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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 10-Q
(Mark One)
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Quarterly Period Ended June 25, 1999
OR
( ) Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 from the transition period
from to
----------- ------------
Commission file number: 0-22163
------------------
AMERITRADE HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 47-0642657
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
4211 SOUTH 102ND STREET, OMAHA, NEBRASKA
68127
(Address of principal executive offices)
(Zip Code)
(402) 331-7856
(Registrant's telephone number, including area code)
-------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to such filing
requirements for the past ninety days:
Yes (X) No ( )
As of August 4, 1999 there were 174,436,656 outstanding shares of the
registrant's common stock consisting of 158,063,856 outstanding shares of Class
A Common Stock and 16,372,800 outstanding shares of Class B Common Stock.
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AMERITRADE HOLDING CORPORATION
INDEX
Page No.
PART I - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS:
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Cash Flows 5
Consolidated Statements of Comprehensive Income 6
Notes to Consolidated Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 9
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 14
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits 15
(b) Reports on Form 8-K 17
Signatures 18
2
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PART I - FINANCIAL INFORMATION
ITEM 1. - CONSOLIDATED FINANCIAL STATEMENTS
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 25, SEPTEMBER 25,
1999 1998
-------------- --------------
(UNAUDITED)
ASSETS
Cash and cash equivalents $ 141,788,814 $ 24,526,935
Cash and investments segregated in
compliance with federal regulations 484,038,205 503,455,354
Receivable from brokers, dealers, and
clearing organizations 48,205,906 25,732,164
Receivable from customers and
correspondents - net of allowance for
doubtful accounts: June - $2,916,120;
September - $1,039,788 1,471,593,946 647,121,854
Furniture, equipment and leasehold
improvements - net of accumulated
depreciation and amortization:
June - $10,942,054;
September - $6,728,212 42,070,114 26,116,333
Goodwill - net of accumulated amortization 5,711,509 5,983,761
Investments 409,562,331 30,760,729
Other assets 49,813,595 26,704,546
-------------- --------------
Total assets $2,651,784,420 $1,290,401,676
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Payable to brokers, dealers and clearing
organizations $ 211,107,934 $ 11,765,785
Payable to customers and correspondents 1,820,477,017 1,136,082,337
Accounts payable and accrued liabilities 59,650,095 30,716,987
Notes payable 58,000,000 11,000,000
Income taxes payable - 1,331,170
Deferred income taxes 163,740,525 14,933,313
-------------- --------------
Total liabilities 2,313,975,571 1,205,829,592
-------------- --------------
Commitments and Contingencies
Stockholders' Equity:
Preferred stock, $1 par value; authorized
3,000,000 shares, none issued
Common stock, $0.01 par value:
Class A - 270,000,000 shares
authorized; 157,841,076 shares
issued at September 25, 1998;
158,063,640 shares issued at June
25, 1999 1,580,636 1,578,411
Class B - 18,000,000 shares
authorized; 16,372,800 shares
issued and outstanding 163,728 163,728
-------------- --------------
Total common stock 1,744,364 1,742,139
Additional paid-in capital 24,072,189 21,683,870
Retained earnings 64,493,988 43,756,848
Treasury stock - Class A shares at cost
(56,652 shares at September 25, 1998;
39,840 shares at June 25, 1999) (93,285) (133,388)
Accumulated other comprehensive income 248,591,593 17,522,615
-------------- --------------
Total stockholders' equity 338,808,849 84,572,084
-------------- --------------
Total liabilities and
stockholders' equity $2,651,784,420 $1,290,401,676
============== ==============
See notes to unaudited consolidated financial statements.
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AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED NINE MONTH PERIOD ENDED
--------------------------- -----------------------------
JUNE 25, 1999 JUNE 26, 1998 JUNE 25, 1999 JUNE 26, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
REVENUES
Commissions and Clearing Fees $ 56,063,864 $ 24,040,099 $ 139,630,246 $ 59,249,480
Interest Revenue 31,208,309 18,850,473 78,923,489 46,759,012
Equity Income from Investments - 2,477,971 - 5,005,664
Gain on Sale of Investments - 794,634 - 794,634
Other 2,867,393 1,762,572 7,482,237 4,243,321
------------ ------------ ------------- ------------
Total Revenues 90,139,566 47,925,749 226,035,972 116,052,111
Interest Expense 12,045,787 8,320,242 32,163,204 20,693,295
------------ ------------ ------------- ------------
Net Revenues 78,093,779 39,605,507 193,872,768 95,358,816
EXPENSES EXCLUDING INTEREST
Employee Compensation and
Benefits 20,972,870 10,684,489 49,337,210 25,376,396
Commissions and Clearance 1,963,332 1,741,344 5,996,229 4,013,773
Communications 5,159,630 3,518,439 13,131,065 9,975,275
Occupancy and Equipment Costs 5,784,505 2,743,697 14,520,690 6,956,743
Advertising 12,104,480 5,243,425 34,901,589 39,757,195
Other 18,219,100 6,414,362 43,574,784 17,832,135
------------ ------------ ------------- ------------
Total Expenses Excluding
Interest 64,203,907 30,345,756 161,461,567 103,911,517
Income (Loss) Before
Provision for Income Taxes 13,889,872 9,259,751 32,411,201 (8,552,701)
Provision for Income Taxes 4,972,460 3,319,428 11,674,061 (2,972,808)
------------ ------------ ------------- ------------
NET INCOME (LOSS) $ 8,917,412 $ 5,940,323 $ 20,737,140 $ (5,579,893)
============ ============ ============= ============
Basic earnings (loss) per share $ 0.05 $ 0.03 $ 0.12 $ (0.03)
Diluted earnings (loss) per share 0.05 0.03 0.12 (0.03)
Weighted average shares
outstanding - basic 176,436,400 174,193,767 174,310,350 174,206,069
Weighted average shares
outstanding - diluted 176,063,043 174,393,524 175,688,608 174,343,447
</TABLE>
See notes to unaudited consolidated financial statements.
4
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AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTH PERIOD ENDED
---------------------------------
JUNE 25, 1999 JUNE 26, 1998
-------------- --------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 20,737,140 $ (5,579,893)
Adjustments to Reconcile Net Income
(Loss) to Net Cash Flows from
Operating Activities:
Depreciation and Amortization 4,458,297 1,815,766
Provision for Losses 2,140,000 320,000
Deferred Income Taxes 1,074,588 471,238
Equity Loss from Investments - (5,005,664)
Gain from Sale of Investment - (794,634)
Amortization of Goodwill 272,252 272,252
Changes in Operating Assets
and Liabilities:
Cash and Investments Segregated in
Compliance with Federal
Regulations 20,417,149 (133,777,327)
Brokerage Receivables (849,085,834) (288,912,953)
Other Assets (23,109,049) (6,112,588)
Brokerage Payables 883,736,829 388,770,794
Accounts Payable and Accrued
Liabilities 28,933,108 11,028,744
Income Tax Payable 533,699 (1,291,410)
-------------- --------------
Net Cash Provided By (Used In)
Operating Activities 90,108,179 (38,795,675)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Furniture, Equipment and
Leasehold Improvements (20,412,079) (14,332,259)
Purchase of Equity Investments - (650,740)
Distributions Received from Equity
Investments - 12,187,485
Proceeds from Sale of Investment - 5,828,395
-------------- --------------
Net Cash Provided By (Used In)
Investing Activities (20,412,079 3,032,881
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Notes Payable 80,000,000 14,000,000
Principal Payments on Notes Payable (33,000,000) (7,500,000)
Proceeds from Exercise of Stock Options 507,209 -
Purchase of Treasury Stock - (286,375)
Sale of Treasury Stock 58,570 128,802
-------------- --------------
Net Cash Provided By Financing
Activities 47,565,779 6,342,427
-------------- --------------
Net Increase (Decrease) In Cash And
Cash Equivalents 117,261,879 (29,420,367)
Cash and Cash Equivalents at Beginning of
Period 24,526,935 53,522,447
-------------- --------------
Cash and Cash Equivalents at End of Period $ 141,788,814 $ 24,102,080
============== ==============
Supplemental Cash Flow Information:
Interest Paid $ 31,226,904 $ 19,892,144
Income Taxes Paid (Refunds Received) $ 14,143,004 $ (2,224,720)
See notes to unaudited consolidated financial statements.
5
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AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED NINE MONTH PERIOD ENDED
--------------------------- -----------------------------
JUNE 25, 1999 JUNE 26, 1998 JUNE 25, 1999 JUNE 26, 1998
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net Income (Loss) $ 8,917,412 $ 5,940,323 $ 20,737,140 $ (5,579,893)
Other Comprehensive Income
Net unrealized holding gains
on investment securities
available-for-sale arising
during the period 205,867,859 378,801,603
Adjustment for deferred income
taxes (80,288,465) (147,732,625)
------------ ------------ ------------- ------------
Total Other Comprehensive
Income, net of tax 125,579,394 - 231,068,978 -
------------ ------------ ------------- ------------
Comprehensive Income (Loss) $134,496,806 $ 5,940,323 $ 251,806,118 $ (5,579,893)
============ ============ ============= ============
</TABLE>
See notes to unaudited consolidated financial statements.
6
<PAGE> 7
AMERITRADE HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the
accounts of Ameritrade Holding Corporation and its wholly-owned subsidiaries
(collectively, the "Company"): Advanced Clearing, Inc. ("Advanced Clearing"),
formerly known as AmeriTrade Clearing, Inc.; Accutrade, Inc. ("Accutrade");
Ameritrade (Inc.), formerly known as Ceres Securities; AmeriVest, Inc.
("AmeriVest"), formerly known as All American Brokers, Inc.; K. Aufhauser &
Company ("Aufhauser"); and OnMoney Financial Services Corporation ("OnMoney").
All significant intercompany balances and transactions have been eliminated. The
Company is a provider of discount securities brokerage and related financial
services, including clearing and execution services.
All share data and per share amounts have been restated to reflect the
two-for-one common stock splits effective August 1998 and February 1999 and the
three-for-one common stock split effective July 2, 1999.
These financial statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC) and, in the opinion
of management, reflect all adjustments, which are all of a normal recurring
nature, necessary to present fairly the financial position, results of
operations and cash flows for the periods presented in conformity with generally
accepted accounting principles. These financial statements should be read in
conjunction with the consolidated financial statements and notes thereto
included in the Company's annual report filed on Form 10-K and amendments
thereto for the fiscal year ended September 25, 1998.
2. NET CAPITAL
The Company's broker-dealer subsidiaries are subject to the Net Capital Rule
under the Securities Exchange Act of 1934 and are required to maintain a minimum
net capital reserve. Net capital and the related net capital requirement may
fluctuate on a daily basis.
The Company's broker-dealer subsidiaries had net capital, in the aggregate, of
$85,061,702 and $40,062,733 as of June 25, 1999 and September 25, 1998,
respectively, which exceeded aggregate minimum net capital requirements by
$53,111,167 and $25,247,775, respectively. Subsidiary net capital in the amount
of $31,950,535 and $14,814,958 as of June 25, 1999 and September 25, 1998,
respectively, is not available for transfer to the Company due to net capital
regulations.
3. NOTES PAYABLE
The Company has a revolving credit agreement with a bank group dated January 16,
1998, as amended May 24, 1999 (the "Revolving Credit Agreement"). The revolving
credit agreement permits borrowings up to $75.0 million through June 30, 2000
with permissible borrowings declining $3.125 million quarterly to $68.75 million
at maturity on December 31, 2000. The revolving credit agreement is
collateralized by the common stock of the Company's subsidiaries, as well as all
of the Company's tangible and intangible assets. Borrowings under the revolving
credit agreement bear interest at prime rate less 0.75 percent (7.00 percent and
7.75 percent at June 25, 1999 and September 25, 1998, respectively). The Company
pays a maintenance fee of 0.25 percent of the unused borrowings through the
maturity date. The Company had outstanding indebtedness under the revolving
credit agreement of $58.0 million and $11.0 million at June 25, 1999 and
September 25, 1998, respectively. The revolving credit agreement contains
certain restrictions, including restrictions on the payment of cash dividends
and additional borrowings, the maintenance of a minimum number of core accounts
and a minimum net worth and a requirement to repay all outstanding indebtedness
under the facility with the proceeds from some public offerings of common stock
(see Note 6 "Subsequent Events" to the Financial Statements included in Item 1
of Part I hereto).
Advanced Clearing, a wholly-owned subsidiary of the Company which acts as a
securities clearing firm, has various secured credit facilities with financial
institutions. These credit facilities are utilized in Advanced Clearing's
securities clearing operations. These facilities provide for the issuance of
letters of credit by the financial institutions on behalf of, and cash
7
<PAGE> 8
advances to, Advanced Clearing. Advanced Clearing has pledged customer
securities as collateral for the related credit, and its obligations under these
facilities and the related collateral requirements fluctuate from time to time.
As of June 25, 1999, the financial institutions had issued letters of credit in
the aggregate amount of $100.0 million but no amount was outstanding. Advanced
Clearing pays a maintenance fee of 0.5 percent of the committed amount for the
letters of credit, and the cash advances bear interest at rates tied to the
prevailing broker call rate, which ranged from 5.50 to 6.75 percent as of June
25, 1999.
4. INVESTMENTS
The Company's investments consist primarily of ownership of unregistered shares
representing an approximate 7.1 percent interest in Knight/Trimark Group, Inc.
("Knight/Trimark"), a publicly held company that is a leading market maker in
Nasdaq securities as well as over-the-counter market in other securities.
Knight/Trimark is the successor company to Roundtable Partners, LLC, in which
the Company had a minority interest. Knight/Trimark became a public company in
1998 and trades on The Nasdaq National Market under the symbol "NITE." The
Company derives significant revenues from Knight/Trimark in exchange for routing
trade orders to them for execution.
5. LEGAL
On September 16, 1998, a putative class action complaint was filed in the
District Court, Douglas County, Nebraska, regarding the Company's alleged
inability to handle the volume of subscribers to its Internet brokerage
services. The complaint seeks injunctive relief enjoining alleged deceptive,
fraudulent and misleading practices, equitable relief compelling the Company to
increase capacity, and unspecified compensatory damages. The Company believes
that it has viable defenses to the allegations raised in the complaint and
intends to assert them vigorously. However, because this proceeding is at a
preliminary phase and the amount of damages sought has not been quantified, the
Company is not presently able to predict the ultimate outcome of this matter.
On October 13, 1997, Advanced Clearing received from the Director of Arbitration
of the NASD an arbitration claim filed by Slavic Investment Corporation, a
former correspondent broker, and Slavic Mutual Funds Management Corporation, a
related company, regarding breach of contract. The damages sought include
approximately $9.3 million in compensatory damages, and five times that amount
in punitive damages. The Company has completed a portion of the arbitration
hearings with additional hearings scheduled for the fall of 1999. The Company
believes that it has viable defenses to the issues raised in the arbitration and
intends to assert them vigorously. The Company also believes that the damages
sought are substantially in excess of any losses that may have been incurred.
However, the Company is not presently able to predict the ultimate outcome of
this matter.
The Company and its subsidiaries are parties to a number of other legal matters
arising in the ordinary course of business. In management's opinion, the Company
has adequate legal defenses to each of these actions and does not believe that
any such matters, either individually or in the aggregate, will materially
affect the Company's financial condition or results of operations.
6. SUBSEQUENT EVENTS
On July 1, 1999, a special meeting of the shareholders of the Company was held
for the purpose of considering and voting upon a proposal to amend and restate
the Company's Certificate of Incorporation to increase the number of shares of
Class A Common Stock that the Company is authorized to issue to 270,000,000 and
to increase the number of shares of Class B Common Stock that the Company is
authorized to issue to 18,000,000. The proposed increase in authorized shares of
Class A Common Stock and Class B Common Stock was approved at the special
meeting by the affirmative vote of a majority of the outstanding shares of each
of the Class A Common Stock and the Class B Common Stock.
In June and July of 1999, the Company filed a Registration Statement on Form S-3
and an amendment thereto with the Securities and Exchange Commission relating to
the sale by the Company and certain shareholders named therein of up to
11,500,000 shares of Class A Common Stock to the public. On July 29, 1999, the
Company announced the cancellation of its proposed public offering of Class A
Common Stock due to market conditions at the time of the proposed offering.
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<PAGE> 9
On August 4, 1999, the Company sold $200,000,000 principal amount of 5.75
percent Convertible Subordinated Notes due August 1, 2004 (the "Notes"), to
qualified institutional investors in a private placement pursuant to Rule 144A
of the Securities Act of 1933. The Notes are convertible into a total of
6,142,470 shares of the Class A Common Stock of the Company at approximately
$32.56 per share. On August 4, 1999, the Company used a portion of the proceeds
of the Notes to repay all outstanding indebtedness under its Revolving Credit
Agreement (see Note 3 "Notes Payable" to the Financial Statements included in
Item 1 of Part I hereto). After the sale of the Notes, the Company will not be
able to make additional borrowings under the Revolving Credit Agreement until
new arrangements have been made with the bank group.
ITEM 2. - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion of the financial condition and results of operations of
the Company should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's annual report on Form
10-K and amendments thereto for the fiscal year ended September 25, 1998. The
results of operations for the three and nine months ended June 25, 1999 are not
necessarily indicative of the results for the entire fiscal year ending
September 24, 1999. This discussion contains forward-looking statements that
involve risks and uncertainties that could cause actual results to differ
materially from those anticipated in such forward looking statements. Factors
that may cause such differences include, but are not limited to: the effect of
customer trading patterns on Company revenues and earnings; computer system
failures; risks associated with the Year 2000 computer systems conversions; the
effects of competitors' pricing, product and service decisions and intensified
competition; evolving regulation and changing industry customs and practices
adversely affecting the Company; the ability of the Company to obtain financing;
adverse results of litigation; changes in revenues and profit margin due to
changes in the securities markets and interest rates; and a significant downturn
in the securities markets over a short period of time or a sustained decline in
securities prices and trading volumes.
RESULTS OF OPERATIONS
THREE MONTH PERIODS ENDED JUNE 25, 1999 AND JUNE 26, 1998
NET REVENUES. Commissions and clearing fees increased 134 percent to $56.1
million in the third quarter of fiscal 1999 from $24.0 million in the third
quarter of fiscal 1998. This increase was primarily attributable to an increase
in the number of securities transactions processed, as average trades per day
increased 179 percent to 59,648 in the third quarter of fiscal 1999 from 21,412
in the third quarter of fiscal 1998. The increase in transaction processing
volume was primarily a result of a significant increase in customer accounts
resulting from the substantial advertising expenditures made by the Company
during fiscal 1998 and during the first nine months of fiscal 1999. Core
accounts increased to approximately 505,000 at June 25, 1999 from approximately
267,000 at June 26, 1998. Offsetting the growth in trades per day is the
decrease in commissions and clearing fees per trade by 17 percent to $15 in the
third quarter of fiscal 1999 from $18 in the third quarter of fiscal 1998. The
Company expects average commission and clearing fees per trade to continue to
decrease due to the growth in the number of lower revenue Internet equity
trades. However, the Company believes the rate of decline in average commission
will be lower than the rate of decline experienced over the past two years.
The Company has arrangements with several execution agents to receive cash
payments in exchange for routing trade orders to these firms for execution
(payment for order flow). The revenues generated by the Company under these
arrangements totaled $6.1 million, or 8 percent of net revenues for the third
quarter of fiscal 1999 and $3.0 million, or 8 percent of net revenues for the
third quarter of fiscal 1998. Payment for order flow is a component of the
commission and clearing fees revenue line. Payment for order flow has decreased
28 percent on a per trade basis from $2.24 in the third quarter of fiscal 1998
to $1.62 in the third quarter of fiscal 1999. The Company expects payment for
order flow to continue to decrease on a per trade basis as a result of
competitive forces and regulatory changes. The majority of these revenues were
received from execution agents owned by Knight/Trimark, a market maker in
over-the-counter equity securities for those securities traded in the Nasdaq
stock market, the OTC Bulletin Board, and those listed on the New York and
American Stock Exchanges. As of June 25, 1999, the Company owned approximately
7.1 percent of the outstanding common stock of Knight/Trimark.
Net interest revenue (interest revenue less interest expense) increased 83
percent to $19.2 million in the third quarter of fiscal 1999 from $10.5 million
in the third quarter of fiscal 1998. This increase was due primarily to an
increase of 7 percent in cash and investments segregated in compliance with
federal regulations, an increase of 141 percent in customer and correspondent
broker-dealer receivables partially offset by an increase of 74 percent in
amounts payable to customers and correspondent broker-dealers in the third
quarter of fiscal 1999 from the third quarter of fiscal 1998.
The Company generally expects net interest revenue to grow as the account base
grows.
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<PAGE> 10
The Company had no equity income from investments in the third quarter of fiscal
1999, compared to $2.5 million in the third quarter of fiscal 1998. The equity
income in fiscal 1998 was primarily generated by the Company's ownership in
Roundtable Partners, LLC, which was reorganized into Knight/Trimark in July
1998. The Company no longer recognizes equity income from this investment.
The Company had no gain on the sale of investments in the third quarter of
fiscal 1999, compared to $0.8 million in the third quarter of fiscal 1998. The
gain in fiscal 1998 was a result of the Company selling a portion of its limited
partnership interest in CSS in June 1998.
Other revenues increased 61 percent to $2.9 million in the third quarter of
fiscal 1999 from $1.8 million in the third quarter of fiscal 1998 due primarily
to an increase in marketing and service fees paid to the Company by mutual funds
as a result of holding more customer mutual fund assets.
EXPENSES EXCLUDING INTEREST. Employee compensation and benefits expense
increased 96 percent to $21.0 million in the third quarter of fiscal 1999 from
$10.7 million in the third quarter of fiscal 1998, due primarily to an increase
in full-time equivalent employees. Full-time equivalent employees rose 86
percent to 1,893 at the end of June 1999 from 1,017 at the end of June 1998. The
increase in employees was necessary to accommodate the dramatic growth in
trading volume following the Company's advertising campaign in fiscal 1998 and
the first half of fiscal 1999. The Company expects employment expense to
continue to increase in support of the expected increase in customer accounts,
customer assets and trades.
Commissions and clearance costs increased 18 percent to $2.0 million in the
third quarter of fiscal 1999 from $1.7 million in the third quarter of fiscal
1998, due primarily to the 179 percent increase in transaction volume. This
increase was offset by efforts that the Company has undertaken to reduce
execution, clearance, settlement, and depository costs with outside entities and
the economies of scale associated with these activities.
Communications expense increased 49 percent to $5.2 million in the third quarter
of fiscal 1999 from $3.5 million in the third quarter of fiscal 1998, primarily
as a result of telephone, quote and market information costs related to the
increase in transaction processing volume. Communication expenses are expected
to continue to increase at a slower rate than transactions processed, as the low
cost of Internet transactions continues to be the Company's predominant
communication channel with its customers.
Occupancy and equipment costs increased 115 percent to $5.8 million in the third
quarter of fiscal 1999 from $2.7 million in the third quarter of fiscal 1998.
The increase was due primarily to the lease of a 132,000 square foot operations
center in Bellevue, Nebraska, which started during the third quarter of fiscal
1998, the lease of two operations centers in Ft. Worth, Texas which started in
third quarter of fiscal 1999, as well as the lease of equipment to accommodate
the Company's continued growth.
Advertising expenses increased 133 percent to $12.1 million in the third quarter
of fiscal 1999 from $5.2 million in the third quarter of fiscal 1998. The
Company plans to continue to expand its customer base through advertising
efforts.
Other operating expenses increased 184 percent to $18.2 million in the third
quarter of fiscal 1999 from $6.4 million in the third quarter of fiscal 1998,
primarily as a result of increased consulting fees related to technology
development and increased confirmation and statement processing costs associated
with the increase in transaction processing volume.
Income tax expense was $5.0 million in the third quarter of fiscal 1999,
compared $3.3 million in the third quarter of fiscal 1998 consistent with the
increase in the Company's pretax income.
NINE MONTH PERIODS ENDED JUNE 25, 1999 AND JUNE 26, 1998
NET REVENUES. Commissions and clearing fees increased 136 percent to $139.6
million in the first nine months of fiscal 1999 from $59.2 million in the first
nine months of fiscal 1998. This increase was primarily attributable to an
increase in the number of securities transactions processed, as average trades
per day increased 192 percent to 48,033 in the first nine months of fiscal 1999
from 16,423 in the first nine months of fiscal 1998. The increase in transaction
processing volume was primarily a result of a significant increase in customer
accounts resulting from the substantial advertising expenditures made by the
Company during fiscal 1998 and during the first nine months of fiscal 1999. Core
accounts increased to approximately 505,000 at June 25, 1999 from approximately
267,000 at June 26, 1998. Offsetting the growth in trades per day is the
decrease in commissions and clearing fees per trade by 21 percent to $15 in the
first nine months of fiscal 1999 from $19 in the first nine months of fiscal
1998. The Company expects average commission and clearing fees per trade to
continue to decrease due to the growth in the number of lower revenue Internet
equity trades. However, the Company believes the rate of decline in average
commission will be lower than the rate of decline experienced over the past two
years.
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<PAGE> 11
The Company has arrangements with several execution agents to receive cash
payments in exchange for routing trade orders to these firms for execution
(payment for order flow). The revenues generated by the Company under these
arrangements totaled $16.4 million, or 8 percent of net revenues for the first
nine months of fiscal 1999 and $7.5 million, or 8 percent of net revenues for
the first nine months of fiscal 1998. Payment for order flow is a component of
the commission and clearing fees revenue line. The majority of these revenues
were received from execution agents owned by Knight/Trimark, a market maker in
over-the-counter equity securities for those securities traded in the Nasdaq
stock market, the OTC Bulletin Board, and those listed on the New York and
American Stock Exchanges. As of June 25, 1999, the Company owned approximately
7.1 percent of the outstanding common stock of Knight/Trimark.
Net interest revenue (interest revenue less interest expense) increased 79
percent to $46.8 million in the first nine months of fiscal 1999 from $26.1
million in the first nine months of fiscal 1998. This increase was due primarily
to an increase of 7 percent in cash and investments segregated in compliance
with federal regulations, an increase of 141 percent in customer and
correspondent broker-dealer receivables partially offset by an increase of 74
percent in amounts payable to customers and correspondent broker-dealers at the
end of the first nine months of fiscal 1999 as compared to the end of the first
nine months of fiscal 1998. The Company generally expects net interest revenue
to grow as the account base grows.
The Company had no equity income from investments in the first nine months of
fiscal 1999, compared to $5.0 million in the first nine months of fiscal 1998.
The equity income in fiscal 1998 was primarily generated by the Company's
ownership in Roundtable Partners, LLC, which was reorganized into Knight/Trimark
in July 1998. The Company no longer recognizes equity income from this
investment.
The Company had no gain on the sale of investments in the first nine months of
fiscal 1999, compared to $0.8 million in the first nine months of fiscal 1998.
The gain in fiscal 1998 was a result of the Company selling a portion of its
limited partnership interest in CSS in June 1998.
Other revenues increased 79 percent to $7.5 million in the first nine months of
fiscal 1999 from $4.2 million in the first nine months of fiscal 1998 due
primarily to an increase in marketing and service fees paid to the Company by
mutual funds as a result of holding more customer mutual fund assets.
EXPENSES EXCLUDING INTEREST. Employee compensation and benefits expense
increased 94 percent to $49.3 million in the first nine months of fiscal 1999
from $25.4 million in the first nine months of fiscal 1998, due primarily to an
increase in full-time equivalent employees. Full-time equivalent employees rose
86 percent to 1,893 at the end of June 1999 from 1,017 at the end of June 1998.
The increase in employees was necessary to accommodate the dramatic growth in
trading volume following the Company's advertising campaign in fiscal 1998 and
the first half of fiscal 1999. The Company expects employment expenses to
continue to increase consistent with the expected increase in customer accounts,
assets and trades.
Commissions and clearance costs increased 50 percent to $6.0 million in the
first nine months of fiscal 1999 from $4.0 million in the first nine months of
fiscal 1998, due primarily to the 192 percent increase in transaction volume.
This increase was offset by efforts that the Company has undertaken to reduce
execution, clearance, settlement, and depository costs with outside entities and
the economies of scale associated with these activities.
Communications expense increased 31 percent to $13.1 million in the first nine
months of fiscal 1999 from $10.0 million in the first nine months of fiscal
1998, primarily as a result of telephone, quote and market information costs
related to the increase in transaction processing volume. Communication expenses
are expected to continue to increase at a slower rate than transactions
processed, as the low cost of Internet transactions continues to be the
Company's predominant communication channel with its customers.
Occupancy and equipment costs increased 107 percent to $14.5 million in the
first nine months of fiscal 1999 from $7.0 million in the first nine months of
fiscal 1998. The increase was due primarily to the lease of a 132,000 square
foot operations center in Bellevue, Nebraska, which started during the third
quarter of fiscal 1998, as well as the lease of equipment to accommodate the
Company's continued growth.
Advertising expenses decreased 12 percent to $34.9 million in the first nine
months of fiscal 1999 from $39.8 million in the first nine months of fiscal
1998. The Company plans to continue to expand its customer base via advertising
efforts.
Other operating expenses increased 145 percent to $43.6 million in the first
nine months of fiscal 1999 from $17.8 million in the first nine months of fiscal
1998, primarily as a result of increased consulting fees related to technology
development and increased confirmation and statement processing costs associated
with the increase in transaction processing volume. In addition, the Company
incurred $3.1 million in customer execution price adjustments largely caused by
system delays and outages in the first quarter of fiscal 1999.
Income tax expense was $11.7 million in the first nine months of fiscal 1999,
compared with a tax benefit of $3.0 million in the first nine months of fiscal
1998 consistent with the increase in the Company's pretax income. The effective
combined
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<PAGE> 12
federal and state tax rate in the first nine months of fiscal 1999 was 36
percent and benefited from the Company's participation in an economic
development tax incentive program offered by the State of Nebraska. The Company
expects to continue to benefit from the State of Nebraska tax incentive program
during the remainder of fiscal 1999.
LIQUIDITY AND CAPITAL RESOURCES
The Company expects to spend between $25.0 million and $35.0 million during
fiscal 1999 on hardware and software upgrades to its computer systems to meet
anticipated increases in trading volumes. In addition, the Company anticipates
expenditures between $10.0 million and $15.0 million during fiscal 1999
primarily for the purchase of office, computer and operating equipment. Lease
commitments for operating equipment and facilities during fiscal 1999 are
expected to be between $10 million and $15 million with an aggregate commitment
of approximately $50 million through fiscal 2018. In addition, the Company plans
to spend approximately $10.0 million on continuing research and development
activities during fiscal 1999. The Company has also entered into a two-year
agreement with America Online, Inc ("AOL") that will feature Ameritrade (Inc.)
as one of four brokerages on AOL's Personal Finance Channel. The agreement calls
for the Company to pay AOL $12.5 million annually over a two-year term and
expires in September 2000. In May 1999, the Company entered into agreements with
Yahoo!, Inc. ("Yahoo") that will feature Ameritrade (Inc.) as one of four
brokerages on Yahoo's finance Web page. The agreements call for the Company to
pay Yahoo $8.3 million through its expiration in December 1999.
The Company expects to finance its capital and liquidity needs during fiscal
1999 and fiscal 2000 from its operating cash flow, a portion of the proceeds
from the issuance of Convertible Subordinated Notes (see Note 6 "Subsequent
Events" to the Financial Statements included in Item 1 of Part I hereto) and
borrowings under a $75.0 million revolving credit facility with a bank group, to
be revised pursuant to the repayment of the facility on August 4, 1999 (see
"Bank Loan Agreements"). Dividends from subsidiaries are subject to the
requirements of the Securities Exchange Commission and the National Association
of Securities Dealers relating to liquidity, capital standards, and the use of
customer funds and securities, as well as credit agreement provisions, which
limit funds available for the payment of dividends to the parent company.
CASH FLOW
Cash provided by operating activities was $90.1 million in the first nine months
of fiscal 1999, compared to cash used of $38.8 million in the first nine months
of fiscal 1998. The increase in cash during the first nine months of fiscal 1999
was attributable to the substantial increase in customer payables at the end of
the first nine months of fiscal year 1999 as well as a net income from
operations in the first nine months of fiscal 1999 versus a net loss in the
first nine months of fiscal 1998.
Cash used in investing activities was $20.4 million in the first nine months of
fiscal 1999, compared to cash provided by investing activities of $3.0 million
in the first nine months of fiscal 1998. Uses of cash in both periods is related
to purchases of property and equipment. However, those amounts were offset in
fiscal 1998 by the proceeds from cash distributions received from the Company's
investment in Knight/Trimark and the sale of an investment.
Cash provided by financing activities was $47.6 million in the first nine months
of fiscal 1999, compared to $6.3 million in the first nine months of fiscal
1998. The cash provided by financing activities for both periods consisted of
net proceeds from the Company's revolving credit agreement with a bank group
(see "Bank Loan Agreements").
BANK LOAN AGREEMENTS
The Company has a revolving credit agreement with a bank group dated January 16,
1998, as amended May 24, 1999. The revolving credit agreement permits borrowings
up to $75.0 million through June 30, 2000 with permissible borrowings declining
$3.125 million quarterly to $68.75 million at maturity on December 31, 2000. The
revolving credit agreement is collateralized by the common stock of the
Company's subsidiaries, as well as all of the Company's tangible and intangible
assets. Borrowings under the revolving credit agreement bear interest at prime
rate less 0.75 percent (7.00 and 7.75 percent at June 25, 1999 and September 25,
1998, respectively). The Company pays a maintenance fee of 0.25 percent of the
unused borrowings through the maturity date. The Company had outstanding
indebtedness under the revolving credit agreement of $58.0 million and $11.0
million at June 25, 1999 and September 25, 1998, respectively. The increase in
indebtedness during the first nine months of fiscal 1999 was due to additional
net capital requirements, purchases of property and equipment and advertising
expenses. The revolving credit agreement contains certain restrictions,
including restrictions on the payment of cash dividends and additional
borrowings, the maintenance of a minimum number of core accounts and a minimum
net worth and a requirement to repay all outstanding indebtedness under the
facility with the proceeds the issuance of Convertible Subordinated Notes. After
the sale of the Notes, the Company will not be able to make additional
borrowings under the Revolving Credit Agreement until new arrangements have been
made with the bank group.
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Advanced Clearing, a wholly-owned subsidiary of the Company which acts as a
securities clearing firm, has various secured credit facilities with financial
institutions. These credit facilities are utilized in Advanced Clearing's
securities clearing operations. These facilities provide for the issuance of
letters of credit by the financial institutions on behalf of, and cash advances
to, Advanced Clearing. Advanced Clearing has pledged customer securities as
collateral for the related credit, and its obligations under these facilities
and the related collateral requirements fluctuate from time to time. As of June
25, 1999, the financial institutions had issued letters of credit in the
aggregate amount of $100.0 million but no amount was outstanding. As of March
26, 1999, the financial institutions had made cash advances to Advanced Clearing
in the aggregate amount of $45.0 million. As is customary, the cash advance was
repaid on the following business day. Advanced Clearing pays a maintenance fee
of 0.5 percent of the committed amount for the letters of credit, and the cash
advances bear interest at rates tied to the prevailing broker call rate, which
ranged from 5.50 to 6.75 percent as of June 25, 1999.
YEAR 2000
The Company relies heavily on computerized information technology systems ("IT")
for its business operations. In particular, securities trading information moves
to and from the Company's IT system to those operated by stock exchanges,
broker-dealers, clearinghouses and other trading partners on a real-time basis
with little human intervention. The Company's business operations are also
dependent on a variety of non-IT systems that contain embedded circuitry such as
telephone equipment, security and alarm systems, copiers, fax machines, mail
room equipment, heating and air conditioning systems and other infrastructure
systems. In addition, the Company has business relationships with a variety of
third parties whose ability to interface with the Company's IT systems or
otherwise perform their obligations to the Company depends on such systems and
equipment. Some or all of these systems and equipment may be affected by the
so-called "Year 2000 problem" which is the potential inability of certain
computer programs and embedded circuitry to correctly recognize dates occurring
after December 31, 1999. The Company has adopted a plan to deal with this "Year
2000 problem" with respect to its IT, non-IT systems and third party business
relationships.
State of Readiness
The Company has hired a Year 2000 project manager who has assembled a working
group that is responsible for the Company's Year 2000 remediation effort. In
general, this effort consists of (i) preparing an inventory of IT and non-IT
systems and assessing the need for remediation of such systems, (ii) determining
the status of Year 2000 remediation of third parties with which the Company has
material business relationships, (iii) remediation of the Company's IT and
non-IT systems and (iv) testing. The Company has also engaged the services of an
independent outside consultant group to gauge the status of the Year 2000
project and two additional outside consultants to provide contract support for
this effort. The Company has completed the inventory and assessment phase of its
Year 2000 program. The Company has been in the process of a planned upgrade of
many components of its IT system and, as this process is completed, the
Company's IT systems are expected to become Year 2000 compliant. The Company
expects the IT systems upgrade and remediation to be completed by July 31, 1999.
The Company has reviewed its non-IT systems, such as telephone systems, which
have been identified as necessary to the Company's ability to conduct the
operation of its business activities. The Company believes that all non-IT
systems have been modified or replaced to be Year 2000 compliant.
The Company plans to conduct testing of IT and non-IT systems as remediation
work is completed. In particular, the IT systems successfully participated in a
series of Securities Industry Association-sponsored industry-wide tests of the
trading cycle through the millennium. These tests exercised not only the
Company's internal IT systems, but also key interfaces with third parties in the
securities industry. Notwithstanding the Company's efforts to anticipate and
remediate Year 2000 problems, there can be no assurance that the inventory and
assessment will discover all potential Year 2000 problems or that testing will
reveal unanticipated material problems with the Company's IT systems and non-IT
systems that will need to be resolved.
The Company has no control over the remediation efforts of third parties with
which it has material business relationships and the failure of certain of these
third parties to successfully remediate their Year 2000 issues could have a
material adverse effect on the Company. Accordingly, the Company has undertaken
the process of contacting each material third party. Such parties include, but
are not limited to, various brokers-dealers, clearinghouses, stock exchanges and
online and Internet service providers. The Company continues to receive
documentation from its third party vendors and partners declaring that their
ability to perform their obligations to the Company are not expected to be
materially adversely affected by the Year 2000 problem. The Company continues to
conduct in-house testing of third party systems where applicable. The Company
continues to pursue updated information from these material third parties in
order to access their Year 2000 readiness.
Costs to Address Year 2000 Compliance
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<PAGE> 14
Costs associated with Year 2000 compliance consist of salaries of the Year 2000
project manager and other staff assigned to the Year 2000 working group,
software used to assess the Company's systems, and consulting and contractor
fees. Additional costs are incurred in connection with replacing non-IT systems
as necessary, polling of third-party readiness and testing. All remediation to
the Company's IT system were made as part of scheduled upgrades and, therefore,
have not been included in the costs of Year 2000 compliance. Costs associated
with the Company's Year 2000 program have been approximately $2.0 million to
date and are expected to range between $2.0 million and $3.0 million by the end
of the project.
Year 2000 Risks
Based on currently available information, the Company does not believe that
there will be any protracted systemic failures of the IT or non-IT systems
utilized by it in connection with the operation of its business. The Company
believes that the most reasonably likely worst-case scenario will be a temporary
interruption or reduction in trading volume capability due to a combination of
interface breakdowns, utilities disruptions or communications degradations. If
such an interruption or reduction occurs, it will result in a loss of revenues
and, depending on the extent of such disruption, may cause the Company to lose
accounts. The Company cannot estimate the magnitude of any such loss of revenue
at this time, but it could be material.
Contingency Plans
The Company has compiled a series of contingency plans with respect to Year 2000
issues as part of an overall business continuity/disaster recovery initiative.
In general, these plans provide for the use of manual processes and back-up
market sources in order to execute securities trades. Other principal components
of the Company's contingency plan include the use of multiple transmission
channels with several long distance telephone vendors and on-site diesel
generators if telephone service or electricity is interrupted. The Company
expects to make refinements to its contingency plans as additional information
regarding Year 2000 strategies becomes available and as a result of the
industry-wide simulation testing described above. There can be no assurance,
however, that any contingency plan utilized by the Company will prevent the
Company from incurring service interruptions and other negative consequences in
the event of Year 2000 problems either with its own IT and non-IT systems or
with those of third parties having material business relationships with the
Company.
All forecasts, estimates or other statements in this report relating to the Year
2000 readiness of the Company are based on information and assumptions about
future events. Such "forward-looking statements" are subject to various known
and unknown risks and uncertainties that may cause actual events to differ from
such statements. Important factors upon which the Company's Year 2000
forward-looking statements are based include, but are not limited to, (a) the
belief of the Company that the upgraded software used in IT systems is already
able to correctly read and interpret dates after December 31, 1999 and will
require little or no remediation; (b) the ability to identify, repair or replace
mission critical non-IT equipment in a timely manner, (c) third parties'
remediation of their internal systems to be Year 2000 ready and their
willingness to test their systems interfaces with those of the Company, (d) no
third party system failures causing material disruption of telecommunications,
data transmission, payment networks, government services, utilities or other
infrastructure, (e) no unexpected failures by third parties with which the
Company has a material business relationship and (f) no material undiscovered
flaws in the Company's Year 2000 inventory and assessment process.
ITEM 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk generally represents the risk of loss that may result from the
potential change in the value of a financial instrument as a result of
fluctuations in interest rates and market prices. The Company has established
policies, procedures and internal processes governing its management of market
risks in the normal course of its business operations.
As a fundamental part of its brokerage business, the Company holds short-term
interest earning assets, mainly funds required to be segregated in compliance
with federal regulations for customers. Such funds totaled $483,038,205 at June
25, 1999 and $503,455,354 at September 25, 1998. The Company invests such funds
primarily in short-term fixed-rate U.S. Treasury Bills and repurchase
agreements. The Company's interest earning assets are financed by short-term
interest bearing liabilities totaling $1,820,477,017 at June 25, 1999 and
$1,136,082,337 at September 25, 1998 in the form of customer cash balances.
Additionally, at June 25, 1999 the Company had $58,000,000 outstanding in notes
payable under a floating interest rate arrangement (see "Bank Loan Agreements")
compared to $11,000,000 outstanding at September 25, 1998. The Company earns a
net interest spread on the difference between amounts earned on customer margin
loans and amounts paid on customer credit balances. Since the Company
establishes the rate paid on customer cash balances, a substantial portion of
its interest rate risk is under the direct management of the Company. The
Company generally moves rates earned on loans in lockstep with rates paid on
credit balances to maintain a consistent net interest spread, and, therefore,
does not anticipate that changes in interest rates will have a material effect
on the Company's earnings and cash flows.
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<PAGE> 15
The Company holds a marketable equity security at June 25, 1999, which is
recorded at fair value of $408,256,481 ($248,591,593 net of tax) and has
exposure to market price risk. The same security was recorded at fair value of
$29,454,879 ($17,522,615 net of tax) at September 25, 1998. This risk is
estimated as the potential loss in fair value resulting from a hypothetical 10
percent adverse change in prices quoted by the stock exchanges and amounts to
approximately $40,000,000 at June 25, 1999. Actual results may differ.
The Company's revenues and financial instruments are denominated in U.S. dollars
and the Company does not invest in derivative financial instruments or
derivative commodity instruments.
PART II - OTHER INFORMATION
ITEM 1. - LEGAL PROCEEDINGS
On September 16, 1998, a putative class action complaint was filed in the
District Court, Douglas County, Nebraska, regarding the Company's alleged
inability to handle the volume of subscribers to its Internet brokerage
services. The complaint seeks injunctive relief enjoining alleged deceptive,
fraudulent and misleading practices, equitable relief compelling the Company to
increase capacity, and unspecified compensatory damages. The Company believes
that it has viable defenses to the allegations raised in the complaint and
intends to assert them vigorously. However, because this proceeding is at a
preliminary phase and the amount of damages sought has not been quantified, the
Company is not presently able to predict the ultimate outcome of this matter.
On October 13, 1997, Advanced Clearing received from the Director of Arbitration
of the NASD an arbitration claim filed by Slavic Investment Corporation, a
former correspondent broker, and Slavic Mutual Funds Management Corporation, a
related company, regarding breach of contract. The damages sought include
approximately $9.3 million in compensatory damages, and five times that amount
in punitive damages. The Company has completed a portion of the arbitration
hearings with additional hearings scheduled for the fall of 1999. The Company
believes that it has viable defenses to the issues raised in the arbitration and
intends to assert them vigorously. The Company also believes that the damages
sought are substantially in excess of any losses that may have been incurred.
However, the Company is not presently able to predict the ultimate outcome of
this matter.
The Company and its subsidiaries are parties to a number of other legal matters
arising in the ordinary course of business. In management's opinion, the Company
has adequate legal defenses to each of these actions and does not believe that
any such matters, either individually or in the aggregate, will materially the
Company's business, financial condition and results of operations.
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS:
3.1 Certificate of Incorporation (incorporated by reference to
Exhibit 3.1 of the Company's Registration Statement on Form
S-1 (Registration No. 333-17495) filed on February 7, 1997)
3.2 Bylaws (incorporated by reference to Exhibit 3.2 of the
Company's Registration Statement on Form S-1 (Registration
No. 333-17495) filed on February 7, 1997)
3.3 Certificate of Amendment of Certificate of Incorporation of
Ameritrade Holding Corporation dated February 10, 1998
(incorporated by reference to Exhibit 3.3 of the Company's
quarterly report on Form 10-Q filed on May 12, 1998)
3.4 Certificate of Correction of Certificate of Amendment of
Certificate of Incorporation of Ameritrade Holding Corporation
dated December 11, 1998 (incorporated by reference to Exhibit
3.4 of the Company's Annual Report on Form 10-K and amendments
thereto filed on December 21, 1998)
3.5 Certificate of Amendment of Certificate of Incorporation of
Ameritrade Holding Corporation dated February 17, 1999
(incorporated by reference to Exhibit 3.5 of the Company's
quarterly report on Form 10-Q filed on May 10, 1999)
3.6 Restated Certificate of Incorporation of Ameritrade Holding
Corporation dated July 1, 1999
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<PAGE> 16
4.1 Form of Certificate for Class A Stock (incorporated by
reference to Exhibit 4.1 of the Company's Registration
Statement on Form S-1 (Registration No. 333-17495) filed on
February 7, 1997)
10.1 Agreement of Limited Partnership, dated as of February 4,
1993, of Comprehensive Software Systems, Ltd. (incorporated by
reference to Exhibit 10.1 of the Company's Registration
Statement on Form S-1 (Registration No. 333-17495) filed on
February 7, 1997)
10.2 Amendment to Agreement of Limited Partnership, dated as of
September 1993, of Comprehensive Software Systems, Ltd.
(incorporated by reference to Exhibit 10.33 of the Company's
Registration Statement on Form S-1 (Registration No. 333-17495)
filed on February 7, 1997)
10.3 Second Amendment to Agreement of Limited Partnership, dated as
of December 1994, of Comprehensive Software Systems, Ltd.
(incorporated by reference to Exhibit 10.34 of the Company's
Registration Statement on Form S-1 (Registration No.
333-17495) filed on February 7, 1997)
10.4 Third Amendment to Agreement of Limited Partnership, dated as
of December 31, 1995, of Comprehensive Software Systems, Ltd.
(incorporated by reference to Exhibit 10.35 of the Company's
Registration Statement on Form S-1 (Registration No.
333-17495) filed on February 7, 1997)
10.5 Sale of Minority Interest Agreement between Comprehensive
Software Systems, Ltd. and ADP Financial Information Services,
Inc., dated as of June 3, 1998 (incorporated by reference to
Exhibit 10.5 of the Company's Annual Report on Form 10-K and
amendments thereto filed on December 21, 1998)
10.6 Broker Loan Pledge and Security Agreement, dated as of October
24, 1989, made by AmeriTrade, Inc. (now known as Advanced
Clearing, Inc.) in favor of the First National Bank of Chicago
(incorporated by reference to Exhibit 10.18 of the Company's
Registration Statement on Form S-1 (Registration No.
333-17495) filed on February 7, 1997)
10.7 Master Broker Loan Note, dated as of October 24, 1989, made by
AmeriTrade, Inc. (now known as Advanced Clearing, Inc.) in
favor of the First National Bank of Chicago (incorporated by
reference to Exhibit 10.19 of the Company's Registration
Statement on Form S-1 (Registration No. 333-17495) filed on
February 7, 1997)
10.8 Lease, dated as of February 3, 1998, between Southroads Mall
and Ameritrade Holding Corporation (incorporated by reference
to Exhibit 10.24 of the Company's quarterly report on Form
10-Q filed on May 12, 1998)
10.9 Lease, dated as of March 19, 1999, between Alliance Gateway
No. 16, Ltd. and Ameritrade Holding Corporation
10.10 Lease, dated as of March 19, 1999, between Alliance Gateway
No. 17, Ltd. and Ameritrade Holding Corporation
10.11 Lease, dated as of April 9, 1999, between IRET Properties and
Ameritrade Holding Corporation
10.12 Lease, dated as of April 22, 1999, between Heritage Commons I,
Ltd. and Ameritrade Holding Corporation
10.13 Employment Contract, dated as of December 3, 1996, between J.
Joe Ricketts and AmeriTrade Holding Corporation (incorporated
by reference to Exhibit 10.26 of the Company's Registration
Statement on Form S-1 (Registration No. 333-17495) filed on
February 7, 1997)
10.14 Employment Contract, dated as of December 3, 1996, between
Joseph A. Konen and AmeriTrade Holding Corporation
(incorporated by reference to Exhibit 10.27 of the Company's
Registration Statement on Form S-1 (Registration No.
333-17495) filed on February 7, 1997)
10.12 Employment Contract, dated as of December 3, 1996, between
Robert T. Slezak and AmeriTrade Holding Corporation
(incorporated by reference to Exhibit 10.28 of the Company's
Registration Statement on Form S-1 (Registration No.
333-17495) filed on February 7, 1997)
10.13 Employment Contract, dated as of February 15, 1999, between
Thomas Lewis and Ameritrade Holding Corporation (incorporated by
reference to Exhibit 10.20 of the Company's quarterly report on
Form 10-Q filed on May 10, 1999)
10.14 Employment Contract, dated as of March 24, 1999, between Jack R.
McDonnell and Ameritrade Holding Corporation (incorporated by
reference to Exhibit 10.21 of the Company's quarterly report on
Form 10-Q filed on May 10, 1999)
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<PAGE> 17
10.15 Form of Executive Bonus Plan (incorporated by reference to
Exhibit 10.29 of the Company's Registration Statement on Form
S-1 (Registration No. 333-17495) filed on February 7, 1997)
10.16 1996 Long-Term Incentive Plan (incorporated by reference to
Exhibit 10.30 of the Company's Registration Statement on Form
S-1 (Registration No. 333-17495) filed on February 7, 1997)
10.17 Amendment to 1996 Long-Term Incentive Plan dated November 11,
1997 (incorporated by reference to Exhibit 10.20 of the
Company's Annual Report on Form 10-K and amendments thereto
filed on December 21, 1998)
10.18 1996 Directors Incentive Plan, as amended February 10, 1998.
This plan supercedes plan filed February 7, 1997 (incorporated
by reference to Exhibit 10.21 of the Company's Annual Report on
Form 10-K and amendments thereto filed on December 21, 1998)
10.19 Loan Agreement, dated as of January 16, 1998, made by Ameritrade
Holding Corporation in favor of a bank group (incorporated by
reference to Exhibit 10.22 of the Company's quarterly report on
Form 10-Q filed on February 13, 1998)
10.20 Amendment to Loan Agreement dated as of May 24, 1999
10.21 Operating Agreement of Adirondack Trading Partners LLC
(incorporated by reference to Exhibit 10.25 of the Company's
Annual Report on Form 10-K and amendments thereto filed on
December 21, 1998)
27.1 Financial Data Schedule (EDGAR filing only)
(B) REPORTS ON FORM 8-K:
No reports on Form 8-K were filed during the three-month period ended
June 25, 1999.
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<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: August 6, 1999
Ameritrade Holding Corporation
(Registrant)
by: /s/ J. Joe Ricketts
----------------------------------------------
J. Joe Ricketts
Director, Chairman and Co-Chief Executive Officer
(Principal Executive Officer)
by: /s/ Thomas K. Lewis
----------------------------------------------
Thomas K. Lewis
Co-Chief Executive Officer
(Principal Executive Officer)
by: /s/ Robert T. Slezak
----------------------------------------------
Robert T. Slezak
Director, Chief Financial Officer, Vice President
and Treasurer (Principal Financial and
Accounting Officer)
18
<PAGE> 1
EXHIBIT 3.6
State of Delaware PAGE 1
OFFICE OF THE SECRETARY OF STATE
-----------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HERE BY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED
CERTIFICATE OF "AMERITRADE HOLDING CORPORATION", FILED IN THIS OFFICE ON THE
FIRST DAY OF JULY, A.D. 1999, AT 3:30 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
/s/ EDWARD J. FREEL
[SEAL] -------------------------------------
2658986 8100 Edward J. Freel, Secretary of State
AUTHENTICATION: 9844495
991271059
DATE: 07-02-99
<PAGE> 2
RESTATED CERTIFICATE OF INCORPORATION
OF
AMERITRADE HOLDING CORPORATION
It is hereby certified that:
1. The present name of the corporation (hereinafter called the
"Corporation") is Ameritrade Holding Corporation. The date of filing of the
original Certificate of Incorporation of the Corporation with the Secretary of
State of Delaware is September 25, 1996.
2. This Restated Certificate of Incorporation restates and amends
the Certificate of Incorporation of the Corporation by amending said
Certificate of Incorporation of the Corporation in its entirety as set forth in
Exhibit A attached hereto and made a part hereof.
3. The Restated Certificate of Incorporation herein certified was
duly adopted by a majority vote of the holders of the Class A common Stock of
the Corporation and by the written consent of the holders of the Class B Common
Stock of the Corporation in accordance with the applicable provisions of
Sections 212, 228, 242 and 245 of the General Corporation Law of Delaware, as
amended.
IN WITNESS WHEREOF, said Ameritrade Holding Corporation has caused
this certificate to be signed by J. Peter Ricketts, its Secretary, this 1st day
of July, 1999.
AMERITRADE HOLDING CORPORATION
By: /s/ J. PETER RICKETTS
Name: J. Peter Ricketts
Its: Secretary
<PAGE> 3
EXHIBIT A
RESTATED CERTIFICATE OF INCORPORATION
OF
AMERITRADE HOLDING CORPORATION
FIRST: The name of the corporation is Ameritrade Holding Corporation
(the "Corporation").
SECOND: The registered office of the Corporation in the State of
Delaware is located at 1209 Orange Street in the City of Wilmington, County of
New Castle. The name of its registered agent at such address is The Corporation
Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "Act").
FOURTH: The total number of shares of capital stock which the
Corporation has authority to issue is 291,000,000 shares, consisting of:
(l) 3,000,000 shares of Preferred Stock, par value $1.00 per
share (the "Preferred Stock");
(2) 270,000,000 shares of Class A Common Stock, par value $.01
per share (the "Class A Stock"); and
(3) 18,000,000 shares of Class B Common Stork, par value $.01
per share (the "Class B Stock").
The Class A Stock and the Class B Stock are hereafter collectively
referred to as the "Common Stock."
A. PREFERRED STOCK
Authority is hereby expressly granted to the Board of Directors to
authorize the issuance of one or more series of Preferred Stock and with respect
to each such series to fix by resolution or resolutions providing for the
issuance of such series the voting powers, full or limited, if any, of the
shares of such series and the designations, preferences and relative,
participating, optional or other special rights and the qualifications,
limitations or restrictions thereof.
<PAGE> 4
B. COMMON STOCK
Except as otherwise provided in this Section B or as otherwise required
by applicable law, all shares of Class A Stock and Class B Stock shall be
identical in all respects and shall entitle the holders thereof to the same
rights and privileges, subject to the same qualifications, limitations and
restrictions.
1. Voting Rights.
(a) General. Except as otherwise provided in this Section B or as
otherwise required by applicable law, the holders of Class A Stock and the
holders of Class B Stock shall vote as a single class and shall be entitled to
one vote per share on all matters to be voted on by the stockholders of the
Corporation.
(b) Election of Directors. The number of directors shall be
determined in the manner provided in the Bylaws of the Corporation. The Class B
Stock shall be entitled to elect a majority of the directors and the Class A
Stock shall be entitled to elect the remaining directors.
(c) Removal. Only the holders of Class A Stock shall be entitled to
vote on the removal, with or without cause, of any director elected by the
holders of Class A Stock. Only the holders of Class B Stock shall be entitled
to vote on the removal, with or without cause, of any director elected by the
holders of Class B Stock.
(d) Vacancies. Any vacancy in the office of a director created by the
death, resignation or removal of a director elected by the holders of Class A
Stock shall be filled only by a vote of the holders of Class A Stock. Any
vacancy in the office of a director created by the death, resignation or removal
of a director elected by the holders of Class B Stock shall be filled only by a
vote of the holders of Class B Stock. Notwithstanding anything in this Section
(d) to the contrary, any vacancy in the office of a director may be filled by
the vote of the majority of the directors (or director) elected by the same
class of stock that elected the director whose death, resignation or removal
created the vacancy, or in the event that there are no such directors, by the
vote of the majority of the other directors or by the sole remaining director,
regardless, in each instance, of any quorum requirements set forth in the Bylaws
of the Corporation. Any director elected by the stockholders or by some or all
of the directors to fill a vacancy shall serve until the next annual meeting of
stockholders and until his or her successor has been elected and has qualified.
Any vacancy in the office of a director created by the increase in the number of
directors may be filled by election at the next annual or special meeting of
stockholders in accordance with Section 1 (b) or by the vote of all the
directors prior to such annual or special meeting of stockholders, in which case
the directors shall designate which class of stock shall be deemed to have
elected the director filling such vacancy.
(e) One Class Outstanding. Notwithstanding anything in this Section 1
to the contrary, the holders of Class A Stock shall be entitled to elect all of
the directors and shall have exclusive
2
<PAGE> 5
voting power on all matters at any time when no Class B Stock is issued and
outstanding, and the holders of Class B Stock shall be entitled to elect all
of the directors and shall have exclusive voting power on all matters at any
time when no Class A Stock is issued and outstanding, subject in each case to
the provisions of any Preferred Stock.
2. Dividends. As and when dividends are declared or paid on the
Common Stock, whether in cash, property or securities of the Corporation, the
holders of Class A Stock and the holders of Class B Stock shall be entitled to
participate in such dividends ratably on a per share basis; provided that if
dividends are declared that are payable in shares of Class A Stock or Class B
Stock, dividends shall be declared that are payable at the same rate on both
classes of stock and any dividends payable in shares of Class A Stock shall be
payable to holders of that class of stock and any dividends payable in shares
of Class B Stock shall be payable to holders of that class of stock.
3. Conversion.
(a) Conversion of Class A Stock. The Class A Stock is not
convertible.
(b) Conversion of Class B Stock.
(i) Each share of Class B Stock may be converted into one share
of Class A Stock at any time at the option of and without cost to the
holder thereof. Any such conversion may be effected by any holder of
Class B Stock surrendering such holder's certificate or certificates
representing the Class B Stock to be converted, duly endorsed, at the
principal office of the Corporation or any transfer agent for the
Class B Stock during normal business hours, together with a written
notice to the Corporation at such office that such holder elects to
convert all or a specified number of shares of Class B Stock and stating
the name or names in which such holder desires the certificate or
certificates representing such Class A Stock to be issued. Promptly
thereafter, the Corporation shall issue and deliver to such holder, or
such holder's nominee or nominees, a certificate or certificates
representing the number of shares of Class A Stock to which such holder
shall be entitled. Such conversion shall be deemed to have been made at
the close of business on the date of such surrender and receipt of such
notice and the person or persons entitled to receive the Class A Stock
issuable upon such conversion shall be treated for all purposes as the
holder or holders of record of such Class A Stock as of the close of
business on that date.
(ii) Each share of Class B Stock shall automatically convert
into one share of Class A Stock if the number of issued and outstanding
shares of Common Stock held by the Control Group is less than twenty
percent (20%) of the aggregate number of issued and outstanding shares
of Common Stock.
(iii) Each share of Class B Stock shall automatically convert
into one share of Class A Stock in the event such share is sold or
transferred to any person other than to a member of the Control Group.
If any share of Class B Stock is sold or transferred to a
3
<PAGE> 6
member of the Control Group who subsequently ceases to be a member of the
Control Group, each such share shall automatically convert into one share of
Class A Stock.
(iv) For purposes of this Section 3, "Control Group" shall mean
J. Joe Ricketts, Marlene M. Ricketts, the lineal descendants of J. Joe
Ricketts and Marlene M. Ricketts and their spouses, and any trust or
other person or entity that holds Common Stock for the benefit for any
of the foregoing.
4. Liquidation. Subject to the provisions of any Preferred Stock,
the holders of Class A Stock and the holders of Class B Stock shall be entitled
to participate ratably on a per share basis in all distriubtions to the holders
of Common Stock in any liquidation, dissolution or winding up of the
Corporation.
5. Subdivision. Reclassification and Combination. The Corporation
shall not subdivide, reclassify or combine any class of Common Stock without at
the same time making a proportionate, subdivision, reclassification or
combination of each other class of Common Stock.
FIFTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Act or on the application of
trustees in dissolution or of any receiver or receivers appointed for this
Corporation under the provisions of Section 279 of Title 8 of the Act, order a
meeting of the creditors or class of creditors, and/or of the stockholders or
class of stockholders of this Corporation, as the case may be, to be summoned
in such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this Corporation, as the case may be, and also on this
Corporation.
SIXTH. A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) under Section 174 of the Act for payment of
unlawful dividends or unlawful stock repurchases or redemptions, or (iv) for
any transaction from which the director derived an improper personal benefit.
SEVENTH: In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to adopt, amend or
repeal the Bylaws of the Corporation.
4
<PAGE> 7
EIGHTH: The Corporation reserves the right to amend, alter, change,
add to or repeal any provision contained in this Certificate of Incorporation
in the manner now or hereafter prescribed by statute, and all rights herein
conferred are granted subject to this reservation.
5
<PAGE> 1
EXHIBIT 10.9
LEASE AGREEMENT
THIS LEASE AGREEMENT, made and entered into by Alliance Gateway No. 16,
Ltd., a Texas limited partnership ("Landlord"), and Ameritrade Holding
Corporation, a Delaware corporation ("Tenant");
WITNESSETH:
1. PREMISES AND TERM. In consideration of the mutual obligations of
Landlord and Tenant set forth herein, Landlord leases to Tenant, and Tenant
hereby takes from Landlord, the Premises situated within the County of Tarrant,
State of Texas, more particularly described and indicated by the cross-hatched
area on Exhibit "A" attached hereto and incorporated herein by reference (the
"Premises") which Premises are to consist of the Building, together with all
rights, privileges, easements, appurtenances, and amenities belonging to or in
any way pertaining to the Premises, to have and to hold, subject to the terms,
covenants and conditions in this Lease. During the Lease Term, Tenant shall have
the exclusive use of at least 400 parking spaces located or to be located on the
Land and the nonexclusive use of all driveways and access-ways on the Land.
Landlord shall have no obligation to patrol or police any parking areas or
otherwise insure that such parking spaces are available for use by Tenant or its
employees, agents or invitees. Tenant agrees that its use of such parking spaces
shall be subject to such reasonable rules and regulations as Landlord may from
time to time promulgate and all reasonable directional and other signs from time
to time existing with respect to the parking relating to the Building. Tenant's
rights under this Lease shall be subject to all matters of public record,
including, without limitation, all easements, deed restrictions, covenants,
conditions and restrictions, as exist on the date hereof and as may hereafter be
imposed by Landlord (provided, however, that Landlord agrees it will not cause
any matter to be filed of record subsequent to the date hereof which would
interfere with the Permitted Use (hereinafter defined) or otherwise materially
change Tenant's obligations hereunder). The term of this Lease ("Term") shall
commence on the Commencement Date and shall end at the same time as the Two
Ameritrade Lease expires. The Premises are to be situated on the Land described
on Exhibit "B" attached hereto and made a part hereof,
A. After the Commencement Date, Landlord and Tenant shall execute and
deliver to one another a memorandum of acceptance of delivery of the Premises in
the form attached hereto as Exhibit "D".
B. Notwithstanding the fact that the Term of this Lease and Tenant's
obligation to pay rent does not commence until the Commencement Date, this Lease
shall nevertheless be binding upon the parties in accordance with its terms when
executed by Landlord and Tenant.
2. BASE RENT, SECURITY DEPOSIT AND ESCROW PAYMENTS.
A. Tenant agrees to pay to Landlord base rent ("Base Rent") for the
Premises, in advance, without demand, deduction or set off, except as otherwise
expressly provided herein, at the following rates and amounts during the Term
hereof:
<PAGE> 2
<TABLE>
<CAPTION>
Monthly Annual Per Square Foot
Month Base Rent Base Rent Per Annum
<S> <C> <C> <C>
Month 1 of this $45,658.03 $547,906.00 $ 11.50
Lease through
month 60 of the
"Term" of the
Two Ameritrade
Lease
Month 61 of Two $51,614.33 $619,372.00 $ 13.00
Ameritrade
Lease through
Month 120 of
Two Ameritrade
Lease
Month 121 of Two $58,324.20 $699,890.36 $ 14.69
Ameritrade
Lease through
expiration date of
primary Term
</TABLE>
Notwithstanding the foregoing, Base Rent shall be abated during months
1-3 of the Term of this Lease.
The first monthly installment of Base Rent, plus the other monthly
charges set forth in Paragraph 2C below, shall be due and payable on the
Commencement Date and subsequent monthly installments shall be due and payable
on or before the first day of each calendar month succeeding the Commencement
Date, except that all payments due hereunder for any fractional calendar month
shall be prorated.
B. In addition, Tenant agrees to deposit with Landlord on the date
hereof the sum of Forty Five Thousand Six Hundred Fifty Eight and 83/100 Dollars
($45,658.83), which shall be held by Landlord as security for the performance of
Tenant's obligations under this Lease, it being expressly understood and agreed
that this security deposit is not an advance rental deposit 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 to pay past due rent or other payments due Landlord under this Lease,
and the cost of any other damage, injury, expense or liability caused by such
Event of Default without prejudice to any other remedy provided herein or
provided by law. Within ten (10) days after demand, Tenant shall pay Landlord
the amount that will restore the security deposit to its original amount. The
security deposit shall be deemed the property of Landlord, but any remaining
balance of such security deposit shall be returned by Landlord to Tenant within
ten (10) days after the fulfillment of Tenant's obligations under this Lease
(excluding any obligations that survive the termination or expiration of this
Lease and with respect to which Tenant has not received written notice from
Landlord within ten (10) days following the expiration or termination of this
Lease).
C. In addition to Base Rent and Tenant's other obligations hereunder,
Tenant agrees to pay its proportionate share (as defined in the Basic Lease
Information) of the following costs and expenses (collectively, the
"Reimbursable Expenses"): (i) Taxes (hereinafter defined) payable by Landlord
pursuant to Paragraph 4A below, (ii) the cost of maintaining insurance pursuant
to Paragraph 10A below, (iii) Common Area Charges (hereinafter defined) payable
by Tenant in accordance with Paragraph 3 below, (iv) subject to Paragraph 2D
below, the cost of any repair, replacement, or capital expenditures required
under any governmental law or regulation that was not applicable to the Building
at time of original construction, and (v) reasonable replacement reserves for
capital items and other operating expenses required by this Lease. During each
month of the Term of this Lease, on the same day that Base Rent is due
<PAGE> 3
[copy missing]
proportionate share of such Reimbursable Expenses, as estimated by Landlord.
Landlord agrees that all escrow amounts deposited by Tenant with Landlord that
are attributable to Taxes shall be held by Landlord in a money market deposit
account ("Tax Escrow Account") in a financial institution selected by Landlord
and reasonably acceptable to Tenant. All interest on the funds in the Tax Escrow
Account shall accrue for the benefit of Tenant so long as no Event of Default
exists hereunder, and such interest shall remain in and become a part of the
funds in the Tax Escrow Account and shall be credited against Tenant's
obligation to pay Taxes hereunder (provided that any such Interest that remains
unapplied after all obligations of Tenant with respect to its proportionate
share of Taxes for any calendar year have been satisfied, shall, at Tenant's
option, be refunded to Tenant within thirty (30) days after final determination
of Tenant's obligation with respect to Taxes arising during such calendar year).
Tenant authorizes Landlord to use the funds deposited with Landlord under this
Paragraph 2C (including the amounts in the Tax Escrow Account and all interest
thereon) to pay such Reimbursable Expenses. Upon the occurrence of an Event of
Default Landlord shall have no obligation to keep the escrow payments for Taxes
in the Tax Escrow Account or any other segregated account (provided that such
escrow payments for Taxes as well as any accrued interest thereon shall be
credited to Tenant's obligation to pay Taxes hereunder). Landlord shall be
entitled to revise its projection of such Reimbursable Expenses at any time and
if Landlord so revises such projection, Tenant shall pay to Landlord, on the
same day as Base Rent is due hereunder, an amount equal to 1/12th of Tenant's
proportionate share of such Reimbursable Expenses pursuant to Landlord's revised
estimate thereof. By April 30 of each calendar year during the Term hereof
Landlord shall determine the actual Reimbursable Expenses for the preceding
calendar year and shall notify Tenant thereof. If the Tenant's total escrow
payments are less than Tenant's actual proportionate share of all such
Reimbursable Expenses, Tenant shall pay the difference to Landlord within ten
(10) days after demand. If the total escrow payments of Tenant are more than
Tenant's actual proportionate share of all such Reimbursable Expenses, Landlord
shall retain such excess and credit it against Tenant's next annual escrow
payments; provided, however, if the total escrow payments of Tenant are more
than Tenant's actual proportionate share of all such Reimbursable Expenses for
the year in which the Lease expires, Landlord shall reimburse Tenant any excess
within ten (10) days following the expiration of the Term.
D. With respect to the cost of replacements and capital expenditures
(as opposed to repairs) referenced in Paragraph 2(C)(iv) and replacement
reserves for capital items referenced in Paragraph 2(C)(v) above, it is agreed
that if the replacement or expenditure is applicable to building owners
generally (and is not necessitated due to Tenant's use of the Premises), then
the cost of any such item shall be amortized amortized over its useful life (at
a per annum interest rate equal to the prime rate of interest announced from
time to time by Bank One Texas, N.A. plus one percentage point) in accordance
with generally accepted accounting principles and the portion of the cost that
shall be included within Paragraph 2(C)(iv) or Paragraph 2(C)(v) above, as
applicable, shall be equal to the product of (i) the actual cost of such item
(together with such interest), multiplied by (ii) a fraction the numerator of
which is the number of years (including partial years) remaining in the Lease
Term as of the date of such replacement or expenditure including the number of
years in any renewal term under Exhibit "F" attached hereto if the renewal
option therefor has been exercised by Tenant prior to the replacement or
expenditure (up to but not greater than the following described denominator),
and the denominator of which is the useful life of the item in question;
provided that if subsequent to any such replacement or expenditure Tenant
exercises any renewal option, the portion of the cost included within Paragraph
2(C)(iv) or Paragraph 2(C)(v) above under this sentence shall be recalculated to
include the length of the renewal term in question. The amount to be included
within Paragraph 2(C)(iv) or Paragraph 2(C)(v) pursuant to the immediately
preceding sentence shall be so included within said Paragraph 2(C)(iv) or
Paragraph 2(C)(v) as applicable, in equal annual amounts over the then remaining
Term of this Lease (from and after the date of such replacement or expenditure).
In no event shall Tenant be required to pay amounts which are amortized pursuant
to this Paragraph 2D, including the interest thereon, in excess of $12,500.00 a
year. Notwithstanding anything to the contrary contained herein, it is agreed
that the cost of any replacement or capital expenditure under Paragraph 2(C)(iv)
or Paragraph 2(C)(v) above that is necessitated due to Tenant's use of the
Premises shall not be so amortized, or be allocated to Tenant based upon its
proportionate share, but shall, instead, be paid for in full by Tenant within
thirty (30) days after Landlord's demand therefor.
<PAGE> 4
3. COMMON AREA CHARGES. In addition to other amounts required to be
paid by Tenant hereunder, Tenant shall pay to Landlord Tenant's proportionate
share of the following costs and expenses (collectively, the "Common Area
Charges"):
A. The cost of repair, maintenance and replacement of; (i) the exterior
of the Building (including painting), other than those structural repairs and
replacements for which Landlord is responsible pursuant to Paragraph 5; (ii)
subject to Paragraph 5(B), all mechanical, electrical, plumbing, sewer,
sprinkler and other life-safety equipment and systems forming a part of the
Building or the Project of which the Building forms a part (other than the cost
of repair, replacement and maintenance of the items which are Tenant's
responsibility pursuant to Paragraph 6 which shall be paid entirely by Tenant as
provided in Paragraph 6); and (iii) all other common areas and facilities
constituting a part of the Building or the Project of which the Building forms a
part (including, but not limited to, all paved areas in and about the Building).
B. The cost of maintenance and replacement of the grass, shrubbery and
other landscaping in and about the Building and/or the Project.
C. The cost of operating and maintaining in a good, neat, clean and
sanitary condition all parking areas, driveways, alleys and grounds in and about
the Building (including trash removal).
D. The cost of assessments under any applicable Declaration of
Covenants, Restrictions and Easements (as may be amended from time to time)
which are assessed by the applicable property owners association (which cost
Landlord estimates to be equal to $.05 per square foot of area in the Building
per year).
E. The cost of operating and maintaining any property, facilities or
services provided for Tenant, which costs shall include, without limitation,
management fees (or if no management company is engaged by Landlord for the
management of the Project, wages and employee benefits payable to employees of
Landlord or affiliates of Landlord whose duties are connected with the operation
and maintenance of the Building), which management fees (or such wages and
benefits) shall not exceed an annual amount equal to 2% of the Base Rent payable
to Landlord with respect to the Building per annum.
Landlord agrees that if any item of Common Area Charges is anticipated
to exceed $10,000, Landlord shall give Tenant at least fifteen (15) days' prior
written notice thereof.
4. TAXES.
A. Landlord agrees to pay all taxes, assessments and governmental
charges of any kind and nature (collectively referred to herein as "Taxes") that
accrue against the Premises, and/or the 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 for the provisions
of any tax abatement agreement with respect to which Landlord is a 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 payable by Landlord.) If
at any time during the Term of this Lease, there shall be levied, assessed or
imposed on Landlord a capital levy or other tax 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 from the Premises and/or the Land
and improvements of which the Premises are a part, then all such taxes,
assessments, levies or charges, or the part thereof so measured or based, shall
be deemed to be included within the term "Taxes" for the purposes hereof. Any
assessments made by the City of Fort Worth, Texas, (the "City"), or other taxing
authorities for the initial extension or construction of the roadways providing
access to the Premises shall not be included in Taxes, but all future
assessments imposed by the City or other taxing authorities in reference to or
in connection with such roadways shall be included in Taxes. Landlord shall have
the right to employ a tax consulting firm to attempt to assure a fair tax burden
on the building and grounds within the applicable taxing jurisdiction. Tenant
agrees to pay its proportionate share of the cost of such consultant to the
extent of any savings realized by Tenant.
<PAGE> 5
B. Tenant shall be liable for all taxes levied or assessed against any
personal property or fixtures placed in the Premises. If any such taxes are
levied or assessed against Landlord or Landlord's property and (i) Landlord pays
the same or (ii) the assessed value of Landlord's property is increased by
inclusion of such personal property and fixtures and Landlord pays the increased
taxes, then, within ten (10) days after demand, Tenant shall pay to Landlord
such taxes.
C. Tenant hereby waives any right it may have under Section 41.413 of
the Texas Tax Code to protest the appraised value of all or any portion of the
Premises and the Building, and any right it may have under Section 42.015 of the
Texas Tax Code to appeal an order of the appraisal review board with respect to
all or any portion of the Premises and/or the Building. Tenant agrees that
Landlord shall have the sole right to protest any appraisals of the Premises and
the Building. Tenant also hereby waives any right it may have to receive a copy
of any notice received by Landlord of reappraisal of all or any portion of the
Premises and/or the Building, including without limitation any notice required
under Section 41.413(d) of the Texas Tax Code. Tenant agrees that Landlord shall
not be liable to Tenant for any damages for Landlord's failure to send to Tenant
a copy of any notice of reappraisal concerning the Premises and/or the Building,
irrespective of any obligation under applicable law of Landlord to provide such
notice. Notwithstanding the foregoing, if Tenant protests, challenges or appeals
any valuation for property tax purposes of all or any portion of the Premises
and/or the Building, and such valuation increases from the value protested,
appealed or challenged, Tenant agrees to indemnify Landlord on an after-tax
basis for any property taxes due as a result of such increase.
D. Landlord agrees to provide to Tenant, within ten (10) days after
Tenant's written request therefor, the most recent tax statements and notices of
reappraisal relating to the Project that are In Landlord's possession. Tenant
shall have the right (unless Landlord shall in good faith agree to contest such
tax increase ("Landlord's Tax Protest") to contest or resist, in good faith,
diligently and by appropriate proceedings, the validity of the amount or rate of
any increase or proposed increase in the Taxes, all at Tenant's sole expense
(provided that in the case of a Landlord's Tax Protest, Tenant shall only be
responsible for the cost of such contest to the extent of any tax savings
realized by Tenant, unless Landlord's Tax Protest was initiated at Tenant's
request, in which case Tenant shall pay all reasonable amounts in connection
with such contest, and if the contest involves property of Landlord in addition
to the Project, the cost of the contest shall be allocated to Tenant on a
reasonable and equitable basis) and Tenant shall have the right to monitor
Landlord's Tax Protest; if Landlord elects not to contest such Taxes or, having
elected to contest such Taxes, fails to contest such Taxes diligently and in
good faith, and such failure continues uncured beyond a reasonable time (not to
exceed ten (10) days before the earlier of the deadline for filing a protest or
any scheduled hearing on such Taxes or appraisal) following written notice from
Tenant to Landlord, Tenant shall have the right to itself contest such Taxes. It
shall be a condition precedent to Tenant's right to contest any such Taxes that
Tenant provide Landlord with security (in a form (i) reasonably acceptable to
Landlord and (ii) acceptable to Landlord's mortgagee) in an amount reasonably
necessary to assure full payment of such Taxes being contested, together with
all penalties, fines and interest and other fees and amounts that could be
collected by the taxing authority in case the contest is unsuccessful (but in
any event not less than the amount required by Landlord's mortgagee in
connection with such contest of Taxes). Landlord shall cooperate with Tenant in
contacting Landlord's mortgagee for the purpose of discussing the amount and
form of security that such mortgagee may require in connection with any such
contest of Taxes. Tenant shall in all events pay all such contested Taxes
(together with all penalties, fines, interest and such other fees and amounts)
at least thirty (30) days prior to the date on which the Project (or any portion
thereof) would be subject to foreclosure on account of nonpayment thereof.
Tenant shall indemnify and hold harmless Landlord from and against any and all
expenses, liabilities and claims (including but not limited to reasonable
attorneys' fees) incurred by or asserted against Landlord or the Project arising
as a result of any such contest by Tenant, Landlord and Tenant agree to
reasonably cooperate with one another in connection with all contests of Taxes
under this Lease.
5. LANDLORD'S REPAIRS.
A. Tenant understands and agrees that Landlord's maintenance
replacement obligations are limited to those expressly set forth in this
Paragraph
<PAGE> 6
its own cost and expense, which expense shall not be reimbursable as a Common
Area Charge, shall be responsible only for repair and replacement of the roof,
foundation, downspouts, gutters, and the structural members of the exterior
walls of the Building, reasonable wear and tear excluded. The term "walls" as
used herein shall not include windows, glass or plate glass, doors, special
store fronts or office entries, unless damage to such items is caused by a
structural shift. Tenant shall promptly give Landlord written notice of defect
or need for repairs after which Landlord shall commence such repair within ten
(10) days of receipt of such notice and shall thereafter have a reasonable
opportunity under the particular circumstance to repair same or cure such defect
in a good and workmanlike manner and Landlord shall diligently prosecute the
repair to completion.
B. Landlord agrees that if a defect in materials or workmanship in the
work done by Landlord ("Landlord's Work") with respect to the initial
construction of the shell portion of the Building ("Defect") is discovered by
Tenant on or prior to the first anniversary of the Commencement Date ("First
Anniversary"), Tenant shall give Landlord written notice thereof ("Defect
Notice") on or prior to the First Anniversary (time being of the essence with
respect thereto). If Landlord receives a Defect Notice prior to the First
Anniversary, Landlord shall, at its sole expense, cause such Defect to be
repaired or remedied. Landlord agrees that if a Defect is discovered by Tenant
subsequent to the First Anniversary, but on or prior to the third anniversary of
the Commencement Date ("Third Anniversary"), Tenant shall give Landlord a Defect
Notice on or prior to the Third Anniversary (time being of the essence with
respect thereto) ("Later Defect Notice"). If Landlord receives a Later Defect
Notice, Landlord shall cause such Defect to be repaired or remedied and Tenant
and Landlord shall each be responsible for one-half of the cost of such repair
or remediation. Notwithstanding the foregoing, nothing contained in this
Paragraph 5B shall: (i) require Landlord to repair or remedy any Defect to the
extent such repair or remediation is necessitated due to the negligence, or
intentional acts or omissions of, or misuse of the item requiring such repair or
remediation by, Tenant or its employees, agents, contractors or invitees;
(ii) require Landlord to repair or remedy any Defect if the coverage afforded by
any warranty or maintenance/service contract relating to the item in question
has been impaired or invalidated by Tenant or its employees, agents, contractors
or invitees; or (iii) require Landlord to repair or remedy any Defect with
respect to which a timely Defect Notice or a timely Later Defect Notice is not
received by Landlord. Landlord may satisfy its obligations under this Paragraph
5B by electing to proceed under any manufacturers' and construction warranties
provided to Landlord in connection with the construction of the Landlord's Work
and/or under the maintenance/service contracts required to be carried by Tenant
under Paragraph 6B hereof and Tenant hereby agrees to cooperate with Landlord in
securing the performance by any manufacturer, contractor or subcontractor under
the warranty provided by such party and/or the maintenance/service contractor of
the work required to be performed by it under any such maintenance/service
contract.
6. TENANT'S REPAIRS AND MAINTENANCE.
A. Except as provided in Paragraph 5 and except for damage to the
Premises or Building caused by an act or omission of Landlord or Landlord's
employees, agents, contractors, or invitees following am completion of the
Landlord's Work, Tenant, at its own cost and expense, shall (i) maintain all
parts of the Premises (including, but not limited to, the floor slab of the
Premises and the mechanical, electrical, plumbing, sewer, sprinkler and other
life-safety equipment, fixtures and systems forming a part of the Premises), in
good, neat, clean, sanitary and operable condition and (ii) make all necessary
repairs and replacements thereto in a good and workmanlike manner. Tenant shall
receive the benefit of the coverage afforded to Landlord by any warranty or
maintenance/service contract relating to the Premises. Tenant shall commence
such repair within ten (10) days of the earlier of (i) Tenant's receipt of
written notice from Landlord of a defect or need for repairs, or (ii) the date
upon which Tenant first became aware of a defect or need for repairs, and Tenant
shall thereafter have a reasonable opportunity under the particular circumstance
to repair same or cure such defect in a good and workmanlike manner and shall
diligently prosecute the repair to completion. In addition to the foregoing,
Tenant shall, at its sole expense, repair any damage to the Premises or the
Building caused by the negligent or intentional acts or omissions of Tenant or
Tenant's employees, agents or invitees, or caused by Tenant's default
hereunder; provided, however, that Tenant's obligations hereunder are subject to
the mutual waiver of subrogation in Paragraph 11D.
<PAGE> 7
B. In addition to Tenant's other obligations hereunder, Tenant, at its
own cost and expense, shall enter into a regularly scheduled preventive
maintenance/service contract with a maintenance contractor reasonably approved
by Landlord for servicing all hot water, heating and air conditioning and
elevator systems and equipment within or serving the Premises. The service
contract must include all services suggested by the equipment manufacturer in
its operations/maintenance manual and an executed copy of such contract must be
provided to Landlord prior to the date Tenant takes possession of the Premises.
C. Tenant's obligations with respect to the "floor slab" of the
Premises pursuant to Paragraph 6A(i) above (i) shall be construed as referring
to the slab on grade of the Premises and not the foundation of the Building, and
(ii) shall apply only to the extent that the repair and maintenance of the floor
slab is not caused by the failure of the foundation of the Building or by a
defect in materials or workmanship in the initial pouring of such slab.
7. ALTERATIONS.
A. Tenant shall not make any alterations, additions or improvements to
the Premises without the prior written consent of Landlord, which consent shall
not be unreasonably withheld so long as such alterations, additions or
improvements do not impair the structural integrity of the Building, are not
visible from the exterior of the Building and do not adversely affect the
Building systems, and, if Landlord does not respond to Tenant's written request
(which request shall be accompanied by a reasonably detailed description of the
contemplated alterations, additions and improvements) within fifteen (15) days
after the date of such request, Landlord's consent shall be deemed granted;
provided, however, Tenant may make alterations that are nonstructural in
character, which are not visible from the exterior of the Building and which do
not adversely affect the Building systems (i) without Landlord's consent (but
with prompt written notice to Landlord) so long as the cost thereof does not
exceed $100,000 during the Term of this Lease, and (ii) with Landlord's prior
written consent (which consent shall not be unreasonably withheld so long as
such work does not impair the structural integrity of the Building, is not
visible from the exterior of the Building and does not adversely affect the
Building systems) with respect to alterations in excess of $100,000 during the
Term of the Lease (collectively, the "Permitted Non-Structural Alterations"). If
Landlord consents to Tenant's proposed alterations, additions or improvements to
the Premises, Landlord shall inform Tenant of its consent and promptly notify
Tenant as to whether Landlord will require Tenant to remove the alteration,
addition or improvement on or before the earlier to occur of the date of
termination of this Lease or permanent vacating of the Premises by Tenant. It is
contemplated by the parties that Tenant may construct a covered or,
alternatively, an enclosed climate-controlled walkway connecting the Building to
another building occupied by Tenant (the "Walkway"). Landlord hereby agrees that
subject to the requirements of this Paragraph 7A, Landlord shall consent to
Tenant's construction of the Walkway provided that (i) prior to commencement of
construction of the Walkway, Tenant submits to Landlord Tenant's plans and
specifications for the Walkway and Landlord approves same, which such approval
shall not be unreasonably withheld; (ii) Tenant complies with the requirements
of the "Alliance Development Guidelines," including, but not limited to,
obtaining Development Review Board approval; and (iii) at Landlord's request,
Tenant shall, prior to the expiration or termination of this Lease (or
termination of Tenant's right of possession, if sooner) at Tenant's sole cost
and expense, remove the Walkway in a good and workmanlike manner and restore the
surface to its condition immediately prior to the commencement of construction
of the Walkway, Tenant, at its own cost and expense, may erect such shelves,
bins, machinery and trade fixtures as it desires without the consent of
Landlord. Tenant's erection of such shelves, bins, machinery and trade fixtures
and the construction of the Permitted Non-Structural Alterations shall be on the
express condition that: (i) such items do not impair the structural integrity of
the Premises, the Building or such improvements; (ii) such items may be removed
without material injury to the Premises; and (iii) the construction, erection or
installation thereof complies with all applicable governmental laws, ordinances,
regulations and with the "Alliance Development Guidelines". All alterations,
additions, improvements and partitions erected by Tenant as well as the
Permitted Non-Structural Alterations shall be and remain the property of Tenant
during the Term of this Lease. On or before the earlier to occur of the date of
termination of this Lease or permanent vacating of the Premises by Tenant,
Tenant shall, at its sole expense, demolish and remove from the Premises all
Permitted Non-Structural
<PAGE> 8
Alterations and shall deliver up to Landlord the Promises in its condition
following the completion of the Leasehold Improvements constructed in
accordance with the Working Drawings pursuant to Exhibit "C" attached hereto and
made a part hereof (unless otherwise required by Landlord by written notice to
Tenant as hereinabove provided), reasonable wear and tear excepted. All
alterations, installations, removals and restoration shall be performed in a
good and workmanlike manner so as not to damage or impair the structural
integrity of the Building and other improvements situated on the Premises.
Following the completion of all alterations, additions or improvements
(including Permitted Non-Structural Alterations), Tenant shall deliver to
Landlord accurate, reproducible "as built" plans of such alterations, additions
or improvements, as constructed. Notwithstanding anything to the contrary
contained herein, it is agreed that the use of and access to the roof of the
Building is expressly reserved to Landlord and is expressly denied to Tenant
(except in order to permit Tenant to discharge its obligation to repair,
maintain and service the HVAC unit situated on the roof of the Building and to
install, repair, maintain and remove the Telecommunications Equipment as
hereinafter provided or to comply with Tenant's other obligations under this
Lease). Tenant shall not penetrate the roof of the Building in any manner, nor
install or construct any alterations, additions or improvements thereon, nor
otherwise use or occupy the roof at any time during the Term hereof (except
such use and occupation of the roof as is necessary in order to permit Tenant to
discharge its obligation to repair, maintain and service the HVAC unit situated
on the roof of the Building and to install, repair, maintain and remove the
Telecommunications Equipment or to comply with other provisions of this Lease).
In those circumstances where Tenant is entitled to enter onto the roof in
accordance with the preceding sentence, Tenant shall not in any event cause the
roof warranty of the Building to be impaired or invalidated (in whole or in
part).
B. Tenant shall have the right to use a portion of the roof area of the
Building, as Tenant may reasonably select (and as is reasonably acceptable to
Landlord) and as shall be permitted by any governmental laws governing the
installation, for the installation, operation, maintenance, security, repair and
replacement of satellite equipment serving the Premises and related cable
connections (the "Telecommunications Equipment"). Tenant's use of the Premises
with respect to the Telecommunications Equipment shall be subject to such
reasonable rules as Landlord may from time to time designate and to the
following additional conditions: (i) Tenant shall be solely responsible for the
installation, maintenance, repair, operation and replacement of the
Telecommunications Equipment, (ii) Tenant shall install screening around the
Telecommunications Equipment to the extent required by the recorded restrictions
applicable to the Premises, (iii) the installation, repair, maintenance and
placement of the Telecommunications Equipment shall in all events be subject to
(and in compliance with) the terms of all deed restrictions, and covenants,
conditions and restrictions affecting the Project and the requirements of the
"Alliance Development Guidelines" as the same may exist from time to time, and
(iv) any penetration of the roof shall be done only by Landlord's roofing
contractor (at Tenant's expense). Prior to the expiration or termination of the
Term (or termination of Tenant's right of possession under this Lease). Tenant
shall remove the Telecommunications Equipment and repair any damage to the
Premises caused by such removal. The cost of such installation, maintenance,
repair, operation and replacement and repairing any damage to the Premises
arising from such removal and restoration shall be paid by Tenant on demand.
8. SIGNS. Any signage, decorations, advertising media, blinds,
draperies, window treatments, bars, and security installations Tenant desires
for the Premises shall be subject to Landlord's prior written approval, which
approval shall not be unreasonably withheld, and shall be submitted to Landlord
prior to the Commencement Date. Tenant shall repair, paint, and/or replace the
Building facia surface to which its signs are attached upon vacation of the
Premises, or the removal or alteration of its signage, all at Tenant's sole cost
and expense. Tenant shall not (i) make any changes to the exterior of the
Premises, (ii) install any exterior lights, decorations, balloons, flags,
pennants, banners or painting, or (iii) erect or install any signs, windows or
door lettering, placards, decorations or advertising media of any type which
can be viewed from the exterior of the Premises, without Landlord's prior
written consent, which consent shall not be unreasonably withheld. All signs,
decorations, advertising media, blinds, draperies and other window treatment or
bars or other security installations visible from outside the Premises shall
conform in all respects to the criteria established by Landlord and to the
requirements of all covenants, conditions and restrictions applicable to the
Premises and the Building (including, but
<PAGE> 9
not limited to, approval by the Development Review Board). Landlord hereby
approves the specifications for Tenant's signage attached hereto as Exhibit
"C-4" and made a part hereof.
9. UTILITIES. Tenant shall timely pay for all 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 pertaining to the Tenant's use of the Premises, and any maintenance
charges for utilities. Tenant shall pay all impact or other fees associated with
utility hookups, meter installations or services to the Premises. Landlord shall
cause all of said services to be separately metered to Tenant. Landlord shall
not be liable for any interruption or failure of utility service on the
Premises, unless Landlord's intentional or negligent acts or omissions caused
such interruption or failure.
10. INSURANCE.
A. Landlord shall maintain insurance covering the Building of which the
Premises are a part in an amount not less than the "replacement cost" thereof
insuring against the perils and costs of Fire, Lightning, Extended Coverage,
Vandalism and Malicious Mischief. Landlord shall carry such additional insurance
as would be carried by a reasonably prudent owner of comparable premises, and,
at Tenant's request, Landlord shall provide Tenant with evidence of such
insurance. Such coverage shall be obtained on commercially reasonable terms from
an insurance company having a Best's rating of A/VII or better and licensed to
do business in the State of Texas. To the extent that the insurance coverage
maintained by Landlord pursuant to this Section 10A is carried under a blanket
policy that insures property owned by Landlord or its affiliates, in addition to
the Project, the cost of such insurance shall be allocated to the Project on a
reasonable and equitable basis. It is agreed that the general liability
insurance policy carried by Landlord, as contemplated by this Paragraph 10A,
shall provide that it shall provide primary coverage when any policy issued to
Tenant is similar or duplicate in coverage, and Tenant's policy shall be excess
over Landlord's policies.
B. Tenant, at its own expense, shall maintain during the Term of this
Lease a policy or policies of worker's compensation and comprehensive general
liability insurance, including personal injury and property damage, with
contractual liability endorsement, in the amount of Two Million Dollars
($2,000,000.00) for property damage and Two Million Dollars ($2,000,000.00) per
occurrence for personal injuries or deaths of persons occurring in or about the
Premises. Tenant, at its own expense, also shall maintain during the Term of
this Lease fire and extended coverage insurance covering the replacement cost of
all alterations, additions, partitions and improvements installed or placed on
the Premises by Tenant or by Landlord on behalf of Tenant, and all of Tenant's
personal property contained within the Premises. Said policies shall (i) name
Landlord as an additional insured and insure Landlord's contingent liability
under this Lease (except for the worker's compensation policy, which instead
shall include a waiver of subrogation endorsement in favor of Landlord), (ii) be
issued by an insurance company which is licensed to do business in the State of
Texas and which has a Best's rating of A/VII or better, and (iii) provide that
said insurance shall not be cancelled unless thirty (30) days prior written
notice shall have been given to Landlord. In addition, such insurance provided
by Tenant shall provide that it shall provide primary coverage when any policy
issued to Landlord is similar or duplicate in coverage, and Landlord's policy
shall be excess over Tenant's policies. All insurance policies carried by Tenant
hereunder shall expressly provide (by endorsement or otherwise) that Landlord's
rights thereunder shall be assignable to Landlord's mortgagee who shall be shown
as an additional insured thereon. Said policy or policies or certificates
thereof shall be delivered to Landlord by Tenant upon commencement of the Term
of the Lease and upon each renewal of said insurance. Notwithstanding the
foregoing, Tenant may elect to self-insure the risk of damage to its personal
property situated at the Premises (but not the Leasehold Improvements or
liability insurance) so long as (i) Tenant gives Landlord at least thirty (30)
days' prior written notice thereof, and (ii) Tenant's not worth (determined in
accordance with generally accepted accounting principles consistently applied)
is $50,000,000 or greater during the period in which Tenant so elects to
self-insure, Self-insurance by Tenant pursuant to the foregoing sentence shall
be deemed to be insurance for the purpose of the mutual waiver of subrogation
contained herein.
<PAGE> 10
C. Tenant will not permit the Premises to be used for any purpose or in
any manner that would (i) void the insurance thereon, (ii) increase the
insurance risk, or (iii) cause the disallowance of any sprinkler credits,
including without limitation, use of the Premises for the receipt, storage or
handling of any product, material or merchandise that is explosive or highly
inflammable. If any increase in the cost of any insurance on the Premises or the
Building of which the Premises are a part is caused by Tenant's use of the
Premises, or because Tenant vacates the Premises, then Tenant shall pay the
amount of such increase to Landlord.
11. FIRE AND CASUALTY DAMAGE.
A. If the Premises or the Building of which the Premises are a part
should be damaged or destroyed by fire or other peril, Tenant shall promptly
give written notice to Landlord. If the Building of which the Premises are a
part should be totally destroyed by any peril, or if they should be so damaged
thereby that, in Landlord's reasonable estimation, rebuilding or repairs cannot
be completed within 180 days after the date of such damage, this Lease shall
terminate and the rent shall be abated during the unexpired portion of this
Lease, effective upon the date of the occurrence of such damage.
B. If the Building of which the Premises are a part should be damaged
by any peril, and in Landlord's reasonable estimation, rebuilding or repairs can
be substantially completed within 180 days after the date of such damage, this
Lease shall not terminate, and Landlord shall restore the Premises to
substantially its previous condition (except that Landlord shall not be required
to rebuild, repair or replace any part of the partitions, fixtures, additions
and other improvements that may have been constructed, erected or installed in,
or about the Premises by Tenant, including the Leasehold Improvements
constructed by Tenant pursuant to Exhibit "C"). Effective upon the date of the
occurrence of such damage and ending upon substantial completion, if the
Premises are untenantable in whole or part during such period, the rent shall be
reduced to such extent as may be fair and reasonable under all of the
circumstances. If such repairs and rebuilding have not been substantially
completed within 180 days after the date of such damage (subject to Force
Majeure Delays (hereinafter defined] and any delays caused by Tenant or its
employees, agents or contractors), Tenant, as Tenant's exclusive remedy, may
terminate this Lease by delivering written notice of termination to Landlord in
which event all rights and obligations hereunder shall cease and terminate
(except as expressly provided to the contrary herein).
C. [Intentionally omitted.]
D. Landlord and Tenant hereby waive and release each other (but only to
the extent of the insurance coverage required to be maintained by the respective
parties hereunder) of and from any and all rights of recovery, claim, action or
cause of action, against each other, their agents, officers and employees, for
any liability, loss or damage that may occur to the Premises, improvements or
the Building of which the Premises are a part, or personal property (building
contents) within the Building and/or Premises as the result of any fire or other
casualty required to be insured against under this Lease. Each party to this
Lease agrees immediately after execution of this Lease to give each insurance
company, which has issued to it policies of fire and extended coverage
insurance, written notice of the terms of the mutual waivers contained in this
subparagraph and to have the insurance policies properly endorsed to reflect
such waivers. This Paragraph 11D overrides any provisions in this Lease to the
contrary.
12. LIABILITY AND INDEMNIFICATION. EACH PARTY ("INDEMNIFYING PARTY")
SHALL INDEMNIFY, PROTECT, HOLD HARMLESS AND DEFEND THE OTHER PARTY ("INDEMNIFIED
PARTY"), ITS AGENTS, EMPLOYEES, CONTRACTORS, PARTNERS, DIRECTORS, OFFICERS AND
ANY AFFILIATES OF THE ABOVE-MENTIONED PARTIES (COLLECTIVELY THE "INDEMNIFIED
AFFILIATES") FROM AND AGAINST ANY AND ALL OBLIGATIONS, SUITS, LOSSES, JUDGMENTS,
ACTIONS, DAMAGES, CLAIMS OR LIABILITY (INCLUDING, WITHOUT LIMITATION, ALL COSTS,
REASONABLE ATTORNEYS' FEES, AND EXPENSES INCURRED IN CONNECTION THEREWITH) IN
CONNECTION WITH ANY LOSS, INJURY OR DAMAGE (I) TO ANY PERSON OR
<PAGE> 11
PROPERTY WHATSOEVER OCCURRING IN, ON OR ABOUT THE PREMISES OR ANY PART THEREOF
AND/OR THE BUILDING, WHEN SUCH INJURY OR DAMAGE SHALL BE CAUSED BY THE ACT,
NEGLECT, FAULT OF, OR OMISSION OF ANY DUTY WITH RESPECT TO THE SAME BY THE
INDEMNIFYING PARTY, OR (II) ARISING FROM A BREACH OR VIOLATION BY THE
INDEMNIFYING PARTY OF ANY COURT ORDER OR ANY LAW, REGULATION, OR ORDINANCE OF
ANY FEDERAL, STATE OR LOCAL AUTHORITY (COLLECTIVELY, THE "LOSSES"), EXCEPT TO
THE EXTENT THE LOSSES ARE CAUSED WHOLLY OR IN PART BY THE NEGLIGENCE OR
INTENTIONAL MISCONDUCT OF THE INDEMNIFIED PARTY AND/OR THE INDEMNIFIED
AFFILIATES. IF ANY CLAIM IS MADE AGAINST EITHER PARTY OR THE INDEMNIFIED
AFFILIATES, THE INDEMNIFYING PARTY, AT ITS SOLE COST AND EXPENSE, SHALL DEFEND
ANY SUCH CLAIM, SUIT OR PROCEEDING. THE PROVISIONS OF THIS PARAGRAPH 12 SHALL
SURVIVE THE EXPIRATION OR TERMINATION OF THIS LEASE WITH RESPECT TO ANY CLAIMS
OR LIABILITY OCCURRING PRIOR TO SUCH EXPIRATION OR TERMINATION.
13. USE. Tenant may use the Premises for general office purposes,
specifically including, but not limited to conducting the sale of stocks, bonds
and other investments to the public via phone and the Internet, and for such
other lawful purposes as may be incidental thereto (the "Permitted Use"). Tenant
shall have full access to the Premises on a twenty-four (24) hour per day 365
day per year basis, subject to the Lease terms and conditions and loss of access
due to fire, casualty, condemnation, or other causes beyond Landlord's control.
Outside storage, including without limitation, storage of trucks and other
vehicles (other than the occasional temporary outdoor storage of a maximum of
ten (10) delivery and general transportation vehicles) is prohibited without
Landlord's prior written consent, which consent shall not be unreasonably
withheld. Tenant shall comply with (i) all governmental laws, ordinances and
regulations applicable to its specific use and occupancy of the Premises (as
opposed to governmental laws, ordinances and regulations applicable to real
estate generally and for which Landlord is liable, the cost of complying with
same being subject to inclusion within Reimbursable Expenses in accordance with
the terms hereof as amortized pursuant to Paragraph 2D), and promptly shall
comply with all governmental orders and directives for the correction,
prevention and abatement of nuisances in or upon, or connected with, the
Premises, all at Tenant's solo expense, (ii) the requirements of all deed
restrictions, restrictive covenants and other covenants, conditions and
restrictions affecting the Building and/or the Land, and (iii) the requirements
of "Alliance Development Guidelines" as may exist from time to time, and all
amendments thereto; provided, however, that future amendments to the "Alliance
Development Guidelines" must (i) not materially interfere with Tenant's
Permitted Use, (ii) receive uniform enforcement, (iii) be delivered to Tenant in
writing, and (iv) if such amendments conflict with the Lease terms, the Lease
shall control. Tenant shall not permit any objectionable or unpleasant odors,
smoke, dust, gas, noise or vibrations to emanate from the Premises, nor take any
other action that would constitute a nuisance or would disturb, unreasonably
interfere with, or endanger Landlord.
Landlord hereby represents that the Permitted Use is not prohibited by
the covenants, conditions and restrictions recorded in Volume 10711, Page 2285
of the real property records of Tarrant County, Texas.
14. INSPECTION. Landlord and Landlord's agents and representatives
shall have the right to enter the Premises at any time, upon twenty-four (24)
hours' notice, to (i) inspect the Premises, (ii) make such repairs as may be
required or permitted pursuant to this Lease, and (iii) show the Premises to
prospective purchasers of, or parties who are anticipated to provide financing
with respect to, the Building. Notwithstanding the foregoing, Landlord shall
have the right to enter the Premises at any time, upon such notice (if any) as
may be reasonable under the circumstances, in case of an emergency posing a
threat to persons or property. During the period that is six (6) months prior to
the end of the Lease Term, upon telephonic notice to Tenant, Landlord and
Landlord's representatives may enter the Premises during business hours for the
purpose of showing the Premises. In addition, Landlord shall have the right to
erect a suitable sign on the Premises stating the Premises are available. Tenant
shall notify Landlord in writing at least thirty (30) days prior to vacating the
Premises and shall arrange to meet with Landlord
<PAGE> 12
for a joint inspection of the Premises prior to vacating. If Tenant fails to
give such notice or to arrange for such inspection, then Landlord's inspection
of the Premises shall be deemed correct for the purpose of determining Tenant's
responsibility for repairs and restoration of the Premises.
15. ASSIGNMENT AND SUBLETTING
A. Tenant shall not assign (either voluntarily, nor permit assignment
by operation of law), sublet, transfer or encumber this Lease, or any interest
therein, without the prior written consent of Landlord; provided, however,
Tenant may assign this Lease or sublet the Premises to any entity that controls,
is controlled by, or is under common control with Tenant (individually, an
"Affiliate"). Landlord agrees that it shall not unreasonably withhold its
consent to any assignment or subletting proposed to be entered into by Tenant.
In considering whether it should consent to any subletting or assignment
requested by Tenant, Landlord may take into consideration (among other factors)
the credit standing of the proposed assignee or subtenant, the purpose for which
the Premises would be used by the proposed assignee or subtenant (including
whether such use would violate any exclusive use rights in existence today, and
those that might then be in existence and of which Tenant has been given written
notice, and by which Landlord may be bound, or violate any deed restrictions,
restrictive covenants, covenants, conditions and restrictions, or the "Alliance
Developments Guidelines," as may then be in existence, it being understood and
agreed that Landlord shall have the right to refuse its consent if the proposed
use by the assignee or subtenant would result in any such violation), the length
of the proposed sublease, the business reputation of the proposed assignee or
subtenant, whether the proposed assignee's or subtenant's operations would
involve use of hazardous substances, and all other relevant factors. Any
attempted assignment, subletting, transfer or encumbrance by Tenant in violation
of the terms and covenants of this Paragraph shall be void. No assignment,
subletting or other transfer, whether consented to by Landlord or not, shall
relieve Tenant of its liability hereunder. In the event Tenant desires to sublet
the Premises, or any portion thereof, or assign this Lease, Tenant shall give
written notice thereof to Landlord at least thirty (30) days prior to the
proposed commencement date of such subletting or assignment, which notice shall
set forth the name of the proposed sublessee or assignee, the relevant terms of
any sublease or assignment and copies of financial reports and other relevant
financial information of the proposed sublessee or assignee. If Landlord does
not respond to Tenant's request to assign, sublet, encumber or transfer this
Lease within thirty (30) days after Landlord's receipt of such request (which
request shall be accompanied by the additional information referenced in the
immediately preceding sentence), Landlord's consent shall be deemed granted.
Landlord shall be entitled to charge Tenant a reasonable fee for processing
Tenant's request for any subletting or assignment, including, but not limited
to, Landlord's reasonable out-of-pocket expenses and attorneys' fees.
B. In addition to, but not in limitation of, Landlord's right to
approve of any sublessee or assignee, Landlord shall have the option, in its
sole discretion, in the event of any proposed subletting or assignment, to
terminate this Lease, or in case of a proposed subletting of less than the
entire Premises, to recapture the portion of the Premises to be sublet, as of
the date the subletting or assignment is to be effective. The option shall be
exercised, if at all, by Landlord giving Tenant written notice thereof within
thirty (30) days following Landlord's receipt of Tenant's written notice as
required above. If this Lease shall be terminated with respect to the entire
Premises pursuant to this Paragraph, the Term of this Lease shall end on the
date stated in Landlord's notice as the effective date of the sublease or
assignment as if that date had been originally fixed in this Lease for the
expiration of the Term hereof; provided, however, that effective on such date
Tenant shall pay Landlord all amounts, as reasonably estimated by Landlord,
payable by Tenant to such date with respect to taxes, insurance, repairs,
maintenance, restoration and other obligations, costs or charges which are the
responsibility of Tenant hereunder. Further, upon any such cancellation Landlord
and Tenant shall have no further obligations or liabilities to each other under
this Lease, except with respect to obligations or liabilities which have accrued
hereunder as of such cancellation date (in the same manner as if such
cancellation date were the date originally fixed in this Lease for the
expiration of the Term hereof) and except for those obligations and liabilities
which, by the express terms of this Lease, are to survive any expiration or
termination hereof. If Landlord recaptures only a portion of the Premises under
this Paragraph, the Base Rent during the unexpired Term hereof shall abate
proportionately based on the rent per square foot contained in this Lease as of
the date immediately prior to such recapture. Tenant shall, at Tenant's own cost
and expense, discharge
<PAGE> 13
in full such commissions which may be due and owing as a result of any proposed
assignment or subletting, whether or not the Premises are recaptured pursuant
hereto and rented by Landlord to the proposed tenant or any other tenant.
C. Upon the occurrence of an assignment or subletting, whether or not
consented to by Landlord, or mandated by judicial intervention, Tenant hereby
assigns, transfers and conveys to Landlord all rents or other sums received or
receivable by Tenant under any such assignment or sublease, which are in excess
of the rents and other sums payable by Tenant under this Lease (or in case of a
sublease, which are in excess of the rents and other sums payable by Tenant with
respect to the portion of the Premises that is subleased), and agrees to pay
such amounts to Landlord within ten (10) days after receipt.
D. if this Lease is assigned to any person or entity pursuant to the
provisions of the United States Bankruptcy Code, 11 U.S.C. Section 101 et. seq.
(the "Bankruptcy Code"), any and all monies or other consideration payable or
otherwise to be delivered in connection with such assignment shall be paid or
delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the estate of Tenant within
the meaning of the Bankruptcy Code. Any and all monies or other considerations
constituting Landlord's property under the preceding sentence not paid or
delivered to Landlord shall be held in trust for the benefit of Landlord and be
promptly paid or delivered to Landlord. Any person or entity to which this Lease
is assigned pursuant to the provisions of the Bankruptcy Code, shall be deemed,
without further act or deed, to have assumed all of the obligations arising
under this Lease on and after the date of such assignment. Any such assignee
shall upon demand execute and deliver to Landlord an instrument confirming such
assumption.
E. Any assignee, sublessee or transferee of Tenant's interest in this
Lease (all such assignees, sublessees and transferees being hereinafter referred
to as "Transferee(s)"), by accepting any such assignment, sublease or transfer
shall be deemed to have assumed Tenant's obligations hereunder, and shall be
deemed to have assumed liability to Landlord for all amounts paid to persons
other than Landlord by such Transferees. No assignment, subletting or other
transfer, whether consented to by Landlord or not or permitted hereunder, shall
relieve Tenant of its liability hereunder. If an Event of Default occurs while
the Premises or any part thereof are assigned or sublet, then Landlord, in
addition to any other remedies herein provided, or provided by law, may collect
directly from such Transferee all rents payable to the Tenant and apply such
rent against any sums due Landlord hereunder. No such collection shall be
construed to constitute a novation or a release of Tenant from the further
performance of Tenant's obligations hereunder. If a Transferee defaults under
this Lease, and Landlord provides the Transferee with notice of such default,
Landlord shall simultaneously notify Tenant of the Transferee's default.
Landlord shall accept performance by Tenant with the same force and effect as
performance by Transferees.
F. The merger or consolidation of Tenant with another entity shall not
be deemed to be an assignment of this Lease by operation of law so long as the
surviving entity in any such merger or consolidation has a net worth (determined
in accordance with generally accepted accounting principles consistently
applied) immediately following such merger or consolidation that is equal to or
greater than the net worth of Tenant immediately prior to such merger or
consolidation.
16. CONDEMNATION.
A. If due to any taking for any public or quasi-public use under
governmental law, ordinance or regulation, or by right of eminent domain, or by
a conveyance in lieu thereof ("Taking") (i) any portion of the parking areas
constituting a part of the Project are taken such that, following the Taking,
the remainder of the Premises are rendered untenantable, or (ii) any portion of
the Land is taken such that access to the Building would be materially impaired
as a result of the Taking, or (iii) more than 25% of the Building is taken, or
(iv) such portion of the Building is taken as would render the remainder of the
Premises untenantable, this Lease shall terminate upon written notice from
Tenant to Landlord sent within thirty (30) days following the Taking and the
rent shall be abated during the unexpired portion of this Lease, effective on
the date of such Taking. Notwithstanding the foregoing If Tenant gives notice of
termination as a result of a Taking pursuant to clauses (i) or (ii) above,
Landlord shall have the right (but not the
<PAGE> 14
obligation) to substitute an alternative parcel of Land ("Substitute Parcel")
owned by Landlord or its affiliates, or alternative areas for such lost parking
and access ("Substitute Areas"), for the purpose of providing access and
parking to Tenant in lieu of access and parking that are lost as a result of
such Taking. Landlord may give Tenant written notice ("Substitution Notice")
that Landlord so elects to provide the Substitute Parcel or Substitute Areas
for such purposes, which Substitution Notice, if given by Landlord, shall be
given within thirty (30) days after Tenant's termination notice and shall
include Landlord's offer as to a fair and reasonable Base Rent adjustment or
abatement, if any. If Landlord gives the Substitution Notice and if the
Substitution Parcel or Substitute Areas and Base Rent adjustment or abatement
are reasonably acceptable to Tenant as being a reasonable substitute for the
access and parking lost as a result of such Taking: (i) Tenant's termination
notice shall be ipso facto null and void and this Lease shall continue in full
force and affect, and (ii) the parties shall promptly (but in all events within
thirty (30) days after the date of the Substitution Notice) enter Into an
amendment to this Lease whereby (A) if a Substitute Parcel is provided, the
Substitute Parcel is substituted for the areas so taken and (B) Tenant agrees
to pay Base Rent for the Substitute Parcel (in lieu of the Base Rent which is
otherwise abated under the preceding provisions of this Paragraph 16) at the
rate proposed by Landlord.
For purposes of this Paragraph 16(A), access shall be deemed to be
"materially impaired" only if access to the Building following the Taking would
be reduced to such an extent as to prevent Tenant from conducting its business
at the Premises in a manner reasonably comparable to Tenant's conduct of its
business at the Premises prior to the Taking.
For purposes of this Paragraph 16(A), "untenantable" shall mean that
following the Taking the Premises would be unfit for Tenant's continued
operation of its business in a manner reasonably comparable to Tenant's conduct
of its business at the Premises prior to the Taking.
B. If this Lease is not terminated under Paragraph 16(A) above as a
result of a Taking, this Lease shall continue in full force and effect but the
rent payable hereunder during the unexpired portion of this Lease shall be
reduced to such extent as may be fair and reasonable under all of the
circumstances (but without duplication of any other rental abatement under
Paragraph 16(A) above).
C. All compensation awarded in connection with or as a result of any
condemnation proceedings affecting the Premises (or any portion thereof) shall
be the property of Landlord; and Tenant hereby assigns any interest in any such
award to Landlord. Notwithstanding the foregoing, Landlord shall have no
interest in any award made to Tenant for loss of business or goodwill or for the
taking of Tenant's fixtures and improvements (it being agreed that Tenant may
pursue such award from the condemning authority).
17. HOLDING OVER At the termination of this Lease by its expiration or
otherwise, Tenant immediately shall deliver possession of the Premises to
Landlord with all repairs and maintenance required herein to be performed by
Tenant completed. If, for any reason, Tenant retains possession of the Premises
or any part thereof after such termination, or fails to complete any repairs
required hereby, then Landlord may, at its option, serve written notice upon
Tenant that such holding over constitutes either (i) the creation of a month to
month tenancy, upon the terms and conditions set forth in this Lease, or (ii)
creation of a tenancy at sufferance, in any case upon the terms and conditions
set forth in this 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
Tenant hereunder, whether or not as additional rent, be equal to 150% of the
rental being paid monthly to Landlord under this Lease immediately prior to such
termination (prorated in the case of (ii) on the basis of a 365-day year for
each day Tenant remains in possession). If no such notice is served, then a
tenancy at sufferance shall be deemed to be created at the rent in the preceding
sentence. Tenant shall also pay to Landlord all damages sustained by Landlord
resulting from retention of possession by Tenant, including the loss of any
proposed subsequent tenant for any portion of the Premises. The provisions of
this Paragraph shall not constitute a waiver by Landlord of any right of
re-entry as herein set forth; nor shall receipt of any rent or any other act in
apparent affirmance of the tenancy operate as a waiver of the right to
terminate this Lease for a breach of any of the terms, covenants, or obligations
herein on Tenant's part to be performed. No holding over by Tenant, whether with
or without consent of Landlord, shall
<PAGE> 15
operate to extend this Lease except as otherwise expressly provided. The
preceding provisions of this Paragraph 17 shall not be construed as consent for
Tenant to retain possession of the Premises in the absence of written consent
thereto by Landlord.
18. QUIET ENJOYMENT. Landlord has the authority to enter into this
Lease and so long as Tenant pays all amounts due hereunder and performs all
other covenants and agreements herein set forth, Tenant shall peaceably and
quietly have, hold and enjoy the Premises for the Term hereof without hindrance
from Landlord subject to the terms and provisions of this Lease.
19. EVENTS OF DEFAULT. The following events (herein individually
referred to as an "Event of Default") each shall be deemed to be an event of
default by Tenant under this Lease:
A. Tenant shall fail to pay any installment of the Base Rent herein
reserved when due, or any other payment or reimbursement to Landlord required
herein when due, and such failure shall continue for ten (10) days after written
notice to Tenant; provided, however, Tenant shall be entitled to such notice and
opportunity to cure on only two (2) occasions during any calendar year.
B. The Tenant shall: (i) become insolvent; (ii) admit in writing its
inability to pay its debts; (iii) make a general assignment for the benefit of
creditors; (iv) commence any case, proceeding or other action seeking to have an
order for relief entered on its behalf as a debtor or to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or of any substantial part of its property; or (v) take any
action to authorize any of the actions set forth above in this Paragraph.
C. Any case, proceeding or other action against the Tenant shall be
commenced seeking: (i) to have an order for relief entered against it as debtor
or to adjudicate it a bankrupt or insolvent; (ii) reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it of its debts under any
law relating to bankruptcy, insolvency, reorganization or relief of debtors;
(iii) appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its property, and such case,
proceeding or other action (a) results in the entry of an order for relief
against it which is not fully stayed within thirty (30) business days after the
entry thereof or (b) shall remain undismissed for a period of forty-five (45)
days.
D. Tenant shall (i) fail to take possession of the Premises upon
substantial completion of the Landlord's Work, (ii) vacate, desert, or abandon
all or a substantial portion of the Premises, or threaten to do so or (iii) fail
to continuously operate its business at the Premises for the Permitted Use set
forth herein, whether or not Tenant is in default in payment of the rental
payments due under this Lease (other than the temporary cessation of business
(i) while Tenant is actively renovating the Premises for a period not in excess
of six (6) months (or such longer period as Landlord may reasonably approve) or
(ii) in instances where Tenant is not renovating, for thirty (30) consecutive
days or sixty (60) days, whether or not consecutive, during any twelve-month
period).
E. Tenant shall fail to discharge any lien placed upon the Premises in
violation of Paragraph 22 hereof.
F. Tenant shall fail to comply with any term, provision or covenant of
this Lease (other than those listed above in this Paragraph 19), and shall not
cure such failure within thirty (30) days after written notice thereof to
Tenant; provided, however, if such failure cannot through the exercise of
reasonable diligence be cured within such thirty (30) days, an Event of Default
shall not be deemed to have occurred under this Paragraph 19F so long as Tenant
commences its curative efforts within such thirty (30) day period and diligently
prosecutes same to completion.
G. An "Event of Default" shall occur under that certain Lease Agreement
of even date herewith by and between Alliance Gateway No. 17, Ltd., as landlord
thereunder, and
<PAGE> 16
Tenant, as tenant thereunder, relating to certain premises in the building known
as "Two Ameritrade Place", (as such Lease Agreement may be amended from time to
time) ("Two Ameritrade Lease").
20. REMEDIES.
A. Upon each occurrence of an Event of Default, Landlord shall have the
option to pursue, without any notice or demand, any one or more of the following
remedies and/or any other remedies to which Landlord is entitled at law or in
equity:
(1) Terminate this Lease, in which event Tenant shall
immediately surrender the Promises to Landlord. If Tenant fails to do
so, Landlord may, without any further notice and without prejudice to
any other remedy Landlord may have for possession or arrearages in
rental, enter upon and take possession of the Promises and remove
Tenant and its effects without being liable for prosecution or any
claim for damages therefor, and Tenant shall indemnify Landlord for all
loss and damage which Landlord may suffer by reason of such
termination, whether through inability to relet the Premises or
otherwise, including any loss of rental for the remainder of the Term.
(2) If the Event of Default relates to nonpayment of Base Rent
or any other monetary sum due hereunder, terminate this Lease, in which
event Tenant's default shall be deemed a total and entire breach of
Tenant's obligations under this Lease and Tenant immediately shall
become liable for damages in an amount equal 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's
default, all sums due pursuant to Paragraph 20B below, and the unpaid
rental due as of the date of termination, over (ii) the fair market
rental value of the Premises for the balance of the Term, discounted at
the Prime Rate to the then present value. For the purposes of clause
(i) above, the components of monthly rent (other than Base Rent) for
the remainder of the Term shall be deemed to be equal to the respective
monthly amounts thereof as were due and payable during the month in
which the Lease was terminated. It is acknowledged, intended and agreed
that the amounts which Landlord is entitled to recover under this
Paragraph 20A(2) constitute liquidated damages and not a penalty for
Tenant's defaults related to nonpayment of rental. Such amounts
constitute the parties' best, good faith, and reasonable estimate of
the damages which would be suffered by Landlord in the event any such
default occurs, the exact amount of such damages being difficult or
impractical to calculate.
(3) Enter upon and take possession of the Premises as Tenant's
agent without terminating this Lease and without being liable for
prosecution or any claim for damages therefor, and Landlord may relet
the Premises as Tenant's agent and receive the rental therefor, in
which event Tenant shall pay to 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 and
enter the Promises, without being liable for prosecution or any claim
for damages therefor, to accomplish such purpose, Tenant shall
reimburse Landlord immediately upon demand for any reasonable expenses
which Landlord incurs in thus effecting compliance with this Lease on
Tenant's behalf, together with interest thereon at the highest lawful
rate from the date Landlord incurs the expense in question until
Landlord is reimbursed therefor.
(5) Require Tenant to pay any rental in quarterly installments
in advance of each calendar quarter during the Term by certified or
cashier's check.
(6) In the event of a monetary default, without notice, alter
the locks and any other security device or devices which allow Tenant
access to the Premises or the Building of which the Premises form a
part, and Landlord shall not be required to provide a new key or right
of access to Tenant, and restrict or terminate any right to use parking
facilities associated with the Building as well as utility services to
the Premises. This
<PAGE> 17
Paragraph 20A(6) is intended to and shall supersede the provisions of
Section 93.002 of the Texas Property Code; provided, however, Tenant
shall be permitted access to the Premises to the extent necessary for
Tenant to maintain compliance with applicable securities laws.
B. Upon the occurrence of an Event of Default, in addition to any other
sum provided to be paid herein, Tenant also shall be liable for and shall pay
to Landlord: (1) reasonable brokers' fees incurred by Landlord in connection
with reletting the whole or any part of the Premises; (ii) the reasonable costs
of removing and staring Tenant's or other occupant's property; (iii) the
reasonable costs of repairing, altering, remodeling or otherwise putting the
Premises into condition acceptable to a new tenant or tenants; (iv) all
reasonable expenses incurred in marketing the Premises and (v) all reasonable
expenses incurred by Landlord in enforcing or defending Landlord's rights
and/or remedies. If either party hereto institutes any action or proceeding to
enforce any provision hereof by reason of any alleged breach of any provision of
this Lease, the prevailing party shall be entitled to receive from the losing
party all reasonable attorneys' fees and all court costs in connection with such
proceeding.
C. In the event Tenant fails to make any payment due hereunder within
five (5) days of the payment due date, to help defray the additional cost to
Landlord for processing such late payments, Tenant shall pay to Landlord on
demand a late charge in an amount equal to three percent (3%) of such payment;
and the failure to pay such amount within five (5) days after demand therefor
shall be an additional Event of Default hereunder; provided, however, that in
the case of Base Rent or the regularly scheduled monthly payment of Reimbursable
Expenses, Tenant shall be entitled to five (5) days' notice and opportunity to
cure on two (2) occasions during any twelve month period without incurring a
late charge. The provision for such late charge shall be in addition to all of
Landlord's other rights and remedies hereunder or at law and shall not be
construed as liquidated damages or as limiting Landlord's remedies in any
manner.
D. Exercise by Landlord of any one or more remedies hereunder granted
or otherwise available shall not be deemed to be an acceptance of surrender of
the Premises by Landlord, whether by agreement or by operation of law, it being
understood that such surrender can be effected only by the written agreement of
Landlord and Tenant. Tenant and Landlord further agree that forbearance by
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 rights
in connection with that or any subsequent default.
E. The term "Prime Rate" as used herein shall mean the per annum "prime
rate" of interest as published, on the date on which this Lease is terminated in
accordance with this Paragraph 20 by The Wall Street Journal, Southwest Edition,
in its listing of "Money Rates," or if The Wall Street Journal is not published
on the date on which this Lease is terminated, then the "prime rate" of interest
as published in The Wall Street Journal on the most recent date prior to the
date on which this Lease is so terminated.
F. If Landlord fails to perform any of its obligations hereunder within
thirty (30) days after written notice from Tenant specifying in detail such
failure (or if the failure cannot be corrected, through the exercise of
reasonable diligence, within such 30-day period, if Landlord does not commence
to correct same within such 30-day period and thereafter diligently prosecute
same to completion), Tenant's sole and exclusive remedy shall be either (i) an
action for damages and Tenant may pursue a money judgment for such damages
against Landlord (subject to the last two sentences of this Paragraph 20, or
(ii) if such failure can be cured by the payment of money, and if Tenant in its
notice to Landlord has notified Landlord that Tenant intends to cure Landlord's
failure, Tenant shall have the right to cure such failure on behalf of Landlord
and, in connection therewith, expend such reasonable sums as are reasonably
necessary to cure such failure (provided that Tenant shall not have the right to
make any repairs or modifications to areas, facilities or systems outside the
Land (such as, without limitation, electrical, plumbing, water, sewer and
sprinkler systems) that specifically serve premises leased to other tenants).
Unless and until Landlord fails to so cure any default after such notice within
the time periods set forth above, Tenant shall not have any remedy or cause of
action by reason thereof. In the event Tenant exercises its rights under clause
(ii) of this Paragraph 20F, then Landlord agrees to reimburse Tenant for all
reasonable out-of-pocket costs so expended by
<PAGE> 18
Tenant in curing any such failure of Landlord together with interest thereon at
the highest lawful rate from the date Tenant incurs the expense in question
until Tenant is reimbursed therefor, within ten (10) days after Landlord
receives a bill therefor (which bill shall set forth in reasonable detail the
costs for which compensation is claimed); provided, however, if Landlord fails
to so reimburse Tenant within thirty (30) days after such request for payment,
Tenant may deduct such amounts from Base Rent until the full amount has been
satisfied (provided that in no event shall the amount so deducted from any
individual monthly installment of Base Rent exceed 50% of such monthly amount of
Base Rent). All notices by Tenant to Landlord under this Paragraph 20F shall
simultaneously be given by Tenant to the holders of any first mortgage or second
mortgage on the Premises, provided Tenant has been given notice of the names and
addresses of such mortgagees. Any mortgagee shall have the right, but not the
obligation, to cure, or commence to cure, any default of Landlord, and Tenant
shall accept performance by any mortgagee with the same force and effect as
performance by Landlord. In no event shall Tenant have the right to offset or
deduct any sums or damages which are owed by Landlord to Tenant against any
amounts that are owed by Tenant to Landlord hereunder, except as provided in the
preceding provisions of this Paragraph 20F. All obligations of Landlord
hereunder will be construed as covenants, not conditions; and subject to
Paragraph 24B all such obligations will be binding upon Landlord only during the
period of its possession of the Premises and not thereafter. The term "Landlord"
shall mean only the owner, for the time being of the Premises, so subject to
Paragraph 24B in the event of the transfer by such owner of its interest in the
Premises, such owner shall thereupon be released and discharged from all
covenants and obligations of the Landlord thereafter accruing, but such
covenants and obligations shall be binding during the Lease Term upon each new
owner for the duration of such owner's ownership. Notwithstanding any other
provision hereof, Landlord shall not have any personal liability hereunder. In
the event of any breach or default by Landlord of any term or provision of this
Lease, Tenant agrees to look solely to the equity or interest then owned by
Landlord in the Premises or of the Building of which the Premises are a part;
however, in no event, shall any deficiency judgment or any money judgment of any
kind be sought or obtained against any Landlord.
G. If Landlord repossesses the Premises pursuant 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 the furniture, fixtures and equipment at the
Premises, including that which is owned by or leased to Tenant at all times
prior to any repossession thereof by any landlord thereof or third party having
a lien thereon. Landlord also shall have the right to relinquish possession of
all or any portion of such furniture, fixtures, equipment and other property to
any person ("Claimant" ) who presents to Landlord a copy of any instrument
represented by Claimant to have been executed by Tenant (or any predecessor of
Tenant) granting Claimant the right under various circumstances to take
possession of such furniture, fixtures, equipment or other property, after
Landlord has made a reasonable inquiry into the authenticity or legality of said
instrument. The rights of Landlord herein stated shall be in addition to any and
all other rights that Landlord has or may hereafter have at law or in equity;
and Tenant stipulates and agrees that the rights herein granted Landlord are
commercially reasonable,
H. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Tenant to or on behalf of Landlord under this Lease, whether or not
expressly denominated as rent, shall constitute rent.
I. Notwithstanding anything to the contrary contained herein, if an
Event of Default exists hereunder solely because of the event described in
Paragraph 19(D) of this Lease (i.e., no other Event of Default exists under this
Lease except for the Event of Default described in said Paragraph 19(D)), and so
long as Tenant keeps the Premises secure from vandalism and unauthorized users,
Landlord's sole remedy on account of such Event of Default shall be to terminate
this Lease following ten (10) days' notice to Tenant and provided Tenant has not
fully remedied such Event of Default within such ten (10) day period (without
pursuing any damages against Tenant and without Tenant being required to
indemnify Landlord against any damages suffered as a result of any such
termination) in which event this Lease shall terminate and the parties shall
have no further rights or obligations hereunder (other than such rights and
obligations as have accrued as of the effective date of such termination and
such rights and obligations as are expressly provided herein as surviving the
expiration or termination of this Lease). The limitation
<PAGE> 19
on Landlord's remedies contained in the immediately preceding sentence shall not
apply if another Event of Default (in addition to the Event of Default described
in Paragraph 19(D)) exists, or if Tenant fails to so keep the Premises secure
from vandalism and unauthorized users, in which event Landlord shall be entitled
to pursue any one or more of its remedies under this Lease, at law and/or in
equity.
21. MORTGAGES. Tenant accepts this Lease subject and subordinate to any
mortgages and/or deeds of trust now or at any time hereafter constituting a lien
or charge upon the Premises or the improvements situated thereon; provided,
however, that if the mortgagee, trustee, or holder of my such mortgage or deed
of trust elects 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 Lease shall be deemed superior to such lien, whether this Lease was
executed before or after said mortgage or deed of trust. Landlord agrees to
promptly obtain and deliver to Tenant a subordination non-disturbance and
attornment agreement in substantially the form attached hereto as Exhibit "G"
and made a part hereof ("SNDA") executed by Landlord's current mortgagee with
respect to the Land. Tenant agrees to enter into the SNDA with such mortgagee
promptly upon Landlord's request therefor. Notwithstanding the foregoing, the
subordination of this Lease to any mortgage or deed of trust that is hereafter
placed upon the Land is expressly conditioned upon Tenant and the mortgagee or
beneficiary under any such mortgage or deed of trust entering into an SNDA in a
form reasonably acceptable to Tenant (Tenant hereby agreeing that an SNDA
substantially in the form that is attached hereto as Exhibit "G" and made a part
hereof is acceptable to Tenant). Tenant agrees to enter into such SNDA with any
such mortgagee or beneficiary promptly upon Landlord's request therefor. Tenant
shall be permitted to record the SNDA in the real property records of Tarrant
County, Texas. If any future mortgagee or beneficiary under a mortgage or deed
of trust hereafter placed upon the Land desires to subordinate its mortgage or
deed of trust to this Lease, Tenant agrees that it shall promptly execute such
instrument as may be reasonably required by such mortgagee or beneficiary in
order to effect such subordination (Tenant hereby agrees that an instrument in
substantially the form of Exhibit "H" attached hereto and made a part hereof is
acceptable to Tenant).
22. MECHANIC'S LIENS. Tenant has no authority; express or implied, to
create or place any lien or encumbrance of any kind or nature whatsoever upon,
or in any manner to bind, the interest of Landlord or Tenant in the Premises or
to charge the rentals payable hereunder for any claim in favor of any person
dealing with Tenant, including those who may furnish materials or perform labor
for any construction or repairs. Tenant covenants and agrees that it will pay or
cause to be paid all sums legally due and payable by it on account of any labor
performed or materials furnished in connection with any work performed by or on
behalf of Tenant on the Premises and that it will save and hold Landlord
harmless from any and all loss, cost or expense based on or arising out of
asserted claims or liens against the leasehold estate or against the right,
title and interest of the Landlord in the Premises or under the terms of this
Lease arising from such work. Tenant agrees to give Landlord prompt written
notice of the placing of any lien or encumbrance against the Premises. If any
mechanics' or materialmen's lien ("M&M Lien") is ever asserted or placed
against or attaches to the Project or any portion thereof as a result of any act
or omission of Tenant or its agents, then in lieu of paying the claim relating
to such M&M Lien Tenant shall have the right to contest the assertion, placement
or attachment of Such M&M Lien so long as (i) prior to any such contest (and no
later than thirty (30) days after such lien has been filed) Tenant at its sole
expense provides to Landlord a bond indemnifying against such M&M Lien that
complies with Chapter 53, Subchapter H of the Texas Property Code (as amended
from time to time) or its successor law, and (ii) Tenant contests such M&M Lien
diligently and in good faith; provided, however, the foregoing right of Tenant
to contest any such M&M Lien shall not impair or otherwise affect Tenant's
indemnification obligations with respect to such M&M Lien. If any lien is
asserted against 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 the removal of such lien shall be Landlord's obligation).
23. HAZARDOUS MATERIALS. Tenant shall never incorporate into, or
dispose of, at, in or under the Premises, the Building or the Land any toxic or
hazardous materials (as defined hereafter). Tenant further agrees not to use at,
place in, or store at the Promises any toxic or hazardous materials, except for
those toxic or hazardous materials that are either (a) office supplies or (b)
kitchen cleaning materials that are generally considered to be a household
cleaner
<PAGE> 20
and are purchased in a container not larger than one (1) gallon and then only
if (i) all such toxic or hazardous materials, supplies and materials are
properly labeled and contained, (ii) all such toxic or hazardous materials are
stored, handled, transported and disposed of in accordance with highest
accepted industry standards and all applicable laws, rules and regulations, and
(iii) if a material safety data sheet is required under applicable laws to
accompany the toxic or hazardous materials, supplies or materials, a copy of
such current material safety data sheet is provided to Landlord. For purposes
of this Lease, "toxic or hazardous materials" shall mean hazardous or toxic
chemicals or any materials containing hazardous or toxic chemicals at levels or
content which cause such materials to be classified as hazardous or toxic as
then prescribed by the highest industry standards or by the then current levels
or 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 governmental
laws, rules or regulations. In the event there is a spill of a toxic or
hazardous materials (other than permitted office supplies and kitchen cleaning
supplies) at the Premises, the Building or the Land of which Tenant is aware,
Tenant shall notify Landlord of the method, time and procedure for any clean-up
and removal of such toxic or hazardous materials; and, Landlord shall have the
right to require reasonable changes in such method, time or procedure. In the
event there is a spill of a toxic or hazardous material that comes from office
supplies in the Premises, Tenant shall notify Landlord if the spill would in
any way endanger or pose a threat to Tenant's employees, Building maintenance
or custodial personnel, other Building tenants or the general public. In the
event of any breach of this provision by Tenant or any contamination of the
Premises, the Building or the Land, by Tenant, Tenant shall pay all costs for
the removal or abatement or clean-up of any toxic or hazardous materials at the
Premises, the Building and the Land. If any lender or governmental agency shall
ever require testing to ascertain whether or not there has been any release of
hazardous materials, then the reasonable costs thereof shall be reimbursed by
Tenant to Landlord upon demand as additional charges, if the audit discloses
Tenant caused the release of hazardous materials and 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 (but in no
event more often than annually at Landlord's request) or otherwise at such
times as requested by Landlord's mortgagee, concerning Tenant's best knowledge
and belief regarding the presence of hazardous substances or materials on the
Premises. In all events, Tenant shall indemnify Landlord in the manner
elsewhere provided in this Lease from any release of hazardous materials on the
Premises occurring while Tenant is in possession or elsewhere if caused by
Tenant or persons acting under Tenant. Landlord hereby agrees to indemnify and
hold Tenant harmless from and against any and all costs of remediation, removal
and clean-up (and fines and penalties relating thereto) of and from
contamination of the Land by toxic or hazardous materials to the extent
required by applicable law, which contamination exists as of the Commencement
Date as a result of the acts of Landlord or its contractors; provided, however,
Landlord's indemnification obligations shall not apply to any such
contamination to the extent it results from the acts or omissions of Tenant,
its agents, employees, licensees, invitees, contractors, sublessees, assignees
or successors in interest. This Paragraph 23 shall survive the expiration or
any termination of this Lease. Following the expiration of this Lease and upon
Tenant's providing Landlord an environmental site assessment in form and
substance reasonably satisfactory to Landlord and evidencing that Tenant is not
then in breach of this Paragraph 23, Landlord agrees to acknowledge in writing
that Tenant has been released from liability under this Paragraph 23.
24. MISCELLANEOUS.
A. Words of any gender used in this Lease shall be held and construed
to include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires. The captions inserted
in this Lease are for convenience only and in no way define, limit or otherwise
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 covenants contained in this Lease shall
run with the land and shall apply to, inure to the benefit of, and be binding
upon, the parties hereto and upon their respective heirs, executors, personal
representatives, legal representatives, successors and assigns, except as
otherwise herein expressly provided. Landlord shall have the right to transfer
and assign, in whole or in part, its rights and obligations in the Building and
property that are the
<PAGE> 21
subject of this Lease. Upon any Landlord's conveyance of the Building or the
Land, and the assignment of its rights under this Lease, to another party who
assumes in writing all of the Landlord's obligations accruing after the date of
the transfer ("Successor"), such Landlord shall be released from its obligations
hereunder and the Successor shall become the "Landlord" hereunder from and after
the date of any such conveyance and assignment and shall thereafter have all of
the rights and obligations of the Landlord hereunder, in accordance with the
terms hereof, during the period of its ownership of the Building. Landlord
agrees to provide Tenant with notice of (i) any transfer of the Building, (ii)
any transfer of Landlord's obligations hereunder, and (iii) the identity of the
Successor party, which notice shall confirm such Successor's assumption of
Landlord's obligations in accordance with this Paragraph 24B. Each party agrees
to furnish to the other, promptly upon demand, a corporate resolution, proof of
due authorization by partners, or other appropriate documentation evidencing the
due authorization of such party to enter into this Lease.
C. Landlord shall not be held responsible for delays in the performance
of its obligations hereunder when caused by material shortages, weather, acts of
God, labor disputes, or delays beyond those normally anticipated in connection
with obtaining governmental approvals (collectively, the "Force Majeure
Delays"). Promptly following the occurrence of any applicable events giving rise
to Force Majeure Delays, Landlord shall provide Tenant written notice of any
such delays that it intends to claim.
D. Tenant agrees, from time to time, within ten (10) days after request
by Landlord, to deliver to Landlord or Landlord's designee, a certificate of
occupancy, financial statements (which may be Tenant's publicly available
financial statements, so long as Tenant is a publicly held company) and an
estoppel certificate stating (1) this Lease is in full force and effect, (2) the
date to which rent is paid, (3) whether there is a default on the part of
Landlord or Tenant under this Lease, (4) whether Tenant has any right of offset,
claims or defenses to the performance of its obligations under this Lease, and
(5) such other factual matters pertaining to this Lease as may be reasonably
requested by Landlord. Tenant shall be entitled to make such qualifications to
the statements in such estoppel certificate as are necessary to make them
factually accurate. Tenant shall not be required to provide estoppel
certificates more frequently than four (4) times in any calendar year. If Tenant
fails to deliver the same within such ten (10) day period such certificate as
submitted by Landlord or Landlord's designee, as the case may be, shall be fully
binding on Tenant, if Tenant fails to deliver a certificate within fifteen (15)
days after receipt by Tenant of the certificate submitted by Landlord or
Landlord's designee, as the case may be.
E. This Lease constitutes the entire understanding and agreement of the
Landlord and Tenant with respect to the subject matter of this Lease, and
contains all of the covenants and agreements of Landlord and Tenant with respect
thereto. Landlord and Tenant each acknowledge that no representations,
inducements, promises or agreements, oral or written, have been made by Landlord
or Tenant, or anyone acting on behalf of Landlord or Tenant, which are not
contained herein, and any prior agreements, promises, negotiations, or
representations not expressly set forth in this Lease are of no force or effect.
This Lease may not be altered, changed or amended except by an instrument in
writing signed by both parties hereto.
F. All nonmonetary obligations of Tenant hereunder not fully performed
as of the expiration or earlier termination of the Term of this Lease, and all
monetary obligations of Tenant of which Tenant receives notice from Landlord
within thirty (30) days thereafter, shall survive the expiration or earlier
termination of the Term hereof, including without limitation, all payment
obligations with respect to taxes and insurance and all obligations concerning
the condition and repair of the Premises. Upon the expiration or earlier
termination of the Term hereof, and prior to Tenant vacating the Premises,
Tenant shall pay to Landlord any amount reasonably estimated by Landlord (with
evidence from an independent inspector reasonably satisfactory to Tenant) as
necessary to put the Premises, including without limitation, all heating and air
conditioning systems and equipment thereon, in good condition and repair,
reasonable wear and tear excluded. Tenant shall also, prior to vacating the
Premises, pay to Landlord the amount, as reasonably estimated by Landlord, of
Tenant's obligation hereunder for real estate taxes and insurance premiums,
common area maintenance, utility and other charges for the year in which the
Lease expires or terminates, which amount shall be prorated to the date of
termination or expiration. All such amounts shall be used and held by Landlord
for payment of
<PAGE> 22
such obligations of Tenant hereunder, with Tenant being liable for any
additional costs therefor within ten (10) days after demand by Landlord, or with
any excess to be returned to Tenant within ten (10) days after all such
obligations have been determined and satisfied as the case may be. Any security
deposit held by Landlord shall be credited against the amounts due from Tenant
under this Paragraph 24F.
G. If any clause or provision of this Lease is illegal, invalid or
unenforceable under present or future laws effective during the Term of this
Lease, then and in that event, it is the intention of the parties hereto that
the remainder of this Lease shall not be affected thereby, and it is also the
intention of the parties to this Lease that in lieu of each clause or provision
of this Lease that is illegal, invalid or unenforceable, there be added, as a
part of this Lease, a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible and be legal,
valid and enforceable.
H. All references in this Lease to "the date 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. Each party represents and warrants to the other party that it has
dealt with no broker, agent or other person in connection with this transaction
and that no broker, agent or other person brought about this transaction, other
than the broker or agent identified In the Basic Lease Information, and each
party agrees to indemnify and hold the other party harmless from and against any
claims by any other broker, agent or other person claiming a commission or
other form of compensation by virtue of having dealt with the indemnifying party
with regard to this leasing transaction.
J. If and when included within the term "Landlord", as used in this
instrument, there is more thin one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of a notice
specifying some individual at some specific address for the 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 a notice
specifying some individual at some specific address 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 with the
provisions of Paragraph 25 hereof to the same effect as if each had received
such notice.
K. By taking possession of the Premises, Tenant shall be deemed to
have: (a) acknowledged that the Premises and the improvements to be constructed
pursuant to Exhibit "C" attached hereto are substantially complete and are
accepted "as is" and "with all faults"; (b) accepted the Premises as suitable
for the purposes for which the Premises are leased; and (c) acknowledged that
the Premises are in a good and satisfactory condition. Landlord expressly
disclaims, and Tenant hereby waives to the full extent permitted by law, any
implied warranty that the Premises or the Building are suitable for Tenant's
intended commercial purpose, and any and all other implied warranties (whether
arising by virtue of statute, case law or otherwise). The foregoing shall not be
construed to relieve Landlord from its obligations which are expressly set forth
in this Lease, including, but not limited to, Landlord's obligations under
Paragraph 5 hereof.
L. Submission of this Lease shall not be deemed to be a reservation of
the Premises. Landlord shall not be bound hereby until its delivery to Tenant of
an executed copy hereof signed by Landlord, already having been signed by
Tenant, and until such delivery Landlord reserves the right to exhibit and lease
the Premises to other prospective tenants. Notwithstanding anything contained
herein to the contrary, Landlord may withhold delivery or possession of the
Premises from Tenant until such time as Tenant has paid to Landlord the security
deposit required by Paragraph 2B hereof.
M. Landlord and Tenant agree that the financial terms and conditions of
this Lease are confidential and the parties hereto agree not to disclose the
financial terms of this Lease to any third party (other than to its attorneys
and accountants and other than to parties who propose to purchase or finance the
Building, or the Project of which the Building forms a part, or who
<PAGE> 23
propose to become investors in Landlord or Tenant) except as may be required by
law or by the order of a court of competent jurisdiction. This Paragraph 24(M)
supersedes that certain agreement between the parties dated January 7. 1999, and
concerning the confidentiality of the terms and conditions of this transaction.
N. [Intentionally omitted.]
25. NOTICES. Each provision of this instrument or of my applicable
governmental laws, ordinances, regulations and other requirements with reference
to the sending, mailing or delivering of notice or the making of any payment by
Landlord to Tenant, or with reference to the sending, mailing or delivering 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 required to be made by Tenant
to Landlord hereunder shall be payable to Landlord at the address for
Landlord set forth in the Basic Lease Information or at such other
address as Landlord may specify from time to time by written notice
delivered in accordance herewith. Tenant's obligation to pay rent and
any other amounts to Landlord under the terms of this Lease shall not
be deemed satisfied until such rent and other amounts have been
actually received by Landlord. In addition to Base Rent due hereunder,
all sums of money and all payments due Landlord hereunder shall be
deemed to be additional rental owed to Landlord
(b) All payments required to be made by Landlord to Tenant
hereunder shall be payable to Tenant at the address set forth in the
Basic Lease Information, or at such other address as Tenant may specify
from time to time by written notice delivered in accordance herewith.
(c) Any written notice or document required or permitted to be
delivered hereunder shall be deemed to be delivered whether actually
received or not, when deposited in the United States Mail, postage
prepaid, Certified or Registered Mail, addressed to the parties hereto
at the respective addresses set out in the Basic Lease Information, or
at such other address as they have theretofore specified by written
notice delivered in accordance herewith.
26. LANDLORD'S LIEN. [Intentionally omitted.]
27. NAMING RIGHTS. Tenant shall have the right to refer to and
otherwise identify the Building as "One Ameritrade Place," or any other such
similar name reasonably approved by Landlord.
28. ADDITIONAL PROVISIONS. See Exhibits "A" through "H" attached
hereto and incorporated by reference herein.
29. TEMPORARY PARKING. With respect to the 400 parking spaces
referenced in Paragraph 1 of this Lease and which are to be situated on the
Land, it is acknowledged and agreed that 177 of said 400 spaces may not be
constructed or be available for use by Tenant until August 1, 1999. If said 177
spaces are not available as of the 91st day after the date of this Lease and
Tenant then desires to have temporary substitute parking prior to the completion
of said 177 permanent spaces, then (i) Tenant shall give Landlord written notice
thereof ("Parking Notice") on or before May 14, 1999 of the number of temporary
parking spaces that Tenant reasonably anticipates it will need prior to the
completion of the permanent spaces (which Parking Notice may be supplemented
every two weeks in accordance with Tenant's then current reasonable estimate of
the number of spaces it will require prior to the completion of the permanent
spaces) and (ii) Landlord shall, at its expense, cause to be constructed within
21 days after any such Parking Notice from Tenant (subject to Force Majeure
Delays), the number of parking spaces designated by Tenant in such Parking
Notice up to a total of 177 temporary parking spaces ("Temporary Spaces") on an
approximately 8,321 acre tract of land that is owned by AIL Investment, L.P., or
at Landlord's option on the land on which the premises leased pursuant to the
"Two Ameritrade Lease" are situated, for use by Tenant and its employees, agents
and invitees until the completion of said permanent 177 spaces on the Land, at
which time Tenant's
<PAGE> 24
right to use the Temporary Spaces shall cease and be of no further force or
effect. Tenant agrees that its use of said Temporary Spaces shall be subject to
the same terms and conditions as are applicable to the permanent parking spaces
as set forth in paragraph 1 of this Lease. Landlord agrees to procure such
licenses from the owners of the tracts on which the Temporary Spaces are
situated so as to enable Tenant to use same as contemplated hereby.
EXECUTED BY LANDLORD this 19 day of March, 1999.
ALLIANCE GATEWAY NO. 16, LTD.,
a Texas limited partnership
By: Hillwood Operating, L.P.,
a Texas limited partnership,
its general partner
By: Hillwood Development Corporation
a Texas corporation,
its general partner
By: /s/ M. THOMAS MASON
-----------------------------------
Its: M. THOMAS MASON
-----------------------------------
SECRETARY
<PAGE> 25
EXECUTED BY TENANT, this 11 day of March, 1999.
AMERITRADE HOLDING CORPORATION,
a Delaware corporation
By: /s/ SUSAN M. HOHMAN
--------------------------------------
Susan Hohman
Its: Vice-President of Infrastructure and Facilities
<PAGE> 26
EXHIBIT A
[GATEWAY #16]
<PAGE> 27
EXHIBIT "B"
LEGAL DESCRIPTION
Being a tract of land situated in the F. Cuella Survey, Tarrant County, Texas
and being part of that tract of land conveyed to Hillwood/Freeway, Ltd.,
recorded in Volume 9581, Page 66, Deed Records of Tarrant County, Texas and
being more particularly described by metes and bounds as follows:
COMMENCING at the northwest corner of Lot 1, Block 2, Alliance Gateway East as
recorded in Cabinet A. Slide 2423, county records, Tarrant County, Texas;
THENCE S 89 degrees 51' 39" W, 733.51 feet to a 5/8 inch iron rod with yellow
cap stamped "Carter & Burgess" set at the POINT OF BEGINNING;
THENCE S 89 degrees 51' 39" W, 146.62 feet to a 5/8 inch iron rod with yellow
cap stamped "Carter & Burgess: set;
THENCE S 00 degree 08' 21" E, 249.98 feet to a 5/8 inch iron rod with yellow cap
stamped "Carter & Burgess: set;
THENCE S 89 degrees 51' 39" W, 190.83 feet to a 5/8 inch iron rod with yellow
cap stamped "Carter Burgess" set;
THENCE N 52 degrees 13' 26" W, 56.02 feet to a 5/8 inch iron rod with yellow cap
stamped "Carter & Burgess" set;
THENCE N 29 degrees 46' 06" W, 161.43 feet to a 5/8 inch iron rod with yellow
cap stamped "Carter & Burgess" set;
THENCE S 59 degrees 14' 27" W, 39.64 feet to a 5/8 inch iron rod with yellow cap
stamped "Carter & Burgess" set;
THENCE N 32 degrees 38' 23" W, 336.97 feet to a 5/8 inch iron rod with yellow
cap stamped "Carter & Burgess" set in the south right-of-way line of State
Highway Number 170, said point also being the beginning of a curve to the right;
THENCE 264.16 feet along the arc of said curve to the right, and with said
right-of-way line through a central angle of 01 degree 19' 23", having a radius
of 11439.16 feet, and a long chord which bears N 58 degrees 01' 03" E, 264.15
feet to a 5/8 inch iron rod with yellow cap stamped "Carter & Burgess" set;
Page l of 2
<PAGE> 28
THENCE N 57 degrees 21' 27" E, 305.86 feet continuing with said right-of-way
line to a 5/8 inch iron rod with yellow cap stamped "Carta & Burgess" set;
THENCE S 32 degrees 38' 23" E, 361.56 feet to a 5/8 inch iron rod with yellow
cap stamped "Carter & Burgess" set;
THENCE S 00 degrees 08' 21" E, 187.55 feet to the POINT OF BEGINNING and
containing 293,817 square feet or 6.745 acres of land more or less.
Page 2 of 2
<PAGE> 29
EXHIBIT "C"
LEASEHOLD IMPROVEMENTS
(Allowance)
1. [Intentionally Omitted)
2. WORKING DRAWINGS. Within 60 days after the date hereof, Tenant
shall, at its expense, provide to Landlord for its approval a fit-out
floor-plan, prepared by DLR Group or another architect that has been approved by
Landlord, of all improvements that Tenant proposes to install in the Premises
("Leasehold Improvements") which Leasehold Improvements are generally described
on Exhibit "C-2" attached hereto and made a part hereof, such working drawings
shall include the partition layout, ceiling plan, electrical outlets and
switches, telephone outlets, drawings or any modifications to the mechanical and
plumbing systems of the Building, and detailed plans and specifications for the
construction of the Leasehold Improvements called for under this Exhibit "C" in
accordance with all applicable governmental laws, codes, rules and regulations.
Further, if any of Tenant's proposed construction work will affect the
Building's HVAC, electrical, mechanical, plumbing systems or other central or
branch systems, then the working drawings pertaining thereto shall, at
Landlord's option be prepared by the Building's engineer of record, whom Tenant
shall at its cost engage for such purpose. Landlord's approval of such working
drawings shall not be unreasonably withheld, provided that (a) they comply with
all applicable governmental laws, codes, rules, and regulations, (b) such
working drawings are sufficiently detailed to allow construction of the
Leasehold Improvements in a good and workmanlike manner, and (c) the
improvements depicted thereon conform to the scope of work depicted on Exhibit
"C-2" attached hereto and to the rules and regulations promulgated from time to
time by Landlord for the construction of tenant improvements (a copy of which
has been delivered to Tenant). As used herein, "Working Drawings", shall mean
the final working drawings approved by Landlord, as amended from time to time by
any approved changes thereto, and "Work" shall mean the work required to
construct and install all Leasehold Improvements to be constructed in accordance
with and as indicated on the Working Drawings. Approval by Landlord of the
Working Drawings shall not be a representation or warranty of Landlord, and
shall create no responsibility or liability on the part of Landlord, with
respect to their adequacy for any use, purpose or condition, their
completeness, design sufficiency, or compliance with any laws, rules or
regulations of governmental agencies or authorities, but shall merely be the
consent of Landlord to the performance of the Work. Tenant shall, at Landlord's
request sign the Working Drawings to evidence its review and approval thereof.
All changes in the Work must receive the prior written approval of Landlord,
which approval shall not be unreasonably withheld so long as the changes in the
Work do not adversely affect the shell of the Building, or the Building systems,
and in the event of any such approved change Tenant shall, upon completion of
the Work, furnish Landlord with an accurate, reproducible "as built" plan (e.g.,
sepia) of the Leasehold Improvements as constructed, which plan shall be
incorporated into this Lease by this reference for all purposes.
3. CONTRACTOR. The Work shall be performed only by contractors and
subcontractors whose bids have been reviewed by Landlord and who are reasonably
acceptable to Landlord. Tenant shall enter into the construction contract
("Contract") with the contractor who has been selected by Tenant and approved by
Landlord (which approval shall not be unreasonably withheld) to perform the Work
("Contractor"). The Contract shall be in form and substance reasonably
acceptable to Landlord. The Contractor and all subcontractors shall be required
to procure and maintain (a) Insurance against such risks, in such amounts, and
with such companies as Landlord may reasonably require and such insurance
policies must name Landlord and Landlord's mortgagee as additional insureds and
(b) payment and performance bonds covering the cost of the Work and otherwise
reasonably satisfactory to Landlord. Certificates of such insurance, with paid
receipts therefor, and copies of such bonds must be received by Landlord before
the Work is commenced. The Work shall be performed in a good and workmanlike
manner that is free of defects and is in strict conformance with the Working
Drawings, shall be diligently prosecuted to completion, and shall be performed
in such a manner and at such times as to maintain harmonious labor relations.
The Contractor and all subcontractors shall contact Landlord and schedule time
periods during which they may use Building facilities in connection with the
Work (e.g., elevators, excess electricity, etc.).
<PAGE> 30
4. [Intentionally Omitted]
5. TOTAL CONSTRUCTION COSTS. Tenant shall bear the entire cost of
performing the Work (including, without limitation, the cost of preparing the
Working Drawings, costs of construction labor and materials, removing any
improvements currently in the Premises, electrical usage during construction,
additional janitorial services, general tenant signage, and related taxes and
insurance costs, all of which costs are herein collectively called the "Total
Construction Costs") in excess of the Construction Allowance (hereinafter
defined) and the A&E Fee Allowance (hereinafter defined).
6. CONSTRUCTION ALLOWANCE. Landlord shall provide to Tenant a
construction allowance ("Construction Allowance") for the purpose of defraying
the cost of constructing the Leasehold Improvements which Construction Allowance
shall be equal to the lesser of (i) the Total Construction Costs, or (ii)
$1,191,100.00 ($25.00 per square foot of area in the Premises).
7. ARCHITECTURAL AND ENGINEERING FEES ALLOWANCE. Separate from the
Construction Allowance, the parties acknowledge and agree that Landlord is
providing an architectural, engineering, and general space-planning fees
allowance of Forty Five Thousand Dollars ($45,000.00) ("A&E Fee Allowance").
Tenant shall be entitled to apply the A&E Fee Allowance to pay for the cost of
the plans, specifications, construction drawings and Working Drawings
contemplated under Section 2 of this Exhibit "C" provided, however, if
Construction Allowance funds are available, then Construction Allowance funds
may be used and if so used, the amount of the Construction Allowance shall be
reduced by the amount so used. The A&E Fee Allowance shall be disbursed to
Tenant upon Tenant's providing to Landlord reasonably satisfactory evidence that
the architectural, engineering and space planning fees in question were in fact
incurred.
8. PAYMENT OF CONSTRUCTION COSTS. (a) Tenant shall cause the Contractor
to construct the Leasehold Improvements in a good and workmanlike manner, in
accordance with the Working Drawings and in compliance with all applicable laws,
codes, rules and regulations. Without limiting the generality of the foregoing,
Tenant shall, at its sole expense, obtain all building permits, certificates of
occupancy and all other approvals, permits, certificates and other
authorizations in connection with the construction of Leasehold Improvements and
the occupancy of the Premises. Tenant shall promptly pay the Contractor, in
accordance with the Contract, for all work performed pursuant thereto and shall
cause the Contractor to pay all its subcontractors, marterialmen, suppliers, and
laborers in a timely manner so that no mechanic's, materialmen's or other lien
shall ever attach to the Project or any portion thereof or any interest therein.
Landlord shall at all times have the right to enter on the Leased
Premises and inspect the progress of the Work and to supervise and coordinate
such construction activities, and so as to determine whether the Leasehold
Improvements are compatible with existing electrical, mechanical, HVAC and other
Building central and branch systems and the Landlord's quality standards. Each
party agrees to reasonably cooperate with the other party in connection with the
prosecution of the work performed by both parties and to not unreasonably
interfere, with the other party's work.
Landlord shall disburse to Tenant the then-available Construction
Allowance in periodic draws (collectively, the "Draws"), each such Draw to be in
an amount equal to the product of (i) the total Construction Allowance,
multiplied by (ii) a fraction, the numerator of which is the value of the
portion of the Work completed from the date of the immediately preceding Draw
(or in the case of the first Draw, since the commencement of the Work) until the
date of the Draw in question (as evidenced by an architect's certificate as
described below), and the denominator of which is the Total Construction Costs,
provided, that;
(i) Tenant delivers to Landlord evidence satisfactory to
Landlord that all such costs incurred in connection with the Work, and
for which Tenant is seeking reimbursement, were in fact incurred by
Tenant;
C-2
<PAGE> 31
(ii) Tenant delivers to Landlord an architect's certificate
(on an AIA form or another form reasonably acceptable to Landlord)
issued by Tenant's architect, as to the value of the work with respect
to which such Draw is being requested;
(iii) Tenant pays to the Contractor, concurrently with the
receipt of the Draw in question, all remaining amounts owed to the
Contractor, all subcontractors, and materialmen, suppliers and laborers
through the date of the Draw in question;
(iv) Tenant delivers to Landlord final mechanic's and
materialmen's lien waivers and releases (in form and substance
acceptable to Landlord) from the Contractor and all subcontractors,
materialmen, suppliers and laborers with respect to all work done
through the date of the Draw in question;
(v) Tenant has prosecuted construction of the Leasehold
Improvements in accordance with the Working Drawings; and
(vi) Tenant is not in default hereunder.
Landlord may, at its option, pay the Construction Allowance through one or more
checks payable jointly to Tenant and the Contractor and any subcontractors,
materialmen, suppliers and laborers to the extent of payments due to such
parties in connection with the Work. Tenant shall be liable for all Total
Construction Costs in excess of the Construction Allowance.
(b) Notwithstanding anything to the contrary contained herein, the
Construction Allowance shall not be used for (and Landlord shall have no
obligation to use or advance any portion of the Construction Allowance for)
the cost of furniture, fixtures or equipment which are not permanently attached
to the Land or the Building (including, but not limited to, tenant signage,
security systems, telephone equipment, or any other special utility service
lines needed by Tenant for its use of the Premises).
9. LEASE CONSTRUCTION PROVISIONS. To the extent not inconsistent with
this Exhibit, Paragraph 7 of this Lease shall govern the performance of the Work
and the Landlord's and Tenant's respective rights and obligations regarding the
improvements installed pursuant thereto.
C-3
<PAGE> 32
EXHIBIT "C-1"
[Intentionally Omitted]
E-1
<PAGE> 33
EXHIBIT C-2
[FLOORPLAN]
<PAGE> 34
[AMERITRADE FLOORPLAN]
<PAGE> 35
EXHIBIT "C-3"
[Intentionally Omitted]
F-1
<PAGE> 36
EXHIBIT "C-4"
ALLIANCE GATEWAY-PHASE I ASSOCIATION
13600 Heritage Parkway
Suite 200
Fort Worth, TX 76177
March 4, 1999
Re: Proposed Building Signage, Ameritrade
Gateway No. 16 & No. 17
Alliance Gateway, Fort Worth
Dear Jack:
The Alliance Gateway-Phase I Association's Development Review Board ("DRB") has
reviewed the conceptual building signage for Ameritrade at the above-referenced
locations. A complete package of the drawings submitted has been enclosed with
comments for your review and consideration.
Either internally illuminated individual letters or reverse channel silhouette
illuminated letter signage will be acceptable. Whichever style is selected
should be used on both buildings. Only one building mounted sign will be allowed
on each building. In both cases the signage should be positioned generally in
the upper third and corner position of the building fascia. Maximum signage
height will be 24 inches.
Signworks Design No. 16484d
o Drawing approved as noted above. The size of the lettering should
perhaps be slightly smaller on Building No. 16. This will depend
ultimitly on the final elevation and wall height of Building No. 17.
Other
o All site signage including internal directional and international must
comply with the Alliance Development Guidelines.
o An Alliance site address sign will be required for both buildings.
Subject to size/color approval, Ameritrade signage copy may be used on
the site address sign as well.
Jack, you mentioned earlier today that the Ameritrade logotype actually has the
logo stacked on top of the name lettering and that this is actually how the
signage will be proposed. This arrangement will probably work fine on Building
No. 17; however, given the height of the fascia on Building No. 16, I have some
real concerns about not "stuffing" the fascia with signage and yet still keeping
the lettering large enough to be readable. We should have this careful
consideration, and it is possible that the stacked arrangement is not achievable
on Building No. 16.
<PAGE> 37
Mr. Jack Morris
March 4,1999
Page 2
I trust this information helps you in finalizing your signage program for both
buildings, and I look forward to receiving finalized drawings.
Please let me know if I can be of any further assistance in this matter.
Sincerely,
/s/ L. RUSSELL LAUGHLIN
L. Russell Laughlin
LRL: msf
Enclosure
cc: 30-16 DRB Ameritrade
Bill Burton, HDC
<PAGE> 38
AMERITRADE
[LOGO]
INDIVIDUAL REVERSE-CHANNEL SILHOUETTE NEON
ILLUMINATED ALUMINUM LETTERS & LOGO
---------------------------------------------------
FABRICATE AND INSTALL A SET OF 30" TO 22 1/4" X 3"
DEEP REVERSE-CHANNEL SILHOUETTE LETTERS PAINTED
BLACK. ALSO FABRICATE AND INSTALL A 42" X 51 1/4" X
3" DEEP REVERSE-CHANNEL SILHOUETTE LOGO PAINTED
BLACK AND [ILLEGIBLE] YELLOW GOLD. [ILLEGIBLE]
<TABLE>
<CAPTION>
Sign Location on
East Elevation
[ILLEGIBLE]
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
[ILLEGIBLE] DESIGNER: [ILLEGIBLE] SPECIFICATIONS: FOR
- ------------------------------------------------------------------------ SHOP USE ONLY
S CONTRACT NO: SALESPERSON: [ILLEGIBLE] DUE DATE:
WORKS ------------------------------------------------------------
PRODUCTS [ILLEGIBLE] [ILLEGIBLE] APPROVED BY:
CO, INC. ------------------------------------------------------------
[ILLEGIBLE] DATE: [ILLEGIBLE] APPROVAL DATE:
- ---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 39
EXHIBIT "D"
MEMORANDUM OF ACCEPTANCE OF PREMISES
This memorandum is entered into on _________ 1999 by Alliance Gateway
No. 16, Ltd. ("Landlord") and Ameritrade Holding Corporation ("Tenant"),
pursuant to Paragraph 1 of the Lease Agreement ("Lease") dated ____________,
1999 executed by Landlord and Tenant. All terms used herein have the same
meanings as in the Lease. This memorandum amends the Lease (including the Basic
Lease Information) to the extent of the matters set forth herein.
1. The Commencement Date is ________ 1999.
2. The Premises contain 47,644 square feet of area.
3. The Building contains 47,644 square feet of area.
4. Tenant's Proportionate Share is 100%.
EXECUTED BY LANDLORD, this ___ day of March, 1999.
ALLIANCE GATEWAY NO. 16, LTD.,
a Texas limited partnership
By: Hillwood Operating, L.P.,
a Texas limited partnership,
its general partner
By: Hillwood Development Corporation
a Texas corporation,
its general partner
By:
--------------------------------------
Its:
--------------------------------------
EXECUTED BY TENANT, this ___ day of March, 1999.
AMERITRADE HOLDING CORPORATION,
a Delaware corporation
By:
----------------------------------------------
Susan Hohman
Its: Vice-President of Infrastructure and
Facilities
D-1
<PAGE> 40
EXHIBIT "E"
FINANCING STATEMENT
[Intentionally ommitted.]
E-1
<PAGE> 41
EXHIBIT "F"
RENEWAL OPTIONS
1. GRANT OF OPTION. Provided Tenant is not then in default under
Subparagraph 19(A) of the Lease, Tenant may renew this Lease for two (2)
additional periods of five (5) years each on the same terms and conditions as
provided in this Lease (except as set forth below), by delivering written notice
of the exercise thereof to Landlord not later than twelve (12) months before
the expiration of the Term. On or before the commencement date of the extended
Term in question, Landlord and Tenant shall execute a renewal agreement
extending the Term on the same terms and conditions as provided in this Lease,
except as follows:
(a) The Base Rent payable during each such extended Term shall
be the prevailing rental rate, at the commencement of such extended
Term, for space of equivalent quality, size, utility and location in
Alliance Commerce Center, Alliance Gateway, Valwood and Centreport
area, taking into account all relevant factors including, but not
limited to, the expense of new tenant finish-out, leasing commissions,
the length of the extended Term and the credit standing of Tenant
("Market Rate"), determined in accordance with paragraph (2) below;
provided, however, that Base Rent payable during any year of such
extended Term shall in no event be less than the Base Rent payable
hereunder during the last year prior to the commencement of such
extended Term;
(b) Tenant shall have no further renewal options unless
expressly granted by Landlord in writing; and
(c) Landlord shall lease to Tenant the Premises in their
then-current condition, provided that Landlord shall continue to
perform its maintenance obligations under the Lease.
Tenant's rights under this Exhibit "F" shall terminate if (i) this
Lease or Tenant's right to possession of the Premises is terminated, (ii) Tenant
assigns any of its interest in this Lease or sublets any portion of the
Premises, unless Tenant's assignee or sublessee is an Affiliate of Tenant, or
(iii) Tenant fails to timely exercise its option under this Exhibit "F", time
being of the essence with respect to Tenant's exercise thereof. If this Lease is
renewed or extended, the word "Term" shall include the additional period
covered by the renewal or extension, and this Lease shall apply to such
additional period except as otherwise provided for herein.
2. DETERMINATION OF MARKET RENT. Upon notification from Tenant of the
exercise of a renewal option, Landlord shall within ten (10) days thereafter
notify Tenant in writing of the proposed Market Rate applicable to the renewal
term in question. Tenant shall, within ten (10) days following receipt of such
notice from Landlord, notify Landlord in writing of the acceptance or rejection
of the proposed Market Rate. If Tenant fails to respond to Landlord's
designation of Market Rate within said 10-day period, Tenant shall be deemed to
have accepted Landlord's designation of Market Rate for all purposes. In event
of rejection by Tenant, the Market Rate for the renewal term in question shall
be determined as follows:
(a) Within ten (10) days following notification of Tenant's
rejection, Landlord and Tenant shall each appoint an appraiser. Any
appraiser appointed hereunder (whether by a party hereto or by an
appraiser so appointed, as hereinafter provided) shall be impartial,
have an office in Tarrant County, shall have at least ten (10) years'
experience as a real estate appraiser of warehouse/industrial buildings
in the Tarrant County area (or shall have at least ten (10) years'
experience in leasing warehouse/industrial space in the Tarrant County
area), and shall be a member of the American Institute of Real Estate
Appraisers or a successor or similar organization of recognized
national standing, some of whose members we frequently employed for
appraisal purposes by federal or state governments. The two appraisers
appointed shall meet promptly and attempt to agree on a determination
of the Market Rate for the renewal term in question. The determination
of Market Rate by the two appraisers, if they agree, shall be binding
on Landlord and
F-1
<PAGE> 42
Tenant. If the Market Rate determinations of the two appraisers differ
by in amount equal to or less then five percent (5%) of the higher of
the two determinations of Market Rate, then the Market Rate shall be
equal to the arithmetic mean of the two determinations.
(b) If the two appraisers cannot agree upon the Market Rate
for the renewal term in question within ten (10) days following their
appointment, or if their determinations of Market Rate differ by more
than five percent (5%) of the higher of the two determinations of
Market Rate, then the two appointees shall select a third appraiser,
but if they are unable to agree on a third appraiser within five (5)
days, then each appraiser shall select the names of two willing persons
qualified to be appraisers hereunder and from the four persons so
named, one name shall be drawn by lot by a representative of Tenant in
the presence of a representative of Landlord, and the person whose name
is so drawn shall be the third appraiser. If either of the first two
appraisers fails to select the names of two willing, qualified
appraisers and to cooperate with the other appraiser so that a third
appraiser can be selected by lot, as aforesaid, the third appraiser
shall be selected by lot from the two appraisers which were selected by
the other appraiser for the drawing. The three appraisers so selected
shall confer and immediately proceed to determine the Market Rate for
the renewal term in question. If the three appraisers fail to agree on
such Market Rate within ten (10) days after the appointment of the
third appraiser, the average of the two determinations of Market Rate
which are closer to each other than the third determination of Market
Rate shall be the Market Rate for the renewal term in question.
(c) The appraisers selected hereunder shall deliver a signed
and written report of their appraisal, or the average of the two
closer appraisals, as the case may be, to Tenant and Landlord. The fee
of the appraiser initially selected by Tenant shall be paid by Tenant,
the fee of the appraiser initially selected by Landlord shall be paid
by Landlord, and the fee of any third appraiser and any expenses
reasonably incident to the appraisal (except attorneys' fees, which
shall be borne by the party incurring the same) shall be shared equally
by Tenant and Landlord. Any vacancy in the office of the appraiser
appointed by Tenant shall be filled by Tenant, any vacancy in the
office of the appraiser appointed by Landlord shall be filled by
Landlord, and any vacancy in the office of the third appraiser shall be
filled by the first two appraisers in the manner specified above for
the selection of a third appraiser.
(d) If appraisal proceedings are initiated as provided above
in order to determine the Market Rate which is applicable to the
renewal term in question, the decision and award of the appraisers as
to such Market Rate shall be final, conclusive, and binding on the
parties, absent settlement by agreement of the parties prior to the
rendering by the appraisers of any such decision and award. If the
Market Rate is not finally determined prior to the commencement of the
renewal term in question, Tenant shall pay Base Rent based upon Base
Rent theretofore in effect under this Lease until the final
determination of the Market Rate for the renewal term in question
occurs as provided above. If the final determination of such Market
Rate is different from the amount paid by Tenant, Tenant shall promptly
pay to Landlord any deficiency in Base Rent or Landlord shall promptly
pay to Tenant any overpayment of Base Rent from the commencement of the
renewal term in question until such final determination.
(e) If the Market Rate for either renewal Term is established using the
appraisal mechanism act forth above, each party shall act diligently and in good
faith (and shall cause the appraiser appointed by such party to so act) such
that the Market Rate for the renewal term in question is established at least
ten (10) months prior to the expiration of the then current Term.
3. TENANT'S RIGHT OF REVOCATION. If (a) Tenant timely and effectively
exercises a renewal option in accordance with this Exhibit "F" and (b) the
appraisal procedures under paragraph (2) above are commenced, and (c) the Market
Rate determined pursuant to such procedures is finally determined, in
accordance with said paragraph (2), not later than ten (10) months prior to the
expiration of the then current Term (without giving effect to the exercise of
the renewal option in question), and (d) Tenant determines that the Market Rate
so determined
F-2
<PAGE> 43
pursuant to such procedures is higher than Tenant desires to pay, then in such
event Tenant may as its sole and exclusive remedy rescind and revoke its prior
exercise of the renewal option in question by giving Landlord written notice
thereof ("Revocation Notice") within ten (10) days after the determination of
the Market Rate but in no event, later than ten (10) months prior to the
expiration of the then current Term (time being of the essence with respect
thereto). If Tenant timely and effectively gives the Revocation Notice to
Landlord, (i) Tenant's prior exercise of the renewal option in question shall be
deemed revoked, rescinded and ipso facto null and void, (ii) the Term shall
expire on the date it would otherwise have expired had Tenant not exercised such
renewal option and (iii) Tenant shall not be entitled to exercise any other
renewal option that might be provided for herein.
F-3
<PAGE> 44
EXHIBIT "G"
STATE OF TEXAS )
COUNTY OF TARRANT )
SUBORDINATION, ATTORNMENT, AND NON-DISTURBANCE AGREEMENT
THIS SUBORDINATION, ATTORNMENT, AND NON-DISTURBANCE AGREEMENT (this
"Agreement") is made and entered into as of the ___ day of ________, 1999, by
and between AMERITRADE HOLDING CORPORATION, a Delaware corporation ("Tenant"),
and SOUTHTRUST BANK, NATIONAL ASSOCIATION, a national banking association
("Bank").
RECITALS:
Tenant is the present tenant under that certain Lease Agreement dated
________________, 1999 (hereinafter the "Lease"), with respect to an
approximately 47,644 square feet of floor space located on the parcel of real
property more particularly described in Exhibit A attached hereto and made a
part hereof. The promises demised to Tenant under the Lease, as more
particularly described therein, are referred to herein as the "Premises."
Alliance Gateway No. ____, Ltd., as the landlord under the Lease (the
"Landlord"), has obtained a loan from Bank, which is secured by a first Deed of
Trust and Security Agreement covering the Premises and an Assignment of Rents
and Leases which collaterally assign to Lender all leases relating thereto. Said
Deed of Trust and Security Agreement and Assignment of Rents and Leases, as the
same may hereafter be amended, increased, renewed, extended, spread,
consolidated, severed, restated, or otherwise changed from time to time (the
consent of Tenant to which shall not be required), are referred to herein as the
"Security Instruments." As a condition to making such loan, Bank has required
that Tenant execute this instrument. The Deed of Trust and the Assignment of
Rents and Leases are recorded at Instrument No. D197202696, Volume ,
Page , and Instrument No. D197202697, Volume , Page ,
respectively, of the Real Property Records of Tarrant County, Texas.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, and as an inducement to Bank to extend financing to the
Landlord, the parties hereto do mutually covenant and agree as follows:
1. SUBORDINATION. The Lease shall at all times be subject and
subordinate in all respects to the Security Instruments, the lien and security
interest imposed by the Security Instruments, and all advances made under the
Security Instruments.
2. BANK'S RIGHT TO CURE. Notwithstanding anything to the contrary in
the Lease or this Agreement, Tenant shall give written notice simultaneously to
Landlord and to Bank of any default or breach by Landlord under the Lease that
are of such a nature as to give Tenant a right to terminate the Lease, to reduce
rent, or to credit or offset any amounts against future rents. After Bank
receives such notice, Bank shall have the same time period available to Landlord
under the Lease in which to cure the breach or default by Landlord. Bank shall
have no obligation to cure (and shall have no liability or obligation for not
curing) any breach or default by Landlord.
3. NON-DISTURBANCE. So long as Tenant is not in default in the payment
of rent, additional rent, or other charges or conditions of the Lease, Tenant
shall not be disturbed by Bank in Tenant's possession, enjoyment, use, and
occupancy of the Premises during the original or any renewal term of the Lease
or any extension or modification thereof.
4. PAYMENT OF RENTS TO BANK. Upon Bank's written request and without
regard to contrary instructions from Landlord, Tenant agrees that it will make
the payments to be made by
G-1
<PAGE> 45
Tenant under the Lease directly to Bank. Prior to the time that Bank shall
succeed to the interest of Landlord in the Premises as described in Section 5
below, receipt of such payments by Bank shall not relieve Landlord of its
obligations under the Lease nor operate to make Bank responsible for the
performance thereof, and Tenant shall continue to look solely to Landlord for
performance of such obligations.
5. ATTORNMENT. If the interest of Landlord in the Premises shall be
acquired by Bank or any other successor landlord through foreclosure, deed in
lieu of foreclosure, or by any other method, and Bank shall succeed to the
interest of Landlord under the Lease, then the Lease shall continue in full
force and effect and shall not be terminated or disturbed except in accordance
with the terms thereof. Tenant shall thereupon be bound to Bank, and Bank shall
be bound to Tenant, under all the terms, covenants, and conditions of the Lease
for the balance of the term thereof remaining, and any extensions or renewals
thereof, with the same force and effect as if Bank was the original landlord
under the Lease. Tenant does hereby attorn to Bank as its landlord, said
attornment to be effective and self-operative without the execution of any
additional documents by the parties hereto immediately upon Bank's succeeding to
the interest of Landlord under the Lease.
6. PROTECTION OF BANK. Notwithstanding anything to the contrary in the
Lease or the Security Instruments, Bank shall not be liable for or bound by any
of the following matters:
(a) except for any default or breach of which Bank has been
notified pursuant to Section 2 hereof but has failed to cure,
any default or breach in the Landlord's obligations under the
Lease occurring prior to the time Bank succeeds to the
interest of Landlord in the Premises;
(b) any payment of rent (including fixed rent, percentage rent, or
additional rent) that Tenant might have made to Landlord more
then thirty (30) days before the date such rent was first due
and payable under the Lease with respect to any period after
the time Bank succeeds to the interest of Landlord in the
Premises;
(c) any deposit or security which was delivered to Landlord but
which was not subsequently delivered to Bank;
(d) any material modification or material amendment to the Lease,
or any waiver of any material terms of the Lease, made without
Bank's prior written consent as required by the Security
Instruments;
(e) any consensual or negotiated surrender, cancellation, or
termination of the Lease, in whole or in part, agreed upon
between Landlord and Tenant, made without Bank's prior written
consent as required by the Security Instruments; or
(f) any obligation of Landlord under the Lease to make pay for,
or reimburse Tenant for any construction, alterations,
demolition, or other improvements or work at the Premises
(other than day-to-day maintenance and repairs and provided
same shall not restrict Tenant's right to abate Base Rent in
the event of Landlord's default under the Lease).
7. NOTICES. All notices, demands, or requests, and responses thereto,
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be given or served by the United States mail, postage prepaid and
certified with return receipt requested, or by a nationally recognized overnight
courier service, addressed as follows:
If to Bank
SouthTrust Bank, National Association
420 North 20th Street, 11th Floor
Commercial Real Estate Group
Birmingham, Alabama 35203
G-2
<PAGE> 46
And to:
SouthTrust Bank, National Association
230 Fourth Avenue North
Eighth Floor
Nashville, Tennessee 37219
Atnn: Mr. Daniel S. Harrington
If to Tenant:
Ameritrade Holding Corporation
1005 North Ameritrade Place
Bellevue, Nebraska 68005
With copy to:
J. Andrew Rogers
Kelly, Hart & Hallman
201 Main Street, Suite 2500
Fort Worth, Texas 76102
or at such other single address in the United States as either party may by
notice in writing designate. Any notice shall be effective the next business day
after being sent by overnight courier service and five (5) business days after
being sent by certified mail (return receipt requested).
8. SUCCESSORS AND ASSIGNS. This Agreement shall bind and benefit the
parties, their successors and assigns. If Bank assigns the Security Instruments,
then upon delivery to Tenant of written notice thereof accompanied by the
assignee's written assumption of all obligations under this Agreement, all
liability of the assignor shall terminate.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between Bank and Tenant regarding the subordination of the Lease to the Security
Instruments and the rights and obligations of Tenant and Bank as to the subject
matter of this Agreement.
10. INTERACTION WITH LEASE WITH SECURITY INSTRUMENTS. If this Agreement
conflicts with the Lease, then this Agreement shall govern as between Tenant and
Bank, including upon any attornment pursuant to this Agreement. This Agreement
supersedes, and constitutes full compliance with, my provisions in the Lease
that provide for subordination of the Lease to, or for delivery of
nondisturbance agreements by the holder of, the Security Instruments. Bank
confirms that Bank has consented to Landlord's entering into the Lease.
11. INTERPRETATION; GOVERNING LAW. The interpretation, validity, and
enforcement of this Agreement shall be governed by and construed under the
internal laws of the State of Texas.
12. AMENDMENTS. This Agreement may be amended, discharged, or
terminated, or any of its provisions waived, only by a written instrument
executed by the party to be charged.
13. EXECUTION. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
14. WAIVER OF JURY TRIAL. THE PARTIES HERETO WAIVE ANY RIGHT TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION (INCLUDING, BUT NOT LIMITED TO, ANY CLAIMS,
CROSS-CLAIMS OR THIRD PARTY CLAIMS) ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT, THE LEASE, OR THE SECURITY INSTRUMENTS. TENANT CERTIFIES THAT NO
REPRESENTATIVE OR AGENT OF BANK OR BANK'S COUNSEL HAS REPRESENTED, EXPRESSLY OR
G-3
<PAGE> 47
OTHERWISE, THAT BANK WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE
THIS WAIVER OF MY TRIAL PROVISION.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
have caused this Agreement to be duly executed, as of the day and year first
above written.
TENANT:
AMERITRADE HOLDING
CORPORATION, a Delaware corporation
By:
------------------------------------------------
Name: Susan Hohman
Title: Vice-President of Infrastructure and
Facilities
Date of execution:
---------------------------------
BANK:
SOUTHTRUST BANK, NATIONAL
ASSOCIATION, a national banking association
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
Date of execution:
---------------------------------
STATE OF )
---------------
COUNTY OF )
--------------
This instrument was acknowledged before me on _______________, 1999 by
______________, ___________ of ___________ on behalf of ____________________.
---------------------------------------------------
Notary Public
My commission expires:
-----------------------------
[NOTARIAL SEAL]
STATE OF )
---------------
COUNTY OF )
--------------
This instrument was acknowledged before me on _______________, 1999 by
______________, ___________ of SouthTrust Bank, National Association, a national
banking association, on behalf of said association.
---------------------------------------------------
Notary Public
My commission expires:
-----------------------------
[NOTARIAL SEAL]
G-4
<PAGE> 48
LANDLORD'S CONSENT
Landlord consents and agrees to the foregoing Agreement, which was
entered into at Landlord's request. The foregoing Agreement shall not alter,
waive, or diminish any of Landlord's obligations under the Security Instruments
or the Lease. The foregoing Agreement discharges the obligations of Bank under
the Security Instruments and related loan documents, if any, to enter into a
nondisturbance agreement with Tenant. Landlord is not a party to the foregoing
Agreement.
LANDLORD:
ALLIANCE GATEWAY NO. 16, LTD.
By: Hillwood Operating, L.P., a Texas limited
partnership, its general partner
By: Hillwood Development Corporation,
a Texas corporation, its general partner
By:
------------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
STATE OF )
---------------
COUNTY OF )
--------------
This instrument was acknowledged before me on _____________, 1999, by
___________________, _________________ of Hillwood Development Corporation, a
Texas corporation, the general partner of Hillwood Operating, L.P. a Texas
limited partnership, general partner of Alliance Gateway No. 16, Ltd., a Texas
limited partnership, on behalf of said partnership.
------------------------------------------------
Notary Public
My commission expires:
--------------------------
[NOTARIAL SEAL]
G-5
<PAGE> 49
EXHIBIT "A"
TO
SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT
[insert legal description]
1
<PAGE> 50
EXHIBIT "H"
SUBORDINATION OF MORTGAGE
_______________, as owner and holder of a certain promissory note
dated ______________, 19___, in the principal sum of _____________ Dollars and
of a certain Mortgage or Deed of Trust of even date therewith and securing the
said Note, recorded on ________ in Volume __________ at Page ________, Real
Property Records, ________ County, __________ now a first lien upon the
premises more particularly demised and described in that certain Lease dated
_________, 19___, by and between _____________, as Lessor, and _______________,
as Lessee, and upon other property, in consideration of such leasing and of the
sum of One ($1.00) Dollar and other good and valuable consideration, receipt of
which is hereby acknowledged,
DOES hereby covenant and agree that the said Mortgage or Deed of Trust
shall be and the same is hereby made SUBORDINATE to the said Lease with the same
force and effect as if the same Lease had been executed, delivered and recorded
prior to the execution, delivery and recording of the said Mortgage or Deed of
Trust;
EXCEPT, HOWEVER, that this Subordination shall not affect nor be
applicable to and does hereby expressly exclude:
(a) The prior right, claim and lien of the said Mortgage or Deed of
Trust in, to and upon any award or other compensation heretofore or hereafter to
be made for any taking by eminent domain of any part of the said premises, and
to the right of disposition thereof in accordance with the provisions of the
said Mortgage or Deed of Trust,
(b) The prior right, claim and lien of the said Mortgage or Deed of
Trust in, to and upon any proceeds payable under all policies of fire and rent
insurance upon the said premises and as to the right of disposition thereof in
accordance with the terms of the said Mortgage or Deed of Trust, and
(c) Any lien, right, power or interest, if any, which may have arisen
or intervened in the period between the recording of the said Mortgage or Deed
of Trust and the execution of the said lease, or any lien or judgment which may
arise at any time under the terms of such lease.
This Subordination shall inure to the benefit of and shall be binding
upon the undersigned, its successors and assigns,
IN WITNESS WHEREOF, the Subordination has been duly signed and
delivered by the undersigned this _____ day of _____________, 1999.
------------------------------
By:
---------------------------
Assistant Secretary
H-1
<PAGE> 51
STATE OF NEW YORK )
) Section:
COUNTY OF NEW YORK )
Before me, a Notary Public, in and for said County, personally appeared
_______________, to me known and known to me to be the persons who, as
_______________ of _______________, the entity which executed the foregoing
instrument, signed the same, and acknowledged to me that they did so sign said
instrument in the name and upon behalf of said corporation as such officers
respectively; that the same is their free act and deed as such officers,
respectively, and the free act and deed of said corporation; that they were duly
authorized thereunto by its board of trustees; and that the seal affixed to said
instrument is the corporate seal of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal at [City], [State] this ______ day of _____________, 1999.
------------------------------
Notary Public
LESSEE'S AGREEMENT
The undersigned as Lessee under the lease herein described, does hereby
accept and agree to the terms of the foregoing Subordination, which shall inure
to the benefit of and be binding upon the undersigned and the heirs, executors,
administrators, legal representatives, successors and assigns of the
undersigned.
By:
---------------------------
ACKNOWLEDGMENTS
INDIVIDUAL
STATE OF )
) Section:
COUNTY OF )
On this _____ day of ____________, 1999, before me personally appeared
to me personally known to be the person described in and who executed the
foregoing instrument, and acknowledged that _____________ executed the same as
their free act and deed.
------------------------------
Notary Public
My commission expires:
------------------------------
H-2
<PAGE> 52
CORPORATE
STATE OF )
) Section:
COUNTY OF )
On this ____ day of ____________, 1999, before me, personally appeared
__________________ to me personally known, who, being by me duly sworn, did say
he is the _______________ of ____________ and that the seal affixed to the
foregoing instrument is the corporate seal of said corporation, and that said
instrument was signed and sealed in behalf of said corporation by authority of
its Board of Directors, and acknowledged said instrument to be the free act and
deed of said corporation.
------------------------------
Notary Public
My commission expires:
------------------------------
PARTNERSHIP
STATE OF )
) Section:
COUNTY OF )
In _____________ County in said station on the _____ day of
___________, 1999, before me personally appeared _____________ as general
partner of _____________ PARTNERSHIP, to be known and known by me to be the
party executing the foregoing and the acknowledged said instrument by him
executed to be his free act and deed, and his free act and deed in his
capacities as aforesaid, and the free act and deed of ______________
PARTNERSHIP.
------------------------------
Notary Public
My commission expires:
------------------------------
H-3
<PAGE> 1
LEASE AGREEMENT
THIS LEASE AGREEMENT, made and entered into by Alliance Gateway No. 17,
Ltd., a Texas limited partnership ("Landlord"), and Ameritrade Holding
Corporation, a Delaware corporation ("Tenant");
WITNESSETH:
1. PREMISES AND TERM. In consideration of the mutual obligations of
Landlord and Tenant set forth herein, Landlord leases to Tenant, and Tenant
hereby takes from Landlord, the Premises situated within the County of Tarrant,
State of Texas, more particularly described and indicated by the cross-hatched
area on Exhibit "A" attached hereto and incorporated herein by reference (the
"Premises") which Premises are to consist of the Building to be constructed
pursuant to the terms hereof, together with all rights, privileges, easements,
appurtenances, and amenities belonging to or in any way pertaining to the
Premises, to have and to hold, subject to the terms, covenants and conditions in
this Lease. During the Lease Term, Tenant shall have the exclusive use of at
least 1,150 parking spaces located or to be located on the Land and the
nonexclusive use of all driveways and access-ways on the Land. Landlord shall
have no obligation to patrol or police any parking areas or otherwise insure
that such parking spaces are available for use by Tenant or its employees,
agents or invitees. Tenant agrees that its use of such parking spaces shall be
subject to such reasonable rules and regulations as Landlord may from time to
time promulgate and all reasonable directional and other signs from time to time
existing with respect to the parking relating to the Building. Tenant's rights
under this Lease shall be subject to all matters of public record, including,
without limitation, all easements, deed restrictions, covenants, conditions and
restrictions, as exist on the date hereof and as may hereafter be imposed by
Landlord (provided, however, that Landlord agrees it will not cause any matter
to be filed of record subsequent to the date hereof which would interfere with
the Permitted Use (hereinafter defined) or otherwise materially change Tenant's
obligations hereunder). The term of this Lease ("Term") shall commence on the
Commencement Date (hereinafter defined) and shall end on the last day of the
month that is 180 months after the Commencement Date. The Premises are to be
situated on the Land described on Exhibit "B" attached hereto and made a part
hereof.
A. The "Commencement Date" shall be the date that is the earlier of (i)
the date on which Tenant first occupies the Premises for the purpose of
conducting its business, or (ii) the date which is ninety-one (91) days after
the Landlord's Work (hereinafter defined) to be erected in accordance with
Exhibit "C" attached hereto and incorporated herein by reference has been
substantially completed. As used herein, the term "substantially completed"
shall mean that, in the reasonable opinion of Landlord, such improvements have
been completed in accordance with Exhibit "C", subject only to completion of (i)
minor punch list items and (ii) those items on the Shell Building Design
Criteria attached hereto as Exhibit "C-1" as are indicated by an "X" provided,
however, Landlord agrees to diligently prosecute and complete such incomplete
items within a reasonable time not to exceed ninety-one (91) days following the
substantial completion of Landlord's Work. If Landlord does not complete such
items marked with an "X" within such ninety-one (91) day period, the
Commencement Date (unless triggered by clause (i) of the first sentence of this
paragraph) shall be extended until such incomplete items we completed, except
for punch list items related to such items marked with an "X". As soon as
Landlord determines that such improvements have been substantially completed,
Landlord shall notify Tenant in writing. Within ten (10) days thereafter, Tenant
shall submit to Landlord in writing notice of Tenant's agreement or disagreement
with Landlord's determination that such improvements have been substantially
completed, and, if, Tenant agrees with Landlord's determination, Tenant shall
submit a punch list of items needing completion or correction. Landlord shall
complete such items within thirty (30) days after receipt of the punch list. In
the event Tenant, its employees, agents or contractors cause construction of
such improvements to be delayed, the Commencement Date shall be deemed to be the
date that substantial completion would have occurred if such delays had not
taken place. Landlord's approval of any plans, specifications or working
drawings prepared by Tenant for the Premises shall create no responsibility or
liability on the part of Landlord for their completeness, design sufficiency or
compliance with any laws, rules, or regulations of governmental agencies or
authorities. After the Commencement Date,
1
<PAGE> 2
Landlord and Tenant shall execute and deliver to one another a memorandum of
acceptance of delivery of the Premises in the form attached hereto as Exhibit
"D".
B. If Landlord has not commenced Landlord's Work on or before April 19,
1999 (which date shall be extended to a later date by one day for each day
constituting a Tenant Delay, and which date, as so extended, shall be referred
to herein as the "Groundbreaking Date"), Tenant shall deliver written notice to
Landlord of such failure. If Landlord has not commenced Landlord's Work within
thirty (30) days of its receipt of Tenant's notice, Tenant shall have the
right, as its sole and exclusive remedy, to terminate this Lease as well as the
One Ameritrade Lease (hereinafter defined) and the lease to be entered into by
and between Heritage Commons I, Ltd. ("HCI") and Tenant for premises to be
situated in the building known as Heritage Commons I, by written notice
delivered to Landlord following the thirtieth (30th) day after the occurrence of
the Groundbreaking Date (but, in all events, prior to the date on which
Landlord commences the Landlord's Work). If Tenant so timely terminates this
Lease (but, in all events, prior to the date on which Landlord commences the
Landlord's Work), then Landlord shall immediately return the Security Deposit
to Tenant and, thereafter, neither Landlord nor HCI nor Tenant shall have any
further rights or obligations hereunder or under such other leases (except as
expressly provided otherwise herein or therein). If Tenant fails to terminate
this Lease and such other leases in writing pursuant to this Paragraph 1B (but,
in all events, prior to the date on which Landlord commences the Landlord's
Work), then Tenant's right to terminate this Lease and such other leases
pursuant to this Paragraph 1B shall be deemed to have been irrevocably waived
by Tenant. For the purposes of this Paragraph 1B only, commencement of
Landlord's Work shall mean Landlord's commencement of site excavation.
C. If Landlord has not substantially completed Landlord's Work by
September 15, 1999 (which date shall be extended to a later date (i) by one day
for each day constituting a Force Majeure delay; (ii) by one day for each day
constituting a Tenant Delay; and (iii) if Landlord delivers possession of a
portion of the Premises to Tenant prior to September 15, 1999, of a quantity
adequate and in a condition ready for the commencement of Tenant's construction
of the Leasehold Improvements (the "Early Delivery Date"), by one day for each
day by which the Early Delivery Date precedes September 15, 1999, and which
date, as so extended, shall be referred to herein as the "Deadline Date"), then
(A) Tenant shall be entitled to receive, as its sole and exclusive remedy, a
credit against the first Base Rent due hereunder in an amount equal to
$3,298.63 (one day's Base Rent) for each day that shall elapse from the
Deadline Date until the date of the substantial completion of Landlord's Work
and (B) the Term of this Lease shall be extended by the number of days as shall
elapse from the Deadline Date until the date of substantial completion of
Landlord's Work. If Landlord has not completed in all material respects the
extension or construction of the roadways and curb cuts as necessary to provide
access to the Premises from the north, south and west property lines on or
before December 15, 1999 (which date shall be extended to a later date (i) by
one day for each day constituting a Force Majeure Delay, and (ii) by one day
for each day constituting a Tenant Delay, and which date, as so extended, shall
be referred to herein as the "Roadway Deadline Date"), then Base Rent shall be
reduced fifty percent (50%) from and after the Roadway Deadline Date, until
such time as Landlord completes the extension or construction of the roadways
to provide such access. Landlord agrees that following completion of such
roadways, it shall use diligent efforts to cause same to be dedicated as public
rights-of-way.
D. Notwithstanding the fact that the Term of this Lease and Tenant's
obligation to pay rent does not commence until the Commencement Date, this
Lease shall nevertheless be binding upon the parties in accordance with its
terms when executed by Landlord and Tenant.
2. BASE RENT, SECURITY DEPOSIT AND ESCROW PAYMENTS.
A. Tenant agrees to pay to Landlord base rent ("Base Rent") for the
Premises, in advance, without demand, deduction or set off, except as
otherwise expressly provided herein, at the following rates and amounts
during the Term hereof:
2
<PAGE> 3
<TABLE>
<CAPTION>
Monthly Annual Per Square Foot
Month Base Rent Base Rent Per Annum
<S> <C> <C> <C>
1-60 $103,950.00 $1,247,400.00 $ 8.91
61-120 $117,483.33 $1,409,800.00 $10.07
121-180 $132,766.66 $1,593,200.00 $11.38
</TABLE>
The first monthly installment of Base Rent, plus the other monthly charges
set forth in Paragraph 2C below, shall be due and payable on the Commencement
Date and subsequent monthly installments shall be due and payable on or before
the first day of each calendar month succeeding the Commencement Date, except
that all payments due hereunder for any fractional calendar month shall be
prorated.
B. In addition, Tenant agrees to deposit with Landlord on the date hereof
the sum of One Hundred Thousand Three Hundred Thirty-three and 33/100 Dollars
($100,333.33), which shall be held by Landlord as security for the performance
of Tenant's obligations under this Lease, it being expressly understood and
agreed that this security deposit is not an advance rental deposit 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 to pay past due rent or other payments due Landlord under this
Lease, and the cost of any other damage, injury, expense or liability caused by
such Event of Default without prejudice to any other remedy provided herein or
provided by law. Within ten (10) days after demand, Tenant shall pay Landlord
the amount that will restore the security deposit to its original amount. The
security deposit shall be deemed the property of Landlord, but any remaining
balance of such security deposit shall be returned by Landlord to Tenant within
ten (10) days after the fulfillment of Tenant's obligations under this Lease
(excluding any obligations that survive the termination or expiration of this
Lease and with respect to which Tenant has not received written notice from
Landlord within ten (10) days following the expiration or termination of this
Lease).
C. In addition to Base Rent and Tenant's other obligations hereunder,
Tenant agrees to pay its proportionate share (as defined in the Basic Lease
Information) of the following costs and expenses (collectively, the
"Reimbursable Expenses"): (i) Taxes (hereinafter defined) payable by Landlord
pursuant to Paragraph 4A below, (ii) the cost of maintaining insurance pursuant
to Paragraph 10A below, (iii) Common Area Charges (hereinafter defined) payable
by Tenant in accordance with Paragraph 3 below, (iv) subject to Paragraph 2D
below, the cost of any repair, replacement, or capital expenditures required
under any governmental law or regulation that was not applicable to the
Building at time of original construction, and (v) reasonable replacement
reserves for capital items and other operating expenses required by this Lease.
During each month of the Term of this Lease, on the same day that Base Rent is
due hereunder, Tenant shall escrow with Landlord an amount equal to 1/12th of
Tenant's proportionate share of such Reimbursable Expenses, as estimated by
Landlord. Landlord agrees that all escrow amounts deposited by Tenant with
Landlord that are attributable to Taxes shall be held by Landlord in a money
market deposit account ("Tax Escrow Account") in a financial institution
selected by Landlord and reasonably acceptable to Tenant. All interest on the
funds in the Tax Escrow Account shall accrue for the benefit of Tenant so long
as no Event of Default exists hereunder, and such interest shall remain in and
become a part of the funds in the Tax Escrow Account and shall be credited
against Tenant's obligation to pay Taxes hereunder (provided that any such
interest that remains unapplied after all obligations of Tenant with respect to
its proportionate share of Taxes for any calendar year have been satisfied,
shall, at Tenant's option, be refunded to Tenant within thirty (30), days after
final determination of Tenant's obligation with respect to Taxes arising during
such calendar year). Tenant authorizes Landlord to use the funds deposited with
Landlord under this Paragraph 2C (including the amounts in the Tax Escrow
Account and all interest thereon) to pay such Reimbursable Expenses. Upon the
occurrence of an Event of Default Landlord shall have no obligation to keep the
escrow payments for Taxes in the Tax Escrow Account or any other segregated
account (provided that such escrow payments for Taxes as well as any accrued
interest thereon shall be credited to Tenant's obligation to pay Taxes
hereunder). Landlord shall be entitled to revise its projection of such
Reimbursable Expenses at any time and if Landlord so revises such projection,
Tenant shall pay to Landlord, on the same day as Base Rent is due hereunder, an
amount equal to 1/12th of Tenant's proportionate
3
<PAGE> 4
share of such Reimbursable Expenses pursuant to Landlord's revised estimate
thereof. By April 30 of each calendar year during the Term hereof Landlord shall
determine the actual Reimbursable Expenses for the preceding calendar year and
shall notify Tenant thereof. If the Tenant's total escrow payments are less
than Tenant's actual proportionate share of all such Reimbursable Expenses,
Tenant shall pay the difference to Landlord within ten (10) days after demand.
If the total escrow payments of Tenant are more than Tenant's actual
proportionate share of all such Reimbursable Expenses, Landlord shall retain
such excess and credit it against Tenant's next annual escrow payments;
provided, however, if the total escrow payments of Tenant are more than
Tenant's actual proportionate share of all such Reimbursable Expenses for the
year in which the Lease expires, Landlord shall reimburse Tenant any excess
within ten (10) days following the expiration of the Term.
D. With respect to the cost of replacements and capital expenditures (as
opposed to repairs) referenced in Paragraph 2(C)(iv) and replacement reserves
for capital items referenced in Paragraph 2(C)(v) above, it is agreed that if
the replacement or expenditure is applicable to building owners generally (and
is not necessitated due to Tenant's use of the Premises), then the cost of any
such item shall be amortized over its useful life (at a per annum interest rate
equal to the prime rate of interest announced from time to time by Bank One
Texas, N.A. plus one percentage point) in accordance with generally accepted
accounting principles and the portion of the cost that shall be included within
Paragraph 2(C)(iv) or Paragraph 2(C)(v) above, as applicable, shall be equal to
the product of (i) the actual cost of such item (together with such interest),
multiplied by (ii) a fraction the numerator of which is the number of years
(including partial years) remaining in the Lease Term as of the date of such
replacement or expenditure including the number of years in any renewal term
under Exhibit "F" attached hereto if the renewal option therefor has been
exercised by Tenant prior to the replacement or expenditure (up to but not
greater than the following described denominator), and the denominator of which
is the useful life of die item in question; provided that if subsequent to any
such replacement or expenditure Tenant exercises any renewal option, the portion
of the cost included within Paragraph 2(C)(iv) or Paragraph 2(C)(v) above under
this sentence shall be recalculated to include the length of the renewal term in
question. The amount to be included within Paragraph 2(C)(iv) or Paragraph
2(C)(v) pursuant to the immediately preceding sentence shall be so included
within said Paragraph 2(C)(iv) or Paragraph 2(C)(v) as applicable, in equal
annual amounts over the then remaining Term of this Lease (from and after the
date of such replacement or expenditure). In no event shall Tenant be required
to pay amounts which are amortized pursuant to this Paragraph 2D including the
interest thereon, in excess of $25,000.00 a year. Notwithstanding anything to
the contrary contained herein, it is agreed that the cost of any replacement or
capital expenditure under Paragraph 2(C)(iv) or Paragraph 2(C)(v) above that is
necessitated due to Tenant's use of the Premises shall not be so amortized, or
be allocated to Tenant based upon its proportionate share, but shall, instead,
be paid for in full by Tenant within thirty (30) days after Landlord's demand
therefor.
3. COMMON AREA CHARGES. In addition to other amounts required to be paid
by Tenant hereunder, Tenant shall pay to Landlord Tenant's proportionate share
of the following costs and expenses (collectively, the "Common Area Charges"):
A. The cost of repair, maintenance and replacement of: (i) the exterior of
the Building (including painting), other than those structural repairs and
replacements for which Landlord is responsible pursuant to Paragraph 5; (ii)
subject to all mechanical, electrical, plumbing, sewer, sprinkler and other
life-safety equipment and systems forming a part of the Building or the Project
of which the Building forms a part (other than the cost of repair, replacement
and maintenance of the items which are Tenant's responsibility pursuant to
Paragraph 6 which shall be paid entirely by Tenant as provided in Paragraph 6;
and (iii) all other common areas and facilities constituting a part of the
Building or the Project of which the Building forms a part (including, but not
limited to, all paved areas in and about the Building).
B. The cost of maintenance and replacement of the grass, shrubbery and
other landscaping in and about the Building and/or the Project.
4
<PAGE> 5
C. The cost of operating and maintaining in a good, neat, clean and
sanitary condition all parking areas, driveways, alleys and grounds in and
about the Building (including trash removal).
D. The cost of assessments under any applicable Declaration of Covenants,
Restrictions and Easements (as may be amended from time to time) which are
assessed by the applicable property owners association (which cost Landlord
estimates to be equal to $.07 per square foot of area in the Building per
year).
E. The cost of operating and maintaining any property, facilities or
services provided for Tenant, which costs shall include, without limitation,
management fees (or if no management company is engaged by Landlord for the
management of the Project, wages and employee benefits payable to employees of
Landlord or affiliates of Landlord whose duties are connected with the
operation and maintenance of the Building), which management fees (or such
wages and benefits) shall not exceed an annual amount equal to 2% of the Base
Rent payable to Landlord with respect to the Building per annum.
Landlord agrees that if any item of Common Area Charges is anticipated to
exceed $10,000, Landlord shall give Tenant at least fifteen (15) days' prior
written notice thereof.
4. TAXES.
A. Landlord agrees to pay all taxes, assessments and governmental charges
of any kind and nature (collectively referred to herein as "Taxes") that accrue
against the Premises, and/or the 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 for the provisions of
any tax abatement agreement with respect to which Landlord is a 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 payable by Landlord.) If
at any time during the Term of this Lease, there shall be levied, assessed or
imposed on Landlord a capital levy or other tax 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 from the Premises and/or the Land
and improvements of which the Premises are a part, then all such taxes,
assessments, levies or charges, or the part thereof so measured or based,
shall be deemed to be included within the term "Taxes" for the purposes hereof.
Any assessments made by the City of Fort Worth, Texas, (the "City"), or other
taxing authorities for the initial extension or construction of the roadways
referenced in Paragraph 1C herein providing access to the Premises shall not be
included in Taxes, but all future assessments imposed by the City or other
taxing authorities in reference to or in connection with such roadways shall be
included in Taxes. Landlord shall have the right to employ a tax consulting
firm to attempt to assure a fair tax burden on the building and grounds within
the applicable taxing jurisdiction. Tenant agrees to pay its proportionate
share of the cost of such consultant to the extent of any savings realized by
Tenant.
B. Tenant shall be liable for all taxes levied or assessed against any
personal property or fixtures placed in the Premises. If any such taxes are
levied or assessed against Landlord or Landlord's property and (i) Landlord
pays the same or (ii) the assessed value of Landlord's property is increased by
inclusion of such personal property and fixtures and Landlord pays the
increased taxes, then, within ten (10) days after demand, Tenant shall pay to
Landlord such taxes.
C. Tenant hereby waives any right it may have under Section 41.413 of the
Texas Tax Code to protest the appraised value of all or any portion of the
Premises and the Building, and any right it may have under Section 42.015 of
the Texas Tax Code to appeal an order of the appraisal review board with
respect to all or any portion of the Premises and/or the Building. Tenant agrees
that Landlord shall have the sole right to protest any appraisals of the
Premises and the Building. Tenant also hereby waives any right it may have to
receive a copy of any notice received by Landlord of reappraisal of all or any
portion of the Premises and/or the Building, including without limitation any
notice required under Section 41.413(d) of the Texas Tax Code. Tenant agrees
that Landlord shall not be liable to Tenant for any damages for Landlord's
failure to send to Tenant a copy of any notice of reappraisal concerning the
Premises and/or the Building, irrespective of any obligation under applicable
law of Landlord to provide such notice.
5
<PAGE> 6
Notwithstanding the foregoing, if Tenant protests, challenges or appeals any
valuation for property tax purposes of all or any portion of the Premises
and/or the Building, and such valuation increases from the value protested,
appealed or challenged, Tenant agrees to indemnify Landlord on an after-tax
basis for any property taxes due as a result of such increase.
D. Landlord agrees to provide to Tenant, within ten (10) days after written
request therefor, the most recent tax statements and notices of reappraisal
relating to the Project that are in Landlord's possession. Tenant shall have
the right (unless Landlord shall in good faith agree to contest such tax
increase ("Landlord's Tax Protest")) to contest or resist, in good faith,
diligently and by appropriate proceedings, the validity of the amount or rate
of any increase or proposed increase in the Taxes, all at Tenant's sole expense
(provided that in the case of a Landlord's Tax Protest, Tenant shall only be
responsible for the cost of such contest to the extent of any tax savings
realized by Tenant, unless Landlord's Tax Protest was initiated at Tenant's
request, in which case Tenant shall pay all reasonable amounts in connection
with such contest, and if the contest involves property of Landlord in addition
to the Project, the cost of the contest shall be allocated to Tenant on a
reasonable and equitable basis) and Tenant shall have the right to monitor
Landlord's Tax Protest; if Landlord elects not to contest such Taxes or, having
elected to contest such Taxes, fails to contest such Taxes diligently and in
good faith, and such failure continues uncured beyond a reasonable time (not to
exceed ten (10) days before the earlier of the deadline for filing a protest or
any scheduled hearing on such Taxes or appraisal) following written notice from
Tenant to Landlord, Tenant shall have the right to itself contest such Taxes.
It shall be a condition precedent to Tenant's right to contest any such Taxes
that Tenant provide Landlord with security (in a form (i) reasonably acceptable
to Landlord and (ii) acceptable to Landlord's mortgagee) in an amount
reasonably necessary to assure full payment of such Taxes being contested,
together with all penalties, fines and interest and other fees and amounts that
could be collected by the taxing authority in case the contest is unsuccessful
(but in any event not less than the amount required by Landlord's mortgagee in
connection with such contest of Taxes). Landlord shall cooperate with Tenant in
contacting Landlord's mortgagee for the purpose of discussing the amount and
form of security that such mortgagee may require in connection with any such
contest of Taxes. Tenant shall in all events pay all such contested Taxes
(together with all penalties, fines, interest and such other fees and amounts)
at least thirty (30) days prior to the date on which the Project (or any
portion thereof) would be subject to foreclosure on account of nonpayment
thereof. Tenant shall indemnify and hold harmless Landlord from and against
any and all expenses, liabilities and claims (including but not limited to
reasonable attorneys' fees) incurred by or asserted against Landlord or the
Project arising as a result of any such contest by Tenant. Landlord and Tenant
agree to reasonably cooperate With one another in connection with all contests
of Taxes under this Lease.
5. LANDLORD'S REPAIRS.
A. Tenant understands and agrees that Landlord's maintenance, repair and
replacement obligations are limited to those expressly set forth in this
Paragraph 5. Landlord, at its own cost and expense, which expense shall not be
reimbursable as a Common Area Charge, shall be responsible only for repair and
replacement of the roof, foundation, downspouts, gutters, and the structural
members of the exterior walls of the Building, reasonable wear and tear
excluded. The term "walls" as used herein shall not include windows, glass or
plate glass, doors, special store fronts or office entries, unless damage to
such items is caused by a structural shift. Tenant shall promptly give Landlord
written notice of defect or need for repairs after which Landlord shall
commence such repair within ten (10) days of receipt of such notice and shall
thereafter have a reasonable opportunity under the particular circumstance to
repair same or cure such defect in a good and workmanlike manner and Landlord
shall diligently prosecute the repair to completion.
B. Landlord agrees that if a defect in materials or workmanship in the
initial construction of the Landlord's Work ("Defect") is discovered by
Tenant on or prior to the first anniversary of the Commencement Date ("First
Anniversary"), Tenant shall give Landlord written notice thereof ("Defect
Notice") on or prior to the First Anniversary (time being of the essence with
respect thereto). If Landlord receives a Defect Notice prior to the First
Anniversary, Landlord shall, at its sole expense, cause such Defect to be
repaired or remedied. Landlord agrees that if a Defect is discovered by Tenant
subsequent to the First Anniversary, but
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<PAGE> 7
on or prior to the third anniversary of the Commencement Date ("Third
Anniversary"), Tenant shall give Landlord a Defect Notice on or prior to the
Third Anniversary (time being of the essence with respect thereto) ("Later
Defect Notice"). If Landlord receives a Later Defect Notice, Landlord shall
cause such Defect to be repaired or remedied and Tenant and Landlord shall each
be responsible for one-half of the cost of such repair or remediation.
Notwithstanding the foregoing, nothing contained in this Paragraph 5B shall; (i)
require Landlord to repair or remedy any Defect to the extent such repair or
remediation is necessitated due to the negligence, or intentional acts or
omissions of, or misuse of the item requiring such repair or remediation by,
Tenant or its employees, agents, contractors or invitees; (ii) require Landlord
to repair or remedy any Defect if the coverage afforded by any warranty or
maintenance/service contract relating to the item in question has been impaired
or invalidated by Tenant or its employees, agents, contractors or invitees; or
(iii) require Landlord to repair or remedy any Defect with respect to which a
timely Defect Notice or a timely Later Defect Notice is not received by
Landlord. Landlord may satisfy its obligations under this Paragraph 5B by
electing to proceed under any manufacturers' and construction warranties
provided to Landlord in connection with the construction of the Landlord's Work
and/or under the maintenance/service contracts required to be carried by Tenant
under Paragraph 6B hereof and Tenant hereby agrees to cooperate with Landlord in
securing the performance by any manufacturer, contractor or subcontractor under
the warranty provided by such party and/or the maintenance/service contractor of
the work required to be performed by it under any such maintenance/service
contract.
6. TENANT'S REPAIRS AND MAINTENANCE.
A. Except as provided in Paragraph 5 and except for damage to the Premises
or Building caused by an act or omission of Landlord or Landlord's employees,
agents, contractors, or invitees following the completion of the Landlord's
Work, Tenant, at its own cost and expense, shall (i) maintain all parts of the
Premises (including, but not limited to, the floor slab of the Premises and the
mechanical, electrical, plumbing, sewer, sprinkler and other life-safety
equipment, fixtures and systems forming a part of the Premises), in good, neat,
clean, sanitary and operable condition and (ii) make all necessary repairs and
replacements thereto in a good and workmanlike manner. Tenant shall receive the
benefit of the coverage afforded to Landlord by any warranty or
maintenance/service contract relating to the Premises. Tenant shall commence
such repair within ten (10) days of the earlier of (i) Tenant's receipt of
written notice from Landlord of a defect or need for repairs, or (ii) the date
upon which Tenant first became aware of a defect or need for repairs, and Tenant
shall thereafter have a reasonable opportunity under the particular circumstance
to repair same or cure such defect in a good and workmanlike manner and shall
diligently prosecute the repair to completion. In addition to the foregoing,
Tenant shall, at its sole expense, repair any damage to the Premises or the
Building caused by the negligent or intentional acts or omissions of Tenant or
Tenant's employees, agents or invitees, or caused by Tenant's default hereunder;
provided, however, that Tenant's obligations hereunder are subject to the mutual
waiver of subrogation in Paragraph 11D.
B. In addition to Tenant's other obligations hereunder, Tenant, at its own
cost and expense, shall enter into a regularly scheduled preventive
maintenance/service contract with a maintenance contractor reasonably approved
by Landlord for servicing all hot water, heating and air conditioning and
elevator systems and equipment within or serving the Premises. The service
contract must include all services suggested by the equipment manufacturer in
its operations/maintenance manual and an executed copy of such contract must be
provided to Landlord prior to the date Tenant takes possession of the Premises.
C. Tenant's obligations with respect to the "floor slab" of the Premises
pursuant to Paragraph 6A(i) above (i) shall be construed as referring to the
slab on grade of the Premises and not the foundation of the Building, and (ii)
shall apply only to the extent that the repair and maintenance of the floor
slab is not caused by the failure of the foundation of the Building or by a
defect in materials or workmanship in the initial pouring of such slab.
7. ALTERATIONS.
A. Tenant shall not make any alterations, additions or improvements to the
Premises without the prior written consent of Landlord, which consent shall not
be unreasonably withheld
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so long as such alterations, additions or improvements do not impair the
structural integrity of the Building, are not visible from the exterior of the
Building and do not adversely affect the Building systems, and, if Landlord does
not respond to Tenant's written request (which request shall be accompanied by a
reasonably detailed description of the contemplated alterations, additions and
improvements) within fifteen (15) days, after the date of such request,
Landlord's consent shall be deemed granted; provided, however, Tenant may make
alterations that are non-structural in character, which are not visible from the
exterior of the Building and which do not adversely affect the Building systems
(i) without Landlord's consent (but with prompt written notice to Landlord) so
long as the cost thereof does not exceed $100,000 during the Term of this Lease,
and (ii) with Landlord's prior written consent (which consent shall not be
unreasonably withheld so long as such work does not impair the structural
integrity of the Building, is not visible from the exterior of the Building and
does not adversely affect the Building systems) with respect to alterations in
excess of $100,000 during the Term of the Lease (collectively, the "Permitted
Non-Structural Alterations"). If Landlord consents to Tenant's proposed
alterations, additions or improvements to the Premises, Landlord shall inform
Tenant of its consent and promptly notify Tenant as to whether Landlord will
require Tenant to remove the alteration, addition or improvement on or before
the earlier to occur of the date of termination of this Lease or permanent
vacating of the Premises by Tenant. It is contemplated by the parties that
Tenant may construct a covered or, alternatively, an enclosed climate-controlled
walkway connecting the Building to another building occupied by Tenant (the
"Walkway"). Landlord hereby agrees that subject to the requirements of this
Paragraph 7A, Landlord shall consent to Tenant's construction of the Walkway
provided that (i) prior to commencement of construction of the Walkway, Tenant
submits to Landlord Tenant's plans and specifications for the Walkway and
Landlord approves same, which such approval shall not be unreasonably withheld;
(ii) Tenant complies with the requirements of the "Alliance Development
Guidelines," including, but not limited to, obtaining Development Review Board
approval; and (iii) at Landlord's request, Tenant shall, prior to the expiration
or termination of this Lease (or termination of Tenant's right of possession, if
sooner) at Tenant's sole cost and expense, remove the Walkway in a good and
workmanlike manner and restore the surface to its condition immediately prior to
the commencement of construction of the Walkway. Tenant, at its own cost and
expense, may erect such shelves, bins, machinery and trade fixtures as it
desires without the consent of Landlord. Tenant's erection of such shelves,
bins, machinery and trade fixtures and the construction of the Permitted
Non-Structural Alterations shall be on the express condition that: (i) such
items do not impair the structural integrity of the Premises, the Building or
such improvements; (ii) such items may be removed without material injury to the
Premises, and (iii) the construction, erection or installation thereof complies
with all applicable governmental laws, ordinances, regulations and with the
"Alliance Development Guidelines". All alterations, additions, improvements and
partitions erected by Tenant as well as the Permitted Non-Structural Alterations
shall be and remain the property of Tenant during the Term of this Lease. On or
before the earlier to occur of the date of termination or this Lease or
permanent vacating of the Premises by Tenant, Tenant shall, at its sole expense,
demolish and remove from the Premises all Permitted Non-Structural Alterations
and shall deliver up to Landlord the Premises in its condition following the
completion of the Leasehold Improvements constructed in accordance with the
Working Drawings pursuant to Exhibit "C" attached hereto and made a part hereof
(unless otherwise required by Landlord by written notice to Tenant as
hereinabove provided), reasonable wear and tear excepted. All alterations,
installations, removals and restoration shall be performed in a good and
workmanlike manner so as not to damage or impair the structural integrity of the
Building and other improvements situated on the Premises. Following the
completion of all alterations, additions or improvements (including Permitted
Non-Structural Alterations). Tenant shall deliver to Landlord accurate,
reproducible "as built" plans or such alterations, additions or improvements, as
constructed. Notwithstanding anything to the contrary contained herein, it is
agreed that the use of and access to the roof of the Building is expressly
reserved to Landlord and is expressly denied to Tenant (except in order to
permit Tenant to discharge its obligation to repair, maintain and service the
HVAC unit situated on the roof of the Building and to install, repair, maintain
and remove the Telecommunications Equipment as hereinafter provided or to comply
with Tenant's other obligations under this Lease). Tenant shall not penetrate
the roof of the Building in any manner, nor install or construct any
alterations, additions or improvements thereon, nor otherwise use or occupy the
roof as any time during the Term hereof (except such use and occupation of the
roof as is necessary in order to permit Tenant to discharge its obligation to
repair, maintain and service the HVAC unit situated on the roof of the Building
and
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to install, repair, maintain and remove the Telecommunications Equipment or to
comply with other provisions of this Lease). In those circumstances where
Tenant is entitled to enter onto the roof in accordance with the preceding
sentence, Tenant shall not in any event cause the roof warranty of the Building
to be impaired or invalidated (in whole or in part).
13. Tenant shall have the right to use a portion of the roof area of the
Building, as Tenant may reasonably select (and as is reasonably acceptable to
Landlord) and as shall be permitted by any governmental laws governing the
installation, for the installation, operation, maintenance, security, repair
and replacement of satellite equipment serving the Premises and related cable
connections (the "Telecommunications Equipment"). Tenant's use of the Premises
with respect to the Telecommunications Equipment shall be subject to such
reasonable rules as Landlord may from time to time designate and to the
following additional conditions: (i) Tenant shall be solely responsible for the
installation, maintenance, repair, operation and replacement of the
Telecommunications Equipment, (ii) Tenant shall install screening around the
Telecommunications Equipment to the extent required by the recorded
restrictions applicable to the Premises, (iii) the installation, repair,
maintenance and placement of the Telecommunications Equipment shall in all
events be subject to (and in compliance with) the terms of all, deed
restrictions, and covenants, conditions and restrictions affecting the Project
and the requirements of the "Alliance Development Guidelines" as the same may
exist from time to time, and (iv) any penetration of the roof shall be done
only by Landlord's roofing contractor (at Tenant's expense). Prior to the
expiration or termination of the Term (or termination of Tenant's right of
possession under this Lease), Tenant shall remove the Telecommunications
Equipment and repair any damage to the Premises caused by such removal. The
cost of such installation, maintenance, repair, operation and replacement and
repairing any damage to the Premises arising from such removal and restoration
shall be paid by Tenant on demand.
8. SIGNS. Any signage, decorations, advertising media, blinds, draperies,
window treatment, bars, and security installations Tenant desires for the
Premises shall be subject to Landlord's prior written approval, which approval
shall not be unreasonably withheld, and shall be submitted to Landlord prior to
the Commencement Date, Tenant shall repair, paint, and/or replace the Building
facia surface to which its signs are attached upon vacation of the Premises, or
the removal or alteration of its signage, all at Tenant's sole cost and
expense. Tenant shall not (i) make any changes to the exterior of the Premises,
(ii) install any exterior lights, decorations, balloons, flags, pennants,
banners or painting, or (iii) erect or install any signs, windows or door
lettering, placards, decorations or advertising media of any type which can be
viewed from the exterior of the Premises, without Landlord's prior written
consent, which consent shall not be unreasonably withheld. All signs,
decorations, advertising media, blinds, draperies and other window treatment or
bars or other security installations visible from outside the Premises shall
conform in all respects to the criteria established by Landlord and to the
requirements of all convenants, conditions and restrictions applicable to the
Premises and the Building (including, but not limited to, approval by the
Development Review Board). Landlord hereby approves the specifications for
Tenant's signage attached hereto as Exhibit "C-4" and made a part hereof.
9. UTILITIES. Tenant shall timely pay for all 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 pertaining to the Tenant's use of the Premises, and any
maintenance charges for utilities. Tenant shall pay all impact or other fees
associated with utility hook-ups, meter installations or services to the
Premises. Landlord shall cause all of said services to be separately metered
to Tenant. Landlord shall not be liable for any interruption or failure of
utility service on the Premises, unless Landlord's intentional or negligent
acts or omissions caused such interruption or failure.
10. INSURANCE.
A. Landlord shall maintain insurance covering the Building of which the
Premises are a part in an amount not less than the "replacement cost" thereof
insuring against the perils and costs of Fire, Lightning, Extended Coverage,
Vandalism and Malicious Mischief. Landlord shall carry such additional insurance
as would be carried by a reasonably prudent owner of comparable premises, and,
at Tenant's request, Landlord shall provide Tenant with evidence of such
insurance. Such coverage shall be obtained on commercially reasonable terms
from an
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insurance company having a Best's rating of A/VII or better and licensed to do
business in the State of Texas. To the extent that the insurance coverage
maintained by Landlord pursuant to this Section 10A is carried under a blanket
policy that insures property owned by Landlord or its affiliates, in addition to
the Project, the cost of such insurance shall be allocated to the Project on a
reasonable and equitable basis. It is agreed that the general liability
insurance policy carried by Landlord, as contemplated by this Paragraph 10A,
shall provide that it shall provide primary coverage when any policy issued to
Tenant is similar or duplicate in coverage, and Tenant's policy shall be excess
over Landlord's policies.
B. Tenant, at its own expense, shall maintain during the Term of this
Lease a policy or policies of worker's compensation and comprehensive general
liability insurance, including personal injury and property damage, with
contractual liability endorsement, in the amount of Two Million Dollars
($2,000,000.00) for property damage and Two Million Dollars ($2,000,000.00) per
occurrence for personal injuries or deaths of persons occurring in or about the
Premises. Tenant, at its own expense, also shall maintain during the Term of
this Lease fire and extended coverage insurance covering the replacement cost of
all alterations, additions, partitions and improvements installed or placed on
the Premises by Tenant or by Landlord on behalf of Tenant, and all of Tenant's
personal property contained within the Premises. Said policies shall (i) name
Landlord as an additional insured and insure Landlord's contingent liability
under this Lease (except for the worker's compensation policy, which instead
shall include a waiver of subrogation endorsement in favor of Landlord), (ii) be
issued by an insurance company which is licensed to do business in the State of
Texas and which has a Best's rating of A/VII or better, and (iii) provide that
said insurance shall not be cancelled unless thirty (30) days prior written
notice shall have been given to Landlord. In addition, such insurance provided
by Tenant shall provide that it shall provide primary coverage when any policy
issued to Landlord is similar or duplicate in coverage, and Landlord's policy
shall be excess over Tenant's policies. All Insurance policies carried by Tenant
hereunder shall expressly provide (by endorsement or otherwise) that Landlord's
rights thereunder shall be assignable to Landlord's mortgagee who shall be shown
as an additional insured thereon. Said policy or policies or certificates
thereof shall be delivered to Landlord by Tenant upon commencement of the Term
of the Lease and upon each renewal of said insurance. Notwithstanding the
foregoing, Tenant may elect to self-insure the risk a damage to its personal
property situated at the Premises (but not the Leasehold Improvements or
liability insurance) so long as (i) Tenant gives Landlord at least thirty (30)
days' prior written notice thereof, and (ii) Tenant's net worth (determined in
accordance with generally accepted accounting principles consistently applied)
is $50,000,000 or greater during the period in which Tenant so elects to
self-insure. Self-insurance by Tenant pursuant to the foregoing sentence shall
be deemed to be insurance for the purpose of the mutual waiver of subrogation
contained herein.
C. Tenant will not permit the Premises to be used for any purpose or in
any manner that would (i) void the insurance thereon, (ii) increase the
insurance risk, or (iii) cause the disallowance of any sprinkler credits,
including without limitation, use of the Premises for the receipt, storage or
handling of any product, material or merchandise that is explosive or highly
inflammable. If any increase in the cost of any insurance on the Premises or the
Building of which the Premises are a part is caused by Tenant's use of the
Premises, or because Tenant vacates the Premises, then Tenant shall pay the
amount of such increase to Landlord.
11. FIRE AND CASUALTY DAMAGE.
A. If the Premises or the Building of which the Premises are a part
should be damaged or destroyed by fire or other peril, Tenant shall promptly
give written notice to Landlord. If the Building of which the Premises are a
part should be totally destroyed by any peril, or if they should be so damaged
thereby that, in Landlord's reasonable estimation, rebuilding or repairs cannot
be completed within 180 days after the date of such damage, this Lease shall
terminate and the rent shall be abated during the unexpired portion of this
Lease, effective upon the date of the occurrence of such damage.
B. If the Building of which the Premises are a part should be damaged
by any peril, and in Landlord's reasonable estimation, rebuilding or repairs can
be substantially completed
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within 180 days after the date of such damage, this Lease shall not terminate,
and Landlord shall restore the Premises to substantially its previous condition
(except that Landlord shall not be required to rebuild, repair or replace any
part of the partitions, fixtures, additions and other improvements that may have
been constructed, erected or installed in, or about the Premises by Tenant,
including the Leasehold Improvements constructed by Tenant pursuant to Exhibit
"C"). Effective upon the date of the occurrence of such damage and ending upon
substantial completion, if the Premises are untenantable in whole or part during
such period, the rent shall be reduced to such extent as may be fair and
reasonable under all of the circumstances. If such repairs and rebuilding have
not been substantially completed within 180 days after the date of such damage
(subject to Force Majeure Delays [hereinafter defined] and any delays caused by
Tenant or its employees, agents or contractors), Tenant, as Tenant's exclusive
remedy, may terminate this Lease by delivering written notice of termination to
Landlord in which event all rights and obligations hereunder shall cease and
terminate (except as expressly provided to the contrary herein).
C. [Intentionally omitted.]
D. Landlord and Tenant hereby waive and release each other (but only to
the extent of the insurance coverage required to be maintained by the respective
parties hereunder) of and from any and all rights of recovery, claim, action or
cause of action, against each other, their agents, officers and employees, for
any liability, loss or damage that may occur to the Premises, improvements or
the Building of which the Premises are a part, or personal property (building
contents) within the Building and/or Premises as the result of any fire or other
casualty required to be insured against under this Lease. Each party to this
Lease agrees immediately after execution of this Lease to give each insurance
company, which has issued to it policies of fire and extended coverage
insurance, written notice of the terms of the mutual waivers contained in this
subparagraph and to have the insurance policies properly endorsed to reflect
such waivers. This Paragraph 11D overrides any provisions in this Lease to the
contrary.
12. LIABILITY AND INDEMNIFICATION. EACH PARTY ("INDEMNIFYING PARTY")
SHALL INDEMNIFY, PROTECT, HOLD HARMLESS AND DEFEND THE OTHER PARTY ("INDEMNIFIED
PARTY"), ITS AGENTS, EMPLOYEES, CONTRACTORS, PARTNERS, DIRECTORS, OFFICERS AND
ANY AFFILIATES OF THE ABOVE-MENTIONED PARTIES (COLLECTIVELY THE "INDEMNIFIED
AFFILIATES") FROM AND AGAINST ANY AND ALL, OBLIGATIONS, SUITS, LOSSES,
JUDGMENTS, ACTIONS, DAMAGES, CLAIMS OR LIABILITY (INCLUDING, WITHOUT LIMITATION,
ALL COSTS, REASONABLE ATTORNEYS' FEES, AND EXPENSES INCURRED IN CONNECTION
THEREWITH) IN CONNECTION WITH ANY LOSS, INJURY OR DAMAGE (I) TO ANY PERSON OR
PROPERTY WHATSOEVER OCCURRING IN, ON OR ABOUT THE PREMISES OR ANY PART
THEREOF AND/OR THE BUILDING, WHEN SUCH INJURY OR DAMAGE SHALL BE CAUSED BY THE
ACT, NEGLECT, FAULT OF, OR OMISSION OF ANY DUTY WITH RESPECT TO THE SAME BY THE
INDEMNIFYING PARTY, OR (II) ARISING FROM A BREACH OR VIOLATION BY THE
INDEMNIFYING PARTY OF ANY COURT ORDER OR ANY LAW, REGULATION, OR ORDINANCE OF
ANY FEDERAL, STATE OR LOCAL AUTHORITY (COLLECTIVELY, THE "LOSSES"), EXCEPT TO
THE EXTENT THE LOSSES ARE CAUSED WHOLLY OR IN PART BY THE NEGLIGENCE OR
INTENTIONAL MISCONDUCT OF THE INDEMNIFIED PARTY AND/OR THE INDEMNIFIED
AFFILIATES. IF ANY CLAIM IS MADE AGAINST EITHER PARTY OR THE INDEMNIFIED
AFFILIATES, THE INDEMNIFYING PARTY, AT ITS SOLE COST AND EXPENSE, SHALL DEFEND
ANY SUCH CLAIM, SUIT OR PROCEEDING. THE PROVISIONS OF THIS PARAGRAPH 12 SHALL
SURVIVE THE EXPIRATION OR TERMINATION OF THIS LEASE WITH RESPECT TO ANY
CLAIMS OR LIABILITY OCCURRING PRIOR TO SUCH EXPIRATION OR TERMINATION.
13. USE. Tenant may use the Premises for general office purposes,
specifically including, but not limited to conducting the sale of stocks, bonds
and other investments to public via phone and the Internet, and for such
other lawful purposes as may be incidental thereto (the "Permitted Use"). Tenant
shall have full access to the Premises on a twenty-four (24) hour
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per day 365 day per year basis, subject to the Lease terms and conditions and
loss of access due to fire, casualty, condemnation, or other causes beyond
Landlord's control. Outside storage, including without limitation, storage of
trucks and other vehicles (other than the occasional temporary outdoor storage
of a maximum of ten (10) delivery and general transportation vehicles) is
prohibited without Landlord's prior written consent, which consent shall not be
unreasonably withheld, Tenant shall comply with (i) all governmental laws,
ordinances and regulations applicable to its specific use and occupancy of the
Premises (as opposed to governmental laws, ordinances and regulations applicable
to real estate generally and for which Landlord is liable, the cost of complying
with same being subject to, inclusion within Reimbursable Expenses in accordance
with the terms hereof as amortized pursuant to Paragraph 2D), and promptly shall
comply with all governmental orders and directives for the correction,
prevention and abatement of nuisances in or upon, or connected with, the
Premises, all at Tenant's sole expense, (ii) the requirements of all deed
restrictions, restrictive covenants and other covenants, conditions and
restrictions affecting the Building and/or the Land, and (iii) the requirements
of "Alliance Development Guidelines" as may exist from time to time, and all
amendments thereto; provided, however, that future amendments to the "Alliance
Development Guidelines" must (i) not materially interfere with Tenant's
Permitted Use, (ii) receive uniform enforcement, (iii) be delivered to Tenant in
writing, and (iv) if such amendments conflict with the Lease terms, the Lease
shall control. Tenant shall not permit any objectionable or unpleasant odors,
smoke, dust, gas, noise or vibrations to emanate from the Premises, nor take any
other action that would constitute a nuisance or would disturb, unreasonably
interfere with, or endanger Landlord.
Landlord hereby represents that the Permitted Use is not prohibited by
the covenants, conditions and restrictions recorded in Volume 10711, Page 2285
of the real property records of Tarrant County, Texas.
14. INSPECTION. Landlord and Landlord's agents and representatives
shall have the right to enter the Premises at any time, upon twenty-four (24)
hours' notice, to (i) inspect the Premises, (ii) make such repairs as may be
required or permitted pursuant to this Lease, and (iii) show the Premises to
prospective purchasers of, or parties who are anticipated to provide financing
with respect to, the Building. Notwithstanding the foregoing, Landlord shall
have the right to enter the Premises at any time, upon such notice (if any) as
may be reasonable under the circumstances, in case of an emergency posing a
threat to persons or property. During the period that is six (6) months prior to
the end of the Lease Term, upon telephonic notice to Tenant, Landlord and
Landlord's representatives may enter the Premises during business hours for the
purpose of showing the Premises. In addition, Landlord shall have the right to
erect a suitable sign on the Premises stating the Premises are available. Tenant
shall notify Landlord in writing at least thirty (30) days prior to vacating the
Premises and shall arrange to meet with Landlord for a joint inspection of the
Premises prior to vacating. If Tenant fails to give such notice or to arrange
for such inspection, then Landlord's inspection of the Premises shall be deemed
correct for the purpose of determining Tenant's responsibility for repairs and
restoration of the Premises.
15. ASSIGNMENT AND SUBLETTING
A. Tenant shall not assign (either voluntarily, nor permit assignment
by operation of law), sublet, transfer or encumber this Lease, or any interest
therein, without the prior written consent of Landlord; provided, however,
Tenant may assign this Lease or sublet the Premises to any entity that controls,
is controlled by, or is under common control with Tenant (individually, an
"Affiliate"). Landlord agrees that it shall not unreasonably withhold its
consent to any assignment or subletting proposed to be entered into by Tenant.
In considering whether it should consent to any subletting or assignment
requested by Tenant, Landlord may take into consideration (among other factors)
the credit standing of the proposed assignee or subtenant, the purpose for which
the Premises would be used by the proposed assignee or subtenant (including
whether such use would violate any exclusive use rights in existence today, and
those that might then be in existence and of which Tenant has been given written
notice, and by which Landlord may be bound, or violate any deed restrictions,
restrictive covenants, covenants, conditions and restrictions, or the "Alliance
Developments Guidelines," as may then be in existence, it being understood and
agreed that Landlord shall have the right to refuse its consent if the proposed
use by the assignee or subtenant would result in any such violation), the length
of the proposed sublease, the business reputation
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the proposed assignee or subtenant, whether the proposed assignee's or
subtenant's operations would involve use of hazardous substances, and all other
relevant factors. Any attempted assignment, subletting, transfer or encumbrance
by Tenant in violation of the terms and covenants of this Paragraph shall be
void. No assignment, subletting or other transfer, whether consented to by
Landlord or not, shall relieve Tenant of its liability hereunder. In the event
Tenant desires to sublet the Premises, or any portion thereof, or assign this
Lease, Tenant shall give written notice thereof to Landlord at least thirty (30)
days prior to the proposed commencement date of such subletting or assignment,
which notice shall set forth the name of the proposed subleases or assignee, the
relevant terms of any sublease or assignment and copies of financial reports and
other relevant financial information of the proposed sublessee or assignee. If
Landlord does not respond to Tenant's request to assign, sublet, encumber or
transfer this Lease within thirty (30) days after Landlord's receipt of such
request (which request shall be accompanied by the additional information
referenced in the immediately preceding sentence), Landlord's consent shall be
deemed granted. Landlord shall be entitled to charge Tenant a reasonable fee for
processing Tenant's request for any subletting or assignment, including, but not
limited to, Landlord's reasonable out-of-pocket expenses and attorneys' fees.
B. In addition to, but not in limitation of, Landlord's right to
approve of any sublessee or assignee, Landlord shall have the option, in its
sole discretion, in the event of any proposed subletting or assignment, to
terminate this Lease, Or in case of a proposed subletting of less than the
entire Premises, to recapture the portion of the Premises to be sublet, as of
the date the subletting or assignment is to be effective. The option shall be
exercised, if at all, by Landlord giving Tenant written notice thereof within
thirty (30) days following Landlord's receipt of Tenant's written notice as
required above. If this Lease shall be terminated with respect to the entire
Premises pursuant to this Paragraph, the Term of this Lease shall end on the
date stated in Landlord's notice as the effective date of the sublease or
assignment as if that date had been originally fixed in this Lease for the
expiration of the Term hereof; provided, however, that effective on such date
Tenant shall pay Landlord all amounts, as reasonable estimated by Landlord,
payable by Tenant to such date with respect to taxes, insurance, repairs,
maintenance, restoration and other obligations, costs or charges which are the
responsibility of Tenant hereunder. Further, upon any such cancellation Landlord
and Tenant shall have no further obligations or liabilities to each other under
this Lease, except with respect to obligations or liabilities which have accrued
hereunder as of such cancellation date (in the same manner as if such
cancellation date were the date originally fixed in this Lease for the
expiration of the Term hereof) and except for those obligations and liabilities
which, by the express terms of this Lease, are to survive any expiration or
termination hereof. If Landlord recaptures only a portion of the Premises under
this Paragraph, the Base Rent during the unexpired Term hereof shall abate
proportionately based on the rent per square foot contained in this Lease as of
the date immediately prior to such recapture. Tenant shall, at Tenant's own cost
and expense, discharge in full such commissions which may be due and owing as a
result of any proposed assignment or subletting, whether or not the Premises are
recaptured pursuant hereto and rented by Landlord to the proposed tenant or any
other tenant.
C. Upon the occurrence of an assignment or subletting, whether or not
consented to by Landlord, or mandated by judicial intervention, Tenant hereby
assigns, transfers and conveys to Landlord all rents or other sums received or
receivable by Tenant under any such assignment or sublease, which are in excess
of the rents and other sums payable by Tenant under this Lease (or in case of a
sublease, which are in excess of the rents and other sums payable by Tenant with
respect to the portion of the Promises that is subleased), and agrees to pay
such amounts to Landlord within ten (10) days after receipt.
D. If this Lease is assigned to any person or entity pursuant to the
provisions of the United States Bankruptcy Code, 11 U.S.C. Section 101 et. seq.
(the "Bankruptcy Code"), any and all monies or other consideration payable or
otherwise to be delivered in connection with such assignment shall be paid or
delivered to Landlord, shall be and remain the exclusive property of Landlord
and shall not constitute property of Tenant or of the estate of Tenant within
the meaning of the Bankruptcy Code. Any and all monies or other considerations
constituting Landlord's property under the preceding sentence not paid or
delivered to Landlord shall be held in trust for the benefit of Landlord and be
promptly paid or delivered to Landlord. Any person or entity to which this Lease
is assigned pursuant to the provisions of the Bankruptcy Code, shall be
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deemed, without further act or deed, to have assumed all of the obligations
arising under this Lease on and after the date of such assignment. Any such
assignee shall upon demand execute and deliver to Landlord an instrument
confirming such assumption.
E. Any assignee, sublessee or transferee of Tenant's interest in this
Lease (all such assignees, sublessees and transferees being hereinafter referred
to as "Transferee(s)"), by accepting any such assignment, sublease or transfer
shall be deemed to have assumed Tenant's obligations hereunder, and shall be
deemed to have assumed liability to Landlord for all amounts paid to persons
other than Landlord by such Transferees. No assignment, subletting or other
transfer, whether consented to by Landlord or not or permitted hereunder, shall
relieve Tenant of its liability hereunder. If an Event of Default occurs while
the Premises or any part thereof are assigned or sublet, then Landlord, in
addition to any other remedies herein provided, or provided by law, may collect
directly from such Transferee all rents payable to the Tenant and apply such
rent against any sums due Landlord hereunder. No such collection shall be
construed to constitute a novation or a release of Tenant from the further
performance of Tenant's obligations hereunder. If a Transferee defaults under
this Lease, and Landlord provides the Transferee with notice of such default,
Landlord shall simultaneously notify Tenant of the Transferee's default.
Landlord shall accept performance by Tenant with the same force and effect as
performance by Transferees.
F. The merger or consolidation of Tenant with another entity shall not
be deemed to be an assignment of this Lease by operation of law so long as the
surviving entity in any such merger or consolidation has a net worth (determined
in accordance with generally accepted accounting principles consistently
applied) immediately following such merger or consolidation that is equal to or
greater than the net worth of Tenant immediately prior to such merger or
consolidation.
16. CONDEMNATION.
A. If due to any taking for any public or quasi-public use under
governmental law, ordinance or regulation, or by right of eminent domain, or by
a conveyance in lieu thereof ("Taking") (i) any portion of the parking areas
constituting a part of the Project are taken such that, following the Taking,
the remainder of the Premises are rendered untenantable, or (ii) any portion of
the Land is taken such that access to the Building would be materially impaired
as a result of the Taking, or (iii) more than 25% of the Building is taken, or
(iv) such portion of the Building is taken as would tender the remainder of the
Premises untenantable, this Lease shall terminate upon written notice from
Tenant to Landlord sent within thirty (30) days following the Taking and the
rent shall be abated during the unexpired portion of this Lease, effective on
the date of such Taking. Notwithstanding the foregoing if Tenant gives notice of
termination as a result of a Taking pursuant to clauses (i) or (ii) above,
Landlord shall have the right (but not the obligation) to substitute an
alternative parcel of Land ("Substitute Parcel") owned by Landlord or its
affiliates, or alternative areas for such lost parking and access ("Substitute
Areas"), for the purpose of providing access and parking to Tenant in lieu of
access and parking that are lost as a result of such Taking. Landlord may give
Tenant written notice ("Substitution Notice") that Landlord so elects to provide
the Substitute Parcel or Substitute Areas for such purposes, which Substitution
Notice, if given by Landlord, shall be given within thirty (30) days after
Tenant's termination notice and shall include Landlord's offer as to a fair and
reasonable Base Rent adjustment or abatement, if any. If Landlord gives the
Substitution Notice and if the Substitution Parcel or Substitute Areas and Base
Rent adjustment or abatement are reasonably acceptable to Tenant as being a
reasonable substitute for the access and parking lost as a result of such
Taking: (i) Tenant's termination notice shall be ipso facto null and void and
this Lease shall continue in full force and effect, and (ii) the parties shall
promptly (but in all events within thirty (30) days; after the date of the
Substitution Notice) enter into an amendment to this Lease whereby (A) if a
Substitute Parcel is provided, the Substitute Parcel is substituted for the
areas so taken and (B) Tenant agrees to pay Base Rent for the Substitute Parcel
(in lieu of the Base Rent which is otherwise abated under the preceding
provisions of this Paragraph 16) at the rate proposed by Landlord.
For purposes of this Paragraph 16(A), access shall be deemed to be
"materially impaired" only if access to the Building following the Taking would
be reduced to such an extent as to
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prevent Tenant from conducting its business at the Premises in a manner
reasonably comparable to Tenant's conduct of its business at the Premises prior
to the Taking.
For purposes of this Paragraph 16(A), "untenantable" shall mean that
following the Taking the Premises would be unfit for Tenant's continued
operation of its business in a manner reasonably comparable to Tenant's conduct
of its business at the Premises prior to the Taking.
B. If this Lease is not terminated under Paragraph 16(A) above as a
result of a Taking, this Lease shall continue in full force and effect but the
rent payable hereunder during the unexpired portion of this Lease shall be
reduced to such extent as may be fair and reasonable under all of the
circumstances (but without duplication of any other rental abatement under
Paragraph 16(A) above).
C. All compensation awarded in connection with or as a result of any
condemnation proceedings affecting die Premises (or any portion thereof) shall
be the property of Landlord; and Tenant hereby assigns any interest in any such
award to Landlord. Notwithstanding the foregoing, Landlord shall have no
interest in any award made to Tenant for loss of business or goodwill or for the
taking of Tenant's fixtures and improvements (it being agreed that Tenant may
pursue such award from the condemning authority).
17. HOLDING OVER. At the termination of this Lease by its expiration or
otherwise, Tenant immediately shall deliver possession of the Premises to
Landlord with all repairs and maintenance required herein to be performed by
Tenant completed. If, for any reason, Tenant retains possession of the Premises
or any part thereof after such termination, or fails to complete any repairs
required hereby, then Landlord may, at its option, serve written notice upon
Tenant that such holding over constitutes either (i) the creation of a month to
month tenancy, upon the terms and conditions set forth in this Lease, or (ii)
creation of a tenancy at sufferance, in any case upon the terms and conditions
set forth in this 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
Tenant hereunder, whether or not as additional rent, be equal to 150% of the
rental being paid monthly to Landlord under this Lease immediately prior to such
termination (prorated in the case of (ii) on the basis of a 365-day year for
each day Tenant remains in possession). If no such notice is served, then a
tenancy at sufferance shall be deemed to be created at the rent in the preceding
sentence. Tenant shall also pay to Landlord all damages sustained by Landlord
resulting from retention of possession by Tenant, including the loss of any
proposed subsequent tenant for any portion of the Premises. The provisions of
this Paragraph shall not constitute a waiver by Landlord of any right of
re-entry as herein set forth; nor shall receipt of any rent or any other act in
apparent affirmance of the tenancy operate as a waiver of the right to terminate
this Lease for a breach of any of the terms, covenants, or obligations herein on
Tenant's part to be performed. No holding over by Tenant, whether with or
without consent of Landlord, shall operate to extend this Lease except as
otherwise expressly provided. The preceding provisions of this Paragraph 17
shall not be construed as consent for Tenant to retain possession of the
Premises in the absence of written consent thereto by Landlord.
18. QUIET ENJOYMENT. Landlord has the authority to enter into this
Lease and so long as Tenant pays all amounts due hereunder and performs all
other covenants and agreements herein set forth, Tenant shall peaceably and
quietly have, hold and enjoy the Premises for the Term hereof without hindrance
from Landlord subject to the terms and provisions of this Lease.
19. EVENTS OF DEFAULT. The following events (herein individually
referred to as an "Event of Default") each shall be deemed to be an event of
default by Tenant under this Lease:
A. Tenant shall fail to pay any installment of the Base Rent herein
reserved when due, or any other payment or reimbursement to Landlord required
herein when due, and such failure shall continue for ten (10) days after written
notice to Tenant; provided, however, Tenant shall be entitled to such notice and
opportunity to cure on only two (2) occasions during any calendar year.
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B. The Tenant shall: (i) become insolvent; (ii) admit in writing its
inability to pay its debts; (iii) make a general assignment for the benefit of
creditors; (iv) commence any case, proceeding or other action seeking to have an
order for relief entered on its behalf as a debtor or to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or of any substantial part of its property; or (v) take any
action to authorize any of the actions set forth above in this Paragraph.
C. Any case, proceeding or other action against the Tenant shall be
commenced seeking: (i) to have an order for relief entered against it as debtor
or to adjudicate it a bankrupt or insolvent; (ii) reorganization, arrangement,
adjustment, liquidation, dissolution or composition of it or its debts under any
law relating to bankruptcy, insolvency reorganization or relief of debtors;
(iii) appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its property, and such case,
proceeding or other action (a) results in the entry of an order for relief
against it which is not fully stayed within thirty (30) business days after the
entry thereof or (b) shall remain undismissed for a period of forty-five (45)
days.
D. Tenant shall (i) fail to take possession of the Premises upon
substantial completion of the Landlord's Work, (ii) vacate, desert, or abandon
all or a substantial portion of the Promises, or threaten to do so or (iii) fail
to continuously operate its business at the Premises for the Permitted Use set
forth herein, whether or not Tenant is in default in payment of the rental
payments due under this Lease (other than the temporary cessation of business
(i) while Tenant is actively renovating the Premises for a period not in excess
of six (6) months (or such longer period as Landlord may reasonably approve) or
(ii) in instances where Tenant is not renovating, for thirty (30) consecutive
days or sixty (60) days, whether or not consecutive, during any twelve-month
period).
E. Tenant shall fail to discharge any lien placed upon the Premises in
violation of Paragraph 22 hereof.
F. Tenant shall fail to comply with any term, provision or covenant of
this Lease (other than those listed above in this Paragraph 19), and shall not
cure such failure within thirty (30) days after written notice thereof to
Tenant; provided, however, if such failure cannot through the exercise of
reasonable diligence be cured within such thirty (30) days, an Event of Default
shall not be deemed to have occurred under this Paragraph 19F so long as Tenant
commences its curative efforts within such thirty (30) day period and diligently
prosecutes same to completion.
G. An "Event of Default" shall occur under that certain Lease Agreement
of even date herewith by and between Alliance Gateway No. 16, Ltd., as landlord
thereunder, and Tenant, as tenant thereunder, relating to certain promises in
the building known as, "One Ameritrade Place" (as such Lease Agreement may be
amended from time to time) ("One Ameritrade Lease").
20. REMEDIES.
A. Upon each occurrence of an Event of Default, Landlord shall have the
option to pursue, without any notice or demand, any one or more of the following
remedies and/or any other remedies to which Landlord is entitled at law or in
equity.
(1) Terminate this Lease, In which event Tenant shall
immediately surrender the Premises to Landlord. If Tenant fails to do
so, Landlord may, without any further notice and without prejudice to
any other remedy Landlord may have for possession or arrearages in
rental, enter upon and take possession of the Premises and remove
Tenant and its effects without being liable for prosecution or any
claim for damages therefor, and Tenant shall indemnify Landlord for all
loss and damage which Landlord may suffer by reason of such
termination, whether through inability to relet the Premises or
otherwise, including any loss of rental for the remainder of the Term.
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(2) If the Event of Default relates to nonpayment of Base Rent
or any other monetary sum due hereunder, terminate this Lease, in which
event Tenant's default shall be deemed a total and entire breach of
Tenant's obligations under this Lease and Tenant immediately shall
become liable for damages in an amount equal 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's
default, all sums due pursuant to Paragraph 20B below, and the unpaid
rental due as of the date of termination, over (ii) the fair market
rental value of the Premises for the balance of the Term, discounted at
the Prime Rate to the then present value. For the purposes of clause
(i) above, the components of monthly rent (other than Base Rent) for
the remainder of the Term shall be deemed to be equal to the respective
monthly amounts thereof as were due and payable during the month in
which the Lease was terminated, It is acknowledged, intended and agreed
that the amounts which Landlord is entitled to recover under this
Paragraph 20A(2) constitute liquidated damages and not a penalty for
Tenant's defaults related to nonpayment of rental. Such amounts
constitute the parties' beat, good faith, and reasonable estimate of
the damages which would be suffered by Landlord in the event any such
default occurs, the exact amount of such damages being difficult or
impractical to calculate.
(3) Enter upon and take possession of the Premises as Tenant's
agent without terminating this Lease and without being liable for
prosecution or any claim for damages therefor, and Landlord may relet
the Premises as Tenant's agent and receive the rental therefor, in
which event Tenant shall pay to 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 and
enter the Premises, without being liable for prosecution or any claim
for damages therefor, to accomplish such purpose. Tenant shall
reimburse Landlord immediately upon demand for any reasonable expenses
which Landlord incurs in thus effecting compliance with this Lease on
Tenant's behalf, together with interest thereon at the highest lawful
rate from the date Landlord incurs the expense in question until
Landlord is reimbursed therefor.
(5) Require Tenant to pay any rental in quarterly installments
in advance of each calendar quarter during the Term by certified or
cashier's check.
(6) In the event of a monetary default, without notice, alter
the locks and any other security device or devices which allow Tenant
access to the Premises or the Building of which the Premises form a
part, and Landlord shall not be required to provide a new key or right
of access to Tenant, and restrict or terminate any right to use parking
facilities associated with the Building as well as utility services to
the Premises. This Paragraph 20A(6) is intended to and shall supersede
the provisions of Section 93.002 of the Texas Property Code; provided,
however, Tenant shall be permitted access to the Premises to the extent
necessary for Tenant to maintain compliance with applicable securities
laws.
B. Upon the occurrence of an Event of Default, in addition to any other
sum provided to be paid herein, Tenant also shall be liable for and shall pay to
Landlord: (i) reasonable brokers' fees incurred by Landlord in connection with
reletting the whole or any part of the Premises, (ii) the reasonable costs of
removing and storing Tenant's or other occupant's property; (iii) the
reasonable costs of repairing, altering, remodeling or otherwise putting the
Premises into condition acceptable to a new tenant or tenants; (iv) all
reasonable expenses incurred in marketing the Premises and (v) all reasonable
expenses incurred by Landlord in enforcing or defending Landlord's rights and/or
remedies. If either party hereto institutes any action or proceeding to enforce
any provision hereof by reason of any alleged breach of any provision of this
Lease, the prevailing party shall be entitled to receive from the losing party
all reasonable attorneys' fees and all court costs in connection with such
proceeding.
C. In the event Tenant fails to make any payment due hereunder within
five (5) days of the payment due date, to help defray the additional cost to
Landlord for processing such late
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payments, Tenant shall pay to Landlord on demand a late charge in an amount
equal to three percent (3%) of such payment; and the failure to pay such amount
within five (5) days after demand therefor shall be an additional Event of
Default hereunder; provided, however, that in the case of Base Rent or the
regularly scheduled monthly payment of Reimbursable Expenses, Tenant shall be
entitled to five (5) days' notice and opportunity to, cure on two (2) occasions
during any twelve month period without incurring a late charge. The provision
for such late charge shall be in addition to all of Landlord's other rights and
remedies hereunder or at law and shall not be construed as liquidated damages or
as limiting Landlord's remedies in any manner.
D. Exercise by Landlord of any one or more remedies hereunder granted
or otherwise available shall not be deemed to be an acceptance of surrender of
the Premises by Landlord, whether by agreement or by operation of law, it being
understood that such surrender can be effected only by the written agreement of
Landlord and Tenant. Tenant and Landlord further agree that forbearance by
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 rights
in connection with that or any subsequent default.
E. The term "Prime Rate" as used herein shall mean the per annum "prime
rate" of interest as published, on the date on which this Lease is terminated in
accordance with this Paragraph 20, by The Wall Street Journal, Southwest
Edition, in its listing of "Money Rates," or if The Wall Street Journal is not
published on the date on which this Lease is terminated, then the "prime rate"
of interest as published in The Wall Street Journal on the most recent date
prior to the date on which this Lease is so terminated.
F. If Landlord fails to perform any of its obligations hereunder within
thirty (30) days after written notice from Tenant specifying in detail such
failure (or if the failure cannot be corrected, through the exercise of
reasonable diligence, within such 30-day period, if Landlord does not commence
to correct same within such 30-day period and thereafter diligently prosecute
same to completion), Tenant's sole and exclusive remedy shall be either (i) an
action for damages and Tenant may pursue a money judgment for such damages
against Landlord (subject to the last two sentences of this Paragraph 2OF or
(ii) if such failure can be cured by the payment of money, and if Tenant in its
notice to Landlord has notified Landlord that Tenant intends to cure Landlord's
failure, Tenant shall have the right to cure such failure on behalf of Landlord
and, in connection therewith, expend such reasonable sums as are reasonably
necessary to cure such failure (provided that Tenant shall not have the right to
make any repairs or modifications to areas, facilities or systems outside the
Land (such as, without limitation, electrical, plumbing, water, sewer and
sprinkler systems) that specifically serve premises leased to other tenants).
Unless and until Landlord fails to so cure any default after such notice within
the time periods set forth above, Tenant shall not have any remedy or cause of
action by reason thereof. In the event Tenant exercises its rights under clause
(ii) of this Paragraph 20F, then Landlord agrees to reimburse Tenant for all
reasonable out-of-pocket costs so expended by Tenant in curing any such failure
of Landlord together with interest thereon at the highest lawful rate from the
date Tenant incurs the expense in question until Tenant is reimbursed therefor,
within ten (10) days after Landlord receives a bill therefor (which bill shall
set forth in reasonable detail the costs for which compensation is claimed);
provided, however, if Landlord fails to so reimburse Tenant within thirty (30)
days after such request for payment, Tenant may deduct such amounts from Base
Rent until the full amount has been satisfied (provided that in no event shall
the amount so deducted from any individual monthly installment of Base Rent
exceed 50% of such monthly amount of Base Rent). All notices by Tenant to
Landlord under this Paragraph 20F shall simultaneously be given by Tenant to the
holders of any first mortgage or second mortgage on the Premises, provided
Tenant has been given notice of the names and addresses of such mortgagees. Any
mortgagee shall have the right, but not the obligation, to cure, or commence to
cure, any default of Landlord, find Tenant shall accept performance by any
mortgagee with the same force and effect as performance by Landlord. In no event
shall Tenant have the right to offset or deduct any sums or damages which are
owed by Landlord to Tenant against any amounts that are owed by Tenant to
Landlord hereunder, except as provided in the preceding provisions of this
Paragraph 20F. All obligations of Landlord hereunder will be construed as
covenants, not conditions; and subject to Paragraph 24B all such obligations
will be binding upon Landlord only during the period of its possession of the
Premises and not thereafter. The term "Landlord" shall mean only the owner, for
the time being of the Premises,
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and subject to Paragraph 24B in the event of the transfer by such owner of its
interest in the Premises, such owner shall thereupon be released and discharged
from all covenants and obligations of the Landlord thereafter accruing, but such
covenants and obligations shall be binding during the Lease Term upon each new
owner for the duration of such owner's ownership. Notwithstanding any other
provision hereof, Landlord shall not have any personal liability hereunder. In
the event of any breach or default by Landlord of any term or provision of this
Lease, Tenant agrees to look solely to the equity or interest then owned by
Landlord in the Promises or of the Building of which the Premises are a part;
however, in no event, shall any deficiency judgment or any money judgment of any
kind be sought or obtained against any Landlord.
G. If Landlord repossesses the Premises pursuant 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 the furniture, fixtures and equipment at the
Premises, including that which is owned by or leased to Tenant at all times
prior to any repossession thereof by any landlord thereof or third party having
a lien thereon. Landlord also shall have the right to relinquish possession of
all or any portion of such furniture, fixtures, equipment and other property to
any person ("Claimant") who presents to Landlord a copy of any instrument
represented by Claimant to have been executed by Tenant (or any predecessor of
Tenant) granting Claimant the right under various circumstances to take
possession of such furniture, fixtures, equipment or other property, after
Landlord has made a reasonable inquiry into the authenticity or legality of said
instrument. The rights of Landlord herein stated shall be in addition to any and
all other rights that Landlord has or may hereafter have at law or in equity;
and Tenant stipulates and agrees that the rights herein granted Landlord are
commercially reasonable.
H. Notwithstanding anything in this Lease to the contrary, all amounts
payable by Tenant to or on behalf of Landlord under this Lease, whether or not
expressly denominated as rent, shall constitute rent.
I. Notwithstanding anything to the contrary contained herein, if an
Event of Default exists hereunder solely because of the event described in
Paragraph 19(D) of this Lease (i.e., no other Event of Default exists under this
Lease except for the Event of Default described in said Paragraph 19(D)), and so
long as Tenant keeps the Premises secure from vandalism and unauthorized users,
Landlord's sole remedy on account of such Event of Default shall be to terminate
this Lease following ten (10) days' notice to Tenant and provided Tenant has not
fully remedied such Event of Default within such ten (10) day period (without
pursuing any damages against Tenant and without Tenant being required to
indemnify Landlord against any damages suffered as a result of any such
termination) in which event this Lease shall terminate and the parties shall
have no further rights or obligations hereunder (other than such rights and
obligations as have accrued as of the effective date of such termination and
such rights and obligations as are expressly provided herein as surviving the
expiration or termination of this Lease). The limitation on Landlord's remedies
contained in the immediately preceding sentence shall not apply if another Event
of Default (in addition to the Event of Default described in Paragraph 19(D))
exists, or if Tenant fails to so keep the Premises secure from vandalism and
unauthorized users, in which event Landlord shall be entitled to pursue any one
or more of its remedies under this Lease, at law and/or in equity.
21. MORTGAGES. Tenant accepts this Lease subject and subordinate to any
mortgages and/or deeds of trust now or at any time hereafter constituting a lien
or charge upon the Premises or the improvements situated thereon; provided,
however, that if the mortgagee, trustee, or holder of any such mortgage or deed
of trust elects 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 Lease shall be deemed superior to such lien, whether this Lease was
executed before or after said mortgage or deed of trust. Landlord agrees to
promptly obtain and deliver to Tenant a subordination non-disturbance and
attornment agreement in substantially the form attached hereto as Exhibit "G"
and made a part hereof ("SNDA") executed by Landlord's current mortgagee with
respect to the Land. Tenant agrees to enter into the SNDA with such mortgagee
promptly upon Landlord's request therefor. Notwithstanding the foregoing, the
subordination of this Lease to any mortgage or deed of trust that is hereafter
placed upon the Land is expressly conditioned upon Tenant and the mortgagee or
beneficiary under any such mortgage or deed of
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trust entering into an SNDA in a form reasonably acceptable to Tenant (Tenant
hereby agreeing that an SNDA substantially in the form that is attached hereto
as Exhibit "G" and made a part hereof is acceptable to, Tenant). Tenant agrees
to enter into such SNDA with any such mortgagee or beneficiary promptly upon
Landlord's request therefor, Tenant shall be permitted to record the SNDA in the
real property records of Tarrant County, Texas. If any future mortgagee or
beneficiary under a mortgage or deed of trust hereafter placed upon the Land
desires to subordinate its mortgage or deed of trust to this Lease, Tenant
agrees that it shall promptly execute such instrument as may be reasonably
required by such mortgagee or beneficiary in order to effect such subordination
(Tenant hereby agrees that an instrument in substantially the form of Exhibit
"H" attached hereto and made a part hereof is acceptable to Tenant).
22. MECHANIC'S LIENS. Tenant has no authority, express or implied, to
create or place any lien or encumbrance of any kind or nature whatsoever upon,
or in any manner to bind, the interest of Landlord or Tenant in the Premises or
to charge the rentals payable hereunder for any claim in favor of any person
dealing with Tenant, including those who may furnish materials or perform labor
for any construction or repairs. Tenant covenants and agrees that it will pay or
cause to be paid all sums legally due and payable by it on account of any labor
performed or materials furnished in connection with any work performed by or on
behalf of Tenant on the Premises and that it will save and hold Landlord
harmless from any and all loss, cost or expense based on or arising out of
asserted claims or liens against the leasehold estate or against the right,
title and interest of the Landlord in the Premises or under the terms of this
Lease arising from such work. Tenant agrees to give Landlord prompt written
notice of the placing of any lien or encumbrance against the Premises. If any
mechanics' or materialmen's lien ("M&M Lien") is ever asserted or placed against
or attaches to the Project or any portion thereof as a result of any act or
omission of Tenant or its agents, then in lieu of paying the claim relating to
such M&M Lien Tenant shall have the right to contest the assertion, placement or
attachment of such M&M Lien so long as (i) prior to any such contest (and no
later than thirty (30) days after such lien has been filed) Tenant at its sole
expense provides to Landlord a bond indemnifying against such M&M Lien that
complies with Chapter 53, Subchapter H of the Texas Property Code (as amended
from time to time) or its successor law, and (ii) Tenant contests such M&M Lien
diligently and in good faith; provided, however, the foregoing right of Tenant
to contest any such M&M Lien shall not impair or otherwise affect Tenant's
indemnification obligations with respect to such M&M Lien. If any lien is
asserted against 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 the removal of such lien shall be Landlord's obligation).
23. HAZARDOUS MATERIALS. Tenant shall never incorporate into, or
dispose of, at, in or under the Premises, the Building or the Land any toxic or
hazardous materials (as defined hereafter). Tenant further agrees not to use at,
place in, or store at the Premises any toxic or hazardous materials, except for
those toxic or hazardous materials that are either (a) office supplies or (b)
kitchen cleaning materials that are generally considered to be a household
cleaner and are purchased in a container not larger than one (1) gallon and then
only if (i) all such toxic or hazardous materials, supplies and materials are
properly labeled and contained, (ii) all such toxic or hazardous materials are
stored, handled, transported and disposed of in accordance with highest
accepted industry standards and all applicable laws, rules and regulations, and
(iii) if a material safety data sheet is required under applicable laws to
accompany the toxic or hazardous materials, supplies or materials, a copy of
such current material safety data sheet is provided to Landlord. For purposes of
this Lease, "toxic or hazardous materials" shall mean hazardous or toxic
chemicals or any materials containing hazardous or toxic chemicals at levels or
content which cause such materials to be classified as hazardous or toxic as
then prescribed by the highest industry standards or by the then current levels
or 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 governmental laws,
rules or regulations. In the event there is a spill of a toxic or hazardous
materials (other than permitted office supplies and kitchen cleaning supplies)
at the Premises, the Building or the Land of which Tenant is aware, Tenant shall
notify Landlord of the method, time and procedure for any clean-up and removal
of such toxic or hazardous materials; and, Landlord shall have the right to
require reasonable changes in such method, time or procedure. In the event there
is a spill of a toxic or hazardous material that comes from office supplies in
the Premises, Tenant shall notify Landlord if the spill would in any way
endanger or pose a threat to
20
<PAGE> 21
Tenant's employees, Building maintenance or custodial personnel, other Building
tenants or the general public. In the event of any breach of this provision by
Tenant or any contamination of the Premises, the Building or the Land, by
Tenant, Tenant shall pay all costs for the removal or abatement or clean-up of
any toxic or hazardous materials at the Premises, the Building and the Land. If
any lender or governmental agency shall ever require testing to ascertain
whether or not there has been any release of hazardous materials, then the
reasonable costs thereof shall be reimbursed by Tenant to Landlord upon demand
as additional charges, if the audit discloses Tenant caused the release of
hazardous materials and 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 (but in no event more often than annually at
Landlord's request) or otherwise at such times as requested by Landlord's
mortgagee, concerning Tenant's best knowledge and belief regarding the presence
of hazardous substances or materials on the Premises. In all events, Tenant
shall indemnify Landlord in the manner elsewhere provided in this Lease from any
release of hazardous materials on the Premises occurring while Tenant is in
possession or elsewhere if caused by Tenant or persons acting under Tenant.
Landlord hereby agrees to indemnify and hold Tenant harmless from and against
any and all costs of remediation, removal and clean-up (and fines and penalties
relating thereto) of and from contamination of the Land by toxic or hazardous
materials to the extent required by applicable law, which contamination exists
as of the Commencement Date as a result of the acts of Landlord or its
contractors; provided, however, Landlord's indemnification obligations shall not
apply to any such contamination to the extent it results from the acts or
omissions of Tenant, its agents, employees, licensees, invitees, contractors,
sublessees, assignees or successors in interest. This Paragraph 23 shall survive
the expiration or any termination of this Lease. Following the expiration of
this Lease and upon Tenant's providing Landlord an environmental site assessment
in form and substance reasonably satisfactory to Landlord and evidencing that
Tenant is not then in breach of this Paragraph 23, Landlord agrees to
acknowledge in writing that Tenant has been released from liability under this
Paragraph 23.
24. MISCELLANEOUS.
A. Words of any gender used in this Lease shall be held and construed
to include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires. The captions inserted
in this Lease are for convenience only and in no way define, limit or otherwise
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 covenants contained in this Lease shall
run with the land and shall apply to, inure to the benefit of, and be binding
upon, the parties hereto and upon their respective heirs, executors, personal
representatives, legal representatives, successors and assigns, except as
otherwise herein expressly provided. Landlord shall have the right to transfer
and assign, in whole or in part, its rights and obligations in the Building and
property that are the subject of this Lease. Upon any Landlord's conveyance of
the Building or the Land, and the assignment of its rights under this Lease, to
another party who assumes in writing all of the Landlord's obligations accruing
after the data of the transfer ("Successor"), such Landlord shall be released
from its obligations hereunder and the Successor shall become the "Landlord"
hereunder from and after the date of any such conveyance and assignment and
shall thereafter have all of the rights and obligations of the Landlord
hereunder, in accordance with the terms hereof, during the period of its
ownership of the Building. Landlord agrees to provide Tenant with notice of (i)
any transfer of the Building, (ii) any transfer of Landlord's obligations
hereunder, and (iii) the identity of the Successor party, which notice shall
confirm such Successor's assumption of Landlord's obligations in accordance with
this Paragraph 24B. Each party agrees to furnish to the other, promptly upon
demand, a corporate resolution, proof of due authorization by partners, or other
appropriate documentation evidencing the due authorization of such party to
enter into this Lease.
C. Landlord shall not be held responsible for delays in the performance
of its obligations hereunder when caused by material shortages, weather, acts of
God, labor disputes, or delays beyond those normally anticipated in connection
with obtaining governmental approvals (collectively, the "Force Majeure Delays
Promptly following the occurrence of any applicable
21
<PAGE> 22
events giving rise to Force Majeure Delays, Landlord shall provide Tenant
written notice of any such delays that it intends to claim.
D. Tenant agrees, from time to time, within ten (10) days after request
by Landlord, to deliver to Landlord or Landlord's designee, a certificate of
occupancy, financial statements (which may be Tenant's publicly available
financial statements, so long as Tenant is a publicly held company) and an
estoppel certificate stating (1) this Lease is in full force and effect, (2) the
date to which rent is paid, (3) whether there is a default on the part of
Landlord or Tenant under this Lease, (4) whether Tenant has any right of offset,
claims or defenses to the performance of its obligations under this Lease, and
(5) such other factual matters pertaining to this Lease as may be reasonably
requested by Landlord. Tenant shall be entitled to make such qualifications to
the statements in such estoppel certificate as are necessary to make them
factually accurate. Tenant shall not be required to provide estoppel
certificates more frequently than four (4) times in any calendar year. If Tenant
fails to deliver the same within such ten (10) day period such certificate as
submitted by Landlord or Landlord's designee, as the case may be, shall be fully
binding on Tenant, if Tenant fails to deliver a certificate within fifteen (15)
days after receipt by Tenant of the certificate submitted by Landlord or
Landlord's designee, as the case may be.
E. This Lease constitutes the entire understanding and agreement of the
Landlord and Tenant with respect to the subject matter of this Lease, and
contains all of the covenants and agreements of Landlord and Tenant with respect
thereto. Landlord and Tenant each acknowledge that no representations,
inducements, promises or agreements, oral or written, have been made by Landlord
or Tenant, or anyone acting on behalf of Landlord or Tenant, which are not
contained herein, and any prior agreements, promises, negotiations, or
representations not expressly set forth in this Lease are of no force or effect.
This Lease may not be altered, changed or amended except by an instrument in
writing signed by both parties hereto.
F. All nonmonetary obligations of Tenant hereunder not fully performed
as of the expiration or earlier termination of the Term of this Lease, and all
monetary obligations of Tenant of which Tenant receives notice from Landlord
within thirty (30) days thereafter, shall survive the expiration or earlier
termination of the Term hereof, including without limitation, all payment
obligations with respect to taxes and insurance and all obligations concerning
the condition and repair of the Premises. Upon the expiration or earlier
termination of the Term hereof, and prior to Tenant vacating the Premises,
Tenant shall pay to Landlord any amount reasonably estimated by Landlord (with
evidence from an independent inspector reasonably satisfactory to Tenant) as
necessary to put the Premises, including without limitation, all heating and air
conditioning systems and equipment thereon, in good condition and repair,
reasonable wear and tear excluded. Tenant shall also, prior to vacating the
Premises, pay to Landlord the amount, as reasonably estimated by Landlord, of
Tenant's obligation hereunder for real estate taxes and insurance premiums,
common area maintenance, utility and other charges for the year in which the
Lease expires or terminates, which amount shall be prorated to the date of
termination or expiration. All such amounts shall be used and held by Landlord
for payment of such obligations of Tenant hereunder, with Tenant being liable
for any additional costs therefor within ten (10) days after demand by Landlord,
or with any excess to be returned to Tenant within ten (10) days after all such
obligations have been determined and satisfied as the case may be. Any security
deposit held by Landlord shall be credited against the amounts due from Tenant
under this Paragraph 24F.
G. If any clause or provision of this Lease is illegal, invalid or
unenforceable under present or future laws effective during the Term of this
Lease, then and in that event, it is the intention of the parties hereto that
the remainder of this Lease shall not be affected thereby, and it is also the
intention of the parties to this Lease that in lieu of each clause or provision
of this Lease that is illegal, invalid or unenforceable, there be added, as a
part of this Lease, a clause or provision as similar in terms to such illegal,
invalid or unenforceable clause or provision as may be possible and be legal,
valid and enforceable.
H. All references in this Lease to "the date 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.
22
<PAGE> 23
I. Each party represents and warrants to the other party that it has
dealt with no broker, agent or other person in connection with this transaction
and that no broker, agent or other person brought about this transaction, other
than the broker or agent identified in the Basic Lease Information, and each
party agrees to indemnify and hold the other party harmless from and against any
claims by any other broker, agent or other person claiming a commission or other
form of compensation by virtue of having dealt with the indemnifying party with
regard to this leasing transaction.
J. If and when included within the term "Landlord", 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 a notice
specifying some individual at some specific address for the 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 a notice
specifying some individual at some specific address 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 with the
provisions of Paragraph 25 hereof to the same effect as if each had received
such notice.
K. By taking possession of the Premises, Tenant shall be deemed to
have: (a) acknowledged that the Premises and the improvements to be constructed
pursuant to Exhibit "C" attached hereto are substantially complete except for
those items marked by an "X" on Exhibit C-1 and "punch list" items (if any) and
are accepted "as is" and "with all faults"; (b) accepted the Premises as
suitable for the purposes for which the Premises are leased; and (c)
acknowledged that the Premises are in a good and satisfactory condition.
Landlord expressly disclaims, and Tenant hereby waives to the full extent
permitted by law, any implied warranty that the Promises or the Building are
suitable for Tenant's intended commercial purpose, and any and all other implied
warranties (whether arising by virtue of statute, case law or otherwise). The
foregoing shall not be construed to relieve Landlord from its obligations which
are expressly set forth in this Lease, including, but not limited to, Landlord's
obligations under Paragraph 5 hereof and Exhibit "C".
L. Submission of this Lease shall not be deemed to be a reservation of
the Premises. Landlord shall not be bound hereby until its delivery to Tenant of
an executed copy hereof signed by Landlord, already having been signed by
Tenant, and until such delivery Landlord reserves the right to exhibit and lease
the Premises to other prospective tenants. Notwithstanding anything contained
herein to the contrary, Landlord may withhold delivery or possession of the
Premises from Tenant until such time as Tenant has paid to Landlord the security
deposit required by Paragraph 2B hereof.
M. Landlord and Tenant agree that the financial terms and conditions of
this Lease are confidential and the parties hereto agree not to disclose the
financial terms of this Lease to any third party (other than to its attorneys
and accountants and other than to parties who propose to purchase or finance the
Building, or the Project of which the Building forms a part, or who propose to
become investors in Landlord or Tenant) except as may be required by law or by
the order of a court of competent jurisdiction. This Paragraph 24(M) supersedes
that certain agreement between the parties dated January 7, 1999, and concerning
the confidentiality of the terms and conditions of this transaction.
N. [Intentionally omitted.]
25. NOTICES. Each provision of this instrument or of any applicable
governmental laws, ordinances, regulations and other requirements with reference
to the sending, mailing or delivering of notice or the making of any payment by
Landlord to Tenant, or with reference to the sending, mailing or delivering 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 required to be made by Tenant
to Landlord hereunder shall be payable to Landlord at the address for
Landlord set forth in the Basic Lease Information or at such other
address as Landlord may specify from time to time by written notice
delivered in accordance herewith. Tenant's obligation to pay rent and
any
23
<PAGE> 24
other amounts to Landlord under the terms of this Lease shall not be
deemed satisfied until such rent and other amounts have been actually
received by Landlord. In addition to Base Rent due hereunder, all sums
of money and all payments due Landlord hereunder shall be deemed to be
additional rental owed to Landlord.
(b) All payments required to be made by Landlord to Tenant
hereunder shall be payable to Tenant at the address set forth in the
Basic Lease Information, or at such other address as Tenant may specify
from time to time by written notice delivered in accordance herewith.
(c) Any written notice or document required or permitted to be
delivered hereunder shall be deemed to be delivered, whether actually
received or not, when deposited in the United States Mail, postage
prepaid, Certified or Registered Mail, addressed to the parties hereto
at the respective addresses set out in the Basic Lease Information, or
at such other address as they have theretofore specified by written
notice delivered in accordance herewith.
26. LANDLORD'S LIEN [Intentionally omitted]
27. NAMING RIGHTS. Tenant shall have the right to refer to and
otherwise identify the Building as "Two Ameritrade Place," or any other such
similar name reasonably approved by Landlord.
28. STATE-OWNED TRACT. It is contemplated by the parties that Landlord
will attempt to acquire from the State of Texas by means of a long-term ground
lease or an outright purchase that certain property located adjacent to the
northwest corner of the Land and containing approximately 3,700 square feet, as
shown in the area designated by shading on the attached Exhibit "B" (the
"State-Owned Tract"). Approximately ten (10) to fifteen (15) parking spaces
(out of the 1,150 spaces referenced in Paragraph 1 hereof) are presently
anticipated to be provided on the State-Owned Tract; provided, however, if for
any reason Landlord is unable to lease or purchase the State-Owned Tract, upon
terms acceptable to Landlord in its sole and absolute discretion (i) Landlord
shall provide Tenant, at its sole cost and expense, with the same number of
parking spaces on the Parking Lot Tract (hereinafter defined), and (ii) the
parties shall execute an amendment to this Lease whereby Tenant's Base Rent
shall be reduced by an amount equal to one cent ($0.01) per square foot of area
in the Premises per annum.
29. ADDITIONAL PROVISIONS. See Exhibits "A" through "H: attached
hereto and incorporated by reference herein.
EXECUTED BY LANDLORD, this 19 day of March, 1999.
ALLIANCE GATEWAY NO. 17, LTD.,
A Texas limited partnership
By: Hillwood Operating, L.P.,
A Texas limited partnership,
its general partner
By: Hillwood Developing Corporation
A Texas corporation,
its general partner
By: M. THOMAS MASON
---------------------------------
Its: M. THOMAS MASON
---------------------------------
SECRETARY
24
<PAGE> 25
EXECUTED BY TENANT, this 11 day of March, 1999.
AMERITRADE HOLDING CORPORATION,
a Delaware corporation
By: /s/ SUSAN M. HOHMAN
--------------------------------
Susan Hohman
Its: Vice President of Infrastructure
and Facilities
<PAGE> 26
EXHIBIT A
AMERITRADE SITE PLAN
<PAGE> 27
EXHIBIT "B"
LEGAL DESCRIPTION
Being a tract of land situated in the F. Cuella Survey, Abstract Number 267,
and the J. Chirino Survey, Abstract Number 265, Tarrant County, Texas and being
part of that tract of land conveyed to Hillwood/Freeway, Ltd., recorded in
Volume 9581, Page 66, Deed Records of Tarrant County, Texas and a portion of
that tract of land as described by deed to Hillwood/1088, Ltd as recorded in
Volume 12268, Page 2197, said county records, and being more particularly
described by metes and bounds as follows:
COMMENCING at the northwest corner of Lot 1, Block 2, Alliance Gateway East as
recorded in Cabinet A, Slide 2423, county records, Tarrant County, Texas;
THENCE S 89 degrees 51'39"W, 733.51 feet to a 5/8 inch iron rod with yellow cap
stamped "Carter & Burgess" set at the POINT OF BEGINNING;
THENCE S 32"38'23"E, 113.14 feet;
THENCE N 59"14'27"E, 39.64 feet;
THENCE S 29"46'06"E, 161.43 feet;
THENCE S 52"13'26"E, 56.02 feet;
THENCE N 89"51'38"E, 70.83 feet;
THENCE S 00 degrees 08'21"E, 505.00 feet;
THENCE S 89 degrees 51'39"W, 894.59 feet to the beginning of a curve to the
right;
THENCE 141.54 feet along the arc of said curve to the right, through a central
angle of 90 degrees 06'27", having a radius of 90.00 feet, the long chord of
which bears N 45 degrees 05'08"W, 127.40 feet;
THENCE N 00 degrees 01'54"W, 395.70 feet to the south right-of-way line of
State Highway 170;
THENCE continuing with said south right-of-way the following bearing and
distances:
N 89 degrees 59'06"E, 80.66 feet;
N 00 degrees 20'13"W, 13.02 feet;
<PAGE> 28
N 51 degrees 03'55"W, 103.64 feet;
N 35 degrees 29'55"E, 84.51 feet;
N 59 degrees 14'12"E, 497.85 feet to the beginning of a curve to the right;
THENCE 111.88 feet along the arc of said curve to the right, through a central
angle of 00 degrees 33'37", having a radius of 11,439.14 feet, the long chord of
which bears N 58 degrees 57'33"E. 111.88 feet;
THENCE S 32 degrees 38'23"E, 223.86 feet to the POINT OF BEGINNING and
continuing 713,090 square feet or 16.370 acres of land more or less.
<PAGE> 29
EXHIBIT "C"
-----------
LEASEHOLD IMPROVEMENTS
----------------------
(Allowance)
1. LANDLORD'S WORK. Landlord shall, at its sole expense, construct the
shell portion ("Shell") of the Building in a good and workmanlike manner and in
accordance with the Shell Building Design Criteria attached hereto as Exhibit
"C-1" and made a part hereof (such work being referred to herein as the
"Landlord's Work").
2. WORKING DRAWINGS. On or before September 15, 1999, Tenant shall, at its
expense, provide to Landlord for its approval final working drawings, prepared
by DLR Group or another architect that has been approved by Landlord, of all
improvements that Tenant proposes to install in the Premises ("Leasehold
Improvements") which Leasehold Improvements are generally described on Exhibit
"C-2" attached hereto and made a part hereof; such working drawings shall
include the partition layout, ceiling plan, electrical outlets and switches,
telephone outlets, drawings or any modifications to the mechanical and plumbing
systems of the Building, and detailed plans and specifications for the
construction of the Leasehold Improvements called for under this Exhibit "C" in
accordance with all applicable governmental laws, codes, rules and regulations.
Further, if any of Tenant's proposed construction work will affect the
Building's HVAC, electrical, mechanical, plumbing systems or other central or
branch systems, then the working drawings pertaining thereto shall, at
Landlord's option, be prepared by the Building's engineer of record, whom
Tenant shall at its cost engage for such purpose. Landlord's approval of such
working drawings shall not be unreasonably withheld, provided that (a) they
comply with all applicable governmental laws, codes, rules, and regulations,
(b) such working drawings are sufficiently detailed to allow construction of
the Leasehold Improvements in a good and workmanlike manner, and (c) the
improvements depicted thereon conform to the scope of work depicted on Exhibit
"C-2" attached hereto and to the rules and regulations promulgated from time to
time by Landlord for the construction of tenant improvements (a copy of which
has been delivered to Tenant). As used herein, "Working Drawings" shall mean
the final working drawings approved by Landlord, as amended from time to time by
any approved changes thereto, and "Work" shall mean the work required to
construct and install all Leasehold Improvements to be constructed in
accordance with and as indicated on the Working Drawings. Approval by Landlord
of the Working Drawings shall not be a representation or warranty of Landlord,
and shall create no responsibility or liability on the part of Landlord, with
respect to their adequacy for any use, purpose or condition, their
completeness, design sufficiency, or compliance with any laws, rules or
regulations of governmental agencies or authorities, but shall merely be the
consent of Landlord to the performance of the Work. Tenant shall, at Landlord's
request, sign the Working Drawings to evidence its review and approval thereof.
All changes in the Work must receive the prior written approval of Landlord,
which approval shall not be unreasonably withheld so long as the changes in the
Work do not adversely affect the Shell, the Building systems, or Landlord's
timely prosecution of the Landlord's Work, and in the event of any such
approved change Tenant shall, upon completion of the Work, furnish Landlord
with an accurate, reproducible "as-built" plan (e.g., sepia) of the Leasehold
Improvements as constructed, which plan shall be incorporated into this Lease
by this reference for all purposes.
3. CONTRACTOR. The Work shall be performed only by contractors and
subcontractors whose bids have been reviewed by Landlord and who are reasonably
acceptable to Landlord. Tenant shall enter into the construction contract
("Contract") with the contractor who has been selected by Tenant and approved
by Landlord (which approval shall not be unreasonably withheld) to perform the
Work ("Contractor"). The Contract shall be in form and substance reasonably
acceptable to Landlord. The Contractor and all subcontractors shall be required
to procure and maintain (a) insurance against such risks, in such amounts, and
with such companies as Landlord may reasonably require and such Insurance
policies must name Landlord and Landlord's mortgagee as additional insureds and
(b) payment and performance bonds covering the cost of the Work and otherwise
reasonably satisfactory to Landlord. Certificates of such insurance, with paid
receipts therefor, and copies of such bonds must be received by Landlord
before the Work is commenced. The Work shall be performed in a good and
workmanlike manner that is free of defects and is in strict conformance with
the Working Drawings, shall be diligently prosecuted to completion, and shall
be performed in such a manner
C-1
<PAGE> 30
and at such times as to maintain harmonious labor relations and not to interfere
with or delay Landlord's prosecution of the Landlord's Work. The Contractor and
all subcontractors shall contact Landlord and schedule time periods during
which they may use Building facilities in connection with the Work (e.g.,
elevators, excess electricity, etc.).
4. TENANT DELAY. If a delay in the performance of the Landlord's Work
occurs (a) because of any change by Tenant to the Working Drawings, (b) because
of Tenant's failure to pay when due any expense, charge or fee due from Tenant
to Landlord pursuant to this Lease, (c) Tenant's failure to reasonably
cooperate with Landlord and its contractors, or (d) Tenant's or Tenant's agents
otherwise delay completion of the Landlord's Work for reasons other than to
enforce Tenant's rights on account of Landlord's breach of its obligations
under the Lease (including, without limitation, any delay caused by Tenant's
early occupancy of a portion of the Premises for the construction of the
Leasehold Improvements), then, any such delay shall be a "Tenant Delay".
5. TOTAL CONSTRUCTION COSTS. Tenant shall bear the entire cost of
performing the Work (including, without limitation, the cost of preparing the
Working Drawings, costs of construction, labor and materials, removing any
improvements currently in the Premises, electrical usage during construction,
additional janitorial services, general tenant signage, and related taxes and
insurance costs, all of which costs are herein collectively called the "Total
Construction Costs") in excess of the Construction Allowance (hereinafter
defined) and the A&E Fee Allowance (hereinafter defined).
6. CONSTRUCTION ALLOWANCE. Landlord shall provide to Tenant a construction
allowance ("Construction Allowance") for the purpose of defraying the cost of
constructing the Leasehold Improvements which Construction Allowance shall be
equal to the lesser of (i) the Total Construction Costs, or (ii) $3,500,000.00
($25.00 per square foot of area in the Premises).
7. ARCHITECTURAL AND ENGINEERING FEES ALLOWANCE. Separate from the
Construction Allowance, the parties acknowledge and agree that Landlord is
providing an architectural, engineering, and general space-planning fees
allowance of Two Hundred Thousand Dollars ($200,000.00) ("A&E Fee Allowance").
Tenant shall be entitled to apply the A&E Fee Allowance to pay for the cost of
the plans, specifications, construction drawings and Working Drawings
contemplated under Section 2 of this Exhibit "C" provided, however, if
Construction Allowance funds are available, then Construction Allowance funds
may be used and if so used, the amount of the Construction Allowance shall be
reduced by the amount so used. The A&E Fee Allowance shall be disbursed to
Tenant upon Tenant's providing to Landlord reasonably satisfactory evidence
that the architectural, engineering and space planning fees in question were in
fact incurred.
8. PAYMENT OF CONSTRUCTION COSTS. (a) Tenant shall cause the Contractor to
construct the Leasehold Improvements in a good and workmanlike manner, in
accordance with the Working Drawings and in compliance with all applicable
laws, codes, rules and regulations. Without limiting the generality of the
foregoing, Tenant shall, at its sole expense, obtain all building permits,
certificates of occupancy and all other approvals, permits, certificates and
other authorizations in connection with the construction of Leasehold
Improvements and the occupancy of the Premises. Tenant shall promptly pay the
Contractor, in accordance with the Contract, for all work performed pursuant
thereto and shall cause the Contractor to pay all its subcontractors,
materialmen, suppliers, and laborers in a timely manner so that no mechanic's,
materialmen's or other lien shall ever attach to the Project or any portion
thereof or any interest therein.
Landlord shall at all times have the right to enter on the Leased Premises
and inspect the progress of the Work and to supervise and coordinate such
construction activities, for the purposes and prosecution of Landlord's Work,
and so as to determine whether the Leasehold Improvements are compatible with
existing electrical, mechanical, HVAC and other Building central and branch
systems and the Landlord's quality standards. Each party agrees to reasonably
cooperate with the other party in connection with the prosecution of the work
performed by both parties and to not unreasonably interfere with the other
party's work.
C-2
<PAGE> 31
Landlord shall disburse to Tenant the then-available Construction
Allowance in periodic draws (collectively, the "Draws"), each such Draw to be
in an amount equal to (the product of (i) the total Construction Allowance,
multiplied by (ii) a fraction, the numerator of which is the value of the
portion of the Work completed from the date of the immediately preceding Draw
(or in the case of the first Draw, since the commencement of the Work) until
the date of the Draw in question (as evidenced by an architect's certificate
as described below), and the denominator of which is the Total Construction
Costs, provided that:
(i) Tenant delivers to Landlord evidence satisfactory to Landlord
that all such costs incurred in connection with the Work, and for which
Tenant is seeking reimbursement, were in fact incurred by Tenant;
(ii) Tenant delivers to Landlord on architect's certificate (on an
AIA form or another form reasonably acceptable to Landlord) issued by
Tenant's architect, as to the value of the work with respect to which such
Draw is being requested;
(iii) Tenant pays to the Contractor, concurrently with the receipt of
the Draw in question, all remaining amounts owed to the Contractor, all
subcontractors, and materialmen, suppliers and laborers through the date
of the Draw in question;
(iv) Tenant delivers to Landlord final mechanic's and materialmen's
lien waivers and releases (in form and substance acceptable to Landlord)
from the Contractor and all subcontractors, materialmen, suppliers and
laborers with respect to all work done through the date of the Draw in
question;
(v) Tenant has prosecuted construction of the Leasehold Improvements
in accordance with the Working Drawings; and
(vi) Tenant is not in default hereunder.
Landlord may, at its option, pity the Construction Allowance through one or more
checks payable jointly to Tenant and the Contractor and any subcontractors,
materialmen, suppliers and laborers to the extent of payments due to such
parties in connection with the Work. Tenant shall be liable for all Total
Construction Costs in excess of the Construction Allowance.
(b) Notwithstanding anything to the contrary contained herein, the
Construction Allowance shall not be used for (and Landlord shall have no
obligation to use or advance any portion of the Construction Allowance for) the
cost of furniture, fixtures or equipment which are not permanently attached to
the Land or the Building (including, but not limited to, tenant signage,
security systems, telephone equipment, or any other special utility service
lines needed by Tenant for its use of the Premises).
9. PARKING LOT IMPROVEMENTS. Tenant shall have the right, at its sole
cost and expense, at any time prior to the expiration of the Lease Term to
require Landlord to pave the approximately 1.39 acre tract of land more
particularly described on Exhibit "C-3" attached hereto and made a part hereof
("Parking Lot Tract" and to construct an additional parking lot thereon
("Additional Parking Lot") in accordance with (i) Landlord's plans and
specifications therefor which have been approved by Tenant in writing (which
approval shall not be unreasonably withheld) and (ii) all applicable laws.
Prior to Landlord's commencement of construction of the Additional Parking Lot,
Tenant shall pay Landlord an amount that is a reasonable estimate of the cost
of such paving and all associated landscaping, irrigation, and design expenses
to be incurred by Landlord in connection with the construction of the
Additional Parking Lot and the satisfaction of all relevant requirements of the
"Alliance Development Guidelines" and the Development Review Board (the
"Up-front Payment"). If at any time during Landlord's construction of the
Additional Parking Lot, Landlord reasonably determines that the cost of such
construction and such associated expenses will exceed the Up-front Payment by
an amount that is at least ten percent (10%) of the Up-front Payment, Landlord
shall provide Tenant with written notice of the cost increase within five (5)
business days of its awareness of such increase. Upon Landlord's completion of
the construction of the Additional Parking Lot,
C-3
<PAGE> 32
Landlord shall invoice Tenant for the actual costs and expenses incurred by
Landlord in connection with its construction of the Additional Parking Lot and
such associated costs. If the amount expended by Landlord is less than the
Up-front Payment, Landlord shall reimburse Tenant for the amount of such excess
within ten (10) days after demand. If the amount expended by Landlord is
greater than the Up-front Payment, Tenant shall pay the difference to Landlord
within ten (10) days after demand. Notwithstanding anything to the contrary
contained herein, Tenant shall not be entitled to use the Construction
Allowance or the A&E Fee Allowance in connection with such construction, and
shall not be entitled to receive any other allowance in connection with the
construction of the Additional Parking Lot.
Notwithstanding the foregoing, if Landlord constructs 10-15 parking spaces
on the Parking Lot Tract as contemplated under Paragraph 28 of the Lease then
the cost of such 10-15 spaces so constructed on the Parking Lot Tract shall be
borne exclusively by Landlord (but Tenant shall be responsible for the costs of
construction of the remaining parking on the Parking Lot Tract, as provided
above).
10. LEASE CONSTRUCTION PROVISIONS. To the extent not inconsistent with
this Exhibit, Paragraph 7 of this Lease shall govern the performance of the
Work and the Landlord's and Tenant's respective rights and obligations
regarding the improvements installed pursuant thereto.
C-4
<PAGE> 33
EXHIBIT "C-1"
ALLIANCE GATEWAY 17
SHELL BUILDING
DESIGN CRITERIA
March 2, 1999
<PAGE> 34
ALLIANCE GATEWAY 17
SHELL BUILDING
DESIGN CRITERIA
GENERAL
1. This design criteria describes the shell building.
2. Total shell building shall be approximately 140,000 square feet.
3. In addition, Landlord shall provide an interior improvement allowance
of $25.00 per square foot ($3,500,000.00) for finish out of the lease
space.
4. Approximately 1,150 parking spaces shall be provided at the
building.
SITE WORK
1. Sub-Soil Investigation
a) A soils report shall be obtained from a qualified local
geotechnical engineer. The report shall be a complete site
analysis, including recommendations for structural foundation
systems, building pad preparation, sub-grade and paving designs.
2. Site Preparation
a) All existing vegetation shall be removed from the proposed
construction area.
b) Existing unsuitable and/or organic soils, if any, shall be
stripped and removed from the building and paving areas. Excess
soils to be removed from site.
c) Soil erosion and sediment control shall be provided to the
satisfaction of local governing authorities.
3. Drainage
a) Parking areas and roadway entrances shall be drained as
required.
b) Storm drainage system shall be sized to accommodate interior
roof drainage systems.
Alliance Gateway 17 March 2, 1999
Design Criteria
-2-
<PAGE> 35
c) Storm water design shall meet all local codes and ordinances.
4. Payment
a) All automobile pavement areas shall be constructed in accordance
with geotechnical and structural engineers' recommendations. As
a minimum, the pavement shall be constructed of 3,000 psi
concrete, 5" thick, with #3 reinforcing bars 18" on center each
way. A heavy broomed finish shall be provided.
b) All truck paving and roadway entrances shall be constructed in
accordance with geotechnical and structural engineer's
recommendations As a minimum, the pavement shall be constructed
of 3,500 psi concrete, 7" thick, on a compacted subgrade with a
minimum of #3 reinforcing bars at 18" on center each way. A
heavy broomed finish shall be provided.
c) All paving shall have the construction joints and sawn control
joints caulked with an appropriate elastomeric sealant.
d) A 6" concrete curb intergral with the concrete paving shall be
provided at the roadway entrances, around truck aprons and along
all truck drives. Curbs shall be drilled at interim locations to
provide for drainage of irrigation water, if required by the
geotechnical engineer.
e) Concrete approaches shall be provided and shall conform to City
specifications.
f) Concrete curbs shall be provided adjacent to all sidewalks,
around planting areas, and at all paving perimeters.
g) All sidewalks shall be 4" thick, 3,000 psi reinforced concrete
over a 3" sand cushion and shall receive a broomed finish.
5. Site Utilities
a) Water for fire protection and domestic water use shall be
provided underground and sized to accommodated building
requirements.
b) A sanitary sewer system shall be provided and sized to
accommodate, the plumbing fixture requirements.
-3-
<PAGE> 36
c) Electric, and natural gas service shall be provided and sized to
accommodate the building requirements.
d) Conduits shall be provided for future telephone service as
provided by the tenant. Service to the building shall be
adjacent to the site, underground and have the ability to
provide voice and data transmission by way of fiber optics.
e) The tenant shall be e responsible for applying for utility
services and for paying the associated fees and deposits.
6. Landscaping
a) Landscape design, soil preparation, plants and labor shall be
included.
b) A lawn sprinkler system shall be installed at all planting
areas. Adequate freeze-proof hose bibs shall be provided off of
this system.
7. Site Lighting
a) Exterior lighting shall be provided by the use of wall-mounted
400 watt, metal halide fixtures at all wells except the office
area.
b) All site lighting shall be activated by light sensitive
photocells.
c) Pole lights shall be installed in the parking lot to provide
adequate lighting.
BUILDING
1. Excavation Backfilling and Grading
a) All cut, fill, fine grading and scraping of the site shall be
included.
b) Fill under the building shall be as specified by geotechnical
engineer and tested as directed by the geotechnical engineer.
Compaction shall be a minimum of 95% (modified Proctor method
ASTM D1557), A select fill building pad of 2' of material with a
plasticity index of maximum 8-15 shall be utilized.
c) Any areas not covered by the building or site work shall be
stabilized and graded for proper drainage and maintenance.
-4-
<PAGE> 37
2. Foundation
a) The foundation for the warehouse and office area shall be as
specified by the geotechnical engineering report.
b) Concrete pads and/or stairs shall be provided at all egress doors.
c) The dock height shall be 48" above the truck apron, measured at 2'-
6" from the building.
3. Floor Slab
a) The warehouse floor slab is to be constructed in accordance with
geotechnical and structural engineer's recommendations. As a minimum,
the floor slab shall be constructed of 6" thick, 4,000 psi reinforced
concrete. Reinforcing shall be #3 reinforcing bars, 18" on center
each way, Pad. located approximately 2" from top of slab.
b) All concrete shall have a maximum allowable slump of 5" as tested by
a qualified concrete testing agency at the site.
c) Surface flatness tolerance in the warehouse area shall be 1/8" in 10'.
d) Placement of concrete shall be done by utilizing a laser driven
screed or a hydraulic power-driven screed in accordance with the
structural engineer's recommendation.
e) Slab control joints shall be saw cut at the optimum time to help
reduce shrinkage cracking, but no less than 10 hours after the
concrete has been placed. The maximum distance between saw cut control
joints shall be 20' or an recommended by structural engineer. The
joints shall be cut a maximum width of 1/8" and one-third the depth
of the slab thickness.
f) Slab construction joints arc to be dowelled with #5 smooth bars at 18"
on center.
g) All concrete mix designs shall be provided by a structual engineer and
shall be reviewed and approved by the structural engineer and the
selected independent testing agency prior to any concrete placement.
-5-
<PAGE> 38
h) All column shall have a formed diamond or round block out that will
be poured and saw cut separately.
i) No key ways of any type shall be allowed in the floor slab.
j) A vapor barrier shall be provided under the office area.
4. Exterior Walls
a) The exterior walls of the warehouse shall be load-bearing concrete
panels formed, poured, finished and erected on-site. The contractor
shall provide panel drawings that detail the thickness of the panels,
structural reinforcing, and lifting anchors that shall be
submitted, reviewed and approved by the structural engineer.
b) Placement of a crane on the floor slab to erect exterior wall panels
is strictly prohibited. The erection of the wall panels shall be from
the exterior of the building.
c) All panel joints shall have a backer rod and be caulked on the inside
rind outside with an elastomeric caulking material.
d) The interior side of the concrete walls shall have all holes patched
and have a smooth, steel trowelled finish.
e) The exterior walls of the office area shall consist of an aluminum
"Alucabond" canopy and storefront glass system designed by the
architect and approved by the structural engineer.
5. Structure
a) The roof structure shall consist of structural steel joist girders
and bar joints supported by steel columns on the interior bays and
loadbearing masonry wall panels or steel columns on the building
perimeter.
b) The standard bay size shall be 40'x50', and the structure shall be
designed to accommodate a 24' interior clear height at the first
column line in from the perimeter wall to the bottom of the joist
structural member.
c) All structural steel shall receive one (1) shop coat of alumimum
colored paint. After erection bas been completed damaged, rusted
-6-
<PAGE> 39
or scraped metal areas shall be touched up with the same aluminum
colored point.
6. Miscellaneous Metals
a) As required, lintels, sill angles, roof frames and other miscellaneous
metals shall be provided and painted to match structural steel.
b) As required, exterior pipe handrails shall be provided at exterior
stairs.
c) Metal channel protectors shall be provided to a height of 4' at all
overhead doors.
d) An interior roof ladder with a cage shall be installed to provide
access to the roof.
7. Roof Deck and Roofing
a) The roof deck shall be a factory-painted, light gray metal deck with a
slope of approximately 1/4" per foot. After erection has been
completed, damaged, rusted or scraped metal areas shall be touched up
with the same paint.
b) The roofing system shall be a four-ply, built-up roofing system
utilizing insulation board with asphalt and gravel topping. The roof's
insulation value shall be a minimum of R-10.
c) The roof shall be drained by roof drains and interior downspouts.
Overflow scuppers shall be provided along the parapet of the
perimeter for emergency conditions.
d) The roof shall have a 10-year limited manufacturer's warranty.
8. Glass and Glazing
a) Fixed glass at the office entrance areas shall be 1/4" tempered float
glass in accordance with the building codes.
9. Doors, Frames and Hardware
a) The office main entrance doors shall be 1/4", reflective, tempered
float glass set in a prefinished anodized aluminum frame.
-7-
<PAGE> 40
b) Exterior and interior personnel doors leading into the warehouse
shall be hollow metal doors with metal frames and standard
industrial-grade hardware as manufactured by Schlage, Best, or equal.
10. Painting
a) All exterior exposed steel, such as personnel doors, handrails, pipe
bollards, etc., shall be given one (1) coat of primer and one (1) coat
of an exterior enamel paint.
b) All concrete to be painted shall receive two (2) coats of heavy-
textured paint manufactured by Thuro-Coat, or equal.
c) All parking striping shall be 4" wide with painted lines and 18'
long approximately 9'0" on center.
11. Fire Protection
a) A Class 4 wet sprinkler system shall be installed in the entire
building. Tenant responsible for extension of Fire Protection System
beyond base building design and as required for tenant's interior
improvements.
b) An underground fire protection system shall to provided as required
to meet local fire protection codes.
12. Electrical
a) Main electrical service from the utility company shall be underground
to a pad-mounted transformer (by the utility company). The service
shall be 480/277 volt, three-phase, four-wire and sized to
accommodate the building requirements. Approximate requirement will
be for 2,000 kW demand.
b) A house panel shall be installed for site lighting operation until
interior finish is provided.
-8-
<PAGE> 41
13. Additional Leasehold Improvements
Hillwood Development Corporation intends to provide only a shell building
for the warehouses and office area as described in the Design Criteria
herein. Additionally, Hillwood shall provide an improvement allowance as
above and in the lease proposal.
-9-
<PAGE> 42
EXHIBIT C
AMERITRADE MALL
<PAGE> 43
EXHIBIT C-2
[AMERITRADE SOUTHROADS LOWER LEVEL SITE PLAN]
<PAGE> 44
EXHIBIT "C-3"
LEGAL DESCRIPTION
Being a tract of land situated in the F. Cualla Survey, Abstract Number 267, and
the J. Chirino Survey, Abstract Number 265, Tarrant County, Texas and being part
of that tract of land conveyed to Hillwood/Freeway, Ltd., recorded in Volume
9581, Page 66, Deed Records of Tarrant County, Texas and being more particularly
described by motes and bounds as follows:
COMMENCING at the northwest corner of Lot 1, Block 2, Alliance Gateway East as
recorded in Cabinet A, Slide 2423, country records, Tarrant County, Texas;
THENCE, S 89 degrees 51'39"W, 146.61 feet;
THENCE, S 00 degrees 08'21"E, 250.00 feet to the POINT OF BEGINNING;
THENCE, S 89 degrees 51'39"W, 120.00 feet;
THENCE N 00 degrees 08'21"W, 505.00 feet;
THENCE N 89 degrees 51'39"E, 120.00 feet to the POINT OF BEGINNING and
containing 60,000 square feet or 1.391 acres of land more or less.
March 3, 1999
Page 1 of 1
<PAGE> 45
EXHIBIT "C-4"
ALLIANCE GATEWAY-PHASE I ASSOCIATION
13600 HERITAGE PARKWAY
SUITE 200
FORT WORTH, TX 76177
March 4, 1999
Re: Proposed Building Signage, Ameritrade
Gateway No. 16 & No. 17
Alliance Gateway, Fort Worth
Dear Jack:
The Alliance Gateway-Phase I Association's Development Review Board ("DRB") has
reviewed the conceptual building signage for Ameritrade at the above-referenced
locations. A complete package of the drawings submitted has been enclosed with
comments for your review and consideration.
Either internally illuminated individual letters or reverse channel silhouette
illuminated letter signage will be acceptable. Whichever style is selected
should be used on both buildings. Only one building mounted sign will be allowed
on each building. In both cases the signage should be positioned generally in
the upper third and corner position of the building fascia. Maximum signage
height will be 24 inches.
Signworks Design No. 16484d
- ---------------------------
o Drawing approved as noted above. The size of the lettering should
perhaps be slightly smaller on Building No. 16. This will depend ultimately
on the final elevation and wall height of Building No. 17.
Other
- -----
o All site signage including internal directional and international must
comply with the Alliance Development Guidelines.
o An Alliance site address sign will be required for both buildings. Subject
to size/color approval, Ameritrade signage copy may be used on the site
address sign as well.
Jack, you mentioned earlier today that the Ameritrade logotype actually has the
logo stacked on top of the name lettering and that this is actually how the
signage will be proposed. This arrangement will probably work fine on Building
No. 17; however, given the height of the fascia on Building No. 16, I have some
real concerns about not "stuffing" the fascia with signage and yet still keeping
the lettering large enough to be readable. We should give this careful
consideration, and it is possible that the stacked arrangement is not achievable
on Building No. 16.
<PAGE> 46
Mr. Jack Morris
March 4, 1999
Page 2
I trust this information helps you in finalizing your signage program for both
buildings, and I look forward to receiving finalized drawings.
Please let me know if I can be of any further assistance in this matter.
Sincerely,
/s/ L. RUSSELL LAUGHLIN
L. Russell Laughlin
LRL:msf
Enclosure
cc: 30-16 DRB Ameritrade
Bill Burton, HDC
<PAGE> 47
AMERITRADE
[LOGO]
INDIVIDUAL REVERSE-CHANNEL SILHOUETTE NEON
ILLUMINATED ALUMINUM LETTERS & LOGO
---------------------------------------------------
Fabricate and Install a set of 30" to 22 1/4" X 3"
deep reverse-channel silhouette letters painted
black also fabricate and install a 42" X 51 1/4" X
3" deep reverse-channel silhouette logo painted
black and [ILLEGIBLE] yellow LED. [ILLEGIBLE]
<TABLE>
<CAPTION>
Sign Location on
East Elevation
[ILLEGIBLE]
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
[ILLEGIBLE] Designer: [ILLEGIBLE] Specifications: For
- ------------------------------------------------------------------------ Shop Use Only
S Contract No: Salesperson: [ILLEGIBLE] Due Date:
WORKS ------------------------------------------------------------
[ILLEGIBLE] [ILLEGIBLE] Approved By:
------------------------------------------------------------
[ILLEGIBLE] Date: [ILLEGIBLE] Approval Date:
- ---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 48
EXHIBIT "D"
MEMORANDUM OF ACCEPTANCE OF PREMISES
This memorandum is entered into on ___________ 1999 by Alliance Gateway No.
17, Ltd. ("Landlord") and Ameritrade Holding Corporation ("Tenant"), pursuant
to Paragraph 1 of the Lease Agreement ("Lease") dated _____________, 1999
executed by Landlord and Tenant. All terms used herein have the same meanings
as in the Lease. This memorandum amends the Lease (including the Basic Lease
Information) to the extent of the matters set forth herein.
1. The Commencement Date is __________ 1999.
2. The Premises contain 140,000 square feet of area.
3. The Building contains 140,000 square feet of area.
4. Tenant's Proportionate Share is 100%.
EXECUTED BY LANDLORD, this ____ day of March, 1999.
ALLIANCE GATEWAY NO. 17, LTD.,
a Texas limited partnership
By: Hillwood Operating, L.P.,
a Texas limited partnership,
its general partner
By: Hillwood Development Corporation
a Texas corporation,
its general partner
By:
---------------------------
Its:
---------------------------
EXECUTED BY TENANT, this ____ day of March, 1999.
AMERITRADE HOLDING CORPORATION,
a Delaware corporation
By:
-----------------------------------
Susan Hohman
Its: Vice-President of Infrastructure
and Facilities
D-1
<PAGE> 49
EXHIBIT "E"
FINANCING STATEMENT
[Intentionally omitted.]
E-1
<PAGE> 50
EXHIBIT "F"
RENEWAL OPTIONS
1. GRANT OF OPTION. Provided Tenant is not then in default under
Subparagraph 19(A) of the Lease, Tenant may renew this Lease for two (2)
additional periods of five (5) years each on the same terms and conditions as
provided in this Lease (except as set forth below), by delivering written
notice of the exercise thereof to Landlord not later than twelve (12) months
before the expiration of the Term. On or before the commencement date of the
extended Term in question, Landlord and Tenant shall execute a renewal
agreement extending the Term on the same terms and conditions as provided in
this Lease, except as follows:
(a) The Base Rent payable during each such extended Term shall be the
prevailing rental rate, at the commencement of such extended Term, for
space of equivalent quality, size, utility and location in Alliance
Commerce Center, Alliance Gateway, Valwood and Centreport area, taking into
account all relevant factors including, but not limited to, the expense of
new tenant finish-out, leasing commissions, the length of the extended Term
and the credit standing of Tenant ("Market Rate"), determined in accordance
with paragraph (2) below; provided, however, that Base Rent payable during
any year of such extended Term shall in no event be less than the Base Rent
payable hereunder during the last year prior to the commencement of such
extended Term;
(b) Tenant shall have no further renewal options unless expressly
granted by Landlord in writing; and
(c) Landlord shall lease to Tenant the Premises in their then-current
condition, provided that Landlord shall continue to perform its maintenance
obligations under the Lease.
Tenant's rights under this Exhibit "F" shall terminate if (i) this Lease
or Tenant's right to possession of the Premises is terminated, (ii) Tenant
assigns any of its interest in this Lease or sublets any portion of the
Premises, unless Tenant's assignee or sublessee is an Affiliate of Tenant, or
(iii) Tenant fails to timely exercise its option under this Exhibit "F", time
being of the essence with respect to Tenant's exercise thereof. If this Lease
is renewed or extended, the word "Term" shall include the additional period
covered by the renewal or extension, and this Lease shall apply to such
additional period except as otherwise provided for herein.
2. DETERMINATION OF MARKET RENT. Upon notification from Tenant of the
exercise of a renewal option, Landlord shall within ten (10) days thereafter
notify Tenant in writing of the proposed Market Rate applicable to the renewal
term in question; Tenant shall, within ten (10) days following receipt of such
notice from Landlord, notify Landlord in writing of the acceptance or rejection
of the proposed Market Rate. If Tenant fails to respond to Landlord's
designation of Market Rate within said 10-day period, Tenant shall be deemed to
have accepted Landlord's designation of Market Rate for all purposes. In event
of rejection by Tenant, the Market Rate for the renewal term in question shall
be determined as follows:
(a) Within ten (10) days following notification of Tenant's
rejection, Landlord and Tenant shall each appoint an appraiser. Any
appraiser appointed hereunder (whether by a party hereto or by an appraiser
so appointed, as hereinafter provided) shall be impartial, have an office
in Tarrant County, shall have at least ten (10) years' experience as a real
estate appraiser of warehouse/industrial buildings in the Tarrant County
area (or shall have at least ten (10) years' experience in leasing
warehouse/industrial space in the Tarrant County area), and shall be a
member of the American Institute of Real Estate Appraisers or a successor
or similar organization of recognized national standing, some of whose
members are frequently employed for appraisal purposes by federal or state
governments. The two appraisers appointed shall meet promptly and attempt
to agree on a determination of the Market Rate for the renewal term in
question. The determination of Market Rate by the two appraisers, if they
agree, shall be binding on Landlord and
F-1
<PAGE> 51
Tenant. If the Market Rate determinations of the two appraisers differ by
an amount equal to or less than five percent (5%) of the higher of the two
determinations of Market Rate, then the Market Rate shall be equal to the
arithmetic mean of the two determinations.
(b) If the two appraisers cannot agree upon the Market Rate for the
renewal term in question within ten (10) days following their appointment,
or if their determinations of Market Rate differ by more than five percent
(5%) of the higher of the two determinations of Market Rate, then the two
appointees shall select a third appraiser, but if they are unable to agree
on a third appraiser within five (5) days, then each appraiser shall select
the names of two willing persons qualified to be appraisers hereunder and
from the four persons so named, one name shall be drawn by lot by a
representative of Tenant in the presence of a representative of Landlord,
and the person whose name is so drawn shall be the third appraiser. If
either of the first two appraisers fails to select the names of two
willing, qualified appraisers and to cooperate with the other appraiser so
that a third appraiser can be selected by lot, as aforesaid, the third
appraiser shall be selected by lot from the two appraisers which were
selected by the other appraiser for the drawing. The three appraisers so
selected shall confer and immediately proceed to determine the Market Rate
for the renewal term in question. If the three appraisers fail to agree on
such Market Rate within ten (10) days after the appointment of the third
appraiser, the average of the two determinations of Market Rate which are
closer to each other than the third determination of Market Rate shall be
the Market Rate for the renewal term in question.
(c) The appraisers selected hereunder shall deliver a signed written
report of their appraisal, or the average of the two closer appraisals, as
the case may be, to Tenant and Landlord. The fee of the appraiser initially
selected by Tenant shall be paid by Tenant, the fee of the appraiser
initially selected by Landlord shall be paid by Landlord, and the fee of
any third appraiser and any expenses reasonably incident to the appraisal
(except attorneys' fees, which shall be borne by the party incurring the
same) shall be shared equally by Tenant and Landlord. Any vacancy in the
office of the appraiser appointed by Tenant shall be filled by Tenant, any
vacancy in the office of the appraiser appointed by Landlord shall be
filled by Landlord, and any vacancy in the office of the third appraiser
shall be filled by the first two appraisers in the manner specified above
for the selection of a third appraiser.
(d) If appraisal proceedings are initiated as provided above in order
to determine the Market Rate which is applicable to the renewal term in
question, the decision and award of the appraisers as to such Market Rate
shall be final, conclusive, and binding on the parties, absent settlement
by agreement of the parties prior to the rendering by the appraisers of any
such decision and award. If the Market Rate is not finally determined prior
to the commencement of the renewal term in question, Tenant shall pay Base
Rent based upon Base Rent theretofore in effect under this Lease until the
final determination of the Market Rate for the renewal term in question
occurs as provided above. If the final determination of such Market Rate is
different from the amount paid by Tenant, Tenant shall promptly pay to
Landlord any deficiency in Base Rent or Landlord shall promptly pay to
Tenant any overpayment of Base Rent from the commencement of the renewal
term in question until such final determination.
(e) If the Market Rate for either renewal Term is established using
the appraisal mechanism set forth above, each party shall act diligently
and in good faith (and shall cause the appraiser appointed by such party to
so act) such that the Market Rate for the renewal term in question is
established at least ten (10) months prior to expiration of the then
current Term.
3. TENANT'S RIGHT OF REVOCATION. If (a) Tenant timely and effectively
exercises a renewal option in accordance with this Exhibit "F", and (b) the
appraisal procedures under paragraph (2) above are commenced, and (c) the
Market Rate determined pursuant to such procedures is finally determined, in
accordance with said paragraph (2), not later than ten (10) months prior to the
expiration of the then current Term (without giving effect to the exercise of
the renewal option in question), and (d) Tenant determines that the Market Rate
so determined
F-2
<PAGE> 52
pursuant to such procedures is higher than Tenant desires to pay, then in such
event Tenant may as its sole and exclusive remedy rescind and revoke its prior
exercise of the renewal option in question by giving Landlord written notice
thereof ("Revocation Notice") within ten (10) days after the determination of
the Market Rate but in no event later than ten (10) months prior to the
expiration of the then current Term (time being of the essence with respect
thereto). If Tenant timely and effectively give the Revocation Notice to
Landlord, (i) Tenant's prior exercise of the renewal option in question shall
be deemed revoked, rescinded and ipso facto null and void, (ii) the Term shall
expire on the date it would otherwise have expired had Tenant not exercised
such renewal option and (iii) Tenant shall not be entitled to exercise any
other renewal option that might be provided for herein.
F-3
<PAGE> 53
EXHIBIT "G"
STATE OF TEXAS )
COUNTY OF TARRANT )
SUBORDINATION, ATTORNMENT, AND NON-DISTURBANCE AGREEMENT
THIS SUBORDINATION, ATTORNMENT, AND NON-DISTURBANCE AGREEMENT (this
"Agreement") is made and entered into as of the ____ day of __________, 1999,
by and between AMERITRADE HOLDING CORPORATION, a Delaware corporation
("Tenant"), and SOUTHTRUST BANK, NATIONAL ASSOCIATION, a national banking
association ("Bank").
R E C I T A L S:
Tenant is the present tenant under that certain Lease Agreement dated
_________, 1999 (hereinafter the "Lease"), with respect to an approximately
140,000 square feet of floor space located on the parcel of real property more
particularly described in Exhibit A attached hereto and made a part hereof. The
premises demised to Tenant under the Lease, as more particularly described
therein, are referred to herein as the "Premises."
Alliance Gateway No. __, Ltd., as the landlord under the Lease (the
"Landlord"), has obtained a loan from Bank, which is secured by a first Deed of
Trust and Security Agreement covering the Premises and an Assignment of Rents
and Leases which collaterally assign to Lender all leases relating thereto.
Said Deed of Trust and Security Agreement and Assignment of Rents and Leases,
as the same may hereafter be amended, increased, renewed, extended, spread,
consolidated, severed, restated, or otherwise changed from time to time (the
consent of Tenant to which shall not be required), are referred to herein as
the "Security Instruments." As a condition to making such loan, Bank has
required that Tenant execute this instrument. The Deed of Trust and the
Assignment of Rents and Leases are recorded at Instrument No. D197202696,
Volume , Page , and Instrument No. D197202697, Volume , Page ,
respectively, of the Real Property Records of Tarrant County, Texas.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, and as an inducement to Bank to extend financing to the
Landlord, the parties hereto do mutually covenant and agree as follows:
1. SUBORDINATION. The Lease shall at all times be subject and
subordinate in all respects to the Security Instruments, the lien and security
interest imposed by the Security Instruments, and all advances made under the
Security Instruments.
2. BANK'S RIGHT TO CURE. Notwithstanding anything to the contrary in
the Lease or this Agreement, Tenant shall give written notice simultaneously to
Landlord and to Bank of any default or breach by Landlord under the Lease that
are of such a nature as to give Tenant a right to terminate the Lease, to
reduce rent, or to credit or offset any amounts against future rents. After
Bank receives such notice, Bank shall have the same time period available to
Landlord under the Lease in which to cure the breach or default by Landlord.
Bank shall have no obligation to cure (and shall have no liability or
obligation for not curing) any breach or default by Landlord.
3. NON-DISTURBANCE. So long as Tenant is not in default in the payment
of rent, additional rent, or other charges or conditions of the Lease, Tenant
shall not be disturbed by Bank in Tenant's possession, enjoyment, use, and
occupancy of the Premises during the original or any renewal term of the Lease
or any extension or modification thereof.
4. PAYMENT OF RENTS TO BANK. Upon Bank's written request and without
regard to contrary instructions from Landlord, Tenant agrees that it will make
the payments to be made by
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<PAGE> 54
Tenant under the Lease directly to Bank. Prior to the time that Bank shall
succeed to the interest of Landlord in the Premises as described in Section 5
below, receipt of such payments by Bank shall not relieve Landlord of its
obligations under the Lease nor operate to make Bank responsible for the
performance thereof, and Tenant shall continue to look solely to Landlord for
performance of such obligations.
5. ATTORNMENT. If the interest of Landlord in the Premises shall be
acquired by Bank or any other successor landlord through foreclosure, deed in
lieu of foreclosure, or by any other method, and Bank shall succeed to the
interest of Landlord under the Lease, then the Lease shall continue in full
force and effect and shall not be terminated or disturbed except in accordance
with the terms thereof. Tenant shall thereupon be bound to Bank, and Bank shall
be bound to Tenant, under all the terms, covenants, and conditions of the Lease
for the balance of the term thereof remaining, and any extensions or renewals
thereof, with the same force and effect as if Bank was the original landlord
under the Lease. Tenant does not hereby attorn to Bank as its landlord, said
attornment to be effective and self-operative without the execution of any
additional documents by the parties hereto immediately upon Bank's succeeding
to the interest of Landlord under the Lease.
6. PROTECTION OF BANK. Notwithstanding anything to the contrary in the
Lease or the Security Instruments, Bank shall not be liable for or bound by any
of the following matters:
(a) except for any default or breach of which Bank has been notified
pursuant to Section 2 hereof but has failed to cure, any default or
breach in the Landlord's obligations under the Lease occurring prior
to the time Bank succeeds to the interest of Landlord in the Premises;
(b) any payment of rent (including fixed rent, percentage rent, or
additional rent) that Tenant might have made to Landlord more than
thirty (30) days before the date such rent first due and payable under
the Lease with respect to any period after the time Bank succeeds to
the interest of Landlord in the Premises;
(c) any deposit or security which was delivered to Landlord but which was
not subsequently delivered to Bank;
(d) any material modification or material amendment to the Lease, or any
waiver of any material terms of the Lease, made without Bank's prior
written consent as required by the Security Instruments;
(e) any consensual or negotiated surrender, cancellation, or termination
of the Lease, in whole or in part, agreed upon between Landlord and
Tenant, made without Bank's prior written consent as required by the
Security Instruments; or
(f) any obligation of Landlord under the Lease to make, pay for, or
reimburse Tenant for any construction, alterations, demolition, or
other improvements or work at the Premises (other than day-to-day
maintenance and repairs and provided same shall not restrict Tenant's
right to abate Base Rent in the event of Landlord's default under the
Lease).
7. NOTICES. All notices, demands, or requests, and responses thereto,
required or permitted to be given pursuant to this Agreement shall be in
writing and shall be given or served by the United States, mail, postage
prepaid and certified with return receipt requested, or by a nationally
recognized overnight courier service, addressed as follows:
If to Bank:
SouthTrust Bank, National Association
420 North 20th Street, 11th Floor
Commercial Real Estate Group
Birmingham, Alabama 35203
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<PAGE> 55
And to:
SouthTrust Bank, National Association
230 Fourth Avenue North
Eighth Floor
Nashville, Tennessee 37219
Attn: Mr. Daniel S. Harrington
If to Tenant:
Ameritrade Holding Corporation
1005 North Ameritrade Place
Bellevue, Nebraska 68005
With copy to:
J. Andrew Rogers
Kelly, Hart & Hallman
201 Main Street, Suite 2500
Fort Worth, Texas 76102
or at such other single address in the United States as either party may by
notice in writing designate. Any notice shall be effective the next business
day after being sent by overnight courier service and five (5) business days
after being sent by certified mail (return receipt requested).
8. SUCCESSORS AND ASSIGNS. This Agreement shall bind and benefit the
parties, their successors and assigns. If Bank assigns the Security
Instruments, then upon delivery to Tenant of written notice thereof accompanied
by the assignee's written assumption of all obligations under this Agreement,
all liability of the assignor shall terminate.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between Bank and Tenant regarding the subordination of the Lease to the
Security Instruments and the rights and obligations of Tenant and Bank as to
the subject matter of this Agreement.
10. INTERACTION WITH LEASE SECURITY INSTRUMENTS. If this Agreement
conflicts with the Lease, then this Agreement shall govern as between Tenant
and Bank, including upon any attornment pursuant to this Agreement. This
Agreement supersedes, and constitutes full compliance with, any provisions in
the Lease that provide for subordination of the Lease to, or for delivery of
nondisturbance agreements by the holder of, the Security Instruments. Bank
confirms that Bank has consented to Landlord's entering into the Lease.
11. INTERPRETATION; GOVERNING LAW. The interpretation, validity, and
enforcement of this Agreement shall be governed by and construed under the laws
of the State of Texas.
12. AMENDMENTS. This Agreement may be amended, discharged, or
terminated, or any of its provisions waived only by a written instrument
executed by the party to be charged.
13. EXECUTION. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
14. WAIVER OF JURY TRIAL. THE PARTIES HERETO WAIVE ANY RIGHT TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION (INCLUDING, BUT NOT LIMITED TO, ANY
CLAIMS, CROSS-CLAIMS OR THIRD PARTY CLAIMS) ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT, THE LEASE, OR THE SECURITY INSTRUMENTS. TENANT
CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF BANK OR BANK'S COUNSEL HAS
REPRESENTED, EXPRESSLY OR
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<PAGE> 56
OTHERWISE, THAT BANK WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO
ENFORCE THIS WAIVER OF JURY TRIAL PROVISION.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
have caused this Agreement to be duly executed, as of the day and year first
above written.
TENANT:
AMERITRADE HOLDING CORPORATION,
A DELAWARE CORPORATION
By:
----------------------------------
Name: Susan Hohman
Title: Vice-President of
Infrastructure and Facilities
Date of execution:
-------------------
BANK:
SOUTHWEST BANK, NATIONAL ASSOCIATION,
A NATIONAL BANKING ASSOCIATION
By:
-----------------------------------
Name:
-------------------------------
Title:
-------------------------------
Date of execution:
-------------------
STATE OF )
-------------
COUNTY OF )
------------
This instrument was acknowledged before me on ___________, 1999 by
_________________, ____________________ of _____________________ on behalf of
____________________.
--------------------------------------
Notary Public
My commission expires:
----------------
[NOTARY SEAL]
STATE OF )
-------------
COUNTY OF )
------------
This instrument was acknowledged before me on ___________, 1999 by
___________, ______________ of SouthTrust Bank, National Association, a national
banking association, on behalf of said association.
--------------------------------------
Notary Public
My commission expires:
----------------
[NOTARY SEAL]
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<PAGE> 57
LANDLORD'S CONSENT
Landlord consents and agrees to the foregoing Agreement, which was entered
into at Landlord's request. The foregoing Agreement shall not alter, waive, or
diminish any of Landlord's obligations under the Security Instruments or the
Lease. The foregoing Agreement discharges the obligations of Bank under the
Security Instruments and related loan documents; if any, to enter into a
nondisturbance agreement with Tenant. Landlord is not a party to the foregoing
Agreement.
LANDLORD:
ALLIANCE GATEWAY NO. 17, LTD.
By: Hillwood Operating, L.P. a Texas limited
partnership, its general partner
By: Hillwood Development Corporation,
a Texas corporation, its general partner
By:
----------------------
Name:
--------------------
Title:
-------------------
STATE OF )
---------------
COUNTY OF )
--------------
This instrument was acknowledged before me on _____________, 1999, by
___________, ________________, of Hillwood Development Corporation, a Texas
corporation, the general partner of Hillwood Operating, L.P. a Texas limited
partnership, general partner of Alliance Gateway No. 17, Ltd., a Texas limited
partnership, on behalf of said partnership.
------------------------------
Notary Public
My commission expires:
--------
[NOTARIAL SEAL]
G-5
<PAGE> 58
EXHIBIT "A"
TO
SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT
[Insert legal description]
<PAGE> 59
EXHIBIT "H"
SUBORDINATION OF MORTGAGE
____________________________________, as owner and holder of a certain
promissory note dated __________, 19__, in the principal sum of ___________
Dollars and of a certain Mortgage or Deed of Trust of even date therewith and
securing the said Note, recorded on _______ in Volume _______ at Page ______,
Real Property Records, ________ County, ________ now a first lien upon the
premises more particularly demised and described in that certain Lease dated
_____________, 19__, by and between _____________________, as Lessor, and
___________________, as Lessee, and upon other property, in consideration of
such leasing and of the sum of One ($1.00) Dollar and other good and valuable
consideration, receipt of which is hereby acknowledged,
DOES hereby convenant and agree that the said Mortgage or Deed of Trust
shall be and the same is hereby made SUBORDINATE to the said Lease with the
same force and effect as if the same Lease has been executed, delivered and
recorded prior to the execution, delivery and recording of the said Mortgage or
Deed of Trust;
EXCEPT, HOWEVER, that this Subordination shall not affect nor be
applicable to and does hereby expressly exclude:
(a) The prior right, claim and lien of the said Mortgage or Deed of Trust
in, to and upon any award or other compensation heretofore or hereafter to be
made for any taking by eminent domain of any part of the said premises, and to
the right of disposition thereof in accordance with the provisions of the said
Mortgage or Deed of Trust,
(b) The prior right, claim and lien of the said Mortgage or Deed of Trust
in, to and upon any proceeds payable under all policies of fire and rent
insurance upon the said premises and as to the right of disposition thereof in
accordance with the terms of the said Mortgage or Deed of Trust, and
(c) Any lien, right, power or interest, if any, which may have arisen or
intervened in the period between the recording of the said Mortgage or Deed of
Trust and the execution of the said lease, or any lien or judgment which may
arise at any time under the terms of such lease.
This Subordination shall inure to the benefit of and shall be binding upon
the undersigned, its successors and assigns.
IN WITNESS WHEREOF, the Subordination has been duly signed and delivered
by the undersigned this _____ day of __________, 1999.
---------------------------------------
By:
-----------------------------------
Assistant Secretary
H-1
<PAGE> 60
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
Before me, a Notary Public, in and for said County, personally appeared
__________________, to me known and known to me to be the persons who, as
_____________________ of _____________________________, the entity which
executed the foregoing instrument, signed the same, and acknowledged to me that
they did so sign said instrument in the name and upon behalf of said
corporation as such officers respectively; that the same is their free act and
deed as such officers, respectively, and the free act and deed of said
corporation; that they were duly authorized thereunto by its board of trustees;
and that the seal affixed to said instrument is the corporate seal of said
corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal at [City], [State] this ____ day of ___________, 1999.
------------------------------------
Notary Public
LESSEE'S AGREEMENT
The undersigned, as Lessee under the lease herein described, does hereby
accept and agree to the terms of the foregoing Subordination, which shall inure
to the benefit of and be binding upon the undersigned and the heirs, executors,
administrators, legal representatives, successors and assigns of the
undersigned.
By:
--------------------------------
ACKNOWLEDGMENTS
INDIVIDUAL
STATE OF )
) SS:
COUNTY OF )
On this ____ day of ___________, 1999, before me personally appeared
__________________ to me personally known to be the person described in and who
executed the foregoing instrument, and acknowledged that ____________________
executed the same as their free act and deed.
------------------------------------
Notary Public
My commission expires:
------------------------------------
H-2
<PAGE> 61
CORPORATE
STATE OF )
) SS:
COUNTY OF )
On this ____ day of ___________, 1999, before me, personally appeared
__________________ to me personally known, who, being by me duly sworn, did say
he is the ______________________ of ________________________ and that the seal
affixed to the foregoing instrument is the corporate seal of said corporation,
and that the instrument was signed and sealed in behalf of said corporation by
authority of its Board of Directors, and acknowledged said instrument to be the
free act and deed of said corporation.
------------------------------------
Notary Public
My commission expires:
------------------------------------
PARTNERSHIP
STATE OF )
) SS:
COUNTY OF )
In _________________ County in said station on the ____ day of ___________,
1999, before me personally appeared __________________ as general partner of
___________________ PARTNERSHIP, to be known and known by me to be the party
executing the foregoing and the acknowledged said instrument by him executed to
be his free act and deed, and his free act and deed in his capacities as
aforesaid, and the free act and deed of _______________________ PARTNERSHIP.
------------------------------------
Notary Public
My commission expires:
------------------------------------
H-3
<PAGE> 1
EXHIBIT 10.11
LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease"),made as of the 9th day of April, 1999,
by and between IRET PROPERTIES, a North Dakota limited partnership (hereinafter
called "Landlord") and AMERITRADE HOLDING CORPORATION, a Delaware corporation
(hereinafter called "Tenant");
ARTICLE I. - BASIC TERMS
1.01 Basic Terms
(A) Address of Landlord: IRET Properties
12 South Main
Minot, North Dakota 58701
or such other address as may from time to time be designated by Landlord in
writing.
(B) Address of Tenant: Ameritrade Holding Corporation
4211 South 102nd Street
Omaha, Nebraska 68127
or such other address as may from time to time be designated by Tenant in
writing.
(C) Premises: The real property which is legally described on Exhibit "A"
attached hereto, together with Building thereon.
(D) Building: The building now located on the Premises.
(E) Lease Term: The period of time commencing on the date hereof (the
"Commencement Date") and expiring on April 30, 2019 (the "Lease Term").
"Lease Year" shall be any twelve month period commencing on May 1, 1999 or
any anniversary thereof and ending on April 30 of the next succeeding year
thereafter.
(F) Rent: All sums, moneys or payments required to be paid by Tenant to
Landlord pursuant to this Lease are collectively referred to herein as
"Rent". All sums, moneys or payments required to be paid by Tenant to
Landlord other than Base Rent are sometimes herein referred to as
"Additional Rent."
(G) Base Rent: The Base Rent during the Lease Term shall be the annual
rental as provided in the Rent Schedule set forth on Exhibit "B" attached
hereto and incorporated herein by this reference, which such amount is
payable in equal monthly installments.
<PAGE> 2
(H) Permitted Uses: For the purpose of an office building and other lawful
purposes.
(I) Exhibits: A. Legal Description of Premises
B. Rent Schedule
1.02 Effect of Reference to Basic Terms: Each reference in this Lease to any of
the Basic Terms contained in Section 1.01 shall be construed to incorporate into
such reference all of the definitions set forth in Section 1.01.
ARTICLE II. - GRANT AND LEASE TERM
2.01 Grant. In consideration of the rents, covenants, agreements and conditions
hereinafter provided to be paid, kept, performed and observed, Landlord hereby
leases to Tenant and Tenant hereby hires from Landlord the Premises described
in Section 1.01(C).
2.02 Lease Term. Tenant shall have and hold the Premises for and during the
Lease Term described in Section 1.01(E), subject to the payment of the Rent and
to the full and timely performance by Tenant of the covenants and conditions
hereinafter set forth.
ARTICLE III. - RENT
3.01 Base Rent. Except as otherwise provided in this Lease, Tenant covenants to
pay to Landlord without notice, deduction, set-off or abatement the Base Rent in
lawful money of the United States in advance on the first day of each month
during the Lease Term. Rent for any partial month shall be prorated on a per
diem basis, it being acknowledged by Landlord that Tenant has paid Rent for the
month of April, 1999. Rent shall be payable to Landlord at Landlord's address
shown at Section 1.01(A) above or such other place as Landlord may designate
from time to time in writing.
3.02 Real Estate Taxes. During the Lease Term, including any extensions or
holding over, Landlord shall pay the amount of all Real Estate Taxes when due.
"Real Estate Taxes" shall mean: (a) all ad valorem real estate taxes,
assessments, levies, impositions or charges on the Premises (adjusted after
protest or litigation, if any) for any part of the Term, exclusive of
penalties, (b) any taxes which shall be levied in lieu of any such ad valorem
real estate taxes, (c) any special assessments for benefits on or to the
Premises in annual installments by Landlord, (d) occupational taxes or
excise taxes levied on rentals derived from the operation of the Premises or
the privilege of leasing property, and (e) the expense of protesting,
negotiating or contesting the amount or validity of any such taxes, charges or
assessments, such expense to be allocable to the period of the item contested,
protested or negotiated only if there is a reduction. The provisions of this
Section 3.02 are subject to the provisions of Sections 23.01 and 23.02.
2
<PAGE> 3
3.03 PAYMENT OF ADDITIONAL RENT. Any Additional Rent payable by Tenant under
this Lease shall be due and payable thirty (30) days after billing by Landlord.
3.04 SERVICE CHARGE. Tenant's failure to make any monetary payment required of
Tenant hereunder within fifteen (15) days of the due date therefor shall result
in the imposition of a service charge for such late payment in the amount of
five percent (5%) of the amount due. In addition, any sum not paid within thirty
(30) days of the due date therefor shall bear interest at an annual rate equal
to the lesser of (i) two percentage points above the reference rate published
from time to time by U.S. Bancorp (or its successors), or if U.S. Bancorp (or
its successors) discontinues publishing such a rate, two percentage points in
excess of the published prime rate or other equivalent reference rate of
interest of a major commercial bank reasonably designated by Landlord, or (ii)
the maximum contract interest rate permitted by applicable law (the "Interest
Rate").
ARTICLE IV. - USE: HAZARDOUS MATERIALS
4.01 HAZARDOUS MATERIALS.
(A) The following terms used in this Section are defined as follows:
(1) "Environmental Laws" means any and all federal, state and local
laws, regulations, ordinances, codes, standards or criteria, orders or
decrees of any jurisdiction where the Premises are located pertaining
to the pollution of or protection of the environment as now or at any
time hereafter in effect including but not limited to those related to
the air, water, noise, odor, pesticides, land, soil, hazardous or
toxic substances and wastes and specifically including, but not
limited to, the Comprehensive Environmental Response and Liability Act
("CERCLA"), as amended by Superfund Amendments and Reauthorization Act
of 1986 ("SARA"), 42 U.S.C. Section 9601 et seq., the Resource
Conservation and Recovery Act, ("RCRA"), 42 U.S.C. Section 6901 et
seq., Clean Air Act, 42 U.S.C. Section 7401 et. seq., as amended,
Clean Water Act, 33 U.S.C. Section 1251 et. seq., and the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq., as all of the
same are amended from time to time.
(2) "Regulated Substances" means any toxic, radioactive or hazardous
substance or waste, pollutant or contaminant including but not limited
to asbestos, urea formaldehyde, the group of organic compounds known
as polychlorinated biphenyls, petroleum products including gasoline,
fuel oil, crude oil and the various constituents of such products, and
any substance or material whose generation, storage, treatment,
handling, release or disposal is regulated by Environmental Laws.
3
<PAGE> 4
(B) Tenant will comply with all Environmental Laws. If any Regulated
Substance is now on the Premises or is brought or caused to be brought into
or onto the Premises during the Term, Tenant shall handle any such
substances in compliance with Environmental Laws. Tenant shall submit to
Landlord, if requested, copies of its approved hazardous materials
communication plan, OSHA monitoring plan, and any permits required by
Environmental Laws, if Tenant is required to prepare, file or obtain any
such plans or permits. Tenant will defend, indemnify and hold Landlord its
directors, officers, employees, agents, successors and assigns,
(hereinafter collectively referred to as the "Indemnitees") harmless from
any losses, liabilities, damages, costs, or expenses (including reasonable
attorneys' fees) which Landlord may suffer or incur as a result of the
presence or introduction into or onto the Premises of any Regulated
Substance or as a result of the violation of any Environmental Laws during
the Term by Tenant or any agent, assignee, subtenant or invitee of Tenant.
This Section shall survive the expiration or sooner termination of this
Lease.
ARTICLE V. - LAWS AND ORDINANCES
5.01 Compliance With Laws and Ordinances. Tenant covenants throughout the Lease
Term, at Tenant's sole cost and expense, to comply with all laws (including
without limitation the provisions of Title III of the Americans with
Disabilities Act of 1990 and the rules promulgated thereunder) and ordinances
an the orders, rules and regulations and requirements of all federal, state and
municipal governments and appropriate departments, commissions, boards, and
officers thereof, and the orders, rules and regulations of the Board of Fire
Underwriters where the Premises are situated, or any other body now or
hereafter constituted exercising similar functions, foreseen or unforeseen,
ordinary as well as extraordinary, and whether or not the same require
structural repairs or alterations, which may be applicable to the Premises, or
the use or manner of use of the Premises. Tenant will also observe and comply
with the requirements of all policies of commercial liability, property and
other insurance at any time in force with respect to the buildings and
improvements on the Premises and the equipment therein.
5.02 Tenants Right to Contest. Tenant shall have the right to contest by
appropriate legal proceedings without cost or expense to Landlord, the validity
of any law, ordinance, order, rule, regulation or requirement of the nature
herein referred to, and if, by the terms of any such law, ordinance, order,
rule, regulation or requirement, compliance therewith may legally be held in
abeyance without subjecting Tenant or Landlord to any liability for failure so
to comply therewith, Tenant may postpone compliance therewith until the final
determination of any such proceedings, provided that all such proceedings shall
be prosecuted with all due diligence and dispatch.
5.03 Licenses and Permits. During the Lease Term, Tenant shall obtain any
necessary licenses or permits(including any requisite certificate of
occupancy)to conduct or operate its business in and upon the Premises which are
required by any applicable governmental body or agency having
4
<PAGE> 5
jurisdiction over the Premises and shall pay the fee or charge imposed for
issuance of such license or permit. Tenant shall renew any such licenses or
permits in accordance with the rules, codes, statutes or ordinances requiring
such licenses or permits. Tenant covenants during the Lease Term to conduct or
operate only the business for which it is licensed and in the event of a change
in the nature of its business or operation to obtain any necessary new or
additional licenses or permits. Tenant shall at its sole cost and expense comply
with all requirements and perform all necessary actions required under such
rules, codes, statutes or ordinances for the issuance of such permits or
licenses.
ARTICLE VI. - UTILITIES AND SERVICES
6.01 Landlord's Responsibility. Landlord shall timely pay for all charges for
electricity, gas, water, fuel, sewer charges, telephone, fire and security alarm
systems, trash hauling, snow removal, landscaping and lawn care, and any other
services or utilities used in, servicing or assessed against the Premises,
unless otherwise herein expressly provided, and to indemnify, defend and hold
Tenant harmless against any liability or damages on such account. The provisions
of this Section 6.01 are subject to the provisions of Sections 23.01 and 23.02.
If Tenant shall opt to perform these obligations under Section 23.01, Tenant may
contract in its own name for such purposes.
ARTICLE VII. - QUIET ENJOYMENT
7.01 Quiet Enjoyment. Landlord covenants that Tenant, on paying the Rents herein
provided and keeping, performing and observing the covenants, agreements and
conditions herein imposed on Tenant, shall peaceably and quietly hold and enjoy
the Premises for the term aforesaid, subject, however, to the terms of this
Lease.
ARTICLE VIII. - ASSIGNMENT AND SUBLETTING
8.01 General Prohibition. Except as specifically provided in this Article VIII,
Tenant shall not assign this Lease or sublet all or any part of the Premises
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed. Notwithstanding any assignment or
subletting and except as otherwise provided below, Tenant shall remain
fully-liable on this Lease and shall not be released from performing any of the
terms, covenants and conditions hereof.
8.02 Sale of Business. Notwithstanding the provisions of Section 8.01, Landlord
agrees that no consent shall be required to an assignment of this Lease to any
person or entity which purchases substantially all of Tenant's assets provided
that:
5
<PAGE> 6
(A) Tenant shall remain fully liable on this Lease and shall not be
released from performing any of the terms, covenants and conditions hereof,
unless the assignee has a net worth at least equal to the net worth of
Tenant immediately prior to the effective date of such assignment; and
(B) Landlord shall promptly be notified of such assignment and the
assignee shall assume in writing all of the obligations of Tenant arising
after the effective date of such assignment.
8.03 Affiliate Transfers. Notwithstanding the provisions of Section 8.01,
Landlord agrees that no consent shall be required for Tenant to assign this
Lease or sublet all or any portion of the Premises to an affiliate or
subsidiary of Tenant, provided, however, that Ameritrade Holding Corporation
shall remain fully liable on this Lease and shall not be released from
performing any of the terms, covenants and conditions hereof.
ARTICLE IX - DAMAGE OR DESTRUCTION
9.01 Landlord. If the Premises or the Building or any part thereof is damaged
by fire or other casualty, cause or condition (an "Occurrence"), Landlord, at
its sole expenses, shall restore the Premises or the Building, as the case may
be, to substantially the same condition as before the Occurrence, provided,
however, (i) Landlord shall not be required to spend more than the insurance
proceeds received for such purpose, and (ii) if the Occurrence occurs within
the last five (5) years of the Lease Term and renders the Premises or Building
substantially untenantable, Landlord may, by written notice to Tenant given
within sixty (60) days after the Occurrence, elect not to restore same and
terminate this Lease as of the date of the Occurrence.
9.02 Termination by Tenant. If as a result of fire or other casualty, cause or
condition whatsoever the Premises are made partially or wholly untenantable,
Tenant shall have the right to terminate this Lease within ninety (90) days
after the Occurrence unless Landlord's contractor estimates in writing that the
Premises can reasonably be expected to be restored within one hundred eighty
(180) days after the Occurrence. If (i) Landlord does not terminate this Lease
pursuant to Section 9.01, (ii) Tenant does not terminate this Lease pursuant to
the immediately preceding sentence, and (iii) Landlord fails within one hundred
eighty (180) days after the Occurrence to the eliminate substantial
interference with Tenant's use of the Premises or substantially to restore the
same, then Tenant may terminate this Lease by giving written notice to Landlord
within thirty (30) days after the expiration of such one hundred eighty (180)
day period, unless Landlord is then pursuing such restoration with reasonable
diligence (having due regard for, and subject always to, reasonable delay
caused by adjustment of insurance loss, strikes, labor difficulties or any
cause beyond Landlord's reasonable control, i.e. force majeure). If despite
Landlord's reasonable diligence, Landlord fails to eliminate substantial
interference with Tenant's use of the Premises or substantially
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to restore the same within two hundred seventy (270) days after the Occurrence,
Tenant may terminate this Lease as of the end of said two hundred seventy (270)
day period by giving notice to Landlord not later than thirty (30) days after
the expiration of said two hundred seventy (270) day period. In any event,
Tenant shall be responsible for the removal, or restoration, when applicable,
of all its damaged property and debris from the Premises, upon request by
Landlord or reimburse Landlord for the cost of removal.
9.03 Restoration by Landlord. If this Lease is not terminated as provided in
either Section 9.01 or 9.02, and if the Premises are made partially or wholly
untenantable, Landlord shall restore the same with reasonable promptness to the
condition in which they were in immediately prior to the Occurrence at
Landlord's expense without any reimbursement by Tenant. Landlord shall be under
no obligation to restore any alterations, improvements or additions to the
Premises made by Tenant or paid for by Tenant after the commencement of the
Lease Term, including, but not limited to, any subsequent changes, alterations
or additions made by Tenant.
9.04 Rent Abatement. If, as a result of fire or other casualty, cause or
condition whatsoever the Premises are made partially untenantable and, if this
Lease has not been terminated as above provided, all Rent shall abate from the
date of the fire or other relevant cause or condition until the Premises are
ready for occupancy and reasonably accessible to Tenant. If a portion of the
Premises is untenantable, rent shall be prorated on a per diem basis and
apportioned in accordance with the portion of the Premises which is usable by
the Tenant until the damaged part is ready for the Tenant's occupancy.
ARTICLE X - LANDLORD'S RIGHTS
10.01 Landlord Reserves the Following Rights.
(A) To exhibit the Premises to others after notice to Tenant (which notice
need not be in writing) at any reasonable time so long as Landlord does
not disrupt Tenant's operations and to display "For Lease" signs on the
Premises during the last six (6) months of the Lease Term; and
(B) To take any and all reasonable measures, including making
inspections, repairs, alterations, additions and improvements to the
Premises or to the Building as may be necessary or desirable for the
operation, safety, protection or preservation of the Premises or the
Building or of Landlord's interest therein.
Landlord may enter upon the Premises at any reasonable time after giving
reasonable notice to Tenant (except in the case of an emergency) and, if
requested by Tenant, accompanied by
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representative of Tenant for the purpose of exercising any or all of the
foregoing rights hereby reserved without being deemed guilty of an eviction or
disturbance of Tenant's use or possession and without being liable in any
manner to Tenant.
ARTICLE XI - HOLDING OVER
11.01 In the event of a holding over by Tenant after expiration or termination
of this Lease without the consent in writing of Landlord, Tenant shall be
deemed a tenant at sufferance and shall pay rent for such occupancy at the rate
of 110% of the last-current Base Rent, prorated for the entire holdover
period, plus reasonable attorneys' fees and reasonable out-of-pocket expenses
incurred by Landlord in enforcing its rights hereunder, plus any other damages
occasioned by such holding over. Except as otherwise agreed, any holding over
with the written consent of Landlord shall constitute Tenant a month-to-month
tenant.
ARTICLE XII - SIGNS AND ADVERTISEMENTS
12.01 Tenant shall be permitted to place upon the Premises or the Building any
signs, billboards or advertisements it deems appropriate, provided, however,
such signs, billboards or advertisements comply with all applicable laws,
ordinances, regulations and restrictions of record.
ARTICLE XIII - MORTGAGE AND TRANSFER; ESTOPPEL CERTIFICATES
13.01 Landlord shall have the right to transfer, mortgage, pledge or otherwise
encumber, assign and convey, in whole or in part, the Premises, the Building,
this Lease, and all or any part of the rights now or hereafter existing and all
Rent payable to Landlord under provisions hereof.
13.02 Upon Landlord's written request, Tenant shall execute, acknowledge and
deliver to Landlord a written statement certifying: (i) that none of the terms
or provisions of this Lease have been changed (or if they have been changed,
stating how they have been changed); (ii) that this Lease has not been canceled
or terminated, (iii) the last date of payment of the Base Rate and other charges
and the time period covered by such payment; (iv) that to the best of Tenant's
knowledge, Landlord is not in default under this Lease (or, if Landlord is
claimed to be in default, stating why), and (v) such other matters as may be
reasonably required by Landlord or the holder of a mortgage, deed of trust or
lien to which the Premises is or becomes subject. Tenant shall deliver such
statement to Landlord within ten (10) days after Landlord's request. Any such
statement by Tenant may be given by Landlord to any prospective purchaser or
encumbrancer of the Premises. Such purchaser or encumbrancer may rely
conclusively upon such statement as true and correct. If Tenant does not deliver
such statement to Landlord with such ten (10) day period, Landlord, and any
prospective purchaser or encumbrancer, may conclusively presume and rely upon
the following facts: (i) that the
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terms and provisions of this Lease have not been changed except as otherwise
represented by Landlord, notice of which shall be provided to Tenant in
Landlord's written request made to Tenant hereunder; (ii) that this Lease has
not been canceled or terminated except as otherwise represented by Landlord,
notice of which shall be provided to Tenant in Landlord's written request made
to Tenant hereunder; (iii) that not more than one month's Base Rent or other
charges have been paid in advance; and (iv) that Landlord is not in default
under the Lease. In such event, Tenant shall be estopped from denying the truth
of such facts.
13.03 Upon Tenant's written request, Landlord shall execute, acknowledge and
deliver to Tenant a written statement certifying: (i) that none of the terms or
provisions of this Lease have been changed (or if they have been changed,
stating how they have been changed); (ii) that this Lease has not been canceled
or terminated; (iii) the last date of payment of the Base Rent and other charges
and the time period covered by such payment; (iv) that to the best of Landlord's
knowledge, Tenant is not in default under this Lease (or, if Tenant is claimed
to be in default, stating why); and (v) such other matters as may be reasonably
required by Tenant or any party who desires to acquire Tenant or substantially
all of the assets of Tenant or any party that has been asked to extend financial
accommodations for the benefit of Tenant. Any such statement by Landlord may be
given by Tenant to any such prospective purchaser or lender. Such purchaser or
lender may rely conclusively upon such statement as true and correct. If
Landlord does not deliver such statement to Tenant within such ten (10) day
period, Tenant, and any such prospective purchaser or lender, may conclusively
presume and rely upon the following facts; (i) that the terms and provisions of
this Lease have not been changed except as otherwise represented by Tenant,
notice of which shall be provided to Tenant in Landlord's written request made
to Tenant hereunder; (ii) that this Lease has not been canceled or terminated
except as otherwise represented by Tenant, notice of which shall be provided to
Tenant in Landlord's written request made to Tenant hereunder; (iii) that not
more than one month's Base Rent or other charges have been paid in advance; and
(iv) that Tenant is not in default under this Lease. In such event, Landlord
shall be estopped from denying the truth of such facts.
ARTICLE XIV - EMINENT DOMAIN
14.01 If the Premises or such substantial part thereof as reasonably renders the
remainder unfit for the intended uses shall be taken by any competent authority
under the power of eminent domain or be acquired for any public or quasi-public
use or purpose, the Lease Term shall cease and terminate upon the date when the
possession of said Premises or the part thereof so taken shall be required for
such use or purpose and without apportionment of the award and Tenant shall have
no claim against Landlord for the value of any unexpired Lease Term. For
purposes of this Section, "substantial part thereof as reasonably renders the
remainder unfit for the intended uses" shall mean either (i) twenty percent
(20%) or more of the parking facilities located on the Premises or (ii) ten
percent (10%) or more of the Building. Notwithstanding anything to the contrary
herein, the Lease shall not terminate
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if Landlord is willing and able to substantially replace the portion of the
Premises so taken (or substantial or functional equivalent) to the satisfaction
of Tenant, which shall not be unreasonably withheld, conditioned or delayed. If
any condemnation proceedings shall be instituted in which it is sought to take
any part of the Building or to change the grade of any street or alley adjacent
to the Building and such taking or change of grade makes it necessary or
desirable to substantially remodel the Building, Landlord shall have the right
to terminate this Lease after having given written notice of termination to
Tenant not less than one hundred eighty (180) days prior to the date of
termination designated in the notice. In either of said events, Rent at the
then current rate shall be apportioned as of the date of the termination.
Notwithstanding anything to the contrary herein, the provision of this Section
14.01 shall not apply in the event only the skywalk or any portion thereof
connected to the Building are taken by condemnation proceedings. No money or
other consideration shall be payable by the Landlord to the Tenant for the right
of termination and the Tenant shall have no right to share in the condemnation
award or in any judgment for damages caused by the taking or the change of
grade. Nothing in this Section shall preclude an award being made to Tenant for
loss of business or depreciation to and cost of removal of equipment or
fixtures.
ARTICLE XV. - COMPLETION AND ACCEPTANCE OF
PREMISES, MAINTENANCE AND REPAIR
15.01 Completion and Acceptance. Tenant has inspected the Premises, and agrees
to accept them "as is". Except as otherwise specifically provided in this
Lease, Landlord disclaims any warranty that the Premises are suitable for
Tenant's use and Tenant acknowledges that it has had a full opportunity to make
its own determination in this regard.
15.02 Maintenance and Repair By Landlord. Landlord shall be responsible for
maintaining and repairing the Premises and all improvements located thereon;
Tenant shall have no obligation to make any repairs, perform any maintenance or
improve or replace any portion of the Premises or any improvements now or
hereafter located thereon, except as otherwise explicitly provided in this
Lease. Landlord shall keep the parking area in good repair and condition,
including periodic re-blacktopping as necessary. Landlord shall furnish and pay
for the upkeep, maintenance, repair, replacement and periodic servicing of the
mechanical and electrical systems, the fire sprinkler system, and overhead
doors servicing the Premises. If Landlord fails to comply with the immediately
preceding sentence, then Tenant may (but without any obligation to do so) enter
into service and maintenance contracts providing for the periodic inspection
and servicing of such equipment and systems, and if Tenant so elects, Landlord
shall reimburse Tenant for the cost and expense of the service, inspection and
repairs provided pursuant to such contracts. Notwithstanding the foregoing,
Tenant shall not be obligated to perform any work which would not be considered
a capital expenditure under generally accepted accounting principles or the
Internal Revenue Code if the useful life of the item in question would extend
beyond the Lease Term unless Landlord pays its proportionate share
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of such capital expenditure. At the end of the Lease Term, Tenant shall
surrender possession of the Premises in good condition subject to reasonable
wear and tear, changes and alterations and damage by fire, casualty and the
elements. If Landlord fails to maintain the Premises as provided for herein,
Tenant shall, after giving Landlord notice and a reasonable opportunity to
correct such failure, have the right, but not the obligation, to perform such
maintenance, in which event Landlord shall promptly reimburse Tenant for its
costs in providing such maintenance or repairs. The provisions of this Section
15.02 are subject to the provisions of Sections 23.01 and 23.02.
ARTICLE XVI - LANDLORD'S RIGHT TO CURE
16.01 Landlord may, but shall not be obligated to, sure any default by Tenant,
after giving Tenant reasonable notice and a reasonable opportunity to cure any
defaults, including, but not limited to, tenant's failure to obtain insurance,
make repairs, or satisfy lien claims, and whenever Landlord so elects, all
costs and expenses paid by Landlord in curing any such default, including
reasonable attorneys' fees, shall be so much Additional Rent due on demand,
together with interest at the Interest Rate (as defined in Section 3.04).
ARTICLE XVII - ALTERATIONS AND ADDITIONS, MECHANICS' LIENS
17.01 Alterations and Additions. Tenant shall not make any alterations,
improvements, or additions to the Premises which would adversely affect the
structural integrity of the Building without the prior written consent and
approval of plans therefor by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed. Any and all of such alterations,
improvements, and additions shall be at the sole cost of Tenant and shall be
done in accordance with Section 17.02 hereof. Alterations, improvements or
additions so made upon the Premises, except moveable furniture, equipment, and
trade fixtures placed in the Premises at the expense of Tenant, shall be and
become the property of Landlord and shall remain upon and be surrendered with
the Premises as a part thereof at the termination of this Lease. If damage to
the Premises or the Building shall be caused by moving any of such furniture,
equipment, trade fixtures or improvements in or out of the Premises (other than
minor damage such as holes caused by nails, screws and other fasteners), such
damage shall be promptly repaired at the cost of Tenant.
17.02 Mechanic's Liens. Tenant shall not cause nor permit any mechanic's liens
or other liens to be placed upon the Premises or the Building and in case of
the filing of any such lien or claim therefor, Tenant shall promptly discharge
the same; provided, however, that Tenant shall have the right to contest the
validity or amount of any such lien upon its prior posting of security with
Landlord, which security, in Landlord's sole reasonable judgment, must be
adequate to pay and discharge any such lien in full plus Landlord's reasonable
estimate of its legal fees. Tenant agrees to pay all legal fees and other costs
incurred by Landlord because of any mechanic's or other liens attributable to
Tenant being placed upon the Premises or the Building.
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ARTICLE XVIII - INSURANCE
18.01 PUBLIC LIABILITY, PROPERTY DAMAGE INSURANCE. Landlord shall maintain in
effect at all times during the Lease Term a "Commercial Liability Insurance"
policy (Insurance Services Office form title), providing coverage on a
"occurrence" rather than on a "claims made" basis, which policy shall include,
but not be limited to, coverage for bodily injury, property damage, personal
injury, contractual liability (applying to this Lease), independent
contractors, and products and completed operations liability, or an equivalent
form, so long as such equivalent form affords coverage which is at least as
broad. Such policy shall name Landlord as an additional insured thereunder.
Landlord shall maintain at all times during the Lease Term a total combined
liability policy limit of at least $1,000,000 applying to the liability for
bodily injury, personal injury and property damage, which total limit may be
satisfied by the limit afforded under its commercial general liability policy
or equivalent policy, or by such policy in combination with an umbrella policy,
provided that the umbrella policy provides coverage at least as broad as that
afforded by the underlying commercial general liability policy or equivalent
policy, and provided further that Tenant is included as an additional insured
thereunder. The provisions of this Section 18.01 are subject to the provisions
of Sections 23.01 and 23.02.
18.02 INSURANCE ON PREMISES. Landlord shall, throughout the Lease Term,
maintain "All Risk" property insurance, including loss of rents coverage, on
the Building and other improvements located on the Premises in such amounts and
with such deductibles as Landlord shall reasonably determine. While any
building or other improvement is in the course of being constructed or rebuilt
on the Premises, the aforesaid property insurance shall be in builder's risk
completed value form, including coverage available on the so-called "all risk"
non-reporting form of policy, for an amount equal to 100% of the insurable
value of such building or other improvement. If the Premises include steam
boilers or other equipment excluded from coverage pursuant to a boiler and
machinery exclusion, Landlord shall maintain boiler and machinery insurance in
an amount reasonably satisfactory to Landlord during the Lease Term. The
provisions of this Section 18.02 are subject to the provisions of Sections
23.01 and 23.02.
18.03 INSURANCE ON TENANT'S PROPERTY. Tenant shall, throughout the Lease Term,
maintain property insurance on all of Tenant's merchandise, trade fixtures,
furnishing, operating equipment and personal property located on the Premises.
18.04 INSURANCE REQUIREMENTS. All such insurance shall:
(A) Be written by an insurance company reasonably satisfactory to
Landlord;
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(B) Name Landlord and others designated by Landlord as additional insureds
or loss payees, as applicable, except that this clause shall not apply to
the insurance required to be carried by Tenant pursuant to Section 18.03
above;
(C) Provide for thirty (30) days prior written notice to Landlord of
cancellation, restriction or reduction of coverage.
Tenant will deliver to Landlord proof of all policies evidencing the insurance
required hereunder, and shall promptly furnish to Landlord, upon request, copies
of all renewal notices and all receipts of paid premiums received by it. At
least thirty (30) days prior to the expiration date of a required policy, Tenant
shall deliver to Landlord a copy of a renewal policy in form reasonably
satisfactory to Landlord.
18.05 Indemnification of Landlord. Tenant shall indemnify, defend and hold
Landlord, its employees and agents harmless from and against all claims,
actions, damages, liabilities and expenses in connection with loss of life,
bodily and personal injury or damage arising from any occurrence in, upon or at
the Premises or any part thereof, or occasioned wholly or in part by any act or
omission of Tenant, its agents, contractors, employees, servants, licensees,
concessionaires or invitees or by anyone permitted to be on the Premises by
Tenant except if due to Landlord's negligence or misconduct. Tenant assumes all
risks of and Landlord, its employees and agents shall not be liable for injury
to person or damage to property resulting from the condition of the Premises or
from the bursting or leaking of any and all pipes, utility lines, connections,
or air conditioning or heating equipment in, on or about the Premises, or from
water, rain or snow which may leak into, issue or flow from any part of the
Building. Tenant agrees at all times to defend, indemnify and hold Landlord
harmless against all actions, claims, demands, costs, damages or expenses of
any kind which may be brought or made against the Landlord or which the
Landlord may pay or incur by reason of Tenant's occupancy of the Premises or
Tenant's negligent performance of or failure to perform any of its obligations
under this Lease. If Landlord shall, without fault on its part, be made a party
to any litigation commenced by or against Tenant, then Tenant shall indemnify,
defend and hold Landlord harmless from and shall pay all costs, expenses, and
reasonable attorney's fees incurred or paid by Landlord in connection with such
litigation.
18.06 Waiver of Claims and Subrogation. Notwithstanding anything in this Lease
to the contrary, each party (the "Releasing Party") hereby releases the other
party (the "Released Party") from liability for any property damage which the
Released Party would, but for this Section, have had to the Releasing Party
resulting from the occurrence of any accident or casualty during the Lease
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Term. Any insurance policy obtained by Landlord or Tenant shall recognize this
Section and contain an appropriate waiver of subrogation clause.
ARTICLE XIX - DEFAULT AND REMEDIES
19.01 Events of Default. Any of the following shall constitute an Event of
Default hereunder:
(a) if any Rent due hereunder shall be unpaid for ten (10) days after
Tenant receives written notice of such failure from Landlord.
(b) if Tenant shall be in default in performing any of the covenants,
terms and conditions of this Lease other than the provisions requiring the
payment of Rent and Landlord shall give to Tenant notice in writing of such
default, and if Tenant shall fail to cure such default within thirty (30)
days after service of such notice, or, if the default is of such character
as to require more than thirty (30) days to cure, Tenant shall fail to
promptly commence such cure and continue thereafter at all times to use
reasonable diligence in curing such default after services of such notice;
(c) the making of an assignment or general arrangement for the benefit of
creditors by Tenant or any guarantor of Tenant's obligations under the
Lease;
(d) the appointment of a receiver or trustee for all or substantially all
the assets of Tenant or any guarantor of Tenant's obligations under this
Lease and such receivership shall not have been terminated or stayed within
the time permitted by law;
(e) the attachment, execution or other judicial seizure of Tenant's
interest in this Lease where such seizure is not discharged within thirty
(30) days.
19.02 Remedies Upon An Event of Default. Upon the occurrence of any Event of
Default, Landlord may, at its option:
(A) Without such action constituting a waiver of the default, do whatever
Tenant is obligated to do under this Lease and enter the Premises without
being liable to prosecution or claim for damages in order to accomplish
such purpose, and if Landlord by reason of such default pays any sum or
does any act that requires the payment of any sum, the sum paid by Landlord
shall be immediately due and payable from Tenant to Landlord, which sum
shall be Additional Rent.
(B) By written notice to Tenant, terminate this Lease. Landlord, upon such
termination, shall be entitled to recover, as liquidated damages and not as
a penalty, a sum of money equal to the value of the Rent provided herein to
be paid by Tenant to Landlord for the remainder of the Lease Term, less the
fair rental value of the Premises for such period.
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(C) Whether or not Landlord terminates the Lease, re-enter and take
possession of the Premises, by summary proceedings or by any other
appropriate legal action or proceedings, without such re-entry working
a forfeiture of the Lease and the rentals due hereunder, in which event
Landlord may, but shall be under no obligation so to do, relet all or
any part of the Premises for such rent and upon such terms as shall be
satisfactory to Landlord (including the right to relet the Premises for
a term greater or lesser than that remaining under the Lease Term, and
the right to relet the Premises as a part of a larger area, and the
right to change the character or use made of the Premises). Landlord
may, for the purposes of such reletting, decorate or make any repairs,
changes, alterations and additions in or to the Premises as may be
commercially reasonable to accommodate such reletting. If Landlord does
not relet the Premises, Tenant shall pay to Landlord as and when due
the Rent and other sums provided herein to be paid by Tenant for the
remainder of the Lease Term. If the Premises are relet and a sufficient
sum shall not be realized from such reletting after paying all of the
expenses of such decoration, repairs, changes, alterations and
additions not chargeable to or paid by the subsequent tenant, the
expenses of such reletting and the collection of the rent accruing
therefrom to satisfy the total Rent herein provided to be paid for the
remainder of the Lease Term, Tenant shall pay to Landlord, on demand,
any deficiency, and Tenant agrees that Landlord may, from time to time,
file suit to recover any sums falling due under the terms of this
Section.
No repossession as described above shall be deemed a termination of
this Lease unless Landlord shall notify Tenant in writing of its intention to
terminate this Lease, nor shall any such repossession without termination be
deemed a waiver on the part of Landlord of its right to thereafter at any time
terminate this Lease and proceed against Tenant for damages arising out of the
breach of this Lease.
19.03 Remedies Cumulative. All rights and remedies provided in this Lease of
Landlord's protection shall be cumulative and in addition to any other rights
and remedies provided by law, Landlord shall be entitled to recover from Tenant
its reasonable attorneys' fees incurred by enforcing its rights hereunder.
19.04 No Waiver. No waiver by Landlord of a breach or default by Tenant under
the terms and conditions of this Lease shall be construed to be a waiver of any
subsequent breach or default nor of any other term or condition of this Lease,
and the failure of Landlord to assert any breach or to declare a default by
Tenant shall not be construed to constitute a waiver thereof so long as such
breach or default continues unremedied.
19.05 No Reinstatement. No receipt of money by Landlord from Tenant after the
expiration or termination of this Lease, or after the service of any notice or
after the commencement of any suit, or after final judgment for possession of
the Premises, shall reinstate, continue or extend the Lease Term or affect any
such notice, demand or suit.
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19.06 DEFAULT UNDER MORTGAGE. If Landlord shall be in default in performing any
of the covenants, terms and conditions under any mortgages against the Premises
executed by Landlord, and the holder of any of said mortgages commences
foreclosure proceedings, Tenant shall have the right to terminate this Lease
upon thirty (30) days written notice to Landlord unless, however, such mortgage
or the applicable subordination, non-disturbance and attornment agreement
provide that the mortgagee, in the event of acquiring title to the Premises
through foreclosure, power of sale, deed in lieu of foreclosure or equivalent,
shall recognize the validity of this Lease and shall honor the rights of the
Tenant hereunder so long as Tenant is not in default of this Lease and agrees
to attorn to such mortgagee as if it were the original landlord hereunder.
Notwithstanding anything to the contrary contained in this Lease or in any
other document, by virtue of that certain Subordination, Non-Disturbance and
Attornment Agreement (the "SNDA") among Landlord, Tenant and Jefferson Pilot
Financial Insurance Company ("Lender"), Tenant's right to terminate this Lease
under this Section 19.06 shall be of no force and effect as to, and shall not
be applicable to, or binding upon: the "Mortgage" or "Deed of Trust" (as
defined in the SNDA) and/or any document related thereto; Lender; any "New
Owner" (as defined in the SNDA) and/or any document related thereto; Lender;
any "New Owner" (as defined in the SNDA); and/or any legal representative,
successor or assign of Lender and or any New Owner.
19.07 MITIGATE DAMAGES. Notwithstanding anything to the contrary in this Lease,
Landlord shall use reasonable efforts to mitigate any damages that Landlord
would otherwise sustain by reason of any default by Tenant in the performance
of Tenant's obligations under this Lease.
ARTICLE XX - NOTICES
20.01 Except as otherwise herein provided, whenever by the terms of this Lease
notice shall or may be given either to Landlord or to Tenant, such notice shall
be in writing and shall be deemed to have been properly served if
hand-delivered or sent by overnight or by certified mail, return receipt
requested, postage prepaid, if to Landlord, at the place where rent is payable,
and if to Tenant, at the Premises. The date of such hand-delivery or mailing
shall be deemed the date of service.
ARTICLE XXI - RIGHT OF FIRST REFUSAL
21.01 GRANT. In consideration of this Lease, Landlord grants to tenant the
Right of First Refusal with respect to the Premises, on the terms set forth in
this Article XXI, provided, however, that such Right of First Refusal is
subject to any mortgage placed on the Premises by Landlord.
21.02 NOTICE. If Landlord decides to place the Premises on the market for sale,
Landlord agrees that it will notify Tenant of its intention to sell the
Premises, but this sentence creates no obligation whatsoever to sell to Tenant
at any time or at any price or terms. If Landlord receives a bona fide written
offer ("Offer") to purchase the Premises which Landlord desires to accept,
Landlord shall notify Tenant in writing ("the "Notice") of the Offer. The Notice
shall be accompanied by the Offer.
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21.03 ACCEPTANCE. Tenant shall have a period (the "Acceptance Period") of thirty
(30) days in which to accept the Offer. Tenant's acceptance of the Offer shall
be made by written notice to Landlord, accompanied by an earnest money payment
by certified or cashier's check or by wire transfer of immediately available
funds, in an amount equal to the earnest money specified in the Offer. Upon such
valid acceptance, Tenant and Landlord shall enter into a purchase agreement
substantially in the form of the Offer. If the Offer includes a condition
precedent of the offerer's ability to obtain financing, Tenant shall also have
the benefit of such condition, but if Tenant then fails to obtain financing, the
earnest money tendered to Landlord shall be retained by Landlord in
consideration for Landlord's foregoing the opportunity to close in accordance
with the original Offer.
21.04 REJECTION. If Tenant does not accept the Offer within the Acceptance
Period, Tenant shall be deemed to have rejected the Offer, and thereupon
Landlord shall be free to sell the Premises substantially in accordance with the
terms of the Offer. In such case, Tenant shall, at Landlord's request, execute
and deliver to Landlord a release, quit claim deed or other instrument to
evidence that the Right of First Refusal has expired.
21.05 EXPIRATION OF RIGHT. The Right of First Refusal shall expire on the
earlier to occur of the following:
(A) The termination of this Lease for any reason.
(B) The termination of the purchase agreement due to the default of
Tenant.
(C) The sale of the Premises by Landlord in accordance with the terms of
an Offer which has been rejected by Tenant as described in Section 21.04
hereof.
21.06 CONDITIONS PRECEDENT. It is a condition precedent to the effective
exercise by Tenant of the Right of First Refusal granted herein that at the time
of the exercise, there shall be no Event of Default by Tenant under this Lease.
It is a condition precedent to Landlord's obligation to close on the purchase
after the exercise of the Right of First Refusal that as of the closing date,
Tenant shall have paid all Rent accruing hereunder through the closing date. The
purchase agreement shall provide that if all such Rent is not paid on or before
the scheduled closing date, such failure on the part of Tenant shall constitute
a breach of the purchase agreement, entitling Landlord to terminate the purchase
agreement and retain the earnest money payment.
ARTICLE XXII - MISCELLANEOUS
22.01 PERSONS BOUND. The agreements, convenants and conditions of this Lease
shall be binding upon and inure to the benefit of the heirs, legal
representatives, successors and assigns of each of the parties hereto, except
that no assignment, encumbrance or subletting by Tenant, unless permitted by the
provisions of this Lease, shall vest any right in the assignee, encumbrance or
subtenant of Tenant.
17
<PAGE> 18
22.02 Partial Invalidity. If any term, covenant, condition or provision of
Lease or the application thereof to any person or circumstance shall, to any
extent be invalid, unenforceable or violate a party's legal rights, then such
term, covenant, condition or provision shall be deemed to be null and void and
unenforceable, however, all other provisions of this Lease, or the application
of such term or provision to persons or circumstances other than those to which
are held invalid, unenforceable or violative of legal rights, shall not be
affected thereby, and each and every other term, condition, covenant and
provision of this Lease shall be valid and be enforced to the fullest extent
permitted by law.
22.03 Captions. The headings and captions used throughout this Lease are for
convenience and reference only and shall in no way be held to explain, modify,
amplify, or aid in the interpretation, construction or meaning of any provisions
in this Lease. The words "Landlord" and "Tenant" wherever used in this Lease
shall be construed to mean plural where necessary, and the necessary grammatical
changes required to make the provisions hereof apply either to corporations,
limited liability companies, partnerships, trusts or individuals, men or women,
shall in all cases be assumed as though in each case fully expressed.
22.04 No Option. Submission of this instrument for examination does not
constitute a reservation of nor option for the Premises. The instrument does
not become effective as a lease or otherwise until execution and delivery by
both Landlord and Tenant.
22.05 Consents and Approval. If any provision or this Lease requires
Landlord's or Tenant's consent or approval, Landlord or Tenant shall not
unreasonably or arbitrarily withhold, condition or delay such consent or
approval. If any provision of this Lease requires Landlord or Tenant to do
anything to the satisfaction of the other party, the party whose satisfaction
must be obtained shall not unreasonably or arbitrarily refuse to state its
satisfaction with such action. If either party decides to deny such consent or
approval, or to withhold its statement of satisfaction with the other party's
performance, it shall simultaneously state its reasons for doing so. If either
party shall request the other party's consent, approval or statement of
satisfaction with respect to any matter hereunder, the other party's failure to
reply to such request within ten (10) days (or other time period set forth
elsewhere in this Lease) after delivery to the other party of copies of all
necessary information and documents that are available and necessary or
appropriate to enable the other party to decide whether to grant such consent,
approval or statement of satisfaction shall be deemed a consent, approval or
statement of satisfaction, as the case may be.
22.06 Applicable Law. This Lease, its interpretation and enforcement shall
be governed by the laws of the State of Nebraska.
22.07 Short Form. Landlord and Tenant agree that neither shall record this
Lease; provided, however, that the parties hereto agree that each will at the
request of the other execute, acknowledge and deliver a memorandum of lease, in
recordable form, describing the parties hereto, the Premises
18
<PAGE> 19
and the Lease Term. Preparation, recording and similar charges and taxes shall
be paid for by the party requesting such memorandum of lease.
22.08 Financial Statements. Tenant has afforded the Landlord the right of
inspection of its financial statements, and agrees that from time to time in
connection with the sale or mortgage of Landlord's interest in Premises, it
will disclose its financial statements to the proposed lender or purchaser;
provided, that such financial statements shall be limited to such
information required to be filed by Tenant under applicable securities
regulations.
22.09 Landlord's Liability. Tenant shall look solely to the then interest of
Landlord in the Premises, or the interest in the Premises of any successor in
interest to Landlord, as owner of the Premises, for the satisfaction of any
remedy of Tenant for Landlord's breach of this Lease or failure to perform any
of Landlord's obligations under this Lease, express or implied, or under any
law. Neither Landlord nor any disclosed or undisclosed principal of Landlord
(or member, officer, director, stockholder, partner or agent of Landlord or of
any such principal), nor any successor of any of them, shall have any personal
liability for any such breach or failure under this Lease or otherwise.
ARTICLE XXIII - REIMBURSEMENT
23.01 Reimbursement of Tenant by Landlord. Tenant shall have the right
(without the obligation) to perform the obligations of the Landlord under
Sections 3.02, 6.01, 15.02, 18.01, and 18.02 herein. In the event Tenant incurs
expenses in fulfilling one or more obligations of the Landlord under any of the
foregoing Sections, Landlord shall reimburse Tenant for the cost and expense
incurred by Tenant in performing such obligations, subject to the limitations
set forth herein. Tenant shall submit to Landlord, on a monthly basis during
the Lease Term, copies of invoices paid by Tenant hereunder or other reasonable
evidence of such payments and Landlord shall pay to Tenant the amount of such
invoices and/or other payments within thirty (30) days after receipt thereof.
Landlord shall not be obligated to reimburse Tenant for expenses hereunder in
the event (i) such reimbursement will cause the Annual Obligation Limit
(defined in Section 24.01 below) to be exceeded or (ii) Tenant has failed to
pay the Base Rent.
23.02 Limitation on Landlord's Obligations. Notwithstanding anything to the
contrary contained herein, the total cost to Landlord of performing its
obligations under this Lease, including but not limited to real estate taxes,
insurance, repairs and maintenance, and utilities and services (including any
payments made to Tenant as reimbursement therefor), shall not exceed the
following annual amounts for any Lease Year:
19
<PAGE> 20
LEASE YEARS ANNUAL OBLIGATION AMOUNT
1-5 $540,000
6-10 $594,000
11-15 $653,400
16-20 $718,740
Any amounts in excess of the Annual Obligation Limit shall be assumed, and
paid, by Tenant as Additional Rent or paid to Landlord as Additional Rent in
accordance with Section 3.3 hereof. The Annual Obligation Limit (and Tenant's
obligation to pay any amount in excess thereof) shall apply during any holdover
period under Section 11.01 hereunder. In the case of a partial lease year,
Landlord's Annual Obligation Limit shall be prorated on a per diem basis.
ARTICLE XXIV - ENTIRE AGREEMENT
24.01 This Lease together with Exhibits attached hereto contains the entire
agreement between the parties and no modification of this Lease shall be
binding upon the parties unless evidenced by an agreement in writing signed by
Landlord and the Tenant after the date hereof. If there be more than one Tenant
named herein, the provision of this Lease shall be applicable to and binding
upon such tenants jointly and severally.
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<PAGE> 21
IN WITNESS WHEREOF, the parties hereto have executed this Lease Agreement
as of the date and year hereinabove set forth.
LANDLORD:
IRET PROPERTIES,
a North Dakota Limited Partnership
By: /s/ Thomas A. Wentz
-------------------------------------
Name: THOMAS A. WENTZ
-----------------------------------
Title: Vice President
----------------------------------
TENANT:
AMERITRADE HOLDING
CORPORATION, a Delaware corporation
By: /s/ Susan M. Hohman
-------------------------------------
Name: SUSAN M. HOHMAN
-----------------------------------
Title: VP, Infrastructure & Facilities
----------------------------------
21
<PAGE> 22
EXHIBIT A
Commitment No. C98-7427
That part of the NW1/4 of the NE1/4 of Section 4, Township 14 North, Range 12
East of the 6th P.M., in the City of Omaha, in Douglas County, Nebraska,
described as follows: Commencing at the NE corner of said NW 1/4 of the NE1/4;
thence southerly on the East line of said NW 1/4 of the NE1/4 83.00 feet; thence
N 89 degrees 10'18" W (assumed bearing) on a line 83.00 feet South of and
parallel to the North line of said NW1/4 of the NE1/4, 667.60 feet to the point
of beginning, said point being 654.78 feet East of West line of said NW 1/4 of
the NE 1/4; thence S 00"28'30" W on a line 654.78 feet East of and parallel to
the West line of said NW1/4 of the NE1/4, 574.68 feet; thence N 89 degrees
18'20" W (recorded) N 89 degrees 15'43" W (measured), 571.79 feet to a point on
the Easterly R.O.W. line of 102nd Street, said point being 83.00 feet East of
the West line of said NW1/4 of the NE1/4; thence N 00 degrees 28'30" E on a line
83.00 feet East of and parallel to the West line of said NW1/4 of the NE1/4 and
the Easterly R.O.W. line of said 102nd Street, 475.55 feet to a point of curve;
thence Northeasterly on a curve to the right (radius 99.38 feet, chord bearing N
45 degrees 39'06" E, chord distance 140.98 feet), an arc distance of 156.73 feet
to a point of tangency, said point being on the Southerly R.O.W. line of "F"
Street and 83.00 feet South of the North line of said NW 1/4 of the NE 1/4;
thence S 89 degrees 10'18" E on a line 83.00 feet South of and parallel to the
North line of said NW1/4 of the NE1/4 and the Southerly R.O.W. line of said "F"
Street, 471.80 feet to the point of beginning;
Together with non-exclusive easement rights reserved in Warranty Deed dated
September 30, 1974, filed October 17, 1974 in Book 1511 at Page 347 of the Deed
Records of Douglas County, Nebraska.
<PAGE> 23
EXHIBIT "B"
<TABLE>
<CAPTION>
LEASE TERM YEARS ANNUAL RENT
- ---------------- -----------
<S> <C>
1-5 $1,288,000.00
6-10 $1,416,800.00
11-15 $1,558,480.00
16-20 $1,714,328.00
</TABLE>
<PAGE> 1
STANDARD BUILDING LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into this 22nd day of April,
1999, by and between Heritage Commons I, Ltd. ("Landlord") and Ameritrade
Holding Corporation ("Tenant").
ARTICLE 1
PREMISES
SECTION 1.1. GRANT. Subject to and upon the terms, provisions, and
conditions hereinafter set forth, and in consideration of the Rental,
covenants, duties, and agreements hereinafter contained, Landlord does hereby
demise and lease to Tenant for the Term, and Tenant does hereby lease from
Landlord for the Term, the Leased Premises. Subject to and upon the terms,
provisions and conditions hereinafter set forth, Landlord hereby grants to
Tenant the license to use (in common with Landlord, other tenants of the
Building, and such other persons as Landlord may permit to use such facilities,
and in accordance with such rules and regulations as Landlord may prescribe for
the use of such facilities), the lobby, pedestrianways, and public corridors of
the Building.
SECTION 1.2. CERTAIN DEFINITIONS. In addition to the definitions set forth
in the Basic Lease Information, for purposes of this Lease, the following terms
shall have the following meanings unless the context otherwise requires:
(a) "Affiliate" shall mean, with respect to any Person, any other
Person who directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with the Person in
question. As used in this definition of "Affiliate," the term "control"
means the possession, directly or indirectly, of the power to direct or
cause the direction of management and policies of a Person, whether through
ownership of voting securities, by contract, or otherwise.
(b) "Basic Lease Information" shall mean the Basic Lease
Information executed by Landlord and Tenant contemporaneously herewith
which sets forth certain definitions and basic provisions of this Lease.
(c) "Branch" shall mean that portion of any Building system which
connects or extends Central systems into or through the Leased Premises.
(d) "Building Standard" shall mean the quantity and quality of
materials, services, finishes and workmanship from time to time specified
by Landlord as the standard quantity and quality of such items to be
furnished to tenants in the Building.
(e) "Central" shall mean that portion of any Building system or
component which is within the core of the Building and serves or benefits
all tenants in the Building.
(f) "Electrical Costs" shall mean the cost of all electricity used
by the Building.
(g) "General Common Areas" shall mean those areas of the Building,
such as elevator rooms, mechanical and electrical rooms, telephone rooms,
lobby areas, loading docks, pedestrian ways, sky lobbies, freight lobbies,
maintenance areas, enclosed public areas and any other similar areas which
serve the Building as a whole as opposed to a particular floor or floors.
(h) "Highest Lawful Rate" shall mean the maximum nonusurious
interest rate, if any, that at any time, or from time to time, may be
contracted for, taken, reserved, charged, or received on the indebtedness
owed to Landlord under this Lease under the laws which are presently in
effect of the United States of America and the State of Texas applicable to
Landlord and such indebtedness or, to the extent permitted by law, under
such applicable laws of the United States of America and the State of Texas
which may hereafter be in effect and which allow a higher maximum
nonusurious interest rate than applicable laws not allow. To the extent
that TEX. REV. CIV. STAT. ANN. art. 5069-I.04, as amended (the "Act"), is
relevant to Landlord for the purposes of determining the Highest Lawful
Rate, Landlord elects to determine such applicable legal rate under the Act
pursuant to the "indicated rate ceiling," pursuant to and subject to the
terms of the Act, and further subject to any right Landlord may have
subsequently, under applicable law, to change the method of determining the
Highest Lawful Rate.
(i) "Holidays" shall mean New Year's Day, Memorial Day, July 4,
Labor Day, Thanksgiving Day, the day following Thanksgiving Day, and
Christmas Day.
(j) "Lease" shall mean this Lease, together with the Basic Lease
Information, all exhibits, addenda, riders and amendments thereto (if any).
(k) [Intentionally Omitted]
(l) "Lease Year" shall mean any period of one year commencing on
the Rent Commencement Date or any anniversary thereof.
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<PAGE> 2
(m) "Net Rentable Area" shall mean that area, on either a single
tenancy floor, on a floor to be occupied by more than one tenant, which is
determined by measuring and computing rentable area on each type of floor
in accordance with the American National Standard Method of Measuring Floor
Area in Office Buildings of the Building Owners and Managers Association
International (ANSIZ65.1-1996; as promulgated on June 7, 1996).
(n) "On-Floor Common Areas" shall mean those areas on multi-tenant
floors devoted to corridors, elevator foyers, restrooms, mechanical and
electrical rooms, janitor closets, vending areas and other similar
facilities designated by Landlord for the use of all tenants on a
particular floor.
(o) "Operation" shall have the meaning ascribed to it in Section
4.3(a).
(p) "Operating Expenses" shall have the meaning ascribed to it in
Section 4.3.
(q) "Operating Year" shall mean any twelve (12)-month period
beginning on January 1 of any calendar year and ending on December 31 of
such calendar year.
(r) "Person" shall mean an individual, corporation, partnership,
trust, estate, unincorporated organization, association, or other entity.
(s) [Intentionally Omitted]
(t) "Prime Rate" shall mean the per annum rate of interest equal to
the "base," "reference," or "prime" rate of interest, however denominated,
established by Bank One, Texas, N.A., or its successor in interest, as its
reference rate of interest (which may not be the lowest rate of interest
charged by Bank One, Texas, N.A. or its successor in interest) and which
rate is in effect on the date on which this Lease is terminated.
(u) "Project" shall mean the Land and Building.
(v) "Rental" shall mean Base Rental, plus Tenant's Proportionate
Share of Operating Expenses, plus Tenant's Proportionate Share of all
Electrical Costs, plus all other sums due, or that may become due, from
Tenant to Landlord under this Lease.
(w) "Rent Commencement Date" shall have the meaning ascribed to it
in the Basic Lease Information.
(x) "Rules and Regulations" shall mean the rules and regulations set
forth in Exhibit E.
(y) "Service Areas" shall mean those areas within (and measured from
the midpoint of the walls enclosing) the Building's stairs, fire towers,
elevator shafts, elevator mechanical rooms, flues, vents, stacks, pipe
shafts, vertical shafts and ducts and other similar vertical penetrations
in the Building.
(z) "Statement" shall have the meaning ascribed to it in Section 4.5.
(aa) "Supplemental Agreement" shall mean the agreement to be entered
into by Landlord and Tenant in the form of Exhibit C attached hereto and
made a part hereof.
(bb) "Tenant's Agents" shall mean Tenant's directors, officers,
employees, partners, shareholders, constituent partners, agents,
representatives, servants, patrons, guests, contractors, licensees,
invitees, assignees, sublessees, visitors and any other person for whom
Tenant is or shall become liable or responsible.
(cc) "Tenant's Proportionate Share" shall mean a fraction the
numerator of which is the Net Rentable Area of the Leased Premises and the
denominator of which is the aggregate Net Rentable Area of the Building;
which fraction, expressed as a percentage, is set forth in the Basic Lease
Information based upon the presently existing Net Rentable Areas in the
Leased Premises and the Building, but which fraction is subject to
adjustment based upon changes in any such areas arising as a result of any
expansion of the Leased Premises, pursuant to any right granted to Tenant
hereunder, and pursuant to the terms of Section 1.3.
(dd) [Intentionally Omitted]
(ee) "Usable Area" shall mean that area, on either a single tenancy
floor or a floor to be occupied by more than one tenant, which is
determined by measuring and computing usable area on each type of floor in
accordance with the American National Standard Method of Measuring Floor
Area in Office Buildings of the Building Owners and Managers Association
International (ANSI Z65.1-1996; as promulgated on June 7, 1996).
SECTION 1.3 ADJUSTMENTS TO NET RENTABLE AREA. The Net Rentable Area of
the Leased Premises and the Building stated in the Basic Lease Information are
estimates subject to a final determination by Landlord based on the final
Working Drawing and on the final floor plans of the Building. The Net Rentable
Area of the Building is
2
<PAGE> 3
subject to further adjustment in the event of any future expansion or
modification of the Building. Landlord's final determination of Net Rentable
Area shall be conclusive and binding upon Tenant provided the Leasehold
Improvements are completed in substantial accordance with the Working Drawing.
SECTION 1.4. SUPPLEMENTAL AGREEMENT. Upon Landlord's final determination
of Net Rentable Area as provided in Section 1.3, and as an express condition
precedent to Tenant's right to occupy the Leased Premises, Landlord and Tenant
agree to execute the Supplemental Agreement. Tenant's failure or refusal to
execute the Supplemental Agreement shall not delay the Rent Commencement Date,
affect the Term, or otherwise affect the obligations of Tenant hereunder.
ARTICLE 2
LEASE AND RENT COMMENCEMENT; TERM
SECTION 2.1. LEASE COMMENCEMENT. This Lease shall be binding upon the
parties hereto when executed by Landlord and Tenant; however, Rental and the
Term shall not commence until the Rent Commencement Date.
SECTION 2.2. RENEWAL TERM. Provided Tenant is not in default hereunder,
Tenant shall have the right to extend the Term of this Lease for an additional
term of 120 days, such additional term to commence immediately upon the
expiration of the primary Term of this Lease. If Tenant elects to so extend the
Term, Tenant shall do so by written notice to Landlord delivered at least 120
days prior to the expiration of the primary Term. Such extension shall be upon
all terms and conditions of this Lease as are applicable to the primary Term
(including but not limited to Base Rental), except that Tenant shall have no
further right to extend the Term hereof.
SECTION 2.3. [Intentionally Omitted]
SECTION 2.4. QUIET ENJOYMENT. So long as Tenant is not in default
hereunder, Tenant shall peaceably and quietly enjoy the Leased Premises without
disturbance from Landlord; subject, however, to the terms of this Lease and to
deeds of trust, mortgages, ordinances, restrictive covenants, franchises,
leases, easements, and other agreements or encumbrances now or hereafter
affecting the Project; provided, however, that Landlord agrees it will not
cause any matter to be filed of record subsequent to the date hereof which
would interfere with the Permitted Use or otherwise materially change Tenant's
obligations hereunder.
ARTICLE 3
BASE RENTAL AND SECURITY DEPOSIT
SECTION 3.1. BASE RENTAL. Tenant agrees to pay Landlord Base Rental at
the rates, in the amounts, and during the time periods set forth in the Basic
Lease Information. Rental shall be paid to Landlord, in lawful money of the
United States, without notice or demand and without deduction or offset (except
as otherwise expressly provided herein), at Landlord's Address (or at such
other address as Landlord may from time to time designate in writing to
Tenant), on the first day of each calendar month throughout the Term or at such
other times as is otherwise expressly provided for herein. Base Rental,
adjusted as herein provided, shall be payable monthly in advance. The first
monthly installment of Base Rental shall be payable contemporaneously with the
execution of this Lease and a like monthly installment of Base Rental shall be
due on the first day of the second full calendar month of the Term and
continuing thereafter on the first day of each succeeding calendar month during
the Term. If the Rent Commencement Date is a day other than the first day of a
calendar month, the monthly installment of Base Rental for the fractional month
in question shall be prorated based on 1/365 of the current annual Base Rental
for each day of such fractional month.
SECTION 3.2. ELECTRICAL COSTS. Tenant shall pay to Landlord an amount
equal to the product of (a) the Electrical Costs, multiplied by (b) Tenant's
Proportionate Share. Such amount shall be payable monthly based on Landlord's
estimate of the amount due for each month, and shall be due on the Rent
Commencement Date and on the first day of each calendar month thereafter unless
Landlord has not theretofore furnished Tenant with information indicating the
amount due, in which event such amount shall be due within ten (10) days after
Landlord has delivered to Tenant an invoice therefor. Landlord shall furnish to
Tenant a statement of Landlord's actual Electrical Costs for the previous
Operating Year as a part of the Statement delivered pursuant to Section 4.5. If
the Statement reveals that Tenant paid more for Electrical Costs than Tenant's
Proportionate Share of Electrical Costs in the Operating Year for which such
Statement was prepared, then Landlord shall reimburse Tenant such excess within
ten (10) days after the delivery of the Statement or, at Tenant's option,
credit the amount of such refund against Tenant's Proportionate Share of
estimated Electrical Costs for the ensuing Operating Year; likewise, if Tenant
paid less than Tenant's Proportionate Share of Electrical Costs, then Tenant
shall pay Landlord such deficiency within ten (10) days after the delivery of
the Statement. With respect to any Operating Year or partial Operating Year in
which the Building is not fully occupied, the Electrical Costs for such period
shall, for the purposes hereof, be increased to the amount which, in Landlord's
reasonable judgement, would have been incurred had the total Net Rentable Area
in the Building been fully occupied.
SECTION 3.3. SECURITY DEPOSIT. Landlord acknowledges the receipt from
Tenant of the sum stated in the Basic Lease Information as the Security
Deposit. The Security Deposit shall be held by Landlord as security for
Tenant's performance under this Lease. The Security Deposit is not an advance
payment of Rental or a measure of Landlord's damages upon default by Tenant.
Landlord may, from time to time, without prejudice to any other remedy, apply
the Security Deposit to make good any arrearages of Rental or to satisfy any
other obligations of Tenant hereunder. Following any such application, Tenant
shall pay to Landlord on demand the amount so applied so as to restore the
Security Deposit to its original amount. If Landlord transfers its interest in
the Leased Premises,
3
<PAGE> 4
Landlord may assign the Security Deposit to the transferee, whereupon Landlord
shall have no further liability for the return thereof to Tenant. The security
deposit shall be deemed the property of Landlord, but any remaining balance of
such security deposit shall be returned by Landlord to Tenant within ten (10)
days after the fulfillment of Tenant's obligations under this Lease (excluding
any obligations that survive the termination or expiration of this Lease and
with respect to which Tenant has not received written notice from Landlord
within ten (10) days following the expiration or termination of this Lease).
ARTICLE 4
OPERATING EXPENSES
SECTION 4.1 OPERATING EXPENSES. For each Operating Year during the Term,
Tenant shall pay to Landlord as Rental, Tenant's Proportionate Share of the
Operating Expenses. In regard to the Operating Year in which this Lease
commences and terminates, Tenant's Proportionate Share shall be pro rated based
on the number of calendar days of the Term which fell within the Operating Year
in question.
SECTION 4.2 ADJUSTMENTS TO OPERATING EXPENSES. [Intentionally Omitted]
SECTION 4.3 DEFINITION OF OPERATING EXPENSES.
(a) "Operating Expenses" as used herein shall consist of any and all
costs, expenses, and disbursements (excluding only the items set forth in
subparagraph (b) below) which Landlord shall incur, pay, or become
obligated to pay, computed in accordance with generally accepted
accounting principles consistently applied on the accrual method of
accounting, in connection with the ownership, operation, maintenance,
repair, access, control, and security of the Project (collectively, the
"Operation" of the Project). The following list is illustrative of costs
included in Operating Expenses, but is not intended to be all-inclusive:
(i) Wages, salaries, fees, and other compensation of all
personnel or entities, including taxes, insurance, and benefits
relating thereto;
(ii) Cost of supplies and materials;
(iii) Cost of maintenance, janitorial, security, landscaping,
access control, and other service agreements;
(iv) Cost of insurance for which Landlord is responsible
hereunder or which Landlord reasonably considers necessary;
(v) All taxes, assessments, fees, and other governmental
charges now or hereafter applicable to the Project or to Landlord's
personal property used in the Operation thereof, whether federal,
state, county, or municipal, and whether assessed by existing taxing
authorities or by taxing authorities subsequently created
(collectively, the "Taxes"). If at any time during the Term there
shall be levied, assessed, or imposed on Landlord or the Project any
fee, charge, or tax directly upon rentals received under leases
covering space in the Project, directly or indirectly upon the
transactions represented by leases covering space in the Project, or
upon the occupancy or use of the Project, such taxes, fees, or
charges shall be included in "Operating Expenses". (For purposes of
this Lease, the term "Taxes" shall include the amount of any taxes
that would otherwise be imposed but for the provisions of any tax
abatement agreement with respect to which Landlord is a 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
applicable to the Project or to Landlord's personal property used in
the Operation thereof and shall be deemed to be payable by Landlord);
(vi) Cost of repairs and maintenance (excluding repairs and
maintenance paid by, or otherwise recovered from, proceeds of
insurance, Tenant, or other parties, or due to Landlord's gross
negligence or intentional acts);
(vii) Amortization of the cost of acquisition and installation
of capital investment items, including accrued interest thereon,
which are installed primarily to reduce Operating Expenses for the
general benefit of the Project or which are installed to comply with
all present and future laws, regulations and the requirements of any
governmental authority (including, but not limited to, any such law,
regulation or requirement which was not applicable to the Building
when it was originally constructed). All such costs shall be
amortized in accordance with standards from time to time adopted by
the Internal Revenue Service for federal income tax purposes;
provided that with respect to any of such items which may at any time
not be amortizable for federal income tax purposes, amortization
shall be determined by Landlord with respect to the reasonable useful
life of the item in question; and further provided that with respect
to any items for which no readily ascertainable amortization
schedules are available, it is the intention of Landlord to amortize
such items as rapidly as possible consistent with sound accounting
principles. Anything to the contrary herein notwithstanding, however,
no item shall be amortized over any period extending beyond the
reasonable useful life of the Project;
4
<PAGE> 5
(viii) Reasonable legal, architectural, engineering,
accounting, appraisal, and auditing fees;
(ix) Building office rent or rental value for management
operations;
(x) Landlord's central accounting costs together with the
costs of audits related thereto;
(xi) A management fee to the manager of the Project (not to
exceed 3% of the Base Rental due under all leases for the Project);
(xii) The cost of all utilities for the Project; and
(xiii) The cost of assessments under my applicable Declaration
of Covenants, Restrictions and Easements (as may be amended from time
to time) which are assessed by the applicable property owners
association.
(b) Operating Expenses shall specifically exclude each of the
following items:
(i) Commissions paid by Landlord for leasing space in the
Project;
(ii) Interest (except as provided by Section 4.3(a)(vii)
above), amortization, or other payments on loans to Landlord secured
by a lien on the Project;
(iii) Costs of alterations, maintenance, or repair
attributable solely to specific tenants of the Building;
(iv) Any item of Operating Expense that is paid by a tenant,
insurance company, or other source;
(v) Any inheritance, estate, gift, franchise, corporation,
income, net profits, or similar tax which may be, or is, assessed
against or imposed upon Landlord and/or the Project (except as
provided by Section 4.3(a)(v) above);
(vi) Expenses for capital investment items for the Building
(other than those described in Section 4.3(a)(vii) above);
(vii) Depreciation of the Building; and
(viii) Electrical costs and any other utility costs to the
extent separately metered to tenants and reimbursed to Landlord by
tenants of the Building pursuant to Section 3.2.
SECTION 4.4. PAYMENT OF ESTIMATED OPERATING EXPENSES. On or before the
Rent Commencement Date, and thereafter on or before the first day of each
Operating Year, Landlord shall furnish Tenant with an estimate of Operating
Expenses for the ensuing Operating Year. On or before the first day of each
calendar month during the ensuing Operating Year, Tenant will pay to Landlord as
Rental 1/12th of Tenant's Proportionate Share of the estimated Operating
Expenses for such Operating Year without demand or notice and without deduction
or offset. In the event Landlord fails to provide an estimate for any ensuing
Operating Year, Tenant shall continue to pay the monthly sum estimated by
Landlord for the prior Operating Year until such estimate is provided by
Landlord at which time Tenant shall pay Tenant's Proportionate Share of the
Operating Expenses in accordance with such estimate as provided herein.
SECTION 4.5. LANDLORD'S STATEMENT OF OPERATING EXPENSES. Within a
reasonable time after the end of each Operating Year and in no event later than
April 30, Landlord will provide Tenant with an annual statement (the
"Statement") setting forth, among other things, the actual Operating Expenses
for such Operating Year together with the amount paid by Tenant as its
Proportionate Share of estimated Operating Expenses. Funds, if any, due from
Tenant to Landlord shall be paid within ten (10) days after delivery of the
Statement. Funds, if any, due from Landlord to Tenant (provided Tenant is not
then in default hereunder and no fact or condition exists which, with the
passage of time or giving of notice or both would constitute a default
hereunder) shall, at the option of Tenant, either by refunded to Tenant within
ten (10) days after delivery of the Statement or applied against Tenant's
Proportionate Share of estimated Operating Expenses for the ensuing Operating
Year, provided, however, if the total escrow payments of Tenant are more than
Tenant's actual proportionate share of all such Operating Expenses for the year
in which the Lease expires, Landlord shall reimburse Tenant any excess within
ten (10) days following the expiration of the Term.
SECTION 4.6. TEXAS TAX CODE PROVISIONS. Tenant hereby waives any right it
may have under Section 41.413 of the Texas Tax Code to protest the appraised
value of all or any portion of the Leased Premises, the Building and the
Project, and any right it may have under Section 42.015 of the Texas Tax Code to
appeal an order of the appraisal review board with respect to all or any portion
of the Leased Premises, the Building and/or the Project. Tenant agrees that
Landlord shall have the sole right to protest any appraisals of the Leased
Premises, the Building and the Project. Tenant also hereby waives any right it
may have to receive a copy of any notice received by Landlord or reappraisal of
all or any portion of the Leased Premises, the Building and/or the Project,
including
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without limitation any notice required under Section 41.413(d) of the Texas
Tax Code. Tenant agrees that Landlord shall not be liable to Tenant for any
damages for Landlord's failure to send to Tenant a copy of any notice of
reappraisal concerning the Leased Premises, the Building and/or the Project,
irrespective of any obligation under applicable law of Landlord to provide such
notice. Notwithstanding the foregoing, if Tenant protests, challenges or appeals
any valuation for property tax purposes of all or any portion of the Leased
Premises, the Building and/or the Project, and such valuation increases from the
value protested, appealed or challenged, Tenant agrees to indemnify Landlord on
an after-tax basis for any property taxes due as a result of such increase.
ARTICLE 5
SERVICES BY LANDLORD
SECTION 5.1. SERVICES PROVIDED BY LANDLORD. Provided Tenant is not in
monetary default hereunder as set forth in Section 15.1(a) hereof, Landlord
agrees to furnish Tenant the following services:
(a) Hot and cold potable water at those points of supply provided for
general use of tenants in the Building.
(b) Heating and air conditioning in season during customary business
hours of the Building (which are currently 7:00 a.m. to 6:00 p.m. on Monday
through Friday, other than Holidays, and 8:00 a.m. to 1:00 p.m., on
Saturday) at such temperatures and in such amounts as may, from time to
time, be considered standard by Landlord. Such service other than during
customary business hours, on Sundays and Holidays will be furnished only
upon at least 24 hours advance notice, and Tenant shall bear the entire
cost thereof, which such cost shall not exceed Landlord's actual expenses
and reasonable overhead expenses incurred in connection with providing such
service.
(c) Elevator service in common with other tenants of the Building for
access to and from the Leased Premises, provided that Landlord may
reasonably limit the number of elevators to be in operation after customary
business hours and on Sundays and Holidays.
(d) Janitorial services considered standard by Landlord. Landlord
agrees that the janitorial company providing such janitorial services shall
be bonded and Landlord shall submit evidence thereof to Tenant upon
Tenant's request.
(e) Electric current during customary business hours at a voltage and
level as specifically set forth in the plans and specifications for
Tenant's leasehold improvements that are approved by Landlord in writing
pursuant to Section 12.2 hereof ("Approved Plans").
(f) Replacement of bulbs in Building Standard and other light
fixtures, provided that Landlord's standard charge for such bulbs replaced
in the Leased Premises shall be paid by Tenant to Landlord on demand.
SECTION 5.2. EXCESS UTILITY USE. Landlord shall not be required to
furnish electrical current above and beyond that specifically set forth in the
Approved Plans. If Tenant's requirements for or consumption of electricity
exceed the electricity to be provided by Landlord as described in Section 5.1,
Landlord shall, at Tenant's expense, make reasonable efforts to supply such
service through the then-existing feeders and risers serving the Building and
the Leased Premises, and Tenant shall pay to Landlord the cost of such service
within ten (10) days after Landlord has delivered to Tenant an invoice therefor.
Landlord may determine the amount of such additional consumption and potential
consumption by either or both: (a) a survey of standard or average tenant usage
of electricity in the Building performed by a reputable consultant selected by
Landlord and paid for by Tenant; or (b) a separate meter in the Leased Premises
installed, maintained, and read by Landlord, at Tenant's expense. Tenant shall
not install any electrical equipment requiring special wiring or requiring
voltage in excess of that specifically set forth in the Approved Plans or
otherwise exceeding Building capacity unless approved in advance by Landlord.
The use of electricity in the Leased Premises shall not exceed the capacity of
existing feeders and risers to or wiring in the Leased Premises. Any feeders,
risers or wiring required to meet Tenant's excess electrical requirements shall,
upon Tenant's written request, be installed by Landlord, at Tenant's cost, if,
in Landlord's reasonable judgment, the same are necessary and shall not cause
permanent damage or injury to the Building or the Leased Premises, cause of
create a dangerous or hazardous condition, entail excessive or unreasonable
alterations, repairs, or expenses, or interfere with or disturb other tenants of
the Building. If Tenant uses machines or equipment, or otherwise generates heat,
in the Leased Premises which affects the temperature otherwise maintained by the
air conditioning system or otherwise overloads any utility, Landlord may install
supplemental air conditioning units or other supplemental equipment in the
Leased Premises, and the cost thereof, including the cost of installation,
operation, use, and maintenance, shall be paid by Tenant to Landlord within ten
(10) days after Landlord has delivered to Tenant an invoice therefor.
SECTION 5.3. NO LIABILITY FOR FAILURE TO PROVIDE SERVICES. The failure of
Landlord to furnish, or any stoppage of, the services described in Section 5.1
resulting from any cause whatsoever will not render Landlord liable for any
damages to person, property, or business, or be construed as an eviction, of
Tenant, or entitle Tenant to any offset against or abatement of Rental, or
otherwise relieve Tenant from the fulfillment of any of its obligations
contained herein (except as expressly provided otherwise in Section 15.6
hereof). Should any malfunction occur, Landlord will use reasonable diligence to
repair same promptly.
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ARTICLE 6
USE
SECTION 6.1. USE OF LEASED PREMISES. The Leased Premises shall be used only
for the Permitted Use. Notwithstanding anything to the contrary contained
herein, in no event shall Tenant permit more than 150 persons to be situated
at the Leased Premises.
SECTION 6.2. COMPLIANCE WITH LAWS AND ORDINANCES. Tenant shall, at its
expense, comply with (a) all laws, rules, orders, ordinances, regulations and
requirements, now in force or which may hereafter be in force, of federal,
state, county, and municipal authorities having jurisdiction over the Leased
Premises and (b) any order, instruction, or direction of any public officer,
which requires abatement of any nuisance or which imposes upon Landlord or
Tenant any duty or obligation arising from Tenant's specific use or alteration
of the Leased Premises or from conditions which have been created by Tenant or
Tenant's Agents (as opposed to governmental laws, ordinances and regulations
applicable to real estate generally and for which Landlord is liable, the cost
of complying with same being subject to inclusion within Operating Expenses in
accordance with the terms hereof as amortized pursuant to Section 4.3(a)(vii).
SECTION 6.3. OBSERVANCE OF RULES AND REGULATIONS. Tenant and Tenant's
Agents shall comply with the Rules and Regulations. Landlord shall have the
right to make reasonable changes to the Rules and Regulations provided that
such changes shall be uniformly enforced and shall not be binding on Tenant
until a copy of such changes has been delivered to Tenant. In the event of a
conflict between the Rules and Regulations and this Lease, the provisions in
this Lease shall control.
SECTION 6.4. PROHIBITED USE BY TENANT. Tenant will not occupy or use, or
permit any portion of the Leased Premises to be occupied or used, for any
purpose other than the Permitted Use, or for any purpose which is unlawful or
which in the judgment of Landlord is disreputable, or which is extra hazardous
on account of fire, explosion or other casualty, or permit anything to be done
which will increase the rate of insurance on the Project or the contents of the
Building. In the event there shall be any such increase in the rate of insurance
on the Project or the contents of the Building, Tenant agrees to pay to
Landlord the amount of such increase on demand. In determining whether such
increased rate is a result of Tenant's acts or use of the Leased Premises, a
schedule issued by the organization computing the insurance rate on the Project
showing the various components of such rate shall be conclusive evidence of
the items and charges which make up such rate. Tenant will conduct its business
and control Tenant's Agents in such a manner as not to create any nuisances or
interfere with, annoy, or disturb other tenants or Landlord.
ARTICLE 7
INSURANCE
SECTION 7.1. TENANT'S INSURANCE. Tenant, at its own expense, shall maintain
during the Term of this Lease a policy or policies of worker's compensation and
comprehensive general liability insurance, including personal injury and
property damage, with contractual liability endorsement, in the amount of Two
Million Dollars ($2,000,000.00) for property damage and Two Million Dollars
($2,000,000.00) per occurrence for personal injuries or deaths of persons
occurring in or about the Leased Premises. Tenant, at its own expense, also
shall maintain during the Term of this Lease fire and extended coverage
insurance covering the replacement cost of all alterations, additions,
partitions and improvements installed or placed on the Leased Premises by Tenant
or by Landlord on behalf of Tenant, and all of Tenant's personal property
contained within the Leased Premises. Said policies shall (i) name Landlord as
an additional insured and insure Landlord's contingent liability under this
Lease (except for the worker's compensation policy, which instead shall include
a waiver of subrogation endorsement in favor of Landlord), (ii) be issued by an
insurance company which is licensed to do business in the State of Texas and
which has a Best's rating of A/VII or better, and (iii) provide that said
insurance shall not be cancelled unless thirty (30) days prior written notice
shall have been given to Landlord. In addition, such insurance provided by
Tenant shall provide that it shall provide primary coverage when any policy
issued to Landlord is similar or duplicate in coverage, and Landlord's policy
shall be excess over Tenant's policies. All insurance policies carried by Tenant
hereunder shall expressly provide (by endorsement or otherwise) that Landlord's
rights thereunder shall be assignable to Landlord's mortgagee who shall be shown
as an additional insured thereon. Said policy or policies or certificates
thereof shall be delivered to Landlord by Tenant upon commencement of the Term
of the Lease and upon each renewal of said insurance. Notwithstanding the
foregoing, Tenant may elect to self-insure the risk of damage to its personal
property situated at the Leased Premises (but not the leasehold improvements in
the Leased Premises or liability insurance) so long as (i) Tenant gives Landlord
at least thirty (30) days' prior written notice thereof, and (ii) Tenant's net
worth (determined in accordance with generally accepted accounting principles
consistently applied) is $50,000,000 or greater during the period in which
Tenant so elects to self-insure. Self-insurance by Tenant pursuant to the
foregoing sentence shall be deemed to be insurance for the purpose of the mutual
waiver of subrogation contained herein.
SECTION 7.2. LANDLORD'S INSURANCE. Landlord shall maintain insurance
covering the Building of which the Leased Premises are a part in an amount not
less than the "replacement cost" thereof insuring against the perils and costs
of Fire, Lighting, Extended Coverage, Vandalism and Malicious Mischief.
Landlord shall carry such additional insurance as would be carried by a
reasonably prudent owner of comparable premises, and, at Tenant's request,
Landlord shall provide Tenant with evidence of such insurance. Such coverage
shall be obtained on commercially reasonable terms from an insurance company
having a Best's rating of A/VII or better and licensed to do business in the
State of Texas. To the extent that the insurance coverage maintained by
Landlord pursuant to this Section 7.2 is carried under a blanket policy that
insures property owned by Landlord or its affiliates, in addition to
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the Project, the cost of such insurance shall be allocated to the Project on a
reasonable and equitable basis. It is agreed that the general liability
insurance policy carried by Landlord, as contemplated by this Section 7.2,
shall provide that it shall provide primary coverage when any policy issued to
Tenant is similar or duplicate in coverage, and Tenant's policy shall be excess
over Landlord's policies.
Section 7.3. Increased Cost of Insurance Resulting from Tenant's Acts.
Tenant will not permit the Leased Premises to be used for any purpose or in any
manner that would (i) void the insurance thereon, (ii) increase the insurance
risk, or (iii) cause the disallowance of any sprinkler credits, including
without limitation, use of the Leased Premises for the receipt, storage or
handling of any product, material or merchandise that is explosive or highly
inflammable. If any increase in the cost of any insurance on the Leased
Premises or the Building of which the Leased Premises are a part is caused by
Tenant's use of the Leased Premises, or because Tenant vacates the Leased
Premises, then Tenant shall pay the amount of such increase to Landlord.
Section 7.4. Waiver of Subrogation. Landlord and Tenant hereby waive and
release each other (but only to the extent of the insurance coverage required to
be maintained by the respective parties hereunder) of and from any and all
rights of recovery, claim, action or cause of action, against each other, their
agents, officers and employees, for any liability, loss or damage that may
occur to the Leased Premises, improvements or the Building of which the Leased
Premises are a part, or personal property (building contents) within the
Building and/or Leased Premises as the result of any fire or other casualty
required to be insured against under this Lease. Each party to this Lease
agrees immediately after execution of this Lease to give each insurance
company, which has issued to it policies of fire and extended coverage
insurance, written notice of the terms of the mutual waivers contained in this
section and to have the insurance policy properly endorsed to reflect such
waivers. This Section 7.4 overrides any provisions in this Lease to the
contrary.
ARTICLE 8
ASSIGNMENT AND SUBLETTING
Section 8.1. Prohibition. Tenant shall not assign (either voluntarily, nor
permit assignment by operation of law), sublet, transfer or encumber this
Lease, or any interest therein, without the prior written consent of Landlord;
provided, however, Tenant may assign this Lease or sublet the Leased Premises
to any entity that controls, is controlled by, or is under common control with
Tenant (individually, an "Affiliate"). Landlord agrees that it shall not
unreasonably withhold its consent to any assignment or subletting proposed to be
entered into by Tenant. In considering whether it should consent to any
subletting or assignment requested by Tenant, Landlord may take into
consideration (among other factors) the credit standing of the proposed
assignee or subtenant, the purpose for which the Leased Premises would be used
by the proposed assignee or subtenant (including whether such use would violate
any exclusive use rights in existence today, and those that might then be in
existence and of which Tenant has been given written notice, and by which
Landlord may be bound, or violate any deed restrictions, restrictive covenants,
covenants, conditions and restrictions, or the "Alliance Developments
Guidelines," as may then be in existence, it being understood and agreed that
Landlord shall have the right to refuse its consent if the proposed use by the
assignee or subtenant would result in any such violation), the length of the
proposed sublease, the business reputation of the proposed assignee or
subtenant, whether the proposed assignee's or subtenant's operations would
involve use of hazardous substances, and all other relevant factors. Any
attempted assignment, subletting, transfer or encumbrance by Tenant in
violation of the terms and covenants of this Paragraph shall be void. No
assignment, subletting or other transfer, whether consented to by Landlord or
not, shall relieve Tenant of its liability hereunder.
Section 8.2. Request to Consent. In the event Tenant desires to sublet the
Leased Premises, or any portion thereof, or assign this Lease, Tenant shall
give written notice thereof to Landlord at least thirty (30) days prior to the
proposed commencement date of such subletting or assignment, which notice shall
act forth the name of the proposed sublessee or assignee, the relevant terms
of any sublease or assignment and copies of financial reports and other
relevant financial information of the proposed sublessee or assignee. If
Landlord does not respond to Tenant's request to assign, sublet, encumber or
transfer this Lease within thirty (30) days after Landlord's receipt of such
request (which request shall be accompanied by the additional information
referenced in the immediately preceding sentence), Landlord's consent shall be
deemed granted. Landlord shall be entitled to charge Tenant a reasonable fee
for processing Tenant's request for any subletting or assignment, including,
but not limited to, Landlord's reasonable out-of-pocket expenses and attorneys'
fees. Any assignee, sublessee or transferee of Tenant's interest in this Lease
(all such assignees, sublessees and transferees being hereinafter referred to
as "Transferee(s)"), by accepting any such assignment, sublease or transfer
shall be deemed to have assumed Tenant's obligations hereunder, and shall be
deemed to have assumed liability to Landlord for all amounts paid to persons
other than Landlord by such Transferees. No assignment, subletting or other
transfer, whether consented to by Landlord or not or permitted hereunder, shall
relive Tenant of its liability hereunder. If an Event of Default occurs while
the Leased Premises or any part thereof are assigned or sublet, then Landlord,
in addition to any other remedies herein provided, or provided by law, may
collect directly from such Transferee all rents payable to the Tenant and apply
such rent against any sums due Landlord hereunder. No such collection shall be
construed to constitute a novation or a release of Tenant from the further
performance of Tenant's obligations hereunder. If a Transferee defaults under
this Lease, and Landlord provides the Transferee with notice of such default,
Landlord shall simultaneously notify Tenant of the Transferee's default.
Landlord shall accept performance by Tenant with the same force and effect as
performance by Transferees. Upon the occurrence of an assignment or subletting,
whether or not consented to by Landlord, or mandated by judicial intervention,
Tenant hereby assigns, transfers and conveys to Landlord all rents or other sums
received or receivable by Tenant under any such assignment or sublease, which
are in excess of the rents and other sums payable by Tenant under this Lease
(or in case of a sublease, which are in excess of the rents and other sums
payable by Tenant with respect to the portion of the Leased Premises that is
subleased), and agrees to pay such amounts to Landlord within ten (10) days
after receipt.
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The merger or consolidation of Tenant with another entity shall not be deemed to
be an assignment of this Lease by operation of law so long as the surviving
entity in any such merger or consolidation has a net worth (determined in
accordance with generally accepted accounting principles consistently applied)
immediately following such merger or consolidation that is equal to or greater
than the net worth of Tenant immediately prior to such merger or consolidation.
Section 8.3. Cancellation by Landlord. In addition to, but not in
limitation of, Landlord's right to approve of any sublessee or assignee,
Landlord shall have the option, in its sole discretion, in the event of any
proposed subletting or assignment, to terminate this Lease, or in case of a
proposed subletting of less than the entire Leased Premises, to recapture the
portion of the Leased Premises to be sublet, as of the date the subletting or
assignment is to be effective. The option shall be exercised, if at all, by
Landlord giving Tenant written notice thereof within thirty (30) days following
Landlord's receipt of Tenant's written notice as required above. If this Lease
shall be terminated with respect to the entire Leased Premises pursuant to this
Paragraph, the Term of this Lease shall end on the date stated in Landlord's
notice as the effective date of the sublease or assignment as if that date had
been originally fixed in this Lease for the expiration of the Term hereof;
provided, however, that effective on such date Tenant shall pay Landlord all
amounts, as reasonably estimated by Landlord, payable by Tenant to such date
with respect to taxes, insurance, repairs, maintenance, restoration and other
obligations, costs or charges which are the responsibility of Tenant hereunder.
Further, upon any such cancellation Landlord and Tenant shall have no further
obligations or liabilities to each other under this Lease, except with respect
to obligations or liabilities which have accrued hereunder as of such
cancellation date (in the same manner as if such cancellation date were the date
originally fixed in this Lease for the expiration of the Term hereof) and except
for those obligations and liabilities which, by the express terms of this Lease,
are to survive any expiration or termination hereof. If Landlord recaptures only
a portion of the Leased Premises under this Paragraph, the Base Rent during the
unexpired Term hereof shall abate proportionately based on the rent per square
foot contained in this Lease as of the date immediately prior to such recapture.
Tenant shall, at Tenant's own cost and expense, discharge in full such
commissions which may be due and owing as a result of any proposed assignment or
subletting, whether or not the Leased Premises are recaptured pursuant hereto
and rented by Landlord to the proposed tenant or any other tenant.
Section 8.4. Tenant's Bankruptcy. If this Lease is assigned to any person
or entity pursuant to the provisions of the United States Bankruptcy code, 11
U.S.C. Section 101 et. seq. (the "Bankruptcy Code"), any and all monies or other
consideration payable or otherwise to be delivered in connection with such
assignment shall be paid or delivered to Landlord, shall be and remain the
exclusive property of Landlord and shall not constitute property of Tenant or of
the estate of Tenant within the meaning of the Bankruptcy Code. Any and all
monies or other considerations constituting Landlord's property under the
preceding sentence not paid or delivered to Landlord shall be held in trust for
the benefit of Landlord and be promptly paid or delivered to Landlord. Any
person or entity to which this Lease is assigned pursuant to the provisions of
the Bankruptcy Code, shall be deemed, without further act or deed, to have
assumed all of the obligations arising under this Lease on and after the date of
such assignment. Any such assignee shall upon demand execute and deliver to
Landlord an instrument confirming such assumption.
Section 8.5. Transfers by Landlord. Landlord shall have the right to
transfer, assign, and convey, in whole or in part, the Building and any and all
of its rights under this Lease, and in the event Landlord assigns its rights
under this Lease, Landlord shall thereby be released from any further
obligations hereunder, and Tenant agrees to look solely to such successor in
interest of the Landlord for performance of such obligations.
ARTICLE 9
SUBORDINATION AND ATTORNMENT
Section 9.1. Subordination and Attornment. Tenant accepts this Lease
subject and subordinate to any mortgages and/or deeds of trust now or at any
time hereafter constituting a lien or charge upon the Leased Premises or the
improvements situated thereon; provided, however, that if the mortgagee,
trustee, or holder of any such mortgage or deed of trust elects 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 Lease shall be deemed superior to
such lien, whether this Lease was executed before or after said mortgage or deed
of trust. Landlord agrees to promptly obtain and deliver to Tenant a
subordination non-disturbance and attornment agreement in substantially the form
attached hereto as Exhibit "G" and made a part hereof ("SNDA") executed by
Landlord's current mortgagee with respect to the Land. Tenant agrees to enter
into the SNDA with such mortgagee promptly upon Landlord's request therefor.
Notwithstanding the foregoing, the subordination of this Lease to any mortgage
or deed of trust that is hereafter placed upon the Land is expressly conditioned
upon Tenant and the mortgagee or beneficiary under any such mortgage or deed of
trust entering into an SNDA in a form reasonably acceptable to Tenant (Tenant
hereby agreeing that an SNDA substantially in the form that is attached hereto
as Exhibit "G" and made a part hereof is acceptable to Tenant). Tenant agrees to
enter into such SNDA with any such mortgagee or beneficiary promptly upon
Landlord's request therefor. Tenant shall be permitted to record the SNDA in the
real property records of Tarrant County, Texas. If any future mortgagee or
beneficiary under a mortgage or deed of trust hereafter placed upon the Land
desires to subordinate its mortgage or deed of trust to this Lease, Tenant
agrees that it shall promptly execute such instrument as may be reasonably
required by such mortgagee or beneficiary in order to effect such subordination.
ARTICLE 10
CASUALTY LOSS
Section 10.1. Landlord's Right to Terminate for Uninsured Loss. If the
Project of any portion thereof is damaged by any casualty not insured against by
Landlord, Landlord may terminate this Lease by written notice to Tenant given
within sixty (60) days after the date of such damage. Subject to Landlord's
superior right to terminate
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this Lease as provided in Section 10.3 and Section 10.4. Tenant may elect to
keep this Lease in full force and effect by funding the cost of repairing the
uninsured damage. Written notice of such election must be given to Landlord
within thirty (30) days following the date of Landlord's termination notice
to Tenant under this Section 10.1. If Tenant elects to fund the cost of
repairing the uninsured damage by giving the written notice required above,
Landlord shall proceed to repair the damage so long as Tenant funds the cost in
the manner provided by Section 10.7. If Tenant does not elect to fund such cost
by giving the written notice required above, and Landlord has elected to
terminate this Lease, Rental shall be apportioned and paid to the date of such
damage, and Tenant shall have a reasonable time to vacate the Leased Premises.
SECTION 10.2. LANDLORD'S RIGHT TO TERMINATE FOR INSUFFICIENT INSURANCE
PROCEEDS. If the Project or any portion thereof is damaged by any casualty and
the proceeds from insurance (after payments required to be made to Landlord's
mortgagee or any ground or primary lessor) plus the amount of any deductible are
insufficient to repair the damage, Landlord may terminate this Lease by written
notice to Tenant given within sixty (60) days after the date of such damage.
Subject to Landlord's superior right to terminate this Lease as provided in
Section 10.3 and Section 10.4, Tenant may elect to keep this Lease in full force
and effect by funding the amount of such insufficiency. Written notice of such
election must be given to Landlord within thirty (30) days following the date of
Landlord's termination notice to Tenant under this Section 10.2. If Tenant
elects to fund the amount of such insufficiency, Landlord shall proceed to
repair the damage so long as Tenant funds the insufficiency in the manner
provided by Section 10.7. If Tenant does not elect to fund such insufficiency by
giving the written notice required above, and Landlord elects to terminate this
Lease, Rental shall be apportioned and paid to the date of such damage, and
Tenant shall have a reasonable time vacate the Leased Premises.
SECTION 10.3. LANDLORD'S RIGHT TO TERMINATE FOR DAMAGE NOT CAPABLE OF
REPAIR IN ONE HUNDRED TWENTY (120) DAYS. Notwithstanding the rights granted to
Tenant in Section 10.01 and Section 10.2, if the Project or any material portion
thereof is damaged by any casualty, and if such damage is not susceptible of
repair within one hundred twenty (120) days (as estimated by an architect or
engineer selected by Landlord), Landlord may terminate this Lease by written
notice to Tenant given within sixty (60) days after the date of such damage. If
this Lease is so terminated, Rental shall be apportioned and paid to the date of
such damage, and Tenant shall have a reasonable time to vacate the Leased
Premises.
SECTION 10.4. LANDLORD'S RIGHT TO TERMINATE FOR ECONOMIC INFEASIBILITY.
Notwithstanding the rights granted to Tenant in Section 10.1 and Section 10.2,
if the Project or any material portion thereof is damaged by any casualty and,
in the reasonable judgment of Landlord, it would not be economically feasible
to repair such damage, Landlord may terminate this Lease by written notice to
Tenant given within sixty (60) days after the date of such damage. If Landlord
so terminates this Lease, Rental shall be apportioned and paid to the date of
such damage, and Tenant shall have a reasonable time to vacate the Leased
Premises. If Landlord terminates this Lease pursuant to this Section 10.4,
however, Landlord must simultaneously terminate the leases of all other tenants
in the Building.
SECTION 10.5. TENANT'S RIGHT TO TERMINATE. If any damage occurs to the
Building that renders the Leased Premises untenantable or inaccessible, and
provided this Lease is not otherwise terminated by Landlord as a result
thereof, Tenant shall have a one-time right to terminate this Lease if Landlord
has not completed repairs to the extent that the Leased Premises are rendered
tenantable and reasonably accessible within one hundred eighty (180) days
(including force majeure) after such damage occurs; such termination to be
evidenced by Tenant giving Landlord written notice within thirty (30) days
after expiration of such one hundred eighty (180)-day period.
SECTION 10.6. TENANT'S RIGHT TO VACATE AND ABATE RENTAL. During any
period that the Leased Premises, or any portion thereof, are rendered
untenantable or inaccessible as the result of any casualty, and provided the
damage was not directly or indirectly caused by the acts or omissions of
Tenant or Tenant's Agents, Rental shall be reduced in a fair and equitable
manner as to that portion of the Leased Premises rendered untenantable or
inaccessible commencing on the date the Leased Premises became untenantable or
inaccessible and terminating on the date the Leased Premises are repaired to a
tenantable and accessible condition or would have been but for delays directly
or indirectly caused by Tenant or Tenant's Agents. During any such period of
Rental reduction, Tenant, at Tenant's expense, may temporarily vacate the
Leased Premises without being in default under this Lease.
SECTION 10.7. TENANT'S PAYMENTS FOR UNINSURED LOSSES OR INSURANCE
DEFICIENCIES. If Tenant elects to pay the cost of repairing uninsured damage
pursuant to Section 10.1 or the amount of the insurance insufficiency pursuant
to Section 10.2, Tenant shall deposit such cost or amount (as determined by an
architect or engineer selected by Landlord) in an interest bearing account with
a financial institution designated by Landlord within ten (10) days following
the date of Tenant's election. Funds so deposited shall be disbursed to Landlord
in the same manner as insurance proceeds are or would be disbursed, provided
that the disbursement of such funds shall not commence until all insurance
proceeds, if any, have been disbursed. Landlord shall have no obligation
whatsoever to reimburse or repay Tenant for any sums paid by Tenant pursuant to
this Section 10.7; provided, however, that any funds remaining in the account
after repairs are complete shall be returned to Tenant.
SECTION 10.8. WAIVER OF DAMAGES. No damages, compensation, or claim shall
be payable by Landlord for inconvenience, loss of business, or annoyance
arising from any repair of the Project. Landlord shall use commercially
reasonable efforts to have such repairs made promptly and in a manner that
minimizes interference with Tenant's occupancy.
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ARTICLE 11
CONDEMNATION
SECTION 11.1. TERMINATION UPON SUBSTANTIAL TAKING. If the whole or
substantially the whole of the Building or the Leased Premises are taken or
condemned for any public purpose, this Lease and the leasehold estate created
hereby shall cease and terminate as of the date of such taking.
SECTION 11.2. LANDLORD'S TERMINATION UPON SUBSTANTIAL INTERFERENCE. If
any portion of the Building is taken or condemned for any public purpose, which
taking, in Landlord's reasonable judgment, interferes materially with Landlord's
use and Operation of the Building or is such that Landlord determines, in
Landlord's sole judgment, that the Building cannot be restored to usefulness in
an economically leasible manner, Landlord may terminate this Lease, effective
as of a date specified in writing by Landlord to Tenant. If Landlord terminates
this Lease pursuant to this Section 11.2, however, Landlord must simultaneously
terminate all other tenant leases in the Building.
SECTION 11.3. TENANT'S TERMINATION UPON SUBSTANTIAL INTERFERENCE. In the
event that a portion, but less than substantially the whole, of the Leased
Premises is taken or condemned for any public purpose, which taking, in
Tenant's reasonable judgment, shall interfere materially with Tenant's use of
the Leased Premises, Tenant may terminate this Lease as of the date of such
taking as to the portion of the Leased Premises so taken, and, unless Landlord
terminates this Lease pursuant to Section 11.2, this Lease shall remain in full
force and effect as to the remainder of the Leased Premises except that Base
Rental shall be reduced by an amount bearing the same proportion to the Base
Rental otherwise required to be paid hereunder as the Net Rentable Area of
portion of the Leased Premises with respect to which Tenant terminates this
Lease bears to the Net Rentable Area of the entire Leased Premises before any
such taking or condemnation.
SECTION 11.4. EFFECT OF TERMINATION. In the event of any termination of
this Lease pursuant to Section 11.1, Section 11.2 or Section 11.3, this Lease
and the estate hereby created shall expire as of the date of such termination
in the same manner and with the same effect as if that were the date set for
the normal expiration of the Term, Rental shall be apportioned as of such date,
and Tenant shall have a reasonable time to vacate the Leased Premises. The
provisions of this Section 11.4 shall apply in the same manner to any partial
termination of this Lease pursuant to Section 11.3.
SECTION 11.5. CONDEMNATION AWARD. Except as provided in Section 11.6,
Landlord shall be entitled to receive the entire award in any condemnation
proceeding without deduction for any estate vested in Tenant by this Lease;
provided that nothing herein contained shall prohibit Tenant from seeking
severance damages or moving expenses as long as such awards do not reduce the
award which would otherwise be payable to Landlord.
SECTION 11.6. TEMPORARY TAKING. If the temporary use or occupancy of all
or any part of the Leased Premises shall be condemned or taken for any public
purpose, this Lease shall be and remain unaffected by such condemnation or
taking and Tenant shall continue to pay all Rental. In the event of any such
condemnation or taking, Tenant shall be entitled to appear, claim, prove, and
receive the portions of the award that represents compensation for use or
occupancy of the Leased Premises during the Term. As to that portion of the
award that represents the cost of restoration of the Leased Premises, however,
Landlord shall be entitled to appear, claim, prove, and receive the portion of
the award that represent the use or occupancy of the Leased Premises after then
end of the Term. Landlord and Tenant agree to request that the court which
renders such condemnation award allocate the award between Landlord and Tenant.
ARTICLE 12
LEASEHOLD IMPROVEMENTS AND ALTERATIONS
SECTION 12.1. [Intentionally omitted.]
SECTION 12.2. TENANT'S ALTERATIONS. Tenant may not, without Landlord's
prior written consent make any alterations, additions or improvements
(including, but not limited to, painting of walls, wallpapering and other
treatment of walls and floors) to the Leased Premises (which consent shall not
be unreasonably withheld). Should Tenant desire any alterations, additions or
improvements Tenant agrees to submit all plans and specifications for same to
Landlord for Landlord's written approval before beginning such work. Upon
Tenant's receipt of Landlord's written approval, and upon Tenant's payment to
Landlord of Landlord's standard charge for reviewing and approving such plans
and specifications, Tenant may proceed with the approved alterations, additions
or improvements so long as they are in substantial conformance (except as to
matters which affect any Central system or Branch of the Building, in which
event construction must be in strict compliance) with the approved plans and
specifications and with the other provisions of Section 12.2 and Section 12.3.
Landlord's approval of the plans, specifications and working drawings for
Tenant's alterations shall create no responsibility or liability on the part of
Landlord for their completeness, design sufficiency, or compliance with any
laws, rules, or regulations of governmental agencies or authorities. All
alterations, additions or improvements shall be made at Tenant's expense, either
by Tenant's contractors which have been approved in writing by Landlord or, by
Landlord's contractors; provided, however, in either event, Tenant shall employ
and use the mechanical, electrical, and plumbing contractors of Landlord to
perform any mechanical, electrical, and plumbing services necessary for such
alterations. All alterations, additions or improvements shall be performed in a
good and workmanlike manner and in compliance with Article 13 and in compliance
with all laws, ordinances, regulations, codes and other governmental
requirements and with the requirements of all covenants, conditions and
restrictions applicable to the Project (including, but not limited to approval
by the Development Review Board).
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SECTION 12.3. NO ALTERATIONS of CENTRAL SYSTEMS and BRANCHES. Tenant
shall not alter or modify or in any manner disturb any Central system or Branch
of the Building except pursuant to Landlord's express written permission and
under Landlord's direct supervision (and subject to the payment to Landlord
upon substantial completion of the work of a fee in the amount of 10% of the
actual costs of performing such work to cover Landlord's costs of supervision
and administration of such activities).
SECTION 12.4. LANDLORD'S PROPERTY UPON TERMINATION. All alterations,
additions or improvements made or installed by or for Tenant in or to the
Leased Premises shall be and remain Tenant's property until the expiration or
termination of this Lease, at which time such alterations, additions and
improvements shall become Landlord's property (except Tenant's furniture,
furnishings, personal property, and movable trade fixtures) and shall not be
removed without Landlord's written consent. Tenant agrees to remove, at
Tenant's expense, all of its furniture, furnishings, personal property, and
movable trade fixtures upon termination or expiration of this Lease and shall
promptly reimburse Landlord for the cost of repairing all damage (ordinary wear
and tear excepted) done to the Leased Premises or the Building by such removal.
All of Tenant's furniture, movable trade fixtures and other personal property
not removed by Tenant from the Leased Premises upon the termination of this
Lease, or of Tenant's right to possess the Leased Premises, shall be
conclusively presumed to have been abandoned by Tenant. Landlord may take
possession of such abandoned property and either declare same to be the
property of Landlord or, at the expanse of Tenant, dispose of such property in
any manner and for whatever consideration landlord, in its sole discretion,
deems advisable.
ARTICLE 13
LIENS
Tenant has no authority, express or implied, to create or place any lien
or encumbrance of any kind or nature whatsoever upon, or in any manner to bind,
the interest of Landlord or Tenant in the Leased premises or to charge the
rentals payable hereunder for any claim in favor of any person dealing with
Tenant, including those who may furnish materials or perform labor for any
construction or repairs. Tenant covenants and agrees that it will pay or cause
to be paid all sums legally due and payable by it on account of any labor
performed or materials furnished in connection with any work performed by or on
behalf of Tenant on the Leased Premises and that it will save and hold Landlord
harmless form any and all loss, cost or expense based on or arising out of
asserted claims or liens against the leasehold estate or against the right,
title and interest of the Landlord in the Leased Premises or under the terms of
this Lease arising form such work. Tenant agrees to give Landlord prompt
written notice of the placing of any lien or encumbrance against the Leased
Premises. If any mechanics' or materialmen's lien (""M&M Lien") is ever
asserted or placed against or attaches to the Project or any portion thereof as
a result of any act or omission of Tenant or its agents, then in lieu of paying
the claim relating to such M&M Lien Tenant shall have the right to contest the
assertion, placement or attachment of such M&M Lien so long as (i) prior to any
such contest (and no later than thirty (30) days after such lien has been
filed) Tenant at its sole expense provides to Landlord a bond indemnifying
against such M&M Lien that complies with Chapter 53, Subchapter H of the Texas
Property Code (as amended from time to time) or its successor law, and (ii)
Tenant contests such M&M Lien diligently and in good faith; provided, however,
the foregoing right of Tenant to contest any such M&M Lien shall not impair or
otherwise affect Tenant's indemnification obligations with respect to such M&M
Lien. If any lien is asserted against the Leased Premises due to acts of
Landlord or its agents or contractors, Tenant shall not be obligated to remove
such lien (it being agreed that the removal of such lien shall be Landlord's
obligation).
ARTICLE 14
TENANT'S REPAIRS
SECTION 14.1. TENANT'S REPAIRS. Except for damage to the Leased Premises
or the Building caused by an act or omission of Landlord or Landlord's
employees, agents, contractors, or invitees following the Commencement Date,
Tenant shall, at Tenant's expense, keep the Leased Premises in good condition
and repair at all times during the Term. Tenant shall repair any damage to the
Project directly or indirectly caused by or arising out of the acts or omissions
of Tenant or Tenant's Agents, and all such repairs shall be performed by
Building maintenance personnel at Tenant's sole expense; provided, however,
that Tenant's obligations hereunder are subject to the mutual waiver of
subrogation contained herein. At the end of the Term, Tenant shall surrender to
Landlord the Leased Premises and all alterations, additions, and improvements
thereto in the same condition as when received, ordinary wear and tear
excepted. Tenant shall receive the benefit of the coverage afforded to Landlord
by any warranty or maintenance/service contract relating to the Leased premises.
Tenant shall commence such repair within ten (10) days of the earlier of (i)
Tenant's receipt of written notice from Landlord of a defect or need for
repairs, or (ii) the date upon which Tenant first became aware of a defect or
need for repairs, and Tenant shall thereafter have a reasonable opportunity
under the particular circumstance to repair same or cure such defect in a good
and workmanlike manner and shall diligently prosecute the repair to completion.
If Tenant fails to make needed repairs as provided above, Landlord may make
such repairs, and Tenant shall pay Landlord on demand Landlord's actual costs
in making such repairs plus a fee in the amount of 10% of the actual costs of
performing such work to cover the costs of Landlord's supervision.
ARTICLE 15
DEFAULTS AND REMEDIES
SECTION 15.1. EVENTS of DEFAULT by TENANT. The occurrence of any one or
more of the following events shall constitute a default by Tenant under this
Lease:
<PAGE> 13
(a) Tenant fails to pay any Rental when due and such failure shall
continue for ten (10) days after written notice to Tenant; provided,
however, Tenant shall be entitled to such notice and opportunity to cure on
only two (2) occasions during any calendar year;
(b) Tenant fails to perform or observe any other covenant or
obligation hereunder or under any of the Rules and Regulations and such
failure continues for more than thirty (30) days after notice or, if such
failure cannot be cured through the exercise of all reasonable diligence,
within such thirty (30)-day period, if Tenant does not commence to cure
same within said thirty (30)-day period and thereafter diligently pursue
the correction of same to completion;
(c) [Intentionally Omitted];
(d) any petition is filed by or against Tenant under any section or
chapter of the present or any future United States Bankruptcy Code or under
any similar law or statute of the United States or any state thereof
(which, in the case of an involuntary proceeding, is not permanently
discharged, dismissed, or vacated, as the case may be, within thirty (30)
days of its commencement), or any order for relief shall be entered against
Tenant in proceedings filed under any section or chapter of the present or
any future United States Bankruptcy Code or under any similar law of
statute of the United State or any state thereof;
(e) Tenant becomes insolvent or makes a transfer in fraud of
creditors;
(f) Tenant makes a general assignment for the benefit of creditors;
(g) a receiver, custodian, or trustee is appointed for Tenant or
for any of the assets of Tenant (or any guarantor of Tenant's obligations
under this Lease) which appointment is not vacated within sixty (60) days
of the date of such appointment;
(h) breach by Tenant of the prohibition against assignment and
subletting under Article 8 hereof; or
(i) the occurrence of a default as so specified under any other
provision of this Lease.
Sections 15.2. Remedies of Landlord. If a default occurs, and at any time
thereafter while Tenant remains in default, Landlord may do any one or more of
the following without any notice or demand:
(a) Terminate this Lease, in which event Tenant shall immediately
surrender the Leased Premises to Landlord. If Tenant fails to do so,
Landlord may, without any further notice and without prejudice to any other
remedy Landlord may have for possession or arrearages in Rental, enter upon
and take possession of the Leased Premises and remove Tenant and its
effects without being liable to prosecution or any claim for damages
therefor, and Tenant shall indemnify Landlord for all loss and damage which
Landlord may suffer by reason of such termination, whether through
inability to relet the Leased Premises or otherwise, including any loss of
Rental for the remainder of the Term.
(b) If the default relates to nonpayment of Rental, terminate this
Lease, in which event Tenant's default shall be deemed a total and entire
breach of Tenant's obligations under this Lease and Tenant immediately
shall become liable for damages in an amount equal to the excess of (i) the
total Base Rental for the remainder of the Term discounted at the Prime
Rate to the then present value, together with all other expenses incurred
by Landlord in connection with Tenant's default, all sums due pursuant to
Section 15.5 thereof, and the unpaid Rental due as of the date of
termination, over (ii) the fair market rental value of the Leased Premises
on a net basis for the balance of the Term discounted at the Prime Rate to
the then present value. It is acknowledged, intended and agreed that the
amounts which Landlord is entitled to recover under this Section 15.2(b)
constitute liquidated damages and not a penalty for Tenant's defaults
related to nonpayment of Rental. Such amounts constitute the parties' best,
good faith, and reasonable estimate of the damages which would be suffered
by Landlord in the event any such default occurs, the exact amount of such
damages being difficult or impractical to calculate.
(c) Enter upon and take possession of the Leased Premises as
Tenant's agent without terminating this Lease and without being liable to
prosecution to any claim for damages therefor, and Landlord may relet the
Leased Premises as Tenant's agent and receive the Rental therefor, in which
event Tenant shall pay to Landlord on demand all sums due pursuant to
Section 15.5 hereof, together with any deficiency that may arise by reason
of such reletting; provided, however, Landlord shall have no duty to relet
the Leased Premises, and Landlord's failure to do so shall not release or
affect Tenant's liability for Rental or for damages.
(d) Do whatever Tenant is obligated to do under this Lease and
enter the Leased Premises, without being liable to prosecution or any claim
for damages therefor, to accomplish such purpose. Tenant shall reimburse
Landlord immediately upon demand for any reasonable expenses which Landlord
incurs in this effecting compliance with this Lease on Tenant's behalf,
together with interest thereon at the Highest Lawful Rate from the date
Landlord incurs the expense in question until Landlord is reimbursed
therefor.
(e) Require Tenant to pay any Rental in quarterly installments in
advance of each calendar quarter during the Term by certified or cashier's
check.
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(f) In the event of a monetary default, without notice, alter the
locks and any other security device or devices which allow Tenant access
to the Leased Premises or the Building, and Landlord shall not be required
to provide a new key or right of access to Tenant, and restrict or
terminate any right to use parking facilities associated with the Building
as well as Building services to the Leased Premises. This Section 15.2(f)
is intended to and shall supersede the provisions of Section 93.002 of the
Texas Property Code; provided, however, Tenant shall be permitted access
to the Leased Premises to the extent necessary for Tenant to maintain
compliance with applicable securities laws.
SECTION 15.3. NO SURRENDER. No act or thing done by Landlord or its
agents or representatives shall constitute an acceptance of an attempted
surrender of the Leased Premises, and no agreement to accept a surrender of
the Leased Premises shall be valid unless made in writing and signed by
Landlord. No re-entry or taking possession of the Leased Premises by Landlord
shall constitute an election by Landlord to terminate this Lease unless a
written notice of termination if given to Tenant. Notwithstanding any such
reletting or re-entry or taking possession, Landlord may at any time thereafter
terminate this Lease for a previous default. Landlord's acceptance of Rental
following an event of default shall be construed as a waiver to such event
of default unless such payment of Rental fully cures such default. No waiver by
Landlord of any breach of this Lease shall constitute a waiver of any other
violation or breach of any other terms hereof. Forbearance by Landlord to
enforce one or more of the remedies herein provided upon a breach hereof shall
not constitute a waiver of any other breach.
SECTION 15.4. NON WAIVER BY LANDLORD. No provision of this Lease shall be
deemed to have been waived by Landlord unless such waiver is in writing and
signed by Landlord. No custom or practice which may develop between the parties
in the administration of this Lease shall be construed to waive or lessen
Landlord's right to insist upon strict performance of the terms of this Lease.
The rights granted to Landlord in this Lease shall be cumulative of every other
right or remedy which Landlord may otherwise have at law or in equity or by
statute, and the exercise of one or more rights or remedies shall not prejudice
or impair the concurrent or subsequent exercise of other rights or remedies.
SECTION 15.5 PAYMENT BY TENANT. Upon the occurrence of any default,
Tenant shall pay to Landlord all reasonable costs incurred by Landlord
(including court costs and reasonable attorneys' fees and expenses) in (a)
obtaining possession of the Leased Premises, (b) removing and storing Tenant's
or any other occupant's property, (c) repairing, restoring, renovating,
altering, remodeling, or otherwise putting the Leased Premises into condition
acceptable to a new tenant, (d) if Tenant is dispossessed of the Leased
Premises and this Lease is not terminated, reletting all or any part of the
Leased Premises (including, but not limited to, brokerage commissions, cost of
tenant finish work, brokerage commissions, advertising and promotional
expenses, and other costs incidental to such reletting), (e) performing
Tenant's obligations which Tenant failed to perform, and (f) enforcing, or
advising Landlord of, its rights, remedies, and recourses arising out of the
default. Landlord's rights and remedies under this Section 15.5 shall be in
addition to the rights and remedies of Landlord set forth in Section 15.2, in
other portions of this Lease, and which may otherwise be available to Landlord
at law or in equity.
SECTION 15.6 DEFAULT BY LANDLORD; TENANT'S REMEDY. If Landlord fails to
perform any of its obligations hereunder within thirty (30) days after written
notice from Tenant specifying in detail such failure (or if the failure cannot
be corrected, through the exercise of reasonable diligence, within such 30-day
period, if Landlord does not commence to correct same within such 30-day period
and thereafter diligently prosecute same to completion), Tenants sole and
exclusive remedy shall be either (i) an action for damages and Tenant may
pursue a money judgement for such damages against Landlord (subject to the last
two sentences of this Section 15.6, or (ii) if such failure can be cured by the
payment of money, and if Tenant in its notice to Landlord has notified Landlord
that Tenant intends to cure Landlord's failure, Tenant shall have the right to
cure such failure on behalf of Landlord and, in connection therewith, expend
such reasonable sums as are reasonably necessary to cure such failure (provided
that Tenant shall not have the right to make any repairs or modifications to
areas, facilities, or systems outside the Leased Premises (such as, without
limitation, electrical, plumbing, water, sewer and sprinkler systems) that
specifically serve premises leased to other tenants). Unless and until Landlord
fails to so cure any default after such notice within the time periods set
forth above, Tenant shall not have any remedy or cause of action by reason
thereof. In the event Tenant exercises its rights under clause (ii) of this
Section 15.6, then Landlord agrees to reimburse Tenant for all reasonable
out-of-pocket costs so expended by Tenant in curing any such failure of
Landlord together with interest thereon at the Highest Lawful Rate from the
date Tenant incurs the expense in question until Tenant is reimbursed therefor,
within ten (10) days after Landlord receives a bill therefor (which bill shall
set forth in reasonable detail the costs for which compensation is claimed);
provided, however, if Landlord fails to so reimburse Tenant within thirty (30)
days after such request for payment, Tenant may deduct such amounts from Base
Rental until the full amount has been satisfied (provided that in no event
shall the amount so deducted from any individual monthly installment of Base
Rental exceed 50% of such monthly amount of Base Rental). All notices by Tenant
to Landlord under this Section 15.6 shall simultaneously be given by Tenant to
the holders of any first mortgage or second mortgage on the Leased Premises,
provided Tenant has been given notice of the names and addresses of such
mortgages. Any mortgagee shall have the right, but not the obligation, to cure,
or commence to cure, and default of Landlord, and Tenant shall accept
performance by any mortgagee with the same force and effect as performance by
Landlord. In no event shall Tenant have the right to offset or deduct any sums
or damages which are owed by Landlord to Tenant against any amounts that are
owed by Tenant to Landlord hereunder, except as provided in the preceding
provisions of this Section 15.6. All obligations of Landlord hereunder will be
construed as covenants, not conditions; and all such obligations will be
binding upon Landlord only during the period of its possession of the Leased
Premises and not thereafter. The term "Landlord" shall mean only the owner, for
the time being of the Leased Premises, in the event of the transfer by such
owner of its interest in the Leased Premises, such owner shall thereupon be
released and discharged from all covenants and obligations
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<PAGE> 15
of the Landlord thereafter accruing, but such covenants and obligations shall
be binding during the Lease Term upon each new owner for the duration of such
owner's ownership. Notwithstanding any other provision hereof, Landlord shall
not have any personal liability hereunder. In the event of any breach or
default by Landlord of any term or provision of this Lease, Tenant agrees to
look solely to the equity or interest then owned by Landlord in the Leased
Premises or of the Building of which the Leased Premises are a part; however,
in no event, shall any deficiency judgment or any money judgment of any kind be
sought or obtained against any Landlord.
Section 15.7. Limitation of Landlord's Liability. Any and all covenants,
undertakings, and agreements herein made on the part of Landlord are not
personal covenants, undertakings or agreements and will not bind Landlord
personally or any assets of Landlord except Landlord's interest in the Project.
All covenants, undertakings, and agreements are made and intended for the
purpose of binding only Landlord's interest in the Project. No personal
liability or personal responsibility is assumed by, nor shall at any time be
asserted or enforceable against, Landlord or its agents, beneficiaries,
partners, constituent partners, shareholders, officers, directors, or their
respective heirs, executors, administrators, legal representatives, successors,
or assigns on account of this Lease or on account of any covenant, undertaking,
or agreement of Landlord in this Lease, all such liability being irrevocably
and unconditionally waived by Tenant.
ARTICLE 16
LANDLORD'S LIEN AND SECURITY INTEREST
[Intentionally Omitted]
ARTICLE 17
EXCULPATION AND INDEMNIFICATION
Section 17.1. Limitation of Liability of Landlord. Unless caused by
Landlord's negligence or willful misconduct, Landlord shall not be liable to
Tenant, Tenant's Agents, or to any person whomsoever for any injury or damage
to person or property due to any cause directly or indirectly related to the
Project including, without limitation, any injury or damage due to or
occasioned by (a) the Project or any portion thereof becoming out of repair,
or by defect in or failure of pipes or wiring, or by the backing up of drains,
or by the bursting or leaking of pipes, faucets and plumbing fixtures or by the
escaping or leaking of gas, water, steam, electricity or oil; (b) the acts or
omissions of Tenant, Tenant's Agents or any other person whomsoever; (c) theft,
vandalism, fire, acts of God, public enemy, injunction, riot, insurrection,
war, court order, requisition or order of governmental authority; (d) the
condition of, design of or any defect (including a latent defect) in the
Project or any portion thereof; and (e) any event, condition or circumstance
beyond the control of Landlord.
Section 17.2. Indemnification. EACH PARTY ("INDEMNIFYING PARTY") SHALL
INDEMNIFY, PROTECT, HOLD HARMLESS AND DEFEND THE OTHER PARTY ("INDEMNIFIED
PARTY"), ITS AGENTS, EMPLOYEES, CONTRACTORS, PARTNERS, DIRECTORS, OFFICERS AND
ANY AFFILIATES OF THE ABOVE-MENTIONED PARTIES (COLLECTIVELY THE "INDEMNIFIED
AFFILIATES") FROM AND AGAINST ANY AND ALL OBLIGATIONS, SUITS, LOSSES,
JUDGMENTS, ACTIONS, DAMAGES, CLAIMS OR LIABILITY (INCLUDING, WITHOUT
LIMITATION, ALL COSTS, REASONABLE ATTORNEYS' FEES, AND EXPENSES INCURRED IN
CONNECTION THEREWITH) IN CONNECTION WITH ANY LOSS, INJURY OR DAMAGE (I) TO ANY
PERSON OR PROPERTY WHATSOEVER OCCURRING IN, ON OR ABOUT THE LEASED PREMISES OR
ANY PART THEREOF AND/OR THE BUILDING, WHEN SUCH INJURY OR DAMAGE SHALL BE
CAUSED BY THE ACT, NEGLECT, FAULT OF, OR OMISSION OF ANY DUTY WITH RESPECT TO
THE SAME BY THE INDEMNIFYING PARTY, OR (II) ARISING FROM A BREACH OR VIOLATION
BY THE INDEMNIFYING PARTY OF ANY COURT ORDER OR ANY LAW, REGULATION, OR
ORDINANCE OF ANY FEDERAL, STATE OR LOCAL AUTHORITY (COLLECTIVELY, THE
"LOSSES"), EXCEPT TO THE EXTENT THE LOSSES ARE CAUSED WHOLLY OR IN PART BY THE
NEGLIGENCE OR INTENTIONAL MISCONDUCT OF THE INDEMNIFIED PARTY AND/OR THE
INDEMNIFIED AFFILIATES. IF ANY CLAIM IS MADE AGAINST EITHER PARTY OR THE
INDEMNIFIED AFFILIATES, THE INDEMNIFYING PARTY, AT ITS SOLE COST AND EXPENSE,
SHALL DEFEND ANY SUCH CLAIM, SUIT OR PROCEEDING. THE PROVISIONS OF THIS SECTION
17.2 SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS LEASE WITH RESPECT TO
ANY CLAIMS OR LIABILITY OCCURRING PRIOR TO SUCH EXPIRATION OR TERMINATION.
ARTICLE 18
NOTICES
Each provision of this Lease which provides for the giving of any notice
or the making of any demand shall be deemed to be complied with when and if
the following steps are taken:
(a) All Rental shall be payable to Landlord at Landlord's Address
set forth in the Basic Lease Information or at such address as Landlord may
specify from time to time by written notice delivered in accordance
herewith; provided, however, in the event Landlord's mortgagee forecloses
on the Project or any portion thereof, Landlord's mortgagee shall have the
right to specify from time to time any other address for the payment of
Rental by written notice delivered in accordance herewith.
(b) Whenever this Lease requires or permits any consent, approval,
notice, request or demand from one party to the other (individually, a
"Notice"), such Notice must be in writing addressed to
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<PAGE> 16
Landlord or Tenant, as the case may be, at the respective addresses set
forth in the Basic Lease Information or at such other addresses as may be
specified by either party from time to time by written notice delivered in
accordance herewith.
All Notices shall be deemed to have been given and received when deposited in
the United States Mail, Registered or Certified Mail, Return Receipt Requested,
with sufficient postage prepaid and addressed to the intended recipient as
provided for herein. If any Notice is given other than by Certified or
Registered Mail as aforesaid, it shall be deemed to have been given when
actually received as evidenced by a receipt signed by the addressee or the
addressee's agent or representative.
ARTICLE 19
GENERAL PROVISIONS
Section 19.1. Landlord's Standard Charges. Where this Lease requires
Tenant to pay fees or charges or to reimburse Landlord for any expense, such
payment or reimbursement will be the standard therefor established by Landlord
from time to time for all tenants in the Project on a uniform basis. Such
charges or fees may include a reasonable allocation of Landlord's overhead,
administrative and related costs.
Section 19.2. Commissions. Each party represents and warrants to the other
party that it has dealt with no broker, agent or other person in connection with
this transaction and that no broker, agent or other person brought about this
transaction, other than the broker or agent identified in the Basic Lease
Information, and each party agrees to indemnify and hold the other party
harmless from and against any claims by any other broker, agent or other person
claiming a commission or other form of compensation by virtue of having dealt
with the indemnifying party with regard to this leasing transaction.
Section 19.3. Invalid Provisions. Every covenant contained in this Lease
is, and shall be construed as, a separate and independent covenant. If any
provision of this Lease shall be invalid or unenforceable, the remainder of this
Lease shall be affected.
Section 19.4. Force Majeure. Whenever a period of time is herein
prescribed for action to be taken by Landlord (except as provided by Section
10.5) or Tenant (except Tenant's obligation to pay Rental), neither Landlord nor
Tenant shall be liable or responsible for, and there shall be excluded from the
computation for any such period of time, any delays due to strikes, riots, acts
of God, shortages of labor or materials, war, governmental laws, regulations, or
restrictions, or any other cause of any kind whatsoever which is beyond the
control of Landlord or Tenant (as applicable).
Section 19.5. Entire Agreement. Neither Landlord nor Landlord's agents,
representatives or brokers have made any representations, warranties, or
promises with respect to the Leased Premises or the Project except as herein
expressly set forth. This Lease sets forth the entire agreement between the
parties and cancels all prior negotiations, arrangements, brochures, agreements,
letters of intent, and understandings, if any, between Landlord and Tenant
regarding the subject matter of this Lease. No amendment or modification of this
Lease shall be binding or valid unless expressed in a writing executed by both
parties hereto.
Section 19.6. Authority of Tenant. If Tenant is a corporation, each of the
persons executing this Lease on behalf of Tenant represents and warrants that
Tenant is a duly organized and existing corporation, that Tenant has been and is
qualified to do business in the State of Texas, that the corporation has full
right and authority to enter into this Lease and that all persons signing on
behalf of the corporation were authorized to do so by appropriate corporate
actions. If Tenant is a partnership, trust, or other legal entity, each of the
persons executing this Lease on behalf of Tenant represents and warrants that
Tenant has complied with all applicable laws, rules and governmental regulations
relative to its right to do business in the State of Texas, that such entity has
the full right and authority to enter into this Lease and that all persons
signing on behalf of Tenant were authorized to do so by any and all necessary or
appropriate partnership, trust, or other actions.
Section 19.7. Approval by Landlord's Mortgage. If, in connection with
obtaining financing for the Building or any ground or underlying Lease, any
lender shall request reasonable modifications in this Lease as a condition for
such financing. Tenant will not unreasonably withhold, delay or defer its
consent thereto, provided that such modifications do not materially increase the
obligations of Tenant hereunder or materially adversely affect either the
leasehold interest hereby created or Tenant's use and enjoyment of the Leased
Premises.
Section 19.8. Governing Laws. This Lease shall be governed by and
construed under the laws of the State of Texas. Any action brought to enforce or
interpret this Lease shall be brought in the court of appropriate jurisdiction
in the county in which the Project is located.
Section 19.9. Building Name. Tenant shall not use the name of the Building
for any purpose other than as the address of the business to be conducted by
Tenant in the Leased Premises. Landlord may, at any time and without notice to
Tenant, change the name of the Building, and Landlord shall not be liable to
Tenant for any damages, costs, or expenses incurred by Tenant as a result of
such change.
Section 19.10. Additional Rights Reserved to Landlord. Landlord reserves
the following rights:
(a) To install, affix, and maintain any and all signs on or about the
exterior of the Building and in the Common Areas, Service Areas, and
Support Areas.
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(b) To approve, prior to installation, all types of window shades,
blinds, drapes, awnings, window ventilators, and other similar equipment,
and to approve all internal lighting that may be visible from the exterior
of the Building.
(c) To retain at all times, and to use in appropriate instances,
keys to all doors within and into the Leased Premises. No locks shall be
changed or added without providing Landlord with a prior written notice
thereof; provided, however, in the event of a breach of security or other
emergency situation, Tenant shall have the right to change or add locks
and immediately thereafter provide Landlord with written notice thereof.
In the event Tenant changes or adds locks, Tenant shall provide Landlord
with copies of the keys for such new locks.
(d) To require all furniture and similar items and all safes and
other heavy equipment and articles to be moved into and out of the
Building and Leased Premises at such times and in such manner as Landlord
directs. Movements of Tenant's property into or out of the Building are
entirely at the risk and responsibility of Tenant.
(e) To prohibit the placing of vending or dispensing machines of any
kind where such vending or dispensing machines might be visible from the
exterior or lobby of the Leased Premises.
(f) To enter into and upon any and all parts of the Leased Premises,
at reasonable hours upon 24 hours' notice (or, in any emergency, at any
hour and upon such notice, if any, as may be reasonable under the
circumstances), (i) in order for Landlord and/or Tenant to be in compliance
with its obligations under this Lease, (ii) to provide any service which
Landlord is now or hereafter obligated to furnish to tenants of the
Building, (iii) to exhibit the Leased Premises to prospective purchasers
or lenders or to prospective tenants and (iv) to inspect the Leased
Premises. Tenant shall not be entitled to any abatement or reduction of
Rental by reason of such entry.
(g) To take all such reasonable measures as Landlord deems advisable
for the security of the Building and its occupants, including without
limitation, the search of all persons entering or leaving the Building,
the evacuation of the Building for cause, suspected cause, or for drill
purposes, the temporary denial of access to the Building, the temporary
interruption of services to be provided by Landlord hereunder, and the
closing of the Building after customary business hours, subject, however,
to Tenant's right to admittance when the Building is closed under such
reasonable regulations as Landlord may prescribe from time to time for
uniform application to all tenants.
SECTION 19.11. LANDLORD'S PREMISES. All the outside walls and windows of
the Leased Premises, and terraces or roofs adjacent to the Leased Premises, the
outside plaza area and any Service Areas in the Leased Premises, any and all
mechanical, electrical, telephone and similar rooms, janitor closets, or other
Building facilities, and the use thereof, as well as access thereto through the
Leased Premises for the purpose of operation, maintenance, decoration and
repairs, are expressly reserved to Landlord, except as otherwise expressly
stated herein; provided, however, that in exercising such rights of access to
the Leased Premises, Landlord agrees to use all reasonable efforts not to
disrupt unreasonably the operations of Tenant except in the case of
emergencies, and in that event only to the extent required to respond to such
emergency in an appropriate manner.
SECTION 19.12. TENANT'S PLANS. Any approval by Landlord or Landlord's
architects and/or engineers of any of Tenant's drawings, plans and
specifications which are prepared in connection with any construction of
improvements or alterations in the Leased Premises shall not in any way be
construed or operate to bind Landlord or to constitute a representation or
warranty of Landlord as to the adequacy or sufficiency of such drawings, plans
and specifications,or the improvements to which they relate, for any use,
purpose, or condition, but such approval shall merely be the consent of
Landlord as may be required hereunder in connection with Tenant's construction
of improvements in the Leased Premises in accordance with such drawings, plans
and specifications under the terms of this Lease.
SECTION 19.13. GENDER. Words of any gender used in this Lease shall be
held and construed to include any other gender, and words in the singular
number shall be held to include the plural unless the context otherwise
requires.
SECTION 19.14 GRAPHICS. Landlord shall provide and install, at Tenant's
expense, Building Standard graphics on or at the exterior doors of the Leased
Premises. Subsequent changes to Building Standard graphics on such exterior
doors shall be at the expense of Tenant. Anything to the contrary herein
notwithstanding, it is agreed that Tenant may use such graphics within the
Leased Premises as Tenant may deem appropriate; provided, however, that any
such graphics which may be visible from any public areas of the Project or from
outside the Project shall be subject to Landlord's prior approval (which
approval shall not be unreasonably withheld).
SECTION 19.15 BINDING EFFECT. All of the covenants, agreements, terms and
conditions to be observed and performed by the parties hereto shall be
applicable to and binding upon their respective heirs, executors,
administrators, personal representatives, successors and, to the extent
assignment and subleasing is permitted hereunder, their respective assigns and
subtenants. Landlord agrees to provide Tenant with notice of (i) any transfer
of the Building, (ii) any transfer of Landlord's obligations hereunder, and
(iii) the identity of the successor owner of the Building ("Successor"), which
notice shall confirm such Successor's assumption of Landlord's obligations
accruing from and after the date of the transfer.
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Section 19.16. Holding Over. Should Tenant continue to hold the Leased
Premises after termination of this Lease, whether by lapse of time or
otherwise, such holding over shall constitute and be construed as a tenancy at
will and, in addition to all other damages and remedies to which Landlord may
be entitled for such holding over, Tenant shall pay, in addition to other
Rental, a daily Base Rental equal to one-thirtieth (1/30th) of an amount equal
to 150% of the amount of the monthly installments of Base Rental payable during
the last month prior to termination. Except as otherwise provided in this
Section 19.16, such holdover tenancy shall be upon and subject to all of the
other terms, provisions, covenants and agreements set forth herein except any
right to renew or extend this Lease or to expand the Leased Premises.
Section 19.17. Acceptance of the Leased Premises. Taking possession of the
Leased Premises by Tenant shall be conclusive evidence that: (a) the Leasehold
Improvements are substantially complete except for "punch list" items (if any)
or, if no Leasehold Improvements are being provided, that the Leased Premises
are accepted "AS IS" and "WITH ALL FAULTS"; (b) Tenant accepts the Project as
suitable for the purposes for which the Leased Premises are leased; (c) Tenant
accepts the Project as being in a good and satisfactory condition; and (d)
Tenant waives any defects (including latent defects) in the Leased Premises,
Building and Project. Tenant acknowledges that no representations or warranties
regarding the condition of the Project or any portion thereof have been made by
Landlord except as may be specifically set forth herein. LANDLORD EXPRESSLY
DISCLAIMS, AND TENANT HEREBY WAIVES TO THE FULL EXTENT PERMITTED BY LAW, ANY
IMPLIED WARRANTY THAT THE PREMISES ARE SUITABLE FOR TENANT'S INTENDED
COMMERCIAL PURPOSE, AND ANY AND ALL OTHER IMPLIED WARRANTIES (WHETHER ARISING
BY VIRTUE OF STATUTE, CASE LAW OR OTHERWISE) AND TENANT'S OBLIGATION TO PAY
RENT HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE
PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS HEREUNDER, AND, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, TENANT SHALL CONTINUE TO PAY THE RENT, WITHOUT
ABATEMENT, SETOFF, DEDUCTION, NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS
DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED. The forgoing shall
not be construed to relieve Landlord from its obligations which are expressly
set forth in this Lease.
Section 19.18. Joint and Several Liability. If there is more than one
Tenant, the obligations imposed by this Lease shall be joint and several. If
there is a guarantor of Tenant's obligations hereunder, the obligations
hereunder imposed upon Tenant shall be joint and several obligations of Tenant
and such guarantor, and Landlord need not first proceed against Tenant before
proceeding against such guarantor, nor shall any such guarantor be released
from its guarantee for any reason whatsoever, including, without limitation,
any amendment of this Lease, any forebearance by Landlord or waiver of any of
Landlord's rights, the failure to give Tenant or such guarantor any notices,
the release of any party liable for the payment of Tenant's obligations
hereunder, or the release of any collateral securing Tenant's obligations
hereunder.
Section 19.19. Estoppel Certificate. Tenant agrees, from time to time,
within ten (10) days after request by Landlord, to deliver to Landlord or
Landlord's designee, a certificate of occupancy, financial statements (which
may be Tenant's publicly available financial statements, so long as Tenant is a
publicly held company) and an estoppel certificate stating (1) this Lease is in
full force and effect, (2) the date to which rent is paid, (3) whether there is
a default on the part of Landlord or Tenant under this Lease, (4) whether
Tenant has any right of offset, claims or defenses to the performance of its
obligations under this Lease, and (5) such other factual matters pertaining to
this Lease as may be reasonably requested by Landlord. Tenant shall be entitled
to make such qualifications to the statements in such estoppel certificate as
are necessary to make them factually accurate. Tenant shall not be required to
provide estoppel certificates more frequently than four (4) times in any
calendar year. If Tenant fails to deliver the same within such ten (10) day
period such certificate as submitted by Landlord or Landlord's designee, as
the case may be, shall be fully binding on Tenant, if Tenant fails to deliver a
certificate within fifteen (15) days after receipt by Tenant of the certificate
submitted by Landlord or Landlord's designee, as the case may be.
Section 19.20. Payment of Rental. In the event Tenant fails to make any
payment due hereunder within five (5) days of the payment due date, to help
defray the additional cost to Landlord for processing such late payments,
Tenant shall pay to Landlord on demand a late charge in an amount equal to
three percent (3%) of such payment; and the failure to pay such amount within
five (5) days after demand therefor shall be an additional default hereunder;
provided, however, that in the case of Base Rental or the regularly scheduled
monthly payment of Operating Expenses, Tenant shall be entitled to five (5)
days' notice and opportunity to cure on two (2) occasions during any twelve
month period without incurring a late charge. The provision for such late
charge shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner. In no event, however, shall the
charges permitted under this Section 19.20 or elsewhere in this Lease, to the
extent the same are considered to be interest under applicable law, exceed the
amount of interest that Landlord could have charged, received or collected on
the indebtedness in question at the Highest Lawful Rate.
Section 19.21. Time of the Essence. Time is of the essence in the
performance by Tenant of all its obligations hereunder.
Section 19.22. Parking. Tenant agrees that no parking is provided unless
specifically provided for in an addendum or exhibit attached hereto.
<PAGE> 19
SECTION 19.23. DEFINITIONS AND BASIC LEASE PROVISIONS. The definitions and
basic provisions set forth in the Basic Lease Information are incorporated
herein by reference for all purposes.
SECTION 19.24. RELOCATION. [Intentionally Omitted]
SECTION 19.25. PROHIBITION ON PLACEMENT OR DISPOSAL OF HAZARDONS OR TOXIC
MATERIALS. Tenant shall never incorporate into, or dispose of, at, in or under
the Leased Premises, the Building or the Land any toxic or hazardous materials
(as defined hereafter). Tenant further agrees not to use at, place in, or store
at the Leased Premises any toxic or hazardous materials, except for those toxic
or hazardous materials that are either (a) office supplies or (b) kitchen
cleaning materials that are generally considered to be a household cleaner and
are purchased in a container not larger than one (1) gallon and then only if
(i) all such toxic or hazardous materials, supplies and materials are properly
labeled and contained, (ii) all such toxic or hazardous materials are stored,
handled, transported and disposed of in accordance with highest accepted
industry standards and all applicable laws, rules and regulations, and (iii) if
a material safety data sheet is required under applicable laws to accompany the
toxic or hazardous materials, supplies or materials, a copy of such current
material safety data sheet is provided to Landlord. For the purposes of this
Lease, "toxic or hazardous materials" shall mean hazardous or toxic chemicals or
any materials containing hazardous or toxic chemicals at levels or content
which cause such materials to be classified as hazardous or toxic as then
prescribed by the highest industry standards or by the then current levels or
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 governmental
laws, rules or regulations. In the event there is a spill of a toxic or
hazardous materials (other than permitted office supplies and kitchen cleaning
supplies) at the Leased Premises, the Building or the Land of which Tenant is
aware, Tenant shall notify Landlord of the method, time and procedure for any
clean-up and removal of such toxic or hazardous materials; and, Landlord shall
have the right to require reasonable changes in such method, time or procedure.
In the event there is a spill of a toxic or hazardous material that comes from
office supplies in the Leased Premises, Tenant shall notify Landlord if the
spill would in any way endanger or pose a threat to Tenant's employees,
Building maintenance or custodial personnel, other Building tenants or the
general public. In the event of any breach of this provision by Tenant or any
contamination of the Leased Premises, the Building or the Land, by Tenant,
Tenant shall pay all costs for the removal or abatement or clean-up of any toxic
or hazardous materials at the Leased premises, the Building and the Land. If
any lender or governmental agency shall ever require testing to ascertain
whether or not there has been any release of hazardous materials, then the
reasonable costs thereof shall be reimbursed by Tenant to Landlord upon demand
as additional charges. If the audit discloses Tenant caused the release of
hazardous materials and if such requirement applies to the Leased Premises. In
addition, Tenant shall execute affidavits, representations and the like from
time to time at Landlord's request (but in no event more often than annually at
Landlord's request) or otherwise at such times as requested by Landlord's
mortgagee, concerning Tenant's best knowledge and belief regarding the presence
of hazardous substances or materials on the Leased Premises. In all events,
Tenant shall indemnify Landlord in the manner elsewhere provided in this Lease
from any release of hazardous materials on the Leased Premises occurring while
Tenant is in possession or elsewhere if caused by Tenant or persons acting
under Tenant. Landlord hereby agrees to indemnify and hold Tenant harmless from
and against any and all costs of remediation, removal and clean-up (and fines
and penalties relating thereto) of and from contamination of the Land by toxic
or hazardous materials to the extent required by applicable law, which
contamination exists as of the Rent Commencement Date as a result of the acts
of Landlord or its contractors; provided, however, Landlord's indemnification
obligations shall not apply to any such contamination to the extent it results
from the acts or omissions of Tenant, its agents, employees, licensees,
invitees, contractors, sublessees, assignees or successors in interest. This
Section 19.25 shall survive the expiration or any termination of this Lease.
Following the expiration of this Lease and upon Tenant's providing Landlord an
environmental site assessment in form and substance reasonably satisfactory to
Landlord and evidencing that Tenant is not then in breach of this Section
19.25, Landlord agrees to acknowledge in writing that Tenant has been released
from liability under this Section 19.25. Landlord shall not join Tenant as a
co-defendant in any litigation of environmental liability unless Tenant or
Tenant's agents, employees, licensees, invitees, contractors, sublessees,
assignees or successors in interest are responsible, in whole or in part, for
the contamination at issue in the lawsuit.
SECTION 19.26. NO OFFER. The submission of this Lease to Tenant shall not
be construed as an offer, nor shall Tenant have any rights with respect thereto
unless and until Landlord shall execute a copy of this Lease and deliver the
same to Tenant.
SECTION 19.27. NO MERGER. There shall be no merger of this Lease or of the
leasehold estate hereby created with the fee estate in the Leased Premises, or
any part thereof, by reason of the fact that the same person or entity may
acquire or hold, directly or indirectly, this Lease or such leasehold estate as
well as the fee estate in the leased Premises or any interest in such fee
estate.
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LANDLORD:
HERITAGE COMMONS I, LTD.,
a Texas limited partnership
By: Hillwood Operating, L.P., a Texas limited
partnership, its general partner
By: Hillwood Development Corporation,
a Texas corporation, its general partner
By: Illegible
------------------------------------------
Its: V.P.
------------------------------------------
TENANT:
AMERITRADE HOLDING CORPORATION,
a Delaware corporation
By: Susan M. Hohman
------------------------------------------
Its: V.P. Inf. & Facilities
------------------------------------------
20
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EXHIBIT "A"
BEING a tract of land situated in the A.C. Warren Survey, Abstract No. 1687,
Tarrant County, Texas and being a portion of that tract of land as described by
deed to Hillwood/2470, Ltd. formerly known as Alliance Airport, Ltd. and
recorded in Volume 9378, Page 2033, County Records, Tarrant County, Texas, said
tract of land being more particularly described by metes and bounds as follows:
COMMENCING at the intersection of the westerly right-of-way line of Interstate
Highway 35W (a variable width right-of-way) with the northerly line of the 470
foot Floodway right-of-way as recorded in Cabinet A, Slide No. 379, said County
Records;
THENCE N 10 degrees 38'57"E, 283.55 feet along the westerly right-of-way line
of said Interstate Highway 35W to a 5/8 inch iron rod with cap stamped "Carter
& Burgess" set, the POINT OF BEGINNING;
THENCE N 79 degrees 21'03"W, 50.00 feet to a 5/8 inch iron rod with cap stamped
"Carter & Burgess" set, the beginning of a curve to the right;
THENCE 40.52 feet along the are of said curve to the right through a central
angle of 27 degrees 09'50", a radius of 85.47 feet and a long chord of N 66
degrees 46'08"W, 40.14 feet to a 5/8 inch iron rod with cap stamped
"Carter & Burgess" set;
THENCE N 52 degrees 11'13"W, 33.11 feet to a 5/8 inch iron rod with cap stamped
"Carter & Burgess" set, the beginning of a curve to the left;
THENCE 382.48 feet along the arc of said curve to the left through a central
angle of 48 degrees 41'52", a radius of 450.00 feet and a long chord of N 76
degrees 32'12"W, 371.07 feet to a 5/8 inch iron rod with cap stamped
"Carter & Burgess" set, the beginning of a reverse curve to the right;
THENCE 140.82 feet along the arc of said reverse curve to the right through a
central angle of 32 degrees 16'26", a radius of 250.00 feet and a long chord of
N 84 degrees 44'58"W, 138.57 feet to a 5/8 inch iron rod with cap stamped
"Carter & Burgess" set;
THENCE N 68 degrees 36'45"W, 70.00 feet to a 5/8 inch iron rod with cap stamped
"Carter & Burgess" set, the beginning of a curve to the right;
THENCE 47.12 feet along the arc of said curve to the right through a central
angle of 90 degrees 00'00", a radius of 30.00 feet and a long chord of N 23
degrees 36'45"W, 42.43 feet to a 5/8 inch iron rod with cap stamped
"Carter & Burgess" set in the easterly right-of-way line of Heritage Parkway (a
100 foot right-of-way) as recorded in Cabinet A, Slide No. 379, said County
Records;
THENCE N 21 degrees 23'15"E, 287.76 feet along said easterly right-of-way line
to a 5/8 inch iron rod with cap stamped "Carter & Burgess" set, the beginning
of a curve to the left;
THENCE 408.89 feet along the arc of said curve to the left and continuing along
said easterly right-of-way line through a central angle of 11 degrees 25'41", a
radius of 2050.00 feet and a long chord of N 15 degrees 40'24"E, 408.21 feet to
a 5/8 inch iron rod with cap stamped "Carter & Burgess" set;
THENCE N 09 degrees 57'34"E, 53.02 feet continuing along said easterly
right-of-way line to a 5/8 inch iron rod with cap stamped "Carter & Burgess"
set, the beginning of a curve to the right;
<PAGE> 22
THENCE 47.12 feet along the arc of said curve to the right and continuing along
said easterly right-of-way line through a central angle of 90 degrees 00'00", a
radius of 30.00 feet and a long chord of N 54 degrees 57'33"E, 42.43 feet to a
5/8 inch iron rod with cap stamped "Carter & Burgess" set;
THENCE S 80 degrees 02'26"E, 605.78 feet to a 5/8 inch iron rod with cap stamped
"Carter & Burgess" set in the westerly right-of-way line of Interstate Highway
35W, the beginning of a non-tangent curve to the left;
THENCE 31.31 feet along the arc of said non-tangent curve to the left and
continuing along said westerly right-of-way line through a central angle of 00
degrees 18'09", a radius of 6931.30 feet and a long chord of S 14 degrees
25'58"W, 31.31 feet to a 5/8 inch iron rod with cap stamped
"Carter & Burgess" set;
THENCE S 75 degrees 43'07"E, 10.00 feet continuing along said westerly
right-of-way line to a 5/8 inch iron rod with cap stamped "Carter & Burgess"
set, the beginning of a non-tangent curve to the left;
THENCE 375.38 feet along the arc of said curve to the left and continuing along
said westerly right-of-way line through a central angle of 03 degrees 37'56", a
radius of 5921.30 feet and a long chord of S 12 degrees 27'55"W, 375.31 feet to
a 5/8 inch iron rod with cap stamped "Carter & Burgess" set;
THENCE S 10 degrees 38'57"W, 450.83 feet continuing along said westerly
right-of-way line to the POINT OF BEGINNING and containing 538,360 square feet
or 12.399 acres of land, more or less.
<PAGE> 23
EXHIBIT "B"
HERITAGE COMMONS I
SOUTH WING - FIRST FLOOR
<PAGE> 24
HERITAGE COMMONS I
SOUTH WING - SECOND FLOOR
<PAGE> 25
EXHIBIT C
SUPPLEMENTAL AGREEMENT
This agreement is entered into on ___________, 19__, by __________________
("Landlord") and ______________________ ("Tenant"), pursuant to Section 1.4 of
the Standard Building Lease Agreement ("Lease") dated _____________, 19__,
executed by Landlord and Tenant. All terms used herein have the same meaning as
in the Lease. This agreement amends the Lease (including the Basic Lease
Information) to the extent of the matters set forth herein.
1. The Rent Commencement Date is April 1, 1999.
2. The Leased Premises contain 21,015 square feet of Net Rentable Area.
3. The Building contains 57,475 square feet of Net Rentable Area.
4. Tenant's Proportionate Share is 36.56%.
5. Tenant's Base Rental during the first year of the Term is $24,307.35
per month.
6. Landlord's estimate of Tenant's Proportionate Share of Operating
Expenses for the ensuing Operating Year (or portion thereof) is $________,
payable in equal monthly installments of $________.
LANDLORD:
HERITAGE COMMONS I, LTD.,
a Texas limited partnership
By: Hillwood Operating, L.P., a Texas limited
partnership, its general partner
By: Hillwood Development Corporation,
a Texas corporation, its general partner
By:
----------------------------------------
Its:
----------------------------------------
TENANT:
AMERITRADE HOLDING CORPORATION,
a Delaware corporation
By: /s/ SUSAN M. HOHMAN
----------------------------------------
Its: VP, Inf. & Facilities
----------------------------------------
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EXHIBIT D
LEASEHOLD IMPROVEMENTS
[Intentionally Omitted]
D-1
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EXHIBIT E
RULES AND REGULATIONS
1. Sidewalks, doorways, vestibules, halls, stairways, and other similar
areas of the Building shall not be obstructed or used for any purpose other than
ingress and egress and for going from one to another part of the Building.
2. Plumbing fixtures and appliances shall be used only for the purposes
for which designed or constructed, and no sweepings, rubbish, rags, or other
unsuitable or unsightly material shall be thrown or placed therein. The cost of
repairing any fixtures or appliances resulting from misuse by a tenant shall be
paid by such tenant.
3. No signs, posters, advertisements, or notices shall be painted or
affixed on or to any windows or doors or other part of the Building except of
such color, size, and style and in such places as shall be first approved in
writing by Landlord. No nails, hooks, or screws shall be driven or inserted in
any part of the Building except by the Landlord's building maintenance
personnel.
4. Landlord will provide and maintain in the Building lobby area an
alphabetical directory board for all tenants, and no other directory shall be
permitted. Tenants will be identified on such directory board by the name of
the tenant, such tenant's suite number and, if requested by the tenant, by the
name of such tenant's chief executive officer or principal; however, such
identification shall be limited to a maximum of three (3) strips on such
directory. The style and size of lettering on such directory shall be
determined by Landlord.
5. Landlord shall provide Building Standard locks for doors in each
tenant's leased premises, and no tenant shall place any additional lock or
locks on any door in its leased premises. One hundred thirty (130) key(s) or
electronic passes to the locks on the doors in Tenant's premises shall be
furnished by Landlord, and Tenant shall not have any duplicate keys or
electronic passes made. Additional keys or electronic passes shall be supplied
by Landlord at tenant's cost and expense. If access cards are to be used in
connection with the Building, Landlord will provide the initial cards at
Landlord's expense; however, any additional or replacement cards will be
supplied by Landlord at the tenant's expense.
6. All tenants will refer all contractors, contractors' representatives,
installation technicians and repair persons rendering any service to them to
Landlord for Landlord's supervision, approval and control before the
performance of any contractual or other services.
7. Movement in or out of the Building of furniture or office equipment,
or dispatch or receipt by tenants of any bulky material, merchandise or
materials which requires use of elevators or stairways, or movement through the
Building entrances or lobby shall be restricted to such hours as Landlord shall
designate, and shall not be undertaken without Landlord's prior written
consent. All such movement shall be under the supervision of Landlord and in
the manner agreed between tenant and Landlord by prearrangement before
performance. Such prearrangement initiated by tenant will include determination
by Landlord as to the time, method and routing of movement, and as to
limitations for safety or other concerns which may prohibit any article,
equipment or any other item from being brought into the Building. The tenants
assume all risks as to the damage to articles moved and injury to persons or
public engaged or not engaged in such movement, including equipment, property
and personnel of Landlord if damaged or injured as a result of acts in
connection with carrying out this service for tenant; and Landlord shall not be
liable for acts of any person engaged in, or any damage or loss to any of said
property or persons resulting from, any act in connection with such service
performed for a tenant.
8. Tenant shall not place a load upon any floor of the Building which
exceeds the floor load per square foot which such floor was designed to carry
or which is allowed by applicable Building code. Landlord shall have the right
to prescribe the weight and position of safes, concentrations of file cabinets,
computers and other heavy equipment, property or installations, which shall in
all cases stand on supporting devices approved by Landlord. All damage done to
the floor, the walls or any part of the Building by taking in or removing any
property of a tenant, or done by tenant's property while in the Building, shall
be repaired at the expense of such tenant.
9. Tenants shall notify the property manager when heavy equipment or
property is to be taken in or out of the Building, and the moving shall be done
under the supervision of the Building manager, after written permission from
Landlord. Persons employed to move such equipment or property must be
acceptable to Landlord.
10. Corridor doors, when not in use, shall be kept closed.
11. No furniture, packages, or bulky material of any kind will be
received in the Building or carried up or down stairs or in the elevators,
except in the manner and at the times specified by Landlord.
12. Each tenant shall cooperate with Landlord's employees in keeping its
premises neat and clean.
13. To insure orderly operation of the Building, no ice, mineral or other
water, towels, newspapers etc. shall be delivered to any premises except by
persons appointed or approved by Landlord.
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14. Should tenant require telegraphic, telephonic, Muzak or other
communication or entertainment services, Landlord will direct the electrician
where and how wires are to be introduced and placed, and none shall be
introduced or placed except as Landlord shall direct.
15. Tenants shall not make or permit any improper noises in the Building
or otherwise interfere in any way with other tenants or persons having
business with them.
16. Nothing (including, without limitation, boxes, crates or excess
trash) shall be swept into, disposed of or deposited, in the corridors, halls,
elevator shafts or stairways. No birds or animals shall be brought into or kept
in, or about the Building or tenant's premises.
17. Business machines and mechanical equipment belonging to the tenant
which cause noise and/or vibration that may be transmitted to the structure of
the Building or to any leased space so as to be objectionable to Landlord or
any tenants in the Building shall be placed and maintained by the tenant, at
the tenant's expense, in adequate settings of cork, rubber, or spring type
noise and/or vibration eliminators.
18. No portion of any tenant's premises shall at any time be used or
occupied as sleeping or lodging quarters.
19. Landlord will not be responsible for lost or stolen personal
property, money or jewelry from tenant's premises or public areas regardless of
whether such loss occurs when such area is locked against entry or not.
20. Canvassing, soliciting, and peddling in the Building is prohibited.
21. All deliveries must be made via the service entrance and service
elevators during normal business hours or as otherwise directed or scheduled by
Landlord. Prior approval must be obtained from Landlord for any deliveries that
must be received after normal business hours.
22. There shall not be used in any space, or in the public halls of the
Building, either by any tenant or by jobbers or others, in the delivery or
receipt of merchandise, any hand trucks, except those equipped with rubber
tires or the like. Use of hand trucks, dollies and all such conveyances shall
be restricted to freight or other passageways and elevators.
23. The premises shall not be used for conducting any barter, trade, or
exchange of goods or sale through promotional give-away gimmicks or any
business involving the sale of second-hand goods, insurance salvage stock, or
fire sale stock, and shall not be used for any auction or pawnshop business,
any fire sale, bankruptcy sale, going-out-of-business sale, moving sale, bulk
sale, or any other business which, because of merchandising methods or
otherwise, would tend to lower the character of the Building, or which would be
in violation of any law.
24. Tenant must dispose of crates, boxes, etc., which will not fit into
office wastepaper baskets.
25. Tenant will be responsible for any damage to carpeting and flooring
as a result of rust or corrosion of file cabinets, pot holders, roller chairs,
and metal objects.
26. Tenants employing laborers or others outside of the Building shall
not have their employees paid in the Building.
27. Tenant shall not advertise the business, profession or activities of
tenant in any manner which violates the letter or spirit of any code of ethics
adopted by any recognized association or organization pertaining thereto or use
the name of the Building for any purpose other than that of the business
address of tenant or use any picture or likeness of the Building or the
Building name in any circulars, notices, advertisements, containers, or
wrapping material, without Landlord's express prior consent in writing.
28. Tenant shall not permit, erect and/or place drapes, furniture,
fixtures, shelving display cases or tables, lights and signs and advertising
devices in front of or in the proximity of interior and exterior windows, glass
panels, or glass doors providing a view into the interior of tenant's premises
unless same shall have first been approved in writing by Landlord.
29. It is the express obligation of the tenant to inform in a timely
manner each of its employees, agents, invitees or guests of the rules and
regulations of the Building and to cause such parties to comply therewith.
30. All holiday and other temporary or special installations or
decoration which a tenant desires to install in the tenant's premises must be
first approved by Landlord and must be flame retardant.
31. Tenants shall not place or use or keep in the Building gasoline,
kerosene oil, acids, caustics or any inflammable or explosive fluid or
substance, or any illuminating material, unless it is battery powered, UL
approved. Lessee shall not cook on the premises.
32. Tenants, employees or agents, or anyone else who desires to enter the
Building after normal business hours, may be required to provide appropriate
identification and sign in upon entry, and sign out upon
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leaving, giving the location during such person's stay and such person's time of
arrival and departure, and shall otherwise comply with any reasonable access
control procedures as Landlord may from time to time institute.
33. Landlord has the right to evacuate the Building in event of
emergency or catastrophe.
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EXHIBIT F
PARKING
Tenant shall be permitted to use 130 vehicular parking spaces on the
surface parking lot associated with the Building ("Parking Lot") during the
Term subject to such terms, conditions and regulations as are from time to time
applicable to patrons of the Parking Lot. Upon Tenant's written request during
the Term of this Lease, Landlord shall designate by physical markings, signage,
or other visible means, some or all of said 130 parking spaces (within the
shaded area shown on the Site Plan attached hereto as Exhibit "F-1" and made a
part hereof) as being for use by Tenant and its employees and invitees, the
number of such spaces that are so designated to be determined by Landlord;
provided, however, Landlord shall designate at least 100 out of said 130
spaces. From and after the designation of any such spaces by Landlord, parking
by Tenant and its employees and invitees with respect to the number of spaces
so designated by Landlord shall be limited to the parking spaces so designated
by Landlord (and Tenant shall instruct and require its employees and invitees
to limit their parking to such designated spaces); provided, however, if
Landlord elects to designate fewer than the full allotment of 130 spaces, then
Tenant and its employees and invitees shall be permitted to park in spaces
other than the designated spaces with respect to the number of spaces (out of
the total of 130) that Landlord elects not to so designate. Such parking spaces
shall be made available to Tenant on a first-come first-serve basis, it being
agreed that Landlord shall have no obligation to patrol, police, monitor or
take any other actions to ensure that Tenant has the use of all such 130 spaces.
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EXHIBIT "F-1"
MAP OF PARKING AREA
<PAGE> 32
EXHIBIT G
STATE OF TEXAS )
COUNTY OF TARRANT )
SUBORDINATION, ATTORNMENT, AND NON-DISTURBANCE AGREEMENT
THIS SUBORDINATION, ATTORNMENT, AND NON-DISTURBANCE AGREEMENT (this
"Agreement") is made and entered into as of the ____ day of ________, 1999, by
and between AMERITRADE HOLDING CORPORATION, a Delaware corporation ("Tenant"),
and SOUTHTRUST BANK, NATIONAL ASSOCIATION, a national banking association
("Bank").
R E C I T A L S:
Tenant is the present tenant under that certain Lease Agreement dated
___________, 1999 (hereinafter the "Lease"), with respect to an approximately
21,015 square feet of floor space located on the parcel of real property more
particularly described in Exhibit A attached hereto and made a part hereof. The
premises demised to Tenant under the Lease, as more particularly described
therein, are referred to herein as the "Premises."
Heritage Commons I, Ltd., as the landlord under the Lease (the
"Landlord"), has obtained a loan from Bank, which is secured by a first Deed of
Trust and Security Agreement covering the Premises and an Assignment of Rents
and Leases which collaterally assign to Lender all leases relating thereto.
Said Deed of Trust and Security Agreement and Assignment of Rents and Leases,
as the same may hereafter be amended, increased, renewed, extended, spread,
consolidated, severed, restated, or otherwise changed from time to time (the
consent of Tenant to which shall not be required), are referred to herein as
the "Security Instruments." As a condition to making such loan, Bank has
required that Tenant execute this instrument. The Deed of Trust and the
Assignment of Rents and Leases are recorded at Instrument No. ______________,
Volume , Page , and Instrument No. ______________, Volume , Page ,
respectively, of the Real Property Records of Tarrant County, Texas.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, and as an inducement to Bank to extend financing to the
Landlord, the parties hereto do mutually covenant and agree as follows:
1. SUBORDINATION. The Lease shall at all times be subject and subordinate
in all respects to the Security Instruments, the lien and security interest
imposed by the Security Instruments, and all advances made under the Security
Instruments.
2. BANK'S RIGHT TO CURE. Notwithstanding anything to the contrary in the
Lease or this Agreement, Tenant shall give written notice simultaneously to
Landlord and to Bank of any default or breach by Landlord under the Lease that
are of such a nature as to give Tenant a right to terminate the Lease, to reduce
rent, or to credit or offset any amounts against future rents. After Bank
receives such notice, Bank shall have the same time period available to Landlord
under the Lease in which to cure the breach or default by Landlord. Bank shall
have no obligation to cure (and shall have no liability or obligation for not
curing) any breach or default by Landlord.
3. NON-DISTURBANCE. So long as Tenant is not in default in the payment of
rent, additional rent, or other charges or conditions of the Lease, Tenant shall
not be disturbed by Bank in Tenant's possession, enjoyment, use, and occupancy
of the Premises during the original or any renewal term of the Lease or any
extension or modification thereof.
4. PAYMENT OF RENTS TO BANK. Upon Bank's written request and without regard
to contrary instructions from Landlord, Tenant agrees that it will make the
payments to be made by Tenant under the Lease directly to Bank. Prior to the
time that Bank shall succeed to the interest of Landlord in the Premises as
described in Section 5 below, receipt of such payments by Bank shall not relieve
Landlord of its obligations under the Lease nor operate to make bank responsible
for the performance thereof, and Tenant shall continue to look solely to
Landlord for performance of such obligations.
5. ATTORNMENT. If the interest of Landlord in the Premises shall be
acquired by Bank or any other successor landlord through foreclosure, deed in
lieu of foreclosure, or by any other method, and Bank shall succeed to the
interest of Landlord under the Lease, then the Lease shall continue in full
force and effect and shall not be terminated or disturbed except in accordance
with the terms thereof. Tenant shall thereupon be bound to Bank, and Bank shall
be bound to Tenant, under all the terms, covenants, and conditions of the Lease
for the balance of the term thereof remaining, and any extensions or renewals
thereof, with the same force and effect as if Bank was the original landlord
under the Lease. Tenant does hereby attorn to Bank as its landlord, said
attornment to be effective and self-operative without the execution of any
additional documents by the parties hereto immediately upon Bank's succeeding to
the interest of Landlord under the Lease.
6. PROTECTION OF BANK. Notwithstanding anything to the contrary in the
Lease or the Security Instruments, Bank shall not be liable for or bound by any
of the following matters.
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(a) except for any default or breach of which Bank has been notified
pursuant to Section 2 hereof but has failed to cure, any default or
breach in the Landlord's obligations under the Lease occurring prior
to the time bank succeeds to the interest of Landlord in the Premises;
(b) any payment of rent (including fixed rent, percentage rent, or
additional rent) that Tenant might have made to Landlord more than
thirty (30) days before the date such rent was first due and payable
under the Lease with respect to ant period after the time Bank
succeeds to the interest due and payable under the Lease with respect
to any period after the time Bank succeeds to the interest of Landlord
in the Premises;
(c) any deposit or security which was delivered to Landlord but which was
not subsequently delivered to Bank;
(d) any material modification or material amendment to the Lease, or any
waiver of any material terms of the Lease, made without Bank's prior
written consent as required by the Security Instruments;
(e) any consensual or negotiated surrender, cancellation, or termination
of the Lease, in whole or in part, agreed upon between Landlord and
Tenant, made without Bank's prior written consent as required by the
Security Instruments; or
(f) any obligation of Landlord under the Lease to make, pay for, or
reimburse Tenant for any construction, alterations, demolition, or
other improvements or work at the Premises (other than day-to-day
maintenance and repairs and provided same shall not restrict Tenant's
right to abate Base Rent in the event of Landlord's default under the
Lease).
7. NOTICES. All notices, demands, or requests, and responses thereto,
required or permitted to be given pursuant to this Agreement shall be in writing
and shall be given or served by the United States mail, postage prepaid and
certified with return receipt requested, or by a nationally recognized overnight
courier service, addressed as follows:
If to Bank:
SouthTrust Bank, National Association
420 North 20th Street, 11th Floor
Commercial Real Estate Group
Birmingham, Alabama 35203
And to:
SouthTrust Bank, National Association
230 Fourth Avenue North
Eighth Floor
Nashville, Tennessee 37219
Attn: Mr. Daniel S. Harrington
If to Tenant:
Ameritrade Holding Corporation
10825 Harney Street
Bellevue, Nebraska 68154
With copy to:
J. Andrew Rogers
Kelly, Hart, & Hallman
201 Main Street, Suite 2500
Fort Worth, Texas 76102
or at such other single address in the United States as either party may by
notice in writing designate. Any notice shall be effective the next business
day after being sent by overnight courier service and five (5) business days
after being sent by certified mail (return receipt requested).
8. SUCCESSORS AND ASSIGNS. This Agreement shall bind and benefit the
parties, their successors and assigns. If Bank assigns the Security
Instruments, then upon delivery to Tenant of written notice thereof accompanied
by the assignee's written assumption of all obligations under this Agreement,
all liability of the assignor shall terminate.
9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between Bank and Tenant regarding the subordination of the Lease to the
Security Instruments and the rights and obligations of Tenant and Bank as to
the subject matter of this Agreement.
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10. INTERACTION WITH LEASE WITH SECURITY INSTRUMENTS. If this Agreement
conflicts with the Lease, then this Agreement shall govern as between Tenant and
Bank, including upon any attornment pursuant to this Agreement. This Agreement
supersedes, and constitutes full compliance with, any provisions in the Lease
that provide for subordination of the Lease to, or for delivery of
nondisturbance agreements by the holder of, the Security Instruments. Bank
confirms that Bank has consented to Landlord's entering into the Lease.
11. INTERPRETATION; GOVERNING LAW. The interpretation, validity, and
enforcement of this Agreement shall be governed by and constructed under the
internal laws of the State of Texas.
12. AMENDMENTS. This Agreement may be amended, discharged, or terminated,
or any of its provisions waived, only by a written instrument executed by the
party to be charged.
13. EXECUTION. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
14. WAIVER OF JURY TRIAL. THE PARTIES HERETO WAIVE ANY RIGHT TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION (INCLUDING, BUT NOT LIMITED TO, ANY CLAIMS,
CROSS-CLAIMS OR THIRD PARTY CLAIMS) ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT, THE LEASE, OR THE SECURITY INSTRUMENTS. TENANT CERTIFIES THAT
NO REPRESENTATIVE OR AGENT OF BANK OR BANK'S COUNSEL HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT BANK WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO
ENFORCE THIS WAIVER OF JURY TRIAL PROVISION.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or
have caused this Agreement to be duly executed, as of the day and year first
above written.
TENANT:
AMERITRADE HOLDING CORPORATION, a
Delaware corporation
By: /s/ SUSAN M. HOHMAN
-----------------------------------
Name: Susan Hohman
Title: Vice-President of
Infrastructure and Facilities
Date of execution: 04-20-99
--------------------
BANK:
SOUTHTRUST BANK, NATIONAL ASSOCIATION,
a national banking association
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Date of execution:
--------------------
STATE OF Nebraska )
--------------------------
COUNTY OF Douglas )
-------------------------
This instrument was acknowledged before me on April 20, 1999 by Susan M.
Hohan, Vice President of Infrastructure and Facilities, on behalf of Ameritrade
Holding Corporation
/s/ JAMES W. MAENNER
---------------------------------------
Notary Public
My commission expires: 2/4/02
-----------------
[NOTARIAL SEAL]
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<PAGE> 35
[NOTARIAL SEAL]
STATE OF )
--------------------------
COUNTY OF )
-------------------------
This instrument was acknowledged before me on _______________, 1999 by
___________________. ___________________ of SouthTrust Bank, National
Association, a national banking association, on behalf of said association.
---------------------------------------
Notary Public
My commission expires:
-----------------
[NOTARIAL SEAL]
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<PAGE> 36
LANDLORD'S CONSENT
Landlord consents and agrees to the foregoing Agreement, which was entered
into at Landlord's request. The foregoing Agreement shall not alter, waive, or
diminish any of Landlord's obligations under the Security Instruments or the
Lease. The foregoing Agreement discharges the obligations of Bank under the
Security Instruments and related loan documents, if any, to enter into a
nondisturbance agreement with Tenant. Landlord is not a party to the foregoing
Agreement.
LANDLORD:
HERITAGE COMMONS I, LTD.,
By: Hillwood Operating, L.P., a Texas
limited partnership, its general
partner
By: Hillwood Development Corporation,
a Texas corporation, its general
partner
By:
------------------------------
Name:
-------------------------
Title:
------------------------
STATE OF )
--------------------------
COUNTY OF )
-------------------------
This instrument was acknowledged before me on ____________, 1999, by
_________________. ________________ of Hillwood Development Corporation, a
Texas corporation, the general partner of Hillwood Operating, L.P. a Texas
limited partnership, general partner of Heritage Commons I, Ltd., a Texas
limited partnership, on behalf of said partnership.
---------------------------------------
Notary Public
My commission expires:
-----------------
[NOTARIAL SEAL]
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<PAGE> 37
EXHIBIT TO "A"
SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT
[Insert legal description]
<PAGE> 1
EXHIBIT 10.20
FIRST AMENDMENT TO
REVOLVING CREDIT AGREEMENT
AMONG
AMERITRADE HOLDING CORPORATION,
FIRST NATIONAL BANK OF OMAHA,
HARRIS TRUST AND SAVINGS BANK,
LASALLE NATIONAL BANK AND
MERCANTILE BANK OF ST. LOUIS, N.A.
MAY 24, 1999
<PAGE> 2
FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
THIS FIRST AMENDMENT to REVOLVING CREDIT AGREEMENT (the "First Amendment")
entered into as of this 24th day of May, 1999, is intended to amend the terms of
the Revolving Credit Agreement (the "Agreement") dated as of the 16th day of
January, 1998, among AMERITRADE HOLDING CORPORATION, a Delaware corporation
having its principal place of business at 4211 South 10201 Street, Omaha,
Nebraska 68127 (the "Borrower"); FIRST NATIONAL BANK OF OMAHA, a national
banking association having its principal place of business at One First National
Center, Omaha, Nebraska 68102 ("Agent" or ("FNB-O"); HARRIS TRUST AND SAVINGS
BANK, an Illinois banking corporation having its principal place of business at
111 W. Monroe Street, Chicago, Illinois 60603 ("Harris"); LASALLE BANK, N.A.
(formerly LASALLE NATIONAL BANK), a national banking association located at 801
Grand Street, Suite 3150, Des Moines, Iowa 50309 ("LaSalle"); and MERCANTILE
BANK OF ST. LOUIS, N.A., a national banking association having its principal
place of business at One Mercantile Center, 7th and Washington TRAM 12-3, St.
Louis, Missouri 63101 ("Mercantile"). All terms and conditions of the Agreement
shall remain in full force and effort except as expressly amended herein. All
capitalized terms herein shall have the meaning prescribed in the Agreement.
This Agreement shall be amended as follows:
1. The following definition is added to Article I of the Agreement:
Permitted Investments: Any one or more of the following:
(a) certificates of deposit fully covered by
Federal Deposit Insurance and maintained at a
bank having capital and surplus of not less
than $50,000,000;
(b) short-term obligations of, or obligations
fully guaranteed by, the United States of
America or any agencies thereof;
(c) commercial paper rated at least A-1 by
Standard and Poor's Corporation. or P-1 by
Moody's Investors Service, Inc.; and
(d) demand deposit accounts maintained in
the ordinary course of the Borrower's
business at a
<PAGE> 3
bank having capital and surplus of not less
than $50,000,000
The definition of "AmeriTrade Clearing" shall now refer to Advance
Clearing, Inc., the new name for AmeriTrade Clearing. Either "AmeriTrade
Clearing" or "Advance Clearing" shall refer to this entity. Any reference
to "LaSalle National Bank" shall mean "LaSalle Bank, N.A."
2. Section 2.1 of the Agreement is hereby amended to read as follows:
2.1 Revolving Credit Until December 31, 2000, the Revolving Lenders
severally agree to advance funds for general corporate purposes not to
exceed the amount shown below (the "Base Revolving Credit Facility")
to the Borrower on a revolving credit basis. Such Advances shall be
made on a pro rata basis by the Revolving Lenders, based on the
following maximum advance limits and applicable percentages for each
Revolving Lender: (i) as to FNB-O, $24,000,000 (32%); (ii) as to
Harris Trust and Savings Bank, $18,000,000 (24%); (iii) as to
Mercantile Bank of St. Louis N.A., $18,000,000 (24%); (iv) as to
LaSalle Bank, N.A.$ 15,000,000 (20%); provided however that each
Revolving Lender's Commitment is several and not joint or joint and
several. The Base Revolving Credit Facility shall be as follows:
Closing until June 30, 2000 $75,000,000
July 1, 2000 - September 30, 2000 $71,875,000
October 1, 2000 - December 31, 2000 $68,750,000
The Borrower shall not be entitled to any Advance hereunder if, after
the making of such Advance, the Principal Loan Amount would exceed the
least of (x) the then current Base Revolving Credit Facility, or (y)
one and one-half (1 1/2) times the Borrower's Annualized Modified Cash
Flow, or (z) the number of Core Retail Accounts times $200, determined
in each case after giving effect to the requested Advance. Nor shall
the Borrower be entitled to any further Advances hereunder after the
occurrence and during the continuation of any Event of Default or any
event which with the passage of time or the giving of notice or both
would constitute an Event of Default, or if the Borrower's
representations and warranties cease to be true and correct at the
time of the requested Advance. Advances shall be made, on the terms
and conditions of this Agreement, upon the Borrower's request.
Requests shall be made by 12:00 noon Omaha time on the Business Day
prior to the requested date of the Advance. Requests shall be made by
presentation to FNB-O of a drawing certificate in the form of Exhibit
B. The
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<PAGE> 4
Borrower's obligation to make payments of principal and interest on
the foregoing revolving credit indebtedness shall be further evidenced
by the Notes.
3. III. REPRESENTATIONS AND WARRANTIES of the Agreement is amended to
include Section 3.14 as follows:
3.14 Year 2000 Compliance. The Borrower has completed its Year 2000
inventory, and where indicated by such inventory, has upgraded (or by
September 30, 1999, will have completed its upgrading of) all its
computer hardware and software systems, so that the effect of the
arrival of January 1, 2000, on the Borrower's computer systems will
not create a material adverse effect upon the conduct of its business.
4. Section 4.2 of the Agreement is hereby amended to read as follows:
4.2 Corporate Structure and Assets. The Borrower shall not merge or
consolidate with any other corporation or entity without the prior
written consent of the Requisite Revolving Lenders, except as provided
below. The Borrower shall not sell any assets, other than in the
ordinary course of business, in an aggregate amount greater than one
million dollars ($1,000,000), except (a) items that are obsolete or no
longer necessary for operation of the business, and (b) the Borrower's
interest in Comprehensive Software Systems, Ltd. and Knight/Trimark
Group, Inc. The Revolving Lenders shall be entitled to receive as a
prepayment on the Notes the Proceeds of any sale of assets of the
Borrower which are prohibited by the preceding sentence.
Notwithstanding the foregoing prepayment requirements, any such
prohibited sale shall remain a violation of this Agreement. Any
proceeds from the Sale of Knight/Trimark Group, Inc. shall be either
paid to the Lenders as a prepayment on the Notes or shall be retained
by the Borrower and shall be reinvested solely in Permitted
Investments or additional investments in Advance Clearing. At all
times during the term of this Agreement, the Borrower shall keep its
stock of Knight/Trimark free from all liens, pledges and other
encumbrances (other than agreements to sell such stock). In addition,
the Borrower shall not engage in any business materially different
from that in which it is presently engaged and businesses reasonably
related thereto without the prior written consent of the Requisite
Revolving Lenders, which consent shall not be unreasonably withheld.
The foregoing restrictions on mergers and consolidations shall not
apply if: (i) in the case of a merger, the Borrower is the surviving
entity and expressly reaffirms its obligations hereunder; (ii) in the
case of a consolidation, the resulting corporation expressly assumes
the obligations of the Borrower hereunder, (iii) the surviving or
resulting corporation is organized under the laws of the United States
or a jurisdiction thereof; (iv) after giving effect to such merger or
consolidation, the surviving or resulting corporation will be
-3-
<PAGE> 5
engaged in substantially the same lines of business as are now engaged
in by the Borrower and its Subsidiaries and businesses reasonably
related thereto; and (v) immediately after giving effect to such
merger or consolidation, no Event of Default will exist hereunder.
5. Section 4.3 of the Agreement is hereby amended to read as follows:
4.3 Net Worth, The Borrower shall maintain a minimum Net Worth during
the term of this Agreement of at least the amounts set forth
hereunder.
Period Minimum Net Worth
------ -----------------
Prior to 12/31/99 $85,000,000
After 12/31/99
but on or prior to 12/31/2000 $105,000,000
6. Section 4.16 of the Agreement is hereby amended to read as follows:
4.16 Capital Expenditures. The Borrower shall not incur in any fiscal
year capital expenditures, determined in accordance with generally
accepted accounting principles, of more than $50,000,000; provided
however that any portion of such $50,000,000 which is not expanded for
capital expenditures may be rolled over and added to the capital
expenditures permitted for the next fiscal year.
7. The fiscal year acquisition and investment amount referenced at (i) of
Section 4.17 of the Agreement is hereby increased from Two Million
Five Hundred Thousand Dollars ($2,500,000) to Five Million Dollars
($5,000,000).
8. Section 4.20 of the Agreement is hereby amended to read as follows:
4.20 Minimum Core Retail Accounts. The Borrower will have at least the
number of Core Retail Accounts on the dates set forth below:
Date Minimum Core Retail Accounts
---- ----------------------------
Prior to 12/31/99 290,000
12/31/99 375,000
& after
9. The following is added as Section 4.24 of the Agreement:
-4-
<PAGE> 6
Section 4.24 Stock Offerings If the Borrower shall receive Net Cash
Proceeds from any public offering of common stock of the Borrower in
an amount in excess of $50,000,000 (a "Qualified Public Offering"),
the Borrower shall repay the amount, if any, outstanding on the Notes
in an amount equal to 100% of such Net Cash Proceeds of such Qualified
Public Offering (provided that the Base Revolving Credit Facility
shall not be reduced or terminated by such offering or such payment).
When used in this section, "Net Cash Proceeds" means, with respect to
any issuance of common stock, the aggregate cash, proceeds received by
the Borrower pursuant to such issuance, net of the costs relating to
such issuance (including, without limitation, sales and underwriter's
commissions and legal, accounting, printing and investment banking
fees).
10. Section 7.8 is hereby amended to read as follows:
Section 7.8 Agenting Fee. The Borrower will pay to FNB-O an annual
agenting fee equal to $37,500, payable quarterly on or before the last
day of such quarter in equal installments of $9,375.
11. VI. DEFAULTS AND REMEDIES of this Agreement is amended to include
Section 6.1(1) as follows:
6.1 (1) At any time after September 30, 1999, the computer systems of
the Borrower shall be unable to perform date-sensitive functions
involving dates after December 31, 1999 and such inability has a
material adverse effect on the ability of the Borrower to carry out
its business.
12. Exhibits A, B and C to the Agreement are hereby amended and replaced
as shown in Exhibits A, B and C to this Agreement.
13. On the date of this First Amendment, the Borrower shall execute and
deliver to the Revolving Lenders revised Notes, such Notes to be
substantially in the form shown on Exhibit A to this First Amendment
in the amounts specified in Paragraph I above. Upon receipt of such
revised Notes, the Revolving Lenders shall cancel and return to the
Borrower the current Notes.
14. This First Amendment may be executed in several counterparts and such
counterparts together shall constitute one and the same instrument.
15. On or prior to the date of this Agreement, the Borrower shall pay to
Agent a closing fee of $37,500, which is equal to 15 basis points
times the increase in the facility over $50,000,000. Such closing fee
shall be remitted to the Revolving Lenders pro rata based on their
respective percentages of such increase.
-5-
<PAGE> 7
16. For purposes of the Security Agreement and the Pledge Agreement, all
references to the "Notes" shall mean the Notes issued under this First
Amendment (and all notes given in substitution, renewal or replacement
thereof), and all references to the "Revolving Credit Agreement" shall
mean the Agreement as amended by this First Amendment and as
subsequently amended from time to time by the parties in accordance
with its terms. It is the intent of the parties to this First
Amendment that the collateral granted under the Security Agreement and
the Pledge Agreement shall secure the obligations created under the
revised Notes issued pursuant to this First Amendment and the
obligations of the Borrower under the Agreement as amended.
17. On or prior to the execution and delivery of this First Amendment, the
Borrower shall deliver to Agent the following:
a. A certified copy of the Borrower's certificate of incorporation
from the Secretary of the State of Delaware and a certificate of
its corporate secretary evidencing the by-laws of the Borrower,
corporate resolutions authorizing the transactions contemplated
by this First Amendment, and the incumbency of the officers of
the Borrower executing this First Amendment and the Notes; and
b. an opinion of special counsel to the Borrower substantially in
the form attached to this First Amendment.
Except as expressly agreed herein, all terms of the Agreement shall remain
in full force and effect.
IN WITNESS WHEREOF, the Borrower and the Revolving Lenders have caused this
First Amendment To Revolving Credit Agreement to be executed by their duly
authorized corporate officers as of the day and year first above written.
AMERITRADE HOLDING CORPORATION
By: /s/ R. T. Slezak
------------------------------------
Title: VP & CFO
-------------------------------
FIRST NATIONAL BANK OF OMAHA
By: /s/ James P. Bonham
------------------------------------
Title: Vice President
-------------------------------
NOTICE: A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract, promise, or offer to forebear repayment of money or to make any other
financial
-6-
<PAGE> 8
accommodation in connection with this loan of money or grant or extension of
credit, or any amendment of, cancellation of, waiver of, or substitution for any
or all of the terms or provisions of any instrument or document executed in
connection with this loan of money or grant or extension of credit, must be in
writing to be effective.
INITIALED: RTS
--------
Borrower
-7-
<PAGE> 9
LASALLE BANK, N.A.
By: /s/ [Illegible]
------------------------------------
Title: Vice President
-------------------------------
NOTICE: A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract, promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of,
or substitution for any or all of the terms or provisions of any instrument or
document executed in connection with this loan of money or grant or extension of
credit, must be in writing to be effective.
INITIALED:
RTS
--------
Borrower
<PAGE> 10
MERCANTILE BANK OF ST. LOUIS, N.A.
By: /s/ Joseph L. Sooter, Jr.
------------------------------------
Title: Vice President
-------------------------------
NOTICE: A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract promise, undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of,
or substitution for any or all of the terms or provisions of any instrument or
document executed in connection with this loan of money or grant or extension of
credit, must be in writing to be effective.
INITIALED:
RTS
--------
Borrower
<PAGE> 11
HARRIS TRUST AND SAVINGS BANK
By: /s/ Gary R. Shafer
------------------------------------
Title: Vice President
-------------------------------
NOTICE: A credit agreement must be in writing to be enforceable under Nebraska
law. To protect you and us from any misunderstandings or disappointments, any
contract, promise undertaking, or offer to forebear repayment of money or to
make any other financial accommodation in connection with this loan of money or
grant or extension of credit, or any amendment of, cancellation of, waiver of,
or substitution for any or all of the terms or provisions of any instrument or
document executed in connection with this loan of money or grant or extension of
credit, must be in writing to be effective.
INITIALED:
RTS
--------
Borrower
<PAGE> 12
EXHIBIT A
TO FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
AMONG
AMERITRADE HOLDING CORPORATION,
FIRST NATIONAL BANK OF OMAHA,
HARRIS TRUST AND SAVINGS BANK,
LASALLE BANK N.A. AND
MERCANTILE BANK OF ST. LOUIS, N.A.
FORM OF NEW NOTES
<PAGE> 13
SECURED BUSINESS PROMISSORY NOTE
Omaha, Nebraska $_____________________
May __, 1999 December 31, 2000
(Note Date) (Maturity Date)
On or before December 31, 2000, AMERITRADE HOLDING CORPORATION ("Maker")
promises to pay to the order of [REVOLVING LENDER] ("Lender") the principal sum
hereof, which shall be the lesser of ___________ Dollars, or so much thereof as
may have been advanced by Lender pursuant to the Revolving Credit Agreement
dated as of January 16, 1998, as amended from time to time (the "Agreement")
among Maker, Lender, First National Bank of Omaha ("Agent"), and the other
Revolving Lenders from time to time party thereto (collectively, the "Lenders").
All capitalized terms not defined herein shall have their respective meanings as
set forth in the Agreement.
Interest shall accrue on the principal sum hereof outstanding from time to
time at a floating per annum interest rate published from time to time as the
"Prime Rate" (the base rate on corporate loans posted by at least 75% of the
nation's 30 largest banks) in the Midwest Edition of the Wall Street Journal on
the date that the interest is billed (or, if no such rate is published on such
date, on the last preceding date when such rate was published), minus 3/4 of 1 %
(the "Revolving Credit Rate"). Interest shall accrue from and after the date of
advance to the date of repayment and shall be calculated based on a year of 360
days, and actual days elapsed. Such rate shall fluctuate daily based on changes
in such Prime Rate on such date. Notwithstanding anything to the contrary
elsewhere herein, after an Event of Default has occurred interest shall accrue
on the entire outstanding balance of principal and interest on all indebtedness
hereunder at a fluctuating rate equal to the Default Rate. Interest shall be due
no later then the tenth day of each month.
On or prior to the end of each calendar quarter, Maker shall repay the
amount, if any, outstanding on the Revolving Credit Note which in the aggregate
exceeds the amount of the Base Revolving Credit Facility to be in place on the
next succeeding Business Day following such calendar quarter. The balance, if
any, shall be due on the Maturity Date stated above.
All obligations of Maker under this Note shall be payable in immediately
available funds in lawful money of the United States of America at the principal
office of Agent in Omaha, Nebraska or at such other address as may be designated
by Agent in writing. In the event that a payment day is not a Business Day, the
payment shall be due on the next succeeding Business Day.
Maker may at any time prepay the Principal Loan Amount outstanding under
this Note if Maker has given Agent and Lender at least one (1) Business Day's
prior written notice of its intention to make such prepayment. Any such
prepayment may be made without penalty.
<PAGE> 14
All obligations of Maker hereunder shall be secured by a first security
interest in the Collateral, as more specifically described in the Security
Agreement and the Pledge Agreement.
GENERAL TERMS
Maker's liability for any amounts owed under this Note and the other
Operative Documents (the "Obligations') shall not be affected by any of the
following:
Acceptance or retention by Lender or Agent of other property or
interests as security for the Obligations, or for the liability of any
person other than a Maker with respect to the Obligations;
The release of all or any of the Collateral or other security for any
of the Obligations to any Maker;
Any release, extension, renewal, modification or compromise of any of
the Obligations or the liability of any obligor thereon; or
Failure by Lender or Agent to resort to other security or any person
liable for any of the obligations before resorting to the Collateral.
Neither Lender nor Agent is required to take any action whatsoever in
respect of the Collateral, Impairment or destruction of the Collateral shall not
release Maker of its liability hereunder.
Upon the failure of Maker to make any payment of principal or interest when
due hereunder or the occurrence of any Event of Default, all of the Obligations
shall, at the option of Agent and without notice or demand, mature and become
immediately due and payable; and Agent shall have all rights and remedies for
default provided by the Uniform Commercial Code, any other applicable law and/or
the Operative Documents.
All costs and expenses incurred by Lender or Agent in enforcing its rights
under this Note or any mortgage, endorsement, surety agreement, guaranty
relating thereto are the obligation of Maker and are immediately due and
payable. Interest shall accrue on such costs and expenses from the date of
incurrence at the rate specified herein for delinquent Note payments. Each
Maker, endorser, surety and guarantor hereby waives presentment, protest,
demand, notice of dishonor, and the defense of any statute of limitations.
Without affecting the liability of any Maker, endorser, surety or
guarantor, the holder or Agent may, without notice, renew or extend the time for
payment, accept partial payments, release or impair any Collateral or other
security for the payment of this Note or agree to sue any party liable on it.
<PAGE> 15
Neither Lender nor Agent shall be deemed to have waived any of its rights
upon or under this Note, or under any mortgage, endorsement, surety agreement or
guaranty, unless such waivers be in writing and signed by Lender or Agent, as
the case may be. No delay or omission on the part of Lender or Agent in
exercising any right shall operate as a waiver of such right or any other right.
A waiver on any one occasion shall not be construed as a bar to or waiver of any
right on any future occasion. All rights and remedies of Lender or Agent on
liabilities or the Collateral, whether evidenced hereby or by any other
instrument or papers, shall be cumulative and may be exercised or concurrently.
Maker, if more than one, shall be jointly and severally liable hereunder
and all provisions hereof regarding the liabilities or security of Maker shall
apply to any liability or any security of any or all of them. This Note shall be
binding upon the heirs, executors, administrators, assigns or successors of
Maker; shall constitute a continuing agreement, applying to all future as well
as existing transactions, whether or not of the character contemplated at the
date of this Note, and if all transactions between Lender and Maker shall be at
any time closed, shall be equally applicable to any new transactions thereafter,
provided that Lender's interest in the Collateral shall be limited to the
extent provided in the Security Agreement and the Pledge Agreement; shall
benefit Lender, its successors and assigns; and shall so continue in force
notwithstanding any change in any partnership party hereto, whether such change
occurs through death, retirement or otherwise.
All obligations of Maker hereunder shall be payable in immediately
available funds in lawful money of the United States of America at the principal
office of the Agent.
This Note shall be construed according to the laws of the State of
Nebraska.
Unless the context otherwise requires, all terms used herein which are
defined in the Uniform Commercial Code shall have the meanings therein stated.
Any provision of this Note which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
This Note is given in substitution of that certain Secured Business
Promissory Note dated January ____, 1998, given by Maker to Lender, in the
principal amount of $___________________.
Executed as of this _____ day of ________________, 1999.
AMERITRADE HOLDING CORPORATION
By:________________________________
Title:________________________________
<PAGE> 16
PROMISSORY NOTE SCHEDULE
Loan Advances and Payments of Principal
AMERITRADE HOLDING CORPORATION
REVOLVING NOTE ADVANCES AND PAYMENTS:
Amount of Unpaid
Amount Principal Paid Amount of Principal Notation
Date of Advance or Prepaid Interest Paid Balance Made By
- ---- ---------- ---------- ------------- ------- -------
<PAGE> 17
EXHIBIT B
TO FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
AMONG
AMERITRADE HOLDING CORPORATION,
FIRST NATIONAL BANK OF OMAHA,
HARRIS TRUST AND SAVINGS BANK,
LASALLE BANK N.A. AND
MERCANTILE BANK OF ST. LOUIS, N.A.
DRAWING CERTIFICATE
<PAGE> 18
DRAWING CERTIFICATE
AMERITRADE HOLDING CORPORATION
To induce the First National Bank of Omaha, and the other Revolving Lenders that
are parties to the Agreement referred to below (the "Revolving Lenders") to make
an Advance under the Revolving Credit Agreement (the "Agreement") dated as of
January 16, 1998, between the undersigned (the "Borrower") and the Revolving
Lenders, the Borrower hereby certifies to the Revolving Lenders that its
Annualized Modified Cash Flow (as defined in the Agreement) as represented below
are true and correct, that the Borrower's representations and warranties under
the Agreement remain true and correct and that there is no Event of Default or
condition or event which with the passage of time or the giving of notice or
both would constitute an Event of Default, and that there is no default under
the aforementioned Agreement.
All information as of: Date_____________
a) Maximum Revolving Credit Facility $______________*
b) Principal on Revolving Credit $______________
c) ADVANCE REQUEST $______________
d) Total Proposed Bank Debt
(line b + line c, but $______________
not to exceed line a)
e) Most recent Annualized Modified Cash Flow $______________
f) 1.5 x Most recent Annualized Modified Cash Flow $______________
g) $200 x Number of Core Retail Accounts $______________
h) Enter the smallest of lines (d), (f), and (g) $______________
* The Maximum Revolving Credit Facility is as follows:
Closing until June 30, 2000 $75,000,000
July 1, 2000 - September 30, 2000 $71,875,000
October 1, 2000 - December 31, 2000 $68,750,000
Name of Borrower: AmeriTrade Holding Corporation
Signature: _____________________
Title: _____________________
<PAGE> 19
EXHIBIT C
TO FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT
AMONG
AMERITRADE HOLDING CORPORATION,
FIRST NATIONAL BANK OF OMAHA,
HARRIS TRUST AND SAVINGS BANK,
LASALLE BANK, N.A. AND
MERCANTILE BANK OF ST. LOUIS, N.A.
COMPLIANCE CERTIFICATE
<PAGE> 20
COMPLIANCE CERTIFICATE
AMERITRADE HOLDING CORPORATION
First National Bank of Omaha Date______________
Attn: James Bonham
16th & Dodge Streets
Omaha, Nebraska 68102
I certify that AmeriTrade Holding Corporation is in compliance with the
requirements set forth in the Revolving Credit Agreement (the "Agreement") dated
as of January 16, 1998, between the undersigned (the "Borrower") and the
Revolving Lenders.
The following calculations are as of ________ (statement date) as required by
Section 4.1(e) of said Agreement:
Evaluations:
Total Indebtedness (TI):
Annualized Modified Cash Flow for this Quarter:
month month month
ending______ ending______ ending______
Consolidated
Net Income (loss)
Before Taxes ____________ ____________ ____________
Non-Ordinary
Non-Cash
Charges (Credits) ____________ ____________ ____________
Plus Advertising
Expenditures in
excess of $667,000
for such month ____________ ____________ ____________
Total a) ____________ b) ____________ c) ____________
QAMCF = (a+b+c) x 4 = ____________
<PAGE> 21
Section 4.3
- - Net Worth: The Borrower shall maintain a Minimum Net Worth during the
term of this Agreement of at least the amounts set forth
hereunder:
Period Shown Minimum Net Worth
------------ -----------------
Prior to 12/31/99 $ 85,000,000
After 12/31/99
but on or prior
to 12/31/00 $100,000,000
- - Position: Total Net Worth = $_____________
The Borrower [is/is not] in compliance with Section 4.3.
Section 4.4
- - Indebtedness: At no time will Borrower: (1) have Indebtedness other then
as incurred under this Agreement or (2) have total
Indebtedness in excess of 3.0 times AMCF.
- - Position: (1) Borrower [has/does not have] Indebtedness other than as
incurred under this Agreement;
(2) (3.0 x AMCF) - total Indebtedness =
________ - ________ = ___________
Section 4.7
- - Distributions: The Borrower shall not declare any dividends (other than
dividends payable in stock of the Borrower) or make any cash
distribution in respect of any shares of its capital stock
or warrants of its capital stock, without the prior written
consent of the Requisite Revolving Lenders.
The Borrower [is/is not] in compliance with Section 4.7.
Section 4.11
- - Guaranties: The Borrower and its Subsidiaries shall not have outstanding
at any time guaranties in an aggregate amount exceeding
$250,000.
- - Position: Aggregate amount of guaranties outstanding: $_____________
The Borrower [is/is not] in compliance with Section 4.11.
<PAGE> 22
Section 4.16
- - Capital Expenditures: The Borrower shall not make capital expenditures in any
fiscal year, commencing with the fiscal year beginning
January 1, 1999, in excess of $50,000,000; provided
however that any portion of such $50,000,000 which is
not expanded for capital expenditures may be rolled
over and added to the capital expenditures for the next
fiscal year.
- - Position: Amount of capital expenditures eligible to be rolled
over to this period:
$____________ + $50,000,000 = $______________
Capital Expenditures this fiscal year = $_____________
The Borrower [is/is not] in compliance with Section 4.16.
Section 4.17
- - Acquisitions The Borrower shall not make acquisitions (other than
excepted acquisitions) which in the aggregate exceed
$5,000,000.
- - Position Acquisitions in the aggregate since the date of the
Agreement = _______________.
The Borrower [is/is not] in compliance with Section 4.17.
Section 4.19
- - Minimum Regulatory
Net Capital AmeriTrade Clearing will have Regulatory Net Capital
not less than 5% of aggregate debit items.
- - Position: Regulatory Net Capital: $__________________(_____%)
Aggregate Debit Items: $__________________
The Borrower [is/is not] in compliance with Section 4.19.
Section 4.20
- - Minimum Core
Retail Accounts The Borrower will have at least the number of Core
Retail Accounts on the dates set forth below:
Date Minimum Core Retail Number of Core
---- ------------------- --------------
Accounts Retail Accounts
-------- ---------------
<PAGE> 23
Prior to 12/31/99 290,000 ___________
On or after 12/31/99 375,000 ___________
The Borrower [is/is not] in compliance with Section 4.20.
Additional Representations:
There have/have not been any sale(s) of assets which would require
prepayment of the Notes under Section 4.2.
There has/has not been a Change of Control.
Name of Borrower: AmeriTrade, Holding Corporation
Signature: _______________________
Title: _______________________
<PAGE> 24
[ LETTERHEAD OF MAYER, BROWN & PLATT ]
May 25, 1999
To the Agent and the Revolving
Lenders party to the Credit Agreement
referred to below
Re: First Amendment, dated as of May 24, 1999, to the Revolving Credit
Agreement, dated as of January 16, 1998, among AmeriTrade Holding
Corporation, the financial institutions party thereto and First
National Bank of Omaha, as agent
Ladies and Gentlemen:
We have acted as special counsel to AmeriTrade Holding Corporation, a
Delaware corporation (the "Company"), in connection with the execution and
delivery of the First Amendment, dated as of May 24, 1999 (the "Amendment"), to
the Revolving Credit Agreement, dated as of January 16, 1998 (the "Credit
Agreement"), among the Company, the financial institutions party thereto (the
"Revolving Lenders") and First National Bank of Omaha, as agent (the "Agent").
In connection with this opinion, we have examined:
(a) the certificate of incorporation and bylaws of the Company;
(b) resolutions of the board of directors of the Company;
(c) the Amendment;
(d) the Security Agreement dated as of January 16, 1998 (the "Security
Agreement") between the Company and the Agent;
(e) the Stock Pledge Agreement dated as of January 16, 1999 (the "Pledge
Agreement") between the Company and the Agent;
(f) the Secured Business Promissory Notes dated May 24, 1999 made by the
Company to the order of the Revolving Lenders (the "Notes"); and
<PAGE> 25
MAYER, BROWN & PLATT
May 25, 1999
Page 2
(g) the Credit Agreement
We also have examined originals, or copies certified or otherwise
identified to our satisfaction as being true copies, of such agreements,
corporate records, certificates of public officials and other documents, as we
have deemed necessary as a basis for the opinions hereinafter expressed. As to
questions of fact material to such opinion, we have, when such facts were not
independently established by us, relied upon certificates of the Company or
its officers or of public officials.
In our examination of the documents referred to above, we have assumed
the authenticity of all such documents submitted to us as originals, the
conformity to the originals of all such documents submitted to us as copies,
the genuineness of all signatures, and the legal capacity and power of, and
due authorization, execution and delivery of the Amendment and the Credit
Agreement by, all parties other than the Company. Further, me have assumed
that each of the Amendment, the Credit Agreement as amended by the Amendment
(the "Amended Credit Agreement"), the Security Agreement and the Pledge
Agreement constitutes the legal, valid and binding obligation of all parties
thereto other than the Company.
Based upon the foregoing and further subject to the qualifications set
forth at the end of this opinion letter, we are of the opinion that:
1. The Company is a validly existing corporation in good standing under
the laws of the State of Delaware. For purposes of the opinion in this
paragraph as to valid existence and good standing, we have relied exclusively
upon a certificate issued by governmental authorities of the State of Delaware
and such opinion is not intended to provide any conclusion or assurance beyond
that conveyed by such certificate.
2. The Company has the requisite corporate power and authority to execute
and deliver the Amendment and the Notes and perform its obligations under the
Notes and the Amended Credit Agreement. The execution and delivery of the
Amendment and the Notes and the performance by the Company of its obligations
under the Notes and the Amended Credit Agreement have been duly authorized by
all necessary corporate action an the part of the Company. Each of the
Amendment and the Notes has been duly executed by the Company.
3. Each Note and the Amended Credit Agreement constitutes the legal,
valid and binding obligation of the Company enforceable against the Company in
accordance with its terms. Each of the Security Agreement and the Pledge
Agreement constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, and the Security
Agreement and the Pledge Agreement secure the indebtedness of the Company
under the Amended Credit Agreement and the Notes. In rendering the opinion in
this
<PAGE> 26
MAYER, BROWN & PLATT
May 25, 1999
Page 3
paragraph 3, we have assumed, with your permission, that the laws of the State
of Illinois would govern the Notes, the Amended Credit Agreement, the Security
Agreement and the Pledge Agreement (the "Documents") notwithstanding the
selection of Nebraska law as the governing law of the Documents. In making the
foregoing assumption, we do not intend to imply that an Illinois court would
not give effect to such selection of Nebraska law.
The opinions set forth above are subject to the following qualifications
and limitations:
(A) Our opinions stated herein are subject to the effect of any
applicable bankruptcy, insolvency, fraudulent conveyance, equitable
subordination, reorganization, readjustment of debt, moratorium or
similar laws affecting creditors' rights generally.
(B) Our opinions stated herein are further subject to the effect of
general principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing (regardless of
whether considered in a proceeding in equity or at law) and by
limitations on the availability of specific performance, injunctive
relief or other equitable remedies.
(C) We express no opinion as to the enforceability, under certain
circumstances, of provisions imposing penalties or forfeitures, late
payment charges or an increase in interest rate upon delinquency in
payment or the occurrence of a default.
(D) Certain of the remedial provisions contained in the Documents
may be unenforceable in whole or in part but the inclusion of such
provisions does not render the Documents invalid as a whole, and there
exist, in the Documents or pursuant to applicable law, legally adequate
remedies for the practical realization of the principal benefits
purported to be afforded by such documents; (except for the economic
consequences of procedural or other delay).
(E) We express no opinion as to:
(1) the existence of any person's or entity's ownership rights
in or title to any collateral;
(2) the validity, perfection, priority or enforceability of any
lien, charge or encumbrance on or to any property or assets;
(3) any agreement by the Company to submit to the jurisdiction
of a particular court, waive jury trial or appoint an agent for
acceptance of service of process;
<PAGE> 27
MAYER, BROWN & PLATT
May 25, 1999
Page 4
(4) any provision purporting to waive any objection to the
laying of venue or any claim that an action or proceeding has been
brought in an inconvenient forum;
(5) any provision of any Document which authorizes or permits
any purchaser of a participation interest from any party to set off
or apply any deposit or property or any indebtedness with respect to
any participation interest;
(6) compliance with, or any governmental or regulatory filing,
approval, authorization, license or consent required by or under,
any (a) Federal or state environmental laws, (b) Federal or state
antitrust laws, (a) Federal or state taxation laws, (d) Federal or
state worker health or safety, zoning or permitting or land use
matters, (e) Federal or state patent, trademark or copyright
statutes, rules or regulations, (f) statutory or other requirements
relating to the disposition of hazardous waste or environmental
protection, (g) Federal or state receivership or conservatorship
laws, (h) securities registration or antifraud provisions under
Federal or state securities laws, (i) Federal or state labor or
employment law or (j) Federal or state employee benefits or pension
law;
(7) the effect of the law of any jurisdiction wherein any
Revolving Lender may be located or wherein the enforcement of any
Document may be sought that limits the rates of interest legally
chargeable or collectible; and
(8) any provision of any Document (i) restricting access to
legal or equitable remedies, (ii) purporting to establish
evidentiary standards, (iii) purporting to appoint any person or
entity as the attorney-in-fact of any other person or entity, (iv)
which provides that the Documents may only be amended, modified or
waived in writing or (v) stating that all rights or remedies of any
party are cumulative and may be enforced in addition to any other
right or remedy and that the election of a particular remedy does
not preclude recourse to one or more remedies.
(F) We note that the enforceability of the Documents may be limited
or rendered ineffective if the Agent or the Revolving Lenders fail to
act in good faith and in a commercially reasonable manner in seeking to
exercise their rights and remedies thereunder. Without limiting the
generality of the foregoing, we note that a court might hold that a
technical and nonmaterial default under the Documents does not give rise
to a right of the Agent or the Revolving Lenders to exercise certain
remedies including, without limitation, acceleration.
<PAGE> 28
MAYER, BROWN & PLATT
May 25, 1999
Page 5
(G) We express no opinion as to the enforceability of the
indemnification provisions of the Documents insofar as said provisions
contravene public policy or might require indemnification or payments to
any person or entity with respect to any litigation determined adversely
to such person or entity, or any loss, cost or expense arising out of
the gross negligence or willful misconduct of such person or entity or
any violation by such person or entity of statutory duties, general
principles of equity or public policy.
(H) No opinion is rendered herein as to the effect of any law
relating to your legal or regulatory status.
(I) We have assumed that there are no agreements or understandings
among the parties, written or oral, and there is no usage of trade or
prior course of dealing among the parties, that would supplement or
modify the terms of any Document.
This opinion is being delivered to you pursuant to Section 17.b of the
Amendment, is rendered solely to and for your benefit and may not be relied
upon for any other purpose, or relied upon by any other person, firm or
corporation for any purpose, without our prior written consent.
Notwithstanding the foregoing, assignees of Revolving Lenders who become
Revolving Lenders under the Amended Credit Agreement and participants
permitted under the Amended Credit Agreement may rely on this opinion as if it
were addressed to them.
We are members of the Bar of the State of Illinois. This opinion is
limited to the law of such state, the federal laws of the United States and
the General Corporation Law of the State of Delaware. With respect to opinions
contained herein on matters governed by the General Corporation Law of the
State of Delaware, you are aware that we are not admitted to the Bar of the
State of Delaware and that such opinions are based solely upon our familiarity
with the General Corporation Law of the State of Delaware as a result of our
prior involvement in transactions of a nature similar to those contemplated by
the Documents. The opinions expressed herein are limited in all respects to
the law existing on the date hereof. In rendering this opinion, we do not
undertake to advise you of any change in law or fact that may occur after the
date hereof.
Very truly yours,
/s/ Mayer, Brown & Platt
MAYER, BROWN & PLATT
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<ARTICLE> BD
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS INCLUDED IN THE FORM 10Q AS OF JUNE 25, 1999 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-24-1999
<PERIOD-START> MAR-27-1999
<PERIOD-END> JUN-25-1999
<CASH> 624,827,019
<RECEIVABLES> 1,519,799,852
<SECURITIES-RESALE> 0
<SECURITIES-BORROWED> 18,836,622
<INSTRUMENTS-OWNED> 0
<PP&E> 42,070,114
<TOTAL-ASSETS> 2,651,784,420
<SHORT-TERM> 0
<PAYABLES> 2,031,584,951
<REPOS-SOLD> 0
<SECURITIES-LOANED> 0
<INSTRUMENTS-SOLD> 0
<LONG-TERM> 0
0
0
<COMMON> 1,744,364
<OTHER-SE> 337,064,485
<TOTAL-LIABILITY-AND-EQUITY> 2,651,784,420
<TRADING-REVENUE> 0
<INTEREST-DIVIDENDS> 31,208,309
<COMMISSIONS> 56,063,864
<INVESTMENT-BANKING-REVENUES> 0
<FEE-REVENUE> 2,867,393
<INTEREST-EXPENSE> 12,045,787
<COMPENSATION> 20,972,870
<INCOME-PRETAX> 13,889,872
<INCOME-PRE-EXTRAORDINARY> 13,889,872
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,917,412
<EPS-BASIC> 0.05
<EPS-DILUTED> 0.05
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