord shall have the right to terminate this Lease by deliveringwritten notice of termination to Tenant within fifteen (15) days after suchrequirement is made known by any such holder, whereupon all rights andobligations hereunder shall cease and terminate (except as expressly providedto the contrary herein).

 

                D.            Landlord hereby waives and releasesTenant (but only to the extent of the insurance coverage required to bemaintained by the respective parties hereunder) of and from any and all rightsof recovery, claim, action or cause of action, against Tenant and its agents,officers and employees, for any liability, loss or damage that may occur to thePremises, improvements or the Building of which the Premises are a part, orpersonal property (building contents) within the Building and/or Premises asthe result of any fire or other casualty required to be insured against underthis Lease. Tenant hereby waives and releases Landlord and Landlord’s propertymanager (but only to the extent of the insurance coverage required to bemaintained by the respective parties hereunder) of and from any and all rightsof recovery, claim, action or cause of action, against Landlord and Landlord’sproperty manager, and their agents, officers and employees, for any liability,loss or damage that may occur to the Premises, improvements or the Building ofwhich the Premises are a part, or personal property (building contents) withinthe Building and/or Premises as the result of any fire or other casualtyrequired to be insured against under this Lease.  Each party to this Lease agrees immediatelyafter execution of this Lease to give each insurance company, which has issuedto it policies of fire and extended coverage insurance, written notice of theterms of the mutual waivers contained in this subparagraph and to have theinsurance policies properly endorsed to reflect such waivers.

 

**                12.          LIABILITY AND INDEMNIFICATION.  EXCEPT FORANY CLAIMS, RIGHTS OF RECOVERY AND CAUSES OF ACTION THAT TENANT HAS RELEASED,LANDLORD SHALL INDEMNIFY, PROTECT, HOLD HARMLESS AND DEFEND TENANT, ITS AGENTS,EMPLOYEES, CONTRACTORS, PARTNERS, DIRECTORS, OFFICERS AND ANY AFFILIATES OF THEABOVE-MENTIONED PARTIES (COLLECTIVELY, THE “TENANT AFFILIATES”) FROM ANDAGAINST ANY AND ALL OBLIGATIONS, SUITS, LOSSES, JUDGMENTS, ACTIONS, DAMAGES,CLAIMS OR LIABILITY (INCLUDING, WITHOUT LIMITATION, ALL COSTS, ATTORNEYS’FEES, AND EXPENSES INCURRED IN CONNECTION THEREWITH) (I) FOR ANY INJURY OR DAMAGE TO ANY PERSON IN, ON OR ABOUT THEPREMISES OR ANY PART THEREOF AND/OR THE BUILDING OF WHICH THE PREMISES AREA PART, WHEN SUCH INJURY OR DAMAGE SHALL BE CAUSED BY THE ACT, NEGLECT, FAULTOF, OR OMISSION OF ANY DUTY WITH RESPECT TO THE SAME BY LANDLORD, ITS AGENTS,SERVANTS AND EMPLOYEES OR (II) ARISING FROM A BREACH, VIOLATION ORNONPERFORMANCE OF ANY TERM, PROVISION, COVENANT OR AGREEMENT OF LANDLORDHEREUNDER, OR A BREACH OR VIOLATION BY LANDLORD OF ANY COURT ORDER OR ANY LAW,REGULATION OR ORDINANCE OF ANY FEDERAL, STATE, OR LOCAL AUTHORITY (EXCEPT TOTHE EXTENT THE INDEMNIFIED LOSS IS CAUSED BY THE NEGLIGENCE OR INTENTIONAL**

 

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**MISCONDUCT OF TENANT AND/OR ANYTENANT AFFILIATES, IN WHICH EVENT THIS INDEMNITY SHALL NOT APPLY TO THEALLOCABLE SHARE OF SUCH LOSS RESULTING FROM THE NEGLIGENCE OR INTENTIONALMISCONDUCT OF TENANT AND/OR ANY TENANT AFFILIATES). ****EXCEPT FOR ANY CLAIMS, RIGHTS OFRECOVERY AND CAUSES OF ACTION THAT LANDLORD HAS RELEASED, TENANT SHALLINDEMNIFY, PROTECT, HOLD HARMLESS AND DEFEND LANDLORD, ITS AGENTS, EMPLOYEES,CONTRACTORS, PARTNERS, DIRECTORS, OFFICERS AND ANY AFFILIATES OF THEABOVE-MENTIONED PARTIES (COLLECTIVELY THE “LANDLORD AFFILIATES”) FROMAND AGAINST ANY AND ALL OBLIGATIONS, SUITS, LOSSES, JUDGMENTS, ACTIONS,DAMAGES, CLAIMS OR LIABILITY (INCLUDING, WITHOUT LIMITATION, ALL COSTS,ATTORNEYS’ FEES, AND EXPENSES INCURRED IN CONNECTION THEREWITH) IN CONNECTIONWITH ANY LOSS, INJURY OR DAMAGE (I) TO ANY PERSON OR PROPERTY WHATSOEVEROCCURRING IN, ON OR ABOUT THE PREMISES OR ANY PART THEREOF AND/OR OF THEBUILDING OF WHICH THE PREMISES ARE A PART, THE USE OF WHICH TENANT MAY HAVEIN ACCORDANCE WITH THIS LEASE, WHEN SUCH INJURY OR DAMAGE SHALL BE CAUSED BYTHE ACT, NEGLECT, FAULT OF, OR OMISSION OF ANY DUTY WITH RESPECT TO THE SAME BYTENANT, OR ANY TENANT AFFILIATES, OR INVITEES, OR (II) ARISING FROM ABREACH, VIOLATION OR NON-PERFORMANCE OF ANY TERM, PROVISION, COVENANT ORAGREEMENT OF TENANT HEREUNDER, OR A BREACH OR VIOLATION BY TENANT OF ANY COURTORDER OR ANY LAW, REGULATION, OR ORDINANCE OF ANY FEDERAL, STATE OR LOCALAUTHORITY, EXCEPT TO THE EXTENT THE INDEMNIFIED LOSS IS CAUSED BY THENEGLIGENCE OR INTENTIONAL MISCONDUCT OF LANDLORD AND/OR LANDLORD AFFILIATES INWHICH EVENT THIS INDEMNITY SHALL NOT APPLY TO THE ALLOCABLE SHARE OF SUCH LOSSRESULTING FROM THE NEGLIGENCE OR INTENTIONAL MISCONDUCT OF LANDLORD AND/ORLANDLORD AFFILIATES.  IF ANY CLAIM ISMADE AGAINST LANDLORD OR LANDLORD AFFILIATES, OR AGAINST TENANT OR TENANTAFFILIATES (AS APPLICABLE), THE INDEMNIFYING PARTY, AT ITS SOLE COST ANDEXPENSE, SHALL DEFEND ANY SUCH CLAIM, SUIT OR PROCEEDING BY OR THROUGHATTORNEYS SATISFACTORY TO THE INDEMNIFIED PARTY.  THE PROVISIONS OF THIS PARAGRAPH 12SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS LEASE WITH RESPECT TO ANYCLAIMS OR LIABILITY OCCURRING PRIOR TO SUCH EXPIRATION OR TERMINATION.**

 

                13.           USE. The Premises shall be used only for the purpose of research anddevelopment, receiving, storing, assembling, manufacturing, shipping andselling (other than retail) products, materials and merchandise made and/ordistributed by Tenant and for such other lawful purposes as may be incidentalthereto.  Tenant acknowledges that itdoes not intend to use the Premises to serve the public.  Outside storage, including withoutlimitation, storage of trucks and other vehicles, is prohibited withoutLandlord’s prior written consent.  Tenantshall comply with (i) all governmental laws, ordinances and regulationsapplicable to the use and occupancy of the Premises, and promptly shall complywith all governmental orders and directives for the 

 

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correction, prevention and abatement of nuisances in or upon, or connectedwith, the Premises, all at Tenant’s sole expense, (ii) the requirements ofall deed restrictions, restrictive covenants and other covenants, conditionsand restrictions affecting the Building and/or the Land, and (iii) therequirements of “Alliance Development Guidelines” as may exist from time totime, and all amendments thereto (provided that any amendments to such deedrestrictions, restrictive covenants and other covenants, conditions andrestrictions as well as amendments to the “Alliance Development Guidelines”shall not materially adversely interfere with the Permitted Use).  Tenant shall not permit any objectionable orunpleasant odors, smoke, dust, gas, noise or vibrations to emanate from thePremises, nor take any other action that would constitute a nuisance or woulddisturb, unreasonably interfere with, or endanger Landlord or any other lesseesof the Building of which the Premises are a part.  Tenantshall, at Tenant’s sole cost, obtain all permits required for Tenant’s use ofthe Premises.

 

                14.           INSPECTION.  Landlord and Landlord’s agents andrepresentatives shall have the right to enter the Premises at any time, upon atleast 24 hours’ prior notice (which may be telephonic notice), and accompaniedby a representative of Tenant (which representative Tenant agrees to makeavailable for the purpose of such entry), to (i) inspect the Premises, (ii) makesuch repairs as may be required or permitted pursuant to this Lease, and (iii) showthe Premises to prospective purchasers of, or parties who are anticipated toprovide financing with respect to, the Building.  Notwithstanding the foregoing, Landlord shallhave the right to enter the Premises at any time, without notice to Tenant, incase of an emergency posing a threat to persons or property.  During the period that is six (6) monthsprior to the end of the Term of this Lease, upon telephonic notice to Tenant,Landlord and Landlord’s representatives may enter the Premises upon at least 24hours’ prior notice (which may be telephonic notice), and accompanied by arepresentative of Tenant (which representative Tenant agrees to make availablefor the purpose of such entry) during business hours for the purpose of showingthe Premises.  In addition, Landlord shallhave the right to erect a suitable sign on the Premises stating the Premisesare available.  Tenant shall notifyLandlord in writing at least thirty (30) days prior to vacating the Premisesand shall arrange to meet with Landlord for a joint inspection of the Premisesprior to vacating.  If Tenant fails togive such notice or to arrange for such inspection, then Landlord’s inspectionof the Premises shall be deemed correct for the purpose of determining Tenant’sresponsibility for repairs and restoration of the Premises.

 

                15.           ASSIGNMENT AND SUBLETTING

 

                A.            Tenant shall not assign (eithervoluntarily, nor permit assignment by operation of law), sublet, transfer orencumber this Lease, or any interest therein (each, a “Transfer”),without the prior written consent of Landlord. Any attempted Transfer by Tenant in violation of the terms and covenantsof this Paragraph shall be void.  NoTransfer, whether consented to by Landlord or not, shall relieve Tenant of itsliability hereunder.  In the event Tenantdesires to effect a Transfer, Tenant shall give written notice thereof toLandlord within a reasonable time prior to the proposed commencement date ofsuch Transfer, which notice shall set forth the name of the proposed sublessee,assignee or other Transferee (as defined below), the relevant terms of anysublease or assignment and copies of financial reports and other relevantfinancial information of the proposed Transferee (a “Transfer Request”).  Landlord shall be entitled to charge Tenant areasonable fee for processing Tenant’s request for any Transfer (other than toan 

 

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Affiliate [defined below]), including, but not limited to, Landlord’sreasonable out-of-pocket expenses and attorneys’ fees.

 

                B.            In addition to, but not inlimitation of, Landlord’s right to approve of any Transferee (other than anyAffiliate), Landlord shall have the option, in its sole discretion, in theevent of any proposed Transfer (other than to an Affiliate), to terminate thisLease, or in case of a proposed subletting of less than the entire Premises, torecapture the portion of the Premises to be sublet, as of the date the Transferis to be effective.  The option shall beexercised, if at all, by Landlord giving Tenant written notice thereof (“RecaptureNotice”) within sixty (60) days following Landlord’s receipt of theTransfer Request as required above.  Ifthis Lease shall be terminated with respect to the entire Premises pursuant tothis Paragraph, the Term of this Lease shall end on the date stated in the RecaptureNotice as if that date had been originally fixed in this Lease for theexpiration of the Term hereof (“Cancellation Date”); provided, however,that effective on the Cancellation Date Tenant shall pay Landlord all amounts,as estimated by Landlord, payable by Tenant to such date with respect to taxes,insurance, repairs, maintenance, restoration and other obligations, costs orcharges which are the responsibility of Tenant hereunder.  Further, upon any such cancellation Landlordand Tenant shall have no further obligations or liabilities to each other underthis Lease, except with respect to obligations or liabilities which haveaccrued hereunder as of such Cancellation Date (in the same manner as if suchCancellation Date were the date originally fixed in this Lease for theexpiration of the Term hereof) and except for those obligations and liabilitieswhich, by the express terms of this Lease, are to survive any expiration ortermination hereof.  If Landlord recapturesonly a portion of the Premises under this Paragraph, the Base Rent during theunexpired Term hereof shall abate proportionately based on the rent per squarefoot contained in this Lease as of the date immediately prior to suchrecapture.  Tenant shall, at Tenant’s owncost and expense, discharge in full any outstanding commission obligation whichmay be due and owing as a result of any proposed Transfer, whether or not thePremises are recaptured pursuant hereto and rented by Landlord to the proposedtenant or any other tenant.

 

                C.            Upon the occurrence of a Transfer(other than to an Affiliate), whether or not consented to by Landlord, ormandated by judicial intervention, Tenant hereby assigns, transfers and conveysto Landlord all rents or other sums received or receivable by Tenant under anysuch assignment or sublease, which are in excess of the rents and other sumspayable by Tenant under this Lease (or in case of a sublease, which are inexcess of the rents and other sums payable by Tenant with respect to theportion of the Premises that is subleased), and agrees to pay such amounts toLandlord within ten (10) days after receipt.

 

                D.            If this Lease is assigned to anyperson or entity pursuant to the provisions of the United States BankruptcyCode, 11 U.S.C. § 101 et. seq. (the “Bankruptcy Code”), and exceptas otherwise provided in the Bankruptcy Code or orders of the applicablebankruptcy court, any and all monies or other consideration payable orotherwise to be delivered in connection with such assignment shall be paid ordelivered to Landlord, shall be and remain the exclusive property of Landlordand shall not constitute property of Tenant or of the estate of Tenant withinthe meaning of the Bankruptcy Code.  Anyand all monies or other considerations constituting Landlord’s property underthe preceding sentence not paid or delivered to Landlord shall be held in trustfor the benefit of Landlord and be promptly paid or delivered to Landlord.  Any person or 

 

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entity to which this Lease is assigned pursuant to the provisions ofthe Bankruptcy Code, shall be deemed, without further act or deed, to haveassumed all of the obligations arising under this Lease on and after the dateof such assignment.  Any such assigneeshall upon demand execute and deliver to Landlord an instrument confirming suchassumption.

 

                E.             Any assignee, sublessee ortransferee of Tenant’s interest in this Lease (all such assignees, sublesseesand transferees being hereinafter referred to as “Transferees”), by acceptingany such Transfer shall be deemed to have assumed Tenant’s obligationshereunder, and shall be deemed to have assumed liability to Landlord for allamounts paid to persons other than Landlord by such Transferees.  No Transfer, whether consented to by Landlordor not or permitted hereunder, shall relieve Tenant of its liabilityhereunder.  If an Event of Default occurswhile the Premises or any part thereof are assigned or sublet, then Landlord,in addition to any other remedies herein provided, or provided by law, maycollect directly from such Transferee all rents payable to Tenant and applysuch rent against any sums due Landlord hereunder.  No such collection shall be construed toconstitute a novation or a release of Tenant from the further performance ofTenant’s obligations hereunder.

 

                F.             Notwithstanding any provision ofthis Lease to the contrary, Tenant may, without Landlord’s consent, but uponprior reasonable notice to Landlord, assign the Lease or sublet the Premises orany portion thereof to any person or entity (i) which controls, iscontrolled by, or is under common control with Tenant, or (ii) (providedsuch person or entity would have a tangible net worth [determined in accordancewith generally accepted accounting principles consistently applied] immediatelyfollowing such acquisition that is equal to or greater than the net worth ofTenant as of the date immediately prior to such acquisition) which acquiressubstantially all the assets of Tenant as a going concern (each such corporation,person or entity described in clauses (i)-(ii) above, an “Affiliate”);provided, however, that the Affiliate assumes in writing all of Tenant’sobligations under the Lease.

 

                G.            Landlordagrees that it shall not unreasonably withhold its consent to any assignment orsubletting proposed to be entered into by Tenant.  In considering whether it should consent toany subletting or assignment requested by Tenant, Landlord may take intoconsideration (among other factors) the credit standing of the proposed assigneeor subtenant, the purpose for which the Premises would be used by the proposedassignee or subtenant (including whether such use would violate any exclusiveuse rights that might be in existence and by which Landlord may be bound, orviolate any deed restrictions, restrictive covenants, covenants, conditions andrestrictions, or the “Alliance Developments Guidelines”, as may then be inexistence, it being understood and agreed that Landlord shall have the right torefuse its consent if the proposed use by the assignee or subtenant wouldresult in any such violation), the length of the proposed sublease, thebusiness reputation of the proposed assignee or subtenant, whether the proposedassignee’s or subtenant’s operations would involve use of hazardous substances,and all other relevant factors.  Notwithstanding the foregoing, it is agreedthat Landlord’s determination as to the credit standing and the businessreputation of the proposed assignee or sublessee may be made in Landlord’s soleand absolute discretion it being understood and agreed that Landlord shall havethe right to refuse its consent if such credit standing or reputation isunacceptable to Landlord. Notwithstanding anything to the contrary contained herein, Landlord, inits sole and absolute discretion, may refuse to consent to a sublease orassignment of any portion of the 

 

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Premises to (i) any party who is a then current tenant of Landlordor an affiliate of a then current tenant of Landlord or a then current tenantof an affiliate of Landlord or an affiliate of a then current tenant of anaffiliate of Landlord, or (ii) any other party who owns property in (orwho is a user or occupant of property in) the Alliance development or the CircleT development but, in each case, only if Landlord or an affiliate of Landlordhas space (in shell condition or better condition) available (at the timeLandlord’s consent is sought) which is sufficient to satisfy the applicableneeds of the proposed assignee or subtenant and is located within or in thevicinity of the Alliance development or the Circle T development.

 

                16.           CONDEMNATION.  If any portion of the Project is taken whichin Landlord’s judgment would materially impair the ownership or operation ofthe Building or as a result of such taking Landlord’s mortgagee accelerates thepayment of indebtedness secured by the Project, then upon written notice byLandlord this Lease shall terminate and the rent shall be apportioned as ofsuch date. If more than twenty-five percent (25%) of the Premises are taken forany public or quasi-public use under governmental law, ordinance or regulation,or by right of eminent domain, or by a conveyance in lieu thereof, and thetaking prevents or materially interferes with the use of the Premises for thepurpose for which they were leased to Tenant, this Lease shall terminate andthe rent shall be abated during the unexpired portion of this Lease, effectiveon the date of such taking.  If less thantwenty-five percent (25%) of the Premises are taken for any public orquasi-public use under any governmental law, ordinance or regulation, or byright of eminent domain, or by a conveyance in lieu thereof, this Lease shallnot terminate (except as may be permitted in the first grammatical sentence ofthis Paragraph 16), but the rent payable hereunder during the unexpired portionof this Lease shall be reduced to such extent as may be fair and reasonableunder all of the circumstances.  Allcompensation awarded in connection with or as a result of any of the foregoingproceedings shall be the property of Landlord; and Tenant hereby assigns anyinterest in any such award to Landlord; provided, however, Landlord shall haveno interest in any award made to Tenant for loss of business or goodwill or forthe taking of Tenant’s fixtures and improvements, if a separate award for suchitems is made to Tenant.

 

                17.           HOLDING OVER.  At the termination of this Lease by itsexpiration or otherwise, Tenant immediately shall deliver possession of thePremises to Landlord with all repairs and maintenance required herein to beperformed by Tenant completed.  If, forany reason, Tenant retains possession of the Premises or any part thereof aftersuch termination, or fails to complete any repairs required hereby, thenLandlord may, at its option, serve written notice upon Tenant that such holdingover constitutes either (i) the creation of a month to month tenancy, uponthe terms and conditions set forth in this Lease, or (ii) creation of atenancy at sufferance, in any case upon the terms and conditions set forth inthis Lease; provided, however, that the monthly rental (or daily rental under(ii)) shall, in addition to all other sums which are to be paid by Tenanthereunder, whether or not as additional rent, be equal to double the rentalbeing paid monthly to Landlord under this Lease immediately prior to suchtermination (prorated in the case of (ii) on the basis of a 365-day yearfor each day Tenant remains in possession). If no such notice is served, then a tenancy at sufferance shall bedeemed to be created at the rent in the preceding sentence.  Tenant shall also pay to Landlord all damagessustained by Landlord resulting from retention of possession by Tenant,including the loss of any proposed subsequent tenant for any portion of thePremises.  The provisions of thisparagraph shall not constitute a 

 

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waiver by Landlord of any right of re-entry as herein set forth; norshall receipt of any rent or any other act in apparent affirmance of thetenancy operate as a waiver of the right to terminate this Lease for a breachof any of the terms, covenants, or obligations herein on Tenant’s part to beperformed.  No holding over by Tenant,whether with or without consent of Landlord, shall operate to extend this Leaseexcept as otherwise expressly provided. The preceding provisions of this Paragraph 17 shall not beconstrued as consent for Tenant to retain possession of the Premises in theabsence of written consent thereto by Landlord.

 

                18.           QUIET ENJOYMENT.  Landlord has the authority to enter into thisLease and so long as Tenant pays all amounts due hereunder and performs allother covenants and agreements herein set forth, Tenant shall peaceably andquietly have, hold and enjoy the Premises for the Term hereof without hindrancefrom Landlord subject to the terms and provisions of this Lease.  If this Lease is a sublease, then Tenantagrees to take the Premises subject to the provisions of the prior leases.

 

                19.           EVENTS OF DEFAULT.  The following events (herein individuallyreferred to as an “Event of Default”) each shall be deemed to be anevent of default by Tenant under this Lease:

 

                A.            Tenant shall fail to pay anyinstallment of the Base Rent herein reserved when due, or any other payment orreimbursement to Landlord required herein when due, and such failure shallcontinue until the later to occur of (i) a period of five (5) daysfrom the date such payment was due or (ii) five (5) days after writtennotice of delinquency is delivered to Tenant; provided, however, Tenant shallbe entitled to the written notice and opportunity to cure in clause (ii) ononly one (1) occasion during any twelve (12) month period.

 

                B.            Any guarantor of Tenant’s obligationshereunder shall:  (i) becomeinsolvent; (ii) admit in writing its inability to pay its debts; (iii) makea general assignment for the benefit of creditors; (iv) commence any case,proceeding or other action seeking to have an order for relief entered on itsbehalf as a debtor or to adjudicate it a bankrupt or insolvent, or seekingreorganization, arrangement, adjustment, liquidation, dissolution orcomposition of it or its debts under any law relating to bankruptcy,insolvency, reorganization or relief of debtors, or seeking appointment of areceiver, trustee, custodian or other similar official for it or for all or ofany substantial part of its property; or (v) take any action to authorizeor in contemplation of any of the actions set forth above in this Paragraph.

 

                C.            Any case, proceeding or other actionagainst any guarantor of Tenant’s obligations hereunder shall be commencedseeking:  (i) to have an order forrelief entered against it as debtor or to adjudicate it a bankrupt orinsolvent; (ii) reorganization, arrangement, adjustment, liquidation,dissolution or composition of it or its debts under any law relating tobankruptcy, insolvency, reorganization or relief of debtors; (iii) appointmentof a receiver, trustee, custodian or other similar official for it or for allor any substantial part of its property, and such case, proceeding or otheraction (a) results in the entry of an order for relief against it which isnot fully stayed within seven (7) business days after the entry thereof or(b) shall remain undismissed for a period of forty-five (45) days.

 

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                D.            Subject to Paragraph 20Kbelow, Tenant shall (i) fail to take possession of the Premises uponsubstantial completion of the Leasehold Improvements, (ii) vacate, desert,or abandon all or a substantial portion of the Premises, or threaten to do soor (iii) fail to continuously operate its business at the Premises for thepermitted use set forth herein, whether or not Tenant is in default in paymentof the rental payments due under this Lease.

 

                E.             Tenant shall fail to discharge (orbond around as provided in Paragraph 22) any lien placed upon thePremises in violation of Paragraph 22 hereof within thirty (30) daysafter Tenant has received notice of any such lien or encumbrance.

 

                F.             Tenant shall fail to comply withany term, provision or covenant of this Lease (other than those listed above inthis Paragraph 19), and shall not cure such failure within thirty (30)days after written notice thereof to Tenant, or such longer time period (not toexceed ninety (90) days) if Tenant is unable to reasonably cure such failurewithin thirty (30) days so long as Tenant commences such cure within thirty(30) days and diligently pursues such cure to completion.

 

                G.            Tenant, its bankruptcy trustee, orany entity authorized by court order to act on behalf of Tenant, shall rejectthis Lease under 11 U.S.C. sec. 365(a) or any other provision of Title 11of the United States Code, or the deemed rejection of this Lease by operationof law under 11 U.S.C. sec. 365(d)(4). Any such rejection of this Lease terminates this Lease, without noticeof any kind to Tenant, effective on the later of:  (1) the date Tenant vacates the Premisesfollowing such rejection; (2) the date the Bankruptcy Court withjurisdiction over Tenant’s bankruptcy case enters an order on its docketauthorizing Tenant to reject this Lease; or (3) the date this Lease isdeemed rejected under 11 U.S.C. sec. 365(d)(4).

 

                H.            Failure to deliver subordination orattornment instruments or any estoppel certificate within the time period setforth in Section 21 and Section 24(d) of this Lease and suchfailure continues for more than ten (10) days after notice thereof.

 

                20.           REMEDIES.

 

                A.            Upon each occurrence of an Event ofDefault, Landlord shall have the option to pursue, without any notice ordemand, any one or more of the following remedies and/or any other remedies towhich Landlord is entitled at law or in equity:

 

                                                                (1)           Terminate this Lease, in which event Tenant shallimmediately surrender the Premises to Landlord. If Tenant fails to do so, Landlord may, without any further notice andwithout prejudice to any other remedy Landlord may have for possession or arrearagesin rental, enter upon and take possession of the Premises and remove Tenant andits effects without being liable for prosecution or any claim for damagestherefor, and Tenant shall indemnify Landlord for all loss and damage whichLandlord may suffer by reason of such termination, whether through inability torelet the Premises or otherwise, including any loss of rental for the remainderof the Term.

 

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                                                                (2)           If the Event of Default relates to nonpayment of Base Rentor any other monetary sum due hereunder, or the desertion, vacation orabandonment of the Premises, terminate this Lease, in which event Tenant’sdefault shall be deemed a total and entire breach of Tenant’s obligations underthis Lease and Tenant immediately shall become liable for damages in an amountequal to the excess of (i) the total rental for the remainder of the Term,discounted at the Prime Rate (hereinafter defined) to the then present value,together with all other expenses incurred by Landlord in connection with Tenant’sdefault, all sums due pursuant to Paragraph 20B below, and the unpaidrental due as of the date of termination, over (ii) the fair market rentalvalue of the Premises for the balance of the Term, discounted at the Prime Rateto the then present value.  For thepurposes of clause (i) above, the components of monthly rent (other thanBase Rent) for the remainder of the Term shall be deemed to be equal to therespective monthly amounts thereof as were due and payable during the month inwhich the Lease was terminated.  It isacknowledged, intended and agreed that the amounts which Landlord is entitledto recover under this Paragraph 20A(2) constitute liquidateddamages and not a penalty for Tenant’s defaults related to nonpayment ofrental, or the desertion, vacation or abandonment of the Premises.  Such amounts constitute the parties’ best,good faith, and reasonable estimate of the damages which would be suffered byLandlord in the event any such default occurs, the exact amount of such damagesbeing difficult or impractical to calculate.

 

                                                                (3)           Enter upon and take possession of the Premises as Tenant’sagent without terminating this Lease and without being liable for prosecutionor any claim for damages therefor, and Landlord may relet the Premises asTenant’s agent and receive the rental therefor, in which event Tenant shall payto Landlord on demand all sums due pursuant to Paragraph 20B below,together with any deficiency that may arise by reason of such reletting.

 

                                                                (4)           Do whatever Tenant is obligated to do under this Lease andenter the Premises, without being liable for prosecution or any claim fordamages therefor, to accomplish such purpose. Tenant shall reimburse Landlord immediately upon demand for any expenseswhich Landlord incurs in thus effecting compliance with this Lease on Tenant’sbehalf, together with interest thereon at the highest lawful rate from the dateLandlord incurs the expense in question until Landlord is reimbursed therefor.

 

                                                                (5)           Require Tenant to pay any rental in quarterly installmentsin advance of each calendar quarter during the Term by certified or cashier’scheck.

 

                                                                (6)           Without notice, alter the locks and any other securitydevice or devices which allow Tenant access to the Premises or the Building ofwhich the Premises form a part, and Landlord shall not be required to provide anew key or right of access to Tenant, and restrict or terminate any right touse parking facilities associated with the Building as well as utility servicesto the Premises.  This Paragraph 20A(6) isintended to and shall supersede the provisions of Section 93.002 of theTexas Property Code.

 

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                                                                (7)           Landlord shall have a duty to mitigate damages under thisLease to the same extent required under Texas law.

 

                B.            Upon the occurrence of an Event of Default, in additionto any other sum provided to be paid herein, Tenant also shall be liable forand shall pay to Landlord:  (i) brokers’fees incurred by Landlord in connection with reletting the whole or any part ofthe Premises; (ii) the costs of removing and storing Tenant’s or otheroccupant’s property; (iii) the costs of repairing, altering, remodeling orotherwise putting the Premises into condition acceptable to a new tenant ortenants; (iv) all reasonable expenses incurred in marketing the Premisesand (v) all reasonable expenses incurred by Landlord in enforcing ordefending Landlord’s rights and/or remedies. If either party hereto institutes any action or proceeding to enforceany provision hereof by reason of any alleged breach of any provision of thisLease, the prevailing party shall be entitled to receive from the losing partyall reasonable attorneys’ fees and all court costs in connection with suchproceeding.  If Tenant files a voluntarypetition under any chapter of title 11 of the United States Code, or if aninvoluntary petition is filed against Tenant seeking relief under any chapterof title 11 of the United States Code, Tenant acknowledges that Landlord may,at its option, retain an attorney to represent Landlord in such bankruptcy caseand all attorneys’ fees and expenses (including expenses of consulting ortestifying expert witnesses) incurred by Landlord in connection with suchbankruptcy case shall be recoverable by Landlord as additional rent under thisLease and shall constitute part of the cure required under 11 U.S.C. sec.365(b)(1)(A) if Tenant seeks to assume or assume and assign this Lease.

 

                C.            In the event Tenant fails to makeany payment due hereunder when payment is due (subject to any notice and cureperiods provided herein), to help defray the additional cost to Landlord forprocessing such late payments, Tenant shall pay to Landlord on demand a latecharge in an amount equal to five percent (5%) of such payment; and the failureto pay such amount within five (5) days after demand therefor shall be anadditional Event of Default hereunder. The provision for such late charge shall be in addition to all ofLandlord’s other rights and remedies hereunder or at law and shall not beconstrued as liquidated damages or as limiting Landlord’s remedies in anymanner.

 

                D.            Exercise by Landlord of any one ormore remedies hereunder granted or otherwise available shall not be deemed tobe an acceptance of surrender of the Premises by Landlord, whether by agreementor by operation of law, it being understood that such surrender can be effectedonly by the written agreement of Landlord and Tenant.  Tenant and Landlord further agree that forbearanceby Landlord to enforce its rights pursuant to this Lease, at law or in equity,shall not be a waiver of Landlord’s right to enforce one or more of its rightsin connection with that or any subsequent default.

 

                E.             The term “Prime Rate” asused herein shall mean the per annum “prime rate” of interest as published, onthe date on which this Lease is terminated in accordance with this Paragraph20, by The Wall Street Journal, Southwest Edition, in its listing of “MoneyRates”, or if The Wall Street Journal is not published on the date on whichthis Lease is terminated, then the “prime rate” of interest as published in TheWall Street Journal on the most recent date prior to the date on which thisLease is so terminated.

 

 

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                F.             If Landlord fails to perform any of its obligationshereunder within thirty (30) days after written notice from Tenant specifyingin detail such failure (or if the failure cannot be corrected, through theexercise of reasonable diligence, within such thirty (30)-day period, ifLandlord does not commence to correct same within such thirty (30)-day periodand thereafter diligently prosecute same to completion), Tenant’s sole andexclusive remedy shall be an action for damages.  Unless and until Landlord fails to so cureany default after such notice, Tenant shall not have any remedy or cause ofaction by reason thereof.  Allobligations of Landlord hereunder will be construed as covenants, notconditions; and all such obligations will be binding upon Landlord only to theextent accruing during the period of its possession of the Premises and notthereafter.  The term “Landlord” shallmean only the owner, for the time being of the Premises, and in the event ofthe transfer by such owner of its interest in the Premises, such owner shallthereupon be released and discharged from all covenants and obligations ofLandlord thereafter accruing, but such covenants and obligations shall bebinding during the Term of this Lease upon each new owner for the duration of suchowner’s ownership.  Notwithstanding anyother provision hereof, Landlord shall not have any personal liabilityhereunder.  In the event of any breach ordefault by Landlord of any term or provision of this Lease, Tenant agrees tolook solely to the equity or interest then owned by Landlord in the Premises orof the Building of which the Premises are a part; however, in no event, shallany deficiency judgment of any kind be sought or obtained against Landlordfollowing Tenant’s realization upon the equity or interest then owned byLandlord in the Premises or the Building of which the Premises are a part.

 

                G.            If Landlord repossesses the Premisespursuant to the authority herein granted, then Landlord shall have the right to(i) keep in place and use or (ii) remove and store, all of thefurniture, fixtures and equipment at the Premises, including that which isowned by or leased to Tenant at all times prior to any foreclosure thereon byLandlord or repossession thereof by any landlord thereof or third party havinga lien thereon.  Landlord also shall havethe right to relinquish possession of all or any portion of such furniture,fixtures, equipment and other property to any person (“Claimant”) whopresents to Landlord a copy of any instrument represented by Claimant to havebeen executed by Tenant (or any predecessor of Tenant) granting Claimant theright under various circumstances to take possession of such furniture,fixtures, equipment or other property, without the necessity on the part ofLandlord to inquire into the authenticity or legality of said instrument.  The rights of Landlord herein stated shall bein addition to any and all other rights that Landlord has or may hereafter haveat law or in equity; and Tenant stipulates and agrees that the rights hereingranted Landlord are commercially reasonable.

 

                H.            Notwithstanding anything in thisLease to the contrary, all amounts payable by Tenant to or on behalf ofLandlord under this Lease, whether or not expressly denominated as rent, shallconstitute rent.

 

                I.              This is a contract under whichapplicable law excuses Landlord from accepting performance from (or renderingperformance to) any person or entity other than Tenant.

 

                J.             Subject to the fourth sentence of Paragraph17 above, but notwithstanding anything to the contrary, neither Landlordnor Tenant will ever be liable under this Lease for consequential damages,punitive damages, exemplary damages or special damages.

 

 

 

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                K.            Notwithstandinganything to the contrary contained herein, if an Event of Default existshereunder solely because of the event described in Paragraph 19D of thisLease (i.e., no other Event of Default exists under this Lease except for theEvent of Default described in said Paragraph 19D), and so long as Tenantkeeps the Premises secure from vandalism and unauthorized users, Landlord’ssole remedy on account of such Event of Default shall be to terminate thisLease by written notice delivered to Tenant (without pursuing any damagesagainst Tenant and without Tenant being required to indemnify Landlord againstany damages suffered as a result of any such termination) in which event thisLease shall terminate and the parties shall have no further rights orobligations hereunder (other than such rights and obligations as have accruedas of the effective date of such termination and such rights and obligations asare expressly provided herein as surviving the expiration or termination ofthis Lease).  The limitation on Landlord’sremedies contained in the immediately preceding sentence shall not apply ifanother Event of Default (in addition to the Event of Default described in Paragraph19D) exists, or if Tenant fails to so keep the Premises secure fromvandalism and unauthorized users, in which event Landlord shall be entitled topursue any one or more of its remedies under this Lease, at law and/or inequity.

 

                21.           MORTGAGES.  Tenant accepts this Lease subject andsubordinate to any mortgages and/or deeds of trust now or at any time hereafterconstituting a lien or charge upon the Premises or the improvements situatedthereon or the Building of which the Premises are a part; provided, however,that if the mortgagee, trustee, or holder of any such mortgage or deed of trustelects to have Tenant’s interest in this Lease superior to any such instrument,then by notice to Tenant from such mortgagee, trustee or holder, this Leaseshall be deemed superior to such lien, whether this Lease was executed beforeor after said mortgage or deed of trust. Tenant, at any time hereafter within fifteen (15) days after demandtherefor, shall execute any instruments, releases or other documents that maybe required by any mortgagee, trustee or holder for the purpose of subjectingand subordinating this Lease to the lien of any such mortgage or deed oftrust.  Landlord agrees to obtain anddeliver to Tenant a subordination non-disturbance and attornment agreement insubstantially the form attached hereto as Exhibit “H” and madea part hereof (“SNDA”) executed by Landlord’s current mortgagee withrespect to the Building.  Tenant agreesto enter into the SNDA with such mortgagee promptly upon Landlord’s requesttherefor.  Notwithstanding the foregoing, the subordination of this Lease to anymortgage or deed of trust that is hereafter placed upon the Building isexpressly conditioned upon Tenant and the mortgagee or beneficiary under anysuch mortgage or deed of trust entering into an SNDA in a form reasonablyacceptable to Tenant (Tenant hereby agreeing that an SNDA substantially in theform that is attached hereto as Exhibit “H” and made a part hereof is acceptable to Tenant).  Tenant agrees to enter into such SNDA withany such mortgagee or beneficiary promptly upon Landlord’s requesttherefor.  If any future mortgagee orbeneficiary under a mortgage or deed of trust hereafter placed upon theBuilding desires to subordinate its mortgage or deed of trust to this Lease,Tenant agrees that it shall promptly execute such instrument as may bereasonably required by such mortgagee or beneficiary in order to effect suchsubordination.

 

                22.           MECHANIC’S LIENS.  Tenant has no authority, express or implied,to create or place any lien or encumbrance of any kind or nature whatsoeverupon, or in any manner to bind, the interest of Landlord or Tenant in thePremises or to charge the rentals payable hereunder for 

 

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any claim in favor of any person dealing with Tenant, including thosewho may furnish materials or perform labor for any construction orrepairs.  Tenant covenants and agreesthat it will pay or cause to be paid all sums legally due and payable by it onaccount of any labor performed or materials furnished in connection with anywork performed on the Premises and that it will save and hold Landlord harmlessfrom any and all loss, cost or expense based on or arising out of assertedclaims or liens against the leasehold estate or against the right, title andinterest of Landlord in the Premises or under the terms of this Lease.  Tenant agrees to give Landlord immediatewritten notice of the placing of any lien or encumbrance against thePremises.  If any mechanics’ or materialmen’s lien (“M&M Lien”) is everasserted or placed against or attaches to the Project or any portion thereof asa result of any act or omission of Tenant or its agents, then in lieu of payingthe claim relating to such M&M Lien Tenant shall have the right to contestthe assertion, placement or attachment of such M&M Lien so long as (i) priorto any such contest (and no later than thirty (30) days after such lien hasbeen filed) Tenant at its sole expense provides to Landlord a bond indemnifyingagainst such M&M Lien that complies with Chapter 53, Subchapter H of theTexas Property Code (as amended from time to time) or its successor law, and (ii) Tenantcontests such M&M Lien diligently and in good faith; provided, however, theforegoing right of Tenant to contest any such M&M Lien shall not impair orotherwise affect Tenant’s indemnification obligations with respect to suchM&M Lien.  If any lien is assertedagainst the Premises due to acts of Landlord or its agents or contractors,Tenant shall not be obligated to remove such lien (it being agreed that theremoval of such lien shall be Landlord’s obligation).

 

                23.           HAZARDOUS MATERIALS.  Tenant shall never incorporate into, ordispose of, at, in or under the Premises, the Building or the Land any toxic orhazardous materials (as defined hereafter). Tenant further agrees not to use at, place in, or store at the Premisesany toxic or hazardous materials, except for those toxic or hazardous materialsthat are either (a) office supplies, (b) materials stored in thenormal course of Tenant’s business, or (c) kitchen cleaning materials thatare generally considered to be a household cleaner and are purchased in acontainer not larger than one (1) gallon and then only if (i) allsuch toxic or hazardous materials, supplies and materials are properly labeledand contained, (ii) all such toxic or hazardous materials are stored,handled, transported and disposed of in accordance with highest acceptedindustry standards and all applicable laws, rules and regulations(including, without limitation, necessary governing permits obtained by Tenantin connection with such use), and (iii) if a material safety data sheet isrequired under applicable laws to accompany the toxic or hazardous materials,supplies or materials, a copy of such current material safety data sheet isprovided to Landlord.  For purposes ofthis Lease, “toxic or hazardous materials” shall mean hazardous or toxicchemicals or any materials containing hazardous or toxic chemicals at levels orcontent which cause such materials to be classified as hazardous or toxic asthen prescribed by the highest industry standards or by the then current levelsor content as set from time to time by the U.S. Environmental Protection Agency(“EPA”) or the U.S. Occupational Safety and Health Administration (“OSHA”)or as defined under 29 CFR 1910 or 29 CFR 1925 or other applicable governmentallaws, rules or regulations.  In theevent there is a spill of toxic or hazardous materials (other than permittedoffice supplies and kitchen cleaning supplies) at the Premises, the Building orthe Land, Tenant shall notify Landlord of the method, time and procedure forany clean-up and removal of such toxic or hazardous materials; and, Landlordshall have the right to require changes in such method, time or procedure inLandlord’s sole discretion.  In the eventthere is a spill of a toxic or hazardous material that comes from officesupplies in the Premises, 

 

 

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Tenant shall notify Landlord if the spill would in any way endanger orpose a threat to Tenant’s employees, Building maintenance or custodialpersonnel, other Building tenants or the general public.  In the event of any breach of this provisionby Tenant or any contamination of the Premises, the Building or the Land, byTenant, Tenant shall pay all costs for the removal or abatement or clean-up ofany toxic or hazardous materials at the Premises, the Building and the Landand  Tenant at its sole cost and expensesshall remove any contamination to a level satisfactory to Landlord , but in noevent to a level and in a manner less than that which complies with theapplicable laws. If any lender or governmental agency shall ever requiretesting to ascertain whether or not there has been any release of hazardousmaterials during Tenant’s occupancy of the Premises, then the reasonable coststhereof shall be reimbursed by Tenant to Landlord upon demand as additionalcharges if such requirement applies to the Premises.  In addition, Tenant shall execute affidavits,representations and the like from time to time at Landlord’s request concerningTenant’s best knowledge and belief regarding the presence of hazardoussubstances or materials on the Premises. Except as may be required by law,Tenant agrees not to enter into any agreement with any person, includingwithout limitation any governmental authority regarding the removal ofhazardous materials without the written consent of Landlord.

 

                Landlordshall have access to, and a right to perform inspections and tests of, thePremises to determine Tenant’s compliance with environmental requirements, itsobligations under this Paragraph 23, or the environmental condition ofthe Premises.  Access shall be granted toLandlord upon Landlord’s prior notice to Tenant and at such times so as tominimize, so far as may be reasonable under the circumstances, any disturbanceto Tenant’s operations (further, Tenant may require that during such accessLandlord’s personnel be accompanied by a representative of Tenant [whichrepresentative Tenant agrees to make available for the purpose of such entry]).  Suchinspections and tests shall be conducted at Landlord’s expense, unless suchinspections or tests reveal that Tenant has not complied with any materialenvironmental requirement, in which case Tenant shall reimburse Landlord forthe reasonable cost of such inspection and tests.  Landlord’s receipt of or satisfaction withany environmental assessment in no way waives any rights that Landlord holdsagainst Tenant.  Tenant shall promptlynotify Landlord of any communication or report that Tenant makes to anygovernmental authority regarding any possible violation of environmentalrequirements or release or threat of release of any hazardous materials onto orfrom the Premises.  Except to the extentprohibited by law, Tenant shall, within five (5) days of receipt thereof,provide Landlord with a copy of any documents or correspondence received fromany governmental agency or other party relating to a possible violation ofenvironmental requirements or claim or liability associated with the release orthreat of release of any hazardous materials onto or from the Premises

 

                In all events,Tenant shall indemnify Landlord in the manner elsewhere provided in this Leasefrom any release of hazardous materials on the Premises occurring while Tenantis in possession thereof or elsewhere in or about the Project if caused byTenant or persons acting under Tenant. This Paragraph 23 shall survive the expiration or any terminationof this Lease.

 

 

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                24.           MISCELLANEOUS.

 

                A.            Words of any gender used in thisLease shall be held and construed to include any other gender, and words in thesingular number shall be held to include the plural, unless the contextotherwise requires.  The captionsinserted in this Lease are for convenience only and in no way define, limit orotherwise describe the scope or intent of this Lease, or any provision hereof,or in any way affect the interpretation of this Lease.

 

                B.            The terms, provisions and covenantscontained in this Lease shall run with the land and shall apply to, inure tothe benefit of, and be binding upon, the parties hereto and upon theirrespective heirs, executors, personal representatives, legal representatives,successors and assigns, except as otherwise herein expressly provided.  Landlord shall have the right to transfer andassign, in whole or in part, its rights and obligations in the Building andproperty that are the subject of this Lease. Upon any Landlord’s conveyance of the Building or the Land, and theassignment of its rights under this Lease, to another party (“Successor”),such Landlord shall be released from its obligations hereunder and theSuccessor shall become the “Landlord” hereunder from and after the date of anysuch conveyance and assignment and shall thereafter have all of the rights andobligations of Landlord hereunder, in accordance with the terms hereof, duringthe period of its ownership of the Building. Each party agrees to furnish to the other, promptly upon demand, acorporate resolution, proof of due authorization by partners, or otherappropriate documentation evidencing the due authorization of such party toenter into this Lease.

 

                C.            Neither party shall be heldresponsible for delays in the performance of its obligations hereunder (otherthan monetary obligations) when caused by material shortages, weather, acts ofGod, labor disputes or other causes beyond the reasonable control of such party(collectively, the “Force Majeure Delays”).

 

                D.            Tenant agrees, from time to time,within fifteen (15) days after request by Landlord, to deliver to Landlord orLandlord’s designee, a certificate of occupancy, financial statements and anestoppel certificate stating (1) that this Lease is in full force andeffect, (2) the date to which rent is paid, (3) that there is nodefault on the part of Landlord or Tenant under this Lease, (4) thatTenant does not have any right of offset, claims or defenses to the performanceof its obligations under this Lease, and (5) such other factual matterspertaining to this Lease as may be requested by Landlord.

 

                E.             This Lease constitutes the entireunderstanding and agreement of Landlord and Tenant with respect to the subjectmatter of this Lease, and contains all of the covenants and agreements ofLandlord and Tenant with respect thereto. Landlord and Tenant each acknowledge that no representations,inducements, promises or agreements, oral or written, have been made byLandlord or Tenant, or anyone acting on behalf of Landlord or Tenant, which arenot contained herein, and any prior agreements, promises, negotiations, orrepresentations not expressly set forth in this Lease are of no force oreffect.  This Lease may not be altered,changed or amended except by an instrument in writing signed by both partieshereto.

 

 

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                F.             All obligations of Tenant hereundernot fully performed as of the expiration or earlier termination of the Term ofthis Lease shall survive the expiration or earlier termination of the Termhereof, including without limitation, all payment obligations with respect totaxes and insurance and all obligations concerning the condition and repair ofthe Premises.  Upon the expiration ortermination of this Lease (or termination of Tenant’s right of possession, ifsooner), Tenant agrees to deliver up the Premises in the condition and state ofrepair required pursuant to this Lease (reasonable wear and tear and damage byfire or other casualty excepted).

 

                G.            If any clause or provision of thisLease is illegal, invalid or unenforceable under present or future lawseffective during the Term of this Lease, then and in that event, it is theintention of the parties hereto that the remainder of this Lease shall not beaffected thereby, and it is also the intention of the parties to this Leasethat in lieu of each clause or provision of this Lease that is illegal, invalidor unenforceable, there be added, as a part of this Lease, a clause orprovision as similar in terms to such illegal, invalid or unenforceable clauseor provision as may be possible and be legal, valid and enforceable.

 

                H.            All references in this Lease to “thedate hereof” or similar references shall be deemed to refer to the last date,in point of time, on which all parties hereto have executed this Lease.

 

                I.              Tenant represents and warrantsthat it has dealt with no broker, agent or other person in connection with thistransaction and that no broker, agent or other person brought about thistransaction, other than the brokers or agents identified in the Basic LeaseInformation, and Tenant agrees to indemnify and hold Landlord harmless from andagainst any claims by any other broker, agent or other person claiming acommission or other form of compensation by virtue of having dealt with Tenantwith regard to this leasing transaction. Landlord will pay a commission to the brokers or agents identified inthe Basic Lease Information pursuant to a separate written agreement.

 

                J.             If and when included within theterm “Landlord”, as used in this instrument, there is more than one person,firm or corporation, all shall jointly arrange among themselves for their jointexecution of a notice specifying some individual at some specific address forthe receipt of notices and payments to Landlord.  If and when included within the term “Tenant”,as used in this instrument, there is more than one person, firm or corporation,all shall jointly arrange among themselves for their joint execution of anotice specifying some individual at some specific address within the continentalUnited States for the receipt of notices and payments to Tenant.  All parties included within the terms “Landlord”and “Tenant”, respectively, shall be bound by notices given in accordance withthe provisions of Paragraph 25 hereof to the same effect as if each hadreceived such notice.

 

                K.            By taking possession of thePremises, Tenant shall be deemed to have: (a) acknowledged that thePremises and the improvements to be constructed pursuant to Exhibit “C”attached hereto are substantially complete except for “punch list” items (ifany) and are accepted “as is” and “with all faults”; (b) accepted thePremises as suitable for the purposes for which the Premises are leased; and (c) acknowledgedthat the Premises are in a good and satisfactory condition.  Landlord expressly disclaims, and Tenanthereby waives to the full extent 

 

 

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permitted by law, any implied warranty that the Premises or theBuilding are suitable for Tenant’s intended commercial purpose, and any and allother implied warranties (whether arising by virtue of statute, case law orotherwise).  The foregoing shall not beconstrued to relieve Landlord from its obligations which are expressly setforth in this Lease.

 

                L.             Submission of this Lease shall notbe deemed to be a reservation of the Premises. Landlord shall not be bound hereby until its delivery to Tenant of anexecuted copy hereof signed by Landlord, already having been signed by Tenant,and until such delivery Landlord reserves the right to exhibit and lease thePremises to other prospective tenants. Notwithstanding anything contained herein to the contrary, Landlord maywithhold delivery or possession of the Premises from Tenant until such time asTenant has paid to Landlord the security deposit required by Paragraph 2Bhereof and one month’s rent as set forth in Paragraph 2A hereof.

 

                M.           Landlord and Tenant agree that theterms and conditions of this Lease are confidential and the parties heretoagree not to disclose the terms of this Lease to any third party (other than toits attorneys and accountants and other than to parties who propose to purchaseor finance the Building, or the Project of which the Building forms a part, orwho propose to become investors in Landlord) except as may be required by lawor by the order of a court of competent jurisdiction.

 

                N.            [Intentionally Omitted].

 

                O.            Tenant agrees that after theCommencement Date Landlord or an affiliate of Landlord may include Tenant’sname and logo in marketing literature for the Alliance development, the CircleT development, and other developments owned and/or operated by Landlord or anaffiliate of Landlord, for the limited purpose of informing third parties thatTenant is occupying the Project or the larger development of which the Projectis a part.

 

                25.           NOTICES.  Each provision of this instrument or of anyapplicable governmental laws, ordinances, regulations and other requirementswith reference to the sending, mailing or delivering of notice or the making ofany payment by Landlord to Tenant, or with reference to the sending, mailing ordelivering of any notice or the making of any payment by Tenant to Landlord,shall be deemed to be complied with when and if the following steps are taken:

 

                (a)           All rent and other payments requiredto be made by Tenant to Landlord hereunder shall be payable to Landlord at theaddress for Landlord set forth in the Basic Lease Information or at such otheraddress as Landlord may specify from time to time by written notice deliveredin accordance herewith.  Tenant’sobligation to pay rent and any other amounts to Landlord under the terms ofthis Lease shall not be deemed satisfied until such rent and other amounts havebeen actually received by Landlord.  Inaddition to Base Rent due hereunder, all sums of money and all payments dueLandlord hereunder shall be deemed to be additional rental owed to Landlord.

 

 

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                (b)           All payments required to be made by Landlord to Tenanthereunder shall be payable to Tenant at the address set forth in the BasicLease Information, or at such other address within the continental UnitedStates as Tenant may specify from time to time by written notice delivered inaccordance herewith.

 

                (c)           Any written notice or documentrequired or permitted to be delivered hereunder shall be deemed to be deliveredand received, whether actually received or not, when deposited, postageprepaid, in the United States Mail, Certified or Registered Mail, or with a reputableovernight courier service (such as Federal Express or UPS), addressed to theparties hereto at the respective addresses set out in the Basic LeaseInformation, or at such other address as they have theretofore specified bywritten notice delivered in accordance herewith.

 

                26.           LANDLORD’S LIEN WAIVED.  Landlord waives all constitutional, statutoryand contractual landlords’ liens.  Withinthirty (30) days after written request from Tenant (but not more than once inany calendar year), Landlord will confirm such waiver in writing.

 

                27.           SECURITYSERVICE.  Tenant acknowledges and agreesthat, while Landlord may (but shall not be obligated to) patrol the Project,Landlord is not providing any security services with respect to the Premisesand that Landlord shall not be liable to Tenant for, and Tenant waives anyclaim against Landlord with respect to, any loss by theft or any other damagesuffered or incurred by Tenant in connection with any unauthorized entry intothe Premises or any other breach of security with respect to the Premises.

 

                28.           GUARANTY OF LEASE.  As a condition precedent to Landlord’sobligations hereunder, Tenant shall cause Guarantor to guarantee this Lease onthe form approved by Landlord.

 

                29.           ADDITIONAL PROVISIONS.  See Exhibits “A” — “H” attachedhereto and incorporated by reference herein.

 

*[signatures on the following pages]*

 

 

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                EXECUTEDBY LANDLORD, this 7 day of March, 2008.

 
|   | **LANDLORD:**                   |
|--------|---------------------------------|
|   |                            |   |   |   |   |
|   | ALLIANCE GATEWAY NO. 23,  LTD., |
|   | a Texas limited  partnership    |
|   |                            |   |   |   |   |
|   |                            | By: | Hillwood Alliance Management, L.P., |
|   |                            |   | a Texas limited partnership, |
|   |                            |   | its general partner |
|   |                            |   |   |   |   |
|   |                            |   | By: | Hillwood Alliance GP, LLC, |
|   |                            |   |   | a Texas limited liability company, |
|   |                            |   |   | its general partner |
|   |                            |   |   |   |
|   |                            |   |   |   |   |
|   |                            |   |   | By: | /s/ Michael K. Berry |
|   |                            |   |   | Name: |   |
|   |                            |   |   | Title: |   |
|        |                                 |  |  |  |  |  |  |  |

 

*[Tenant’s signature on the following page]*

 

 

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                EXECUTEDBY TENANT, this 7 day of March, 2008.

 
|   | **TENANT:**            |                  |
|--------|------------------------|-----------------------|
|   |                   |                  |
|   | ENTECH, INC.           |                  |
|   | a Delaware corporation |                  |
|   |                   |                  |
|   |                   |                  |
|   | /s/                    |                  |
|   |                   |                  |
|   |                   |
|   | By:                    | /s/ Larry L. Crawford |
|   | Name:                  |                  |
|   | Title:                 |                  |
|   |                   |
|        |                        |                       |  |

 

 

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