Exhibit 10.21
AMENDED AND RESTATED LEASE AGREEMENT
BY AND BETWEEN
DNA COG, LTD., AS LANDLORD
AND
CABOT OIL & GAS CORPORATION, AS TENANT
April 24, 1998
TABLE OF CONTENTS
Page
ARTICLE I Premises........................................................ 1
1.1 Premises................................................. 1
1.2 Definitions for Measuring the Premises and the Building.. 2
1.3 Measurement of Premises.................................. 3
1.4 No Modification of Net Rentable Area..................... 3
ARTICLE II Term............................................................ 4
2.1 Term..................................................... 4
ARTICLE III Rental Payments................................................. 4
3.1 Payments of Rent......................................... 4
3.2 Base Rental.............................................. 5
3.3 Additional Rental........................................ 5
3.4 Operating Expenses....................................... 6
3.5 Reduced Services......................................... 12
3.6 Tax Protests............................................. 12
ARTICLE IV Landlord Services............................................... 13
4.1 Services to be Provided by Landlord...................... 13
4.2 Interruption of Services................................. 15
4.3 Payment for Non-Standard Services........................ 16
4.4 Keys and Locks........................................... 17
4.5 Graphics and Building Directory.......................... 18
ARTICLE V Use and Care of the Premises.................................... 19
5.1 Use...................................................... 19
5.2 Care of the Premises..................................... 20
5.3 Entry for Repairs and Inspection......................... 20
5.4 Tenant's Compliance with Laws and Regulations;
Rules of Building..................................... 21
5.5 Landlord's Compliance with Laws.......................... 21
5.6 Hazardous Substances..................................... 21
5.7 Parking.................................................. 22
ARTICLE VI Construction of Project and Leasehold Improvements.............. 23
6.1 Construction of Project.................................. 23
6.2 Construction of Leasehold Improvements................... 23
6.3 Alterations, Additions, Improvements..................... 23
6.4 Property of Landlord..................................... 24
6.5 Taxes and Tax Abatement.................................. 24
6.6 Repairs by Landlord...................................... 25
6.7 Repairs by Tenant........................................ 25
6.8 Waiver of Landlord Liens................................. 25
ARTICLE VII Condemnation and Casualty....................................... 26
7.1 Condemnation............................................. 26
7.2 Damages from Certain Causes.............................. 27
7.3 Fire or Other Casualty................................... 27
7.4 Casualty Insurance....................................... 28
7.5 Liability Insurance...................................... 29
7.6 Hold Harmless............................................ 29
7.7 Waiver of Subrogation Rights............................. 30
108
ARTICLE VIII Tenant Default.................................................. 30
8.1 Default by Tenant........................................ 30
8.2 Non-Waiver............................................... 35
8.3 Holding Over............................................. 35
8.4 Attorneys' Fees.......................................... 35
8.5 Limitation of Landlord's Liability....................... 35
8.6 Limitation of Tenant's Liability......................... 36
8.7 Arbitration.............................................. 36
8.8 Default by Landlord...................................... 37
ARTICLE IX Transfers....................................................... 38
9.1 Assignment or Sublease by Tenant......................... 38
9.2 Transfer by Landlord..................................... 40
9.3 Peaceful Enjoyment....................................... 40
ARTICLE X Additional Provisions........................................... 41
10.1 Notices.................................................. 41
10.2 Subordination............................................ 41
10.3 Estoppel Certificate or Three-Party Agreement............ 41
10.4 Brokerage................................................ 42
10.5 Disclaimers.............................................. 42
10.6 Memorandum of Lease...................................... 42
10.7 Publicity................................................ 42
10.8 Effect of Delivery of This Lease......................... 42
10.9 Communications Equipment................................. 42
10.10 Uninterrupted Power Supply............................... 44
10.11 Option to Purchase....................................... 44
10.12 Purchase of Property..................................... 45
10.13 Miscellaneous............................................ 45
10.14 Restatement.............................................. 46
EXHIBITS:
Exhibit A - Land Description
Exhibit B - Floor Plans
Exhibit C - Certificate of Commencement Date
Exhibit D - Project Rules and Regulations
Exhibit E - Construction of the Project
Exhibit E-1 - Construction Schedule
Exhibit F - Leasehold Improvements
Exhibit G - Initial Plans and Specifications
Exhibit G-1 - Tenant Add Ons
Exhibit H - Renewal Option
Exhibit I - Expansion Option
Exhibit J - First Refusal Right
Exhibit K - Cleaning Specifications
Exhibit L - Memorandum of Lease
Exhibit M - Security Services
Exhibit N - Restrictions
109
GLOSSARY FOR DEFINED TERMS
Landlord.................................................................... 1
Tenant...................................................................... 1
Building.................................................................... 1
Land........................................................................ 1
Garage...................................................................... 1
Project..................................................................... 1
Initial Premises............................................................ 1
Premises.................................................................... 1
Net Rentable Area........................................................... 2
Usable Area................................................................. 2
Service Areas............................................................... 2
Building Common Areas....................................................... 2
On-Floor Common Areas....................................................... 3
Leasable Space.............................................................. 3
Term........................................................................ 4
Commencement Date........................................................... 4
Rent Commencement Date...................................................... 4
Rent........................................................................ 4
Base Rental................................................................. 5
Base Rental Rate............................................................ 5
Tenant's Additional Rental.................................................. 5
Tenant's Estimated Additional Rental........................................ 5
Tenant's Proportionate Share................................................ 6
Operating Expenses.......................................................... 6
Comparable Buildings........................................................ 13
HVAC Service................................................................ 13
Outline Plans and Specifications............................................ 13
Normal Business Hours....................................................... 13
Holidays.................................................................... 13
Essential Services.......................................................... 16
Significant Portion......................................................... 16
Untenantable................................................................ 16
Legal Requirements.......................................................... 21
Rules and Regulations....................................................... 21
ADA......................................................................... 21
hazardous substances........................................................ 22
Landlord Indemnified Parties................................................ 22
Tenant Indemnified Parties.................................................. 22
Restoration Estimate........................................................ 27
Objectively Reasonable Efforts.............................................. 33
Event of Default............................................................ 37
Affiliate................................................................... 40
Control..................................................................... 40
Tenant's Equipment Area..................................................... 42
Communications Equipment.................................................... 42
UPS......................................................................... 44
Restrictions................................................................ 45
Lease....................................................................... C-1
Project Architect........................................................... E-1
Base Building Contractor.................................................... E-1
Preliminary Plans and Specifications........................................ E-1
Project Plans and Specifications............................................ E-1
Construction Schedule....................................................... E-3
Delivery.................................................................... E-3
Core and Shell Improvements................................................. F-1
Initial Tenant Improvements................................................. F-1
Tenant Plans and Specifications............................................. F-1
Tenant's Architect.......................................................... F-1
High Risk Items............................................................. F-2
Tenant Contractor........................................................... F-2
Landlord's Representative................................................... F-5
Tenant's Representative..................................................... F-6
Tenant Delay................................................................ F-6
Landlord Delay.............................................................. F-6
Force Majeure............................................................... F-7
Completion Date............................................................. F-7
substantial completion...................................................... F-7
substantially completed..................................................... F-7
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Tenant Allowance............................................................ F-9
Initial Allowance........................................................... F-9
Additional Allowance........................................................ F-9
Permitted Tenant Allowance Costs............................................ F-9
Renewal Option.............................................................. H-1
Renewal Term................................................................ H-1
MRR......................................................................... H-2
Expansion Option............................................................ I-1
Expansion Space............................................................. I-1
Expansion Premises.......................................................... I-1
Preference Right............................................................ J-1
Preference Space............................................................ J-1
Preference Notice........................................................... J-1
ADA......................................................................... 21
Additional Allowance........................................................ F-9
Affiliate................................................................... 40
Base Building Contractor.................................................... E-1
Base Rental................................................................. 5
Base Rental Rate............................................................ 5
Building Common Areas....................................................... 2
Building.................................................................... 1
Commencement Date........................................................... 4
Communications Equipment.................................................... 42
Comparable Buildings........................................................ 13
Completion Date............................................................. F-7
Construction Schedule....................................................... E-3
Control..................................................................... 40
Core and Shell Improvements................................................. F-1
Delivery.................................................................... E-3
Essential Services.......................................................... 16
Event of Default............................................................ 37
Expansion Option............................................................ I-1
Expansion Space............................................................. I-1
Expansion Premises.......................................................... I-1
Force Majeure............................................................... F-7
Garage...................................................................... 1
Hazardous Substances........................................................ 22
High Risk Items............................................................. F-2
Holidays.................................................................... 13
HVAC Service................................................................ 13
Initial Premises............................................................ 1
Initial Allowance........................................................... F-9
Initial Tenant Improvements................................................. F-1
Land........................................................................ 1
Landlord.................................................................... 1
Landlord Indemnified Parties................................................ 22
Landlord Delay.............................................................. F-6
Landlord's Representative................................................... F-5
Leasable Space.............................................................. 3
Lease....................................................................... C-1
Legal Requirements.......................................................... 21
MRR......................................................................... H-2
Net Rentable Area........................................................... 2
Normal Business Hours....................................................... 13
objectively reasonable efforts.............................................. 00
Xx-Xxxxx Xxxxxx Areas....................................................... 3
Operating Expenses.......................................................... 6
Outline Plans and Specifications............................................ 13
Permitted Tenant Allowance Costs............................................ F-9
Preference Right............................................................ J-1
Preference Space............................................................ J-1
Preference Notice........................................................... J-1
Preliminary Plans and Specifications........................................ E-1
Premises.................................................................... 1
Project Plans and Specifications............................................ E-1
Project Architect........................................................... E-1
Project..................................................................... 1
Renewal Option.............................................................. H-1
Renewal Term................................................................ H-1
Rent........................................................................ 4
Rent Commencement Date...................................................... 4
Restoration Estimate........................................................ 27
Restrictions................................................................ 45
111
Rules and Regulations....................................................... 21
Service Areas............................................................... 2
Significant Portion......................................................... 16
substantial completion...................................................... F-7
substantially completed..................................................... F-7
Tenant Contractor........................................................... F-2
Tenant Delay................................................................ F-6
Tenant...................................................................... 1
Tenant Allowance............................................................ F-9
Tenant Indemnified Parties.................................................. 22
Tenant Plans and Specifications............................................. F-1
Tenant's Architect.......................................................... F-1
Tenant's Additional Rental.................................................. 5
Tenant's Estimated Additional Rental........................................ 5
Tenant's Representative..................................................... F-6
Tenant's Proportionate Share................................................ 6
Tenant's Equipment Area..................................................... 42
Term........................................................................ 4
Untenantable................................................................ 16
UPS......................................................................... 44
Usable Area................................................................. 2
112
AMENDED AND RESTATED LEASE AGREEMENT
THIS AMENDED AND RESTATED LEASE AGREEMENT (this "Lease") is effective as of
the 24th day of April, 1998, by and between DNA COG, LTD., a Texas limited
partnership ("Landlord"), whose address for purposes hereof is c/o Xxxxxx Xxxxxx
Xxxxxxxxx Company, 0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000,
and CABOT OIL & GAS CORPORATION, a Delaware corporation ("Tenant"), whose
address for purposes hereof is 00000 Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, prior
to the Commencement Date (as defined below), and thereafter shall be that of the
Building (as defined below).
W I T N E S S E T H:
ARTICLE I
Premises
1.1 Premises.
(a) Subject to and upon the terms, provisions and conditions hereinafter
set forth, and each in consideration of the duties, covenants and
obligations of the other under this Lease, Landlord does hereby lease
to Tenant, and Tenant does hereby lease from Landlord, approximately
111,695 square feet of Net Rentable Area (as defined below),
comprising a portion of the 1st Floor and all of Floors 3, 4, 5, and
6, of the building to be constructed by Landlord at 0000 Xxxxxxx
Xxxxxxx, Xxxxxxx, Xxxxxx, Xxxxxx, Xxxxx (the "Building"), and situated
on that parcel of real property to be purchased by Landlord and
described on Exhibit "A" attached hereto (the "Land"). The Building,
together with the Land and any additional land used in connection with
the Building, the parking facilities serving the Building and any
additional parking areas serving or used in connection with the
Building (collectively, the "Garage"), and all other improvements
situated on the Land or directly benefiting the Building, shall
collectively be referred to herein as the "Project". The area
initially leased in the Building under this Lease is hereinafter
called the "Initial Premises" and is shown on the floor plan(s)
attached hereto as Exhibit "B". The Initial Premises, as expanded
pursuant to the terms hereof, shall hereinafter be referred to as the
"Premises".
(b) In addition to Tenant's rights with respect to the Premises, Tenant
and Tenant's agents, employees, invitees and guests shall also have
the non-exclusive right, in common with Landlord and the other
tenants, if any, in the Project (and such tenants' agents, employees,
invitees and guests), to use the common areas within the Project,
including without limitation, all lobbies and restrooms (other than
lobbies and restrooms on floors occupied entirely by one tenant or
within such tenant's premises), public corridors, stairways (exclusive
of any internal stairways which are wholly located within a tenant's
leased premises, as to which such tenant shall have the exclusive
right to use), elevators, entranceways, sidewalks, driveways, and
other common areas, easements, facilities and appurtenances which,
from time to time, benefit and serve, or are designed and intended to
benefit and serve, tenants of the Project, subject to the Project
Rules and Regulations (as hereinafter defined) to the extent
hereinafter set forth; provided, that Landlord shall have the right,
from time to time, to change such common areas within the Project as
reasonably necessary or appropriate.
(c) Tenant shall also have the non-exclusive right to enter into and use
the interior stairs of the Building shown on the Project Plans and
Specifications (as hereinafter defined), and to install card-key
readers (or other means of access, subject to obtaining Landlord's
prior approval thereto) for access from such stairwells onto the
floors of the Building included in the Premises; provided, that Tenant
pays for all costs and expenses of installing, operating and
maintaining such access control systems, and for complying with all
applicable Legal Requirements with respect thereto. Tenant agrees to
indemnify Landlord for any and all liability and claims resulting from
unauthorized access to the Premises and/or the Building as a result of
such card-key or other means of access installed by Tenant.
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1.2 Definitions for Measuring the Premises and the Building.
(a) The term "Net Rentable Area" shall mean, with respect to the area or
areas within the Building being measured, the total of (i) the Usable
Area (as defined below) of the area being measured; plus (ii) the
portion of the Building Common Areas (as defined below) allocable to
the area being measured; plus (iii) the portion of the On-Floor Common
Areas (as defined below) allocable to the area being measured.
(b) The term "Usable Area" shall mean, with respect to any Leasable Space
(as defined below) in the Building, the total square footage of such
space measured from the inside surface of the outer glass, finished
column or exterior wall of the Building enclosing such space to (a)
the inside surface of the opposite outer glass, finished column or
exterior wall of the Building, or (b) the mid-point of any demising
walls separating such space from other space within the Building, as
the case may be. The Usable Area of any tenant space shall include any
areas for the specific use of such tenant or installed at the request
of such tenant, such as special stairs or elevators. No deductions
from Usable Area shall be made for columns or projections.
(c) The term "Service Areas" shall mean the square footage of the areas
within (and measured from the mid-point of the walls enclosing) any
Building stairs, fire towers, elevator shafts, flues, vents, stacks,
vertical pipe shafts, vertical ducts and other vertical penetrations.
Areas reserved for the exclusive use of a tenant such as special
stairs or elevators are not included within the definition of Service
Areas.
(d) The term "Building Common Areas" shall mean the square footage of the
areas within (and measured from the mid-point of the walls enclosing)
the Building elevator machine rooms, main mechanical and electrical
rooms, public lobbies, enclosed garage access walkways and other areas
not included in Service Areas or On-Floor Common Areas, but which are
necessary or desirable for the proper utilization of the Building or
to provide customary services to the Building. The allocation to the
Premises of the Building Common Areas shall be equal to the total
Building Common Areas within the Building multiplied by a fraction,
the numerator of which is the Usable Area of the Premises and the
denominator of which is the total Usable Area of the Building.
(e) The term "On-Floor Common Areas" shall mean, with respect to any floor
on which all of the Leasable Space on such floor is not leased to one
tenant, the square footage of the areas within (and measured from the
mid-point of the walls enclosing) public corridors, elevator foyers,
restrooms, mechanical rooms, janitor closets, telephone and equipment
rooms, and other similar facilities for the use of tenants on the
floor on which the Premises are located and which are not included in
Service Areas or reserved for the exclusive use of a particular
tenant. The allocation to the Premises of any On-Floor Common Areas
shall be equal to the total On-Floor Common Areas on a floor
multiplied by a fraction, the numerator of which is the Usable Area of
the Premises located on said floor and the denominator of which is the
total Usable Area of said floor.
(f) The term "Leasable Space" shall mean the space in the Building that is
actually leased to tenants (including without limitation, Tenant), or
that is available or intended for lease to tenants, including the
Premises and the management and/or leasing office(s) for the Project.
1.3 Measurement of Premises. Based on the foregoing definitions, the Net
Rentable Area of the Premises is estimated to be approximately 111,695 square
feet and the Net Rentable Area of the Building is estimated to be approximately
149,654 square feet. After the Commencement Date but not later than thirty (30)
days following the Commencement Date (as hereinafter defined), Landlord shall
cause such estimates to be confirmed by the Project Architect in accordance with
the definitions contained in this Lease. Upon such confirmation by the Project
Architect, Tenant shall have the right to request that the Project Architect
review such calculations with Tenant's Architect (as hereinafter defined) and in
the event of a dispute regarding same that cannot be resolved by the parties
within sixty (60) days following notice thereof to the other party, either party
shall be entitled to submit such dispute to arbitration in accordance with
Section 8.7 below. In the event of a change in the Net Rentable Area of the
114
Premises or the Building based on physical changes to the Building, Landlord and
Tenant shall each execute a confirmation agreement setting forth such corrected
areas as well as Tenant's Share and Tenant's Base Rental (if changed). Landlord
and Tenant shall each execute similar confirmation agreements each time
additional space is added to or deleted from the Premises or Base Rental or
Tenant's Share changes pursuant to the terms hereof.
1.4 No Modification of Net Rentable Area. No modification of Net Rentable Area
of the Premises (except incident to additions thereto or deletions therefrom
pursuant to the terms hereof) or the Building shall be made for purposes of this
Lease except upon the mutual agreement of Landlord and Tenant.
ARTICLE II
Term
2.1 Term. Subject to and upon the terms and conditions set forth in this Lease,
the term of this Lease (the "Term") shall commence on the date (the
"Commencement Date") which is the earlier to occur of (a) the Completion Date
(as defined in Exhibit "F") or (b) the date Tenant first occupies and commences
to use the Premises for the conduct of its business therein, and shall expire on
the last day of the one hundred twentieth (120th) full calendar month after the
Commencement Date, unless earlier terminated as provided in this Lease. If the
Commencement Date should be changed for any reason, including a change pursuant
to the terms of Exhibit "F" attached hereto, Landlord shall not be responsible
for any claims, damages or liabilities in connection therewith or by reason
thereof except as specifically provided in Exhibits "E" and "F". After the
occurrence of the Commencement Date, Tenant and Landlord shall execute a
certificate confirming the Commencement Date in the form attached hereto as
Exhibit "C".
ARTICLE III
Rental Payments
3.1 Payments of Rent.
(a) Commencing on the date (the "Rent Commencement Date") which is the
later to occur of (a) the Commencement Date or (b) August 1, 1999, and
continuing thereafter throughout the Term, Tenant shall pay the Base
Rental as described in Section 3.2, plus Tenant's Estimated Additional
Rental and Tenant's Additional Rental, as described in Section 3.3
(the Base Rental, Tenant's Estimated Additional Rental, Tenant's
Additional Rental, and all other amounts payable to Landlord under
this Lease are sometimes hereinafter collectively referred to as
"Rent"), in the manner and at such times as are provided in this
Lease. Base Rental, together with Tenant's Estimated Additional
Rental, shall be due and payable in twelve (12) equal installments on
the first day of each calendar month during the Term, in legal tender
of the United States of America, and Tenant shall pay such Rent to
Landlord at Landlord's address specified in the preamble paragraph of
this Lease (or to such other person or at such other address as may be
designated by Landlord from time to time), so that Landlord has
received such installments monthly on or before the first day of each
such calendar month.
(b) If the Commencement Date is other than the first day of a calendar
month or if this Lease terminates on other than the last day of a
calendar month, then the installments of Base Rental, Tenant's
Estimated Additional Rental and Tenant's Additional Rental for such
month or months shall be prorated and the installment or installments
so prorated shall be paid in advance. The payment for such prorated
month shall be calculated by multiplying the sum of Base Rental and
Tenant's Estimated Additional Rental or Tenant's Additional Rental, as
the case may be, by a fraction, the numerator of which shall be the
number of days of the Term occurring during said commencement or
termination month, as the case may be, and the denominator of which
shall be three hundred sixty-five (365).
(c) Tenant shall pay all Rent that becomes payable by Tenant to Landlord
under this Lease at the times and in the manner provided in this
Lease, without demand, abatement, deduction, set-off or counterclaim
except as expressly permitted in this Lease. All Rent owed by Tenant
115
to Landlord under this Lease shall bear interest from the date due
until properly paid at a rate (the "Applicable Rate") equal to the
lesser of (i) four percent (4%) above the per annum "base rate" (or if
the "base rate" is discontinued, the rate announced as that being
charged to the most creditworthy commercial borrowers for ninety (90)
day unsecured loans) announced by Citibank, N.A. (or its successor),
from time to time, or (ii) the maximum lawful contract rate per annum;
provided that, the first two (2) late payments of Rent made by Tenant
during any twelve (12) month period shall not begin to accrue interest
at the Applicable Rate until three (3) days after the date when such
payment of Rent is due if such payment is not made within said three
(3) day period.
3.2 Base Rental. Throughout the Term, Tenant shall pay a base annual rental
("Base Rental") equal to the product of the following base rental rates
(individually, a "Base Rental Rate" and collectively, "Base Rental Rates") for
the indicated rental periods multiplied by the number of square feet of Net
Rentable Area within the Premises during such period:
Annual
Rental Period Base Rental Rate Base Rental*
========================================= ================ ===========
Rent Commencement Date through the 5th $16.54 $1,847,435
anniversary of the Commencement Date
5th anniversary of the Commencement Date $18.61 $2,078,644
through the 10th anniversary of the
Commencement Date
*assuming 111,695 square feet of Net Rentable Area in the Premises.
3.3 Additional Rental.
(a) Tenant shall also pay as additional rental Tenant's Proportionate
Share of Operating Expenses for each calendar year during the Term
plus an annual management fee equal to three percent (3%) of the Base
Rental and Additional Rental (exclusive of such management fee)
payable by Tenant for such calendar year (collectively, "Tenant's
Additional Rental"). At least thirty (30) days prior to the Rent
Commencement Date and prior to the commencement of each calendar year
during the Term, Landlord shall provide Tenant a statement of
Landlord's reasonable estimate of Tenant's Additional Rental
("Tenant's Estimated Additional Rental") for such calendar year, or
portion thereof as the case may be, and Tenant shall thereafter pay
Tenant's Estimated Additional Rental for such calendar year in
accordance with Section 3.1 above. In addition, if at any time during
a calendar year it appears to Landlord that Tenant's Additional Rental
for such calendar year will exceed Tenant's Estimated Additional
Rental then being paid by Tenant, Landlord shall have the right, but
not the obligation, to appropriately revise, on at least 30 days'
notice to Tenant, Tenant's Estimated Additional Rental for the
remainder of such calendar year and Tenant shall thereafter pay the
revised Tenant's Estimated Additional Rental for the remainder of such
calendar year.
(b) Within one hundred fifty (150) days after the end of the calendar year
during the Term, and as soon as reasonably possible after the
termination of this Lease (Landlord and Tenant agreeing that the
provisions of this Section 3.3 shall survive the termination of this
Lease), Landlord shall provide Tenant a statement showing the
Operating Expenses for said calendar year as prepared by a certified
public accounting firm, and a statement prepared by Landlord comparing
Tenant's Estimated Additional Rental with Tenant's Additional Rental.
If Tenant's Estimated Additional Rental exceeds Tenant's Additional
Rental for said calendar year, Landlord shall refund to Tenant the
excess paid by Tenant within thirty (30) days after providing Tenant
the statement. Additionally, if Tenant's Estimated Additional Rental
has been overestimated by five percent (5%) or more, Landlord shall
refund to Tenant interest on the entire overpayment at the Applicable
Rate from July 1 of the calendar year during which such overpayment
was made until refunded. If Tenant's Additional Rental exceeds
Tenant's Estimated Additional Rental for said calendar year, Tenant
shall pay to Landlord within thirty (30) days of receipt of the
116
statement an amount equal to such difference. Notwithstanding anything
in this Lease to the contrary, Landlord acknowledges and agrees that,
except as provided in Section 3.4(d) below, in no event shall any
Operating Expenses be billed or chargeable to Tenant after the date
which is two (2) years following the calendar year end in which such
Operating Expenses were incurred by Landlord. In the event Landlord
(or any successor to Landlord in the event the Building is conveyed to
a new owner during the Term of this Lease, as the Term may be renewed
as provided herein) fails to xxxx any such Operating Expenses to
Tenant within the aforementioned two (2) year period, Tenant shall
have no obligation to pay any such Operating Expenses. For purposes of
this Section 3.3, third-party expenses shall be deemed to have been
incurred by Landlord on the date that Landlord receives an invoice for
such third-party expense.
(c) "Tenant's Proportionate Share" shall mean the percentage found by
dividing the Net Rentable Area of the Premises by the Leasable Area in
the Building.
3.4 Operating Expenses.
(a) The term "Operating Expenses" shall mean all reasonable expenses,
costs and disbursements relating to or incurred or paid in connection
with the ownership, operation and maintenance of the Project, computed
on an accrual basis and determined in accordance with generally
accepted accounting principles consistently applied, including but not
limited to the following: (i) wages and salaries of all persons (other
than corporate, executive or home office administrative personnel)
engaged in the operation, maintenance or access control of the
Project, and personnel who provide traffic control relating to ingress
and egress to and from the Building and Garage to the adjacent public
streets, including all taxes, insurance, and benefits relating
thereto; provided, that if any such personnel are working on other
projects, including those being periodically developed, managed and/or
operated by Landlord or one or more of its affiliates in addition to
the Project, then such employees' wages, salaries and other
compensation and benefits shall be equitably allocated among all such
projects such that only that portion of such expenses (in proportion
to their time spent in performing services for the Project) shall be
included herein; (ii) the cost of all supplies, tools, equipment, and
materials used in the management, operation, maintenance and security
of the Project; (iii)the cost of all utilities for the Project,
including but not limited to the cost of water and power for heating,
lighting, air conditioning, and ventilating the Building during Normal
Business Hours, but excluding those costs separately billed to
specific tenants; (iv) the cost of all maintenance and service
agreements for the Project and the equipment therein, including but
not limited to access control, window cleaning, elevator maintenance,
janitorial service, security and landscaping; (v) the cost of repairs
and general maintenance (excluding repairs and general maintenance
paid by proceeds of insurance, by Tenant or by other third parties,
alterations attributable solely to tenants of the Project, and repairs
and general maintenance required to be paid by other tenants or which
would have been paid by insurance required to be maintained by
Landlord under this Lease); (vi) an amortization charge (including an
interest factor equal to the Applicable Rate) on account of any
Capital Cost (as defined in paragraph (v) of Section 3.4(b) below)
incurred by Landlord to either (a) effect a reduction in the Operating
Expenses of the Project (in which case the Capital Cost shall be
amortized over the payback period, but such amortization charge shall
not exceed the actual annual reduction in Operating Expenses) or (b)
comply with applicable governmental requirements due to changes in
laws (or current reasonable interpretations thereof) in effect as of
the Commencement Date (in which case the Capital Cost shall be
amortized over the useful life of the Capital Cost not to exceed ten
(10) years); (vii)the cost of all insurance relating to the Project,
including but not limited to the cost of casualty, rental loss and
liability insurance applicable to the Project and Landlord's personal
property used in connection therewith and the cost of deductibles (to
the extent not in excess of any limitations on deductible amounts set
forth herein) paid on claims made by Landlord; provided, however, with
respect to rental loss insurance, Operating Expenses shall not include
any additional premiums associated with covering rental loss for a
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period in excess of twelve (12) months; (viii) all taxes, assessments,
and governmental charges, whether directly paid by Landlord, whether
federal, state, county, or municipal and whether imposed by taxing
districts of authorities presently taxing the Project or by others
subsequently created or otherwise, and any other taxes and assessments
attributable to the Project or its operation, including without
limitation reasonable costs and expenses incurred by Landlord in
contesting such taxes, but excluding federal and state taxes on
income, death taxes, franchise taxes, and any taxes imposed or
measured on or by the income of Landlord from the operation of the
Project (other than ad valorem taxes on the Project determined by
reference to Landlord's income from the Project) or imposed in
connection with any change of ownership of the Project; provided,
however, that if at any time during the Term, the present method of
taxation or assessment shall be so changed that the whole or any part
of the taxes, assessments, levies, impositions, or charges now levied,
assessed or imposed on real estate and the improvements thereof, shall
be changed and as a substitute therefor, or in lieu of an addition
thereto, taxes, assessments, levies, impositions, or changes shall be
levied, assessed, or imposed wholly or partially, directly or
indirectly, as a capital levy or otherwise on the rents received from
the Project or the Rent reserved herein or any part thereof, then such
substitute or additional taxes, assessments, levies, impositions or
charges, to the extent so levied, assessed, or imposed, shall be
deemed to be included within the Operating Expenses to the extent that
such substitute or additional tax would be payable if the Project were
the only property of Landlord subject to such tax; (ix) market rental
and other office expenses for Landlord's On-Site management office;
provided, in no event shall such expenses apply to in excess of 1,500
square feet of Net Rentable Area; (x) all landscape maintenance costs
for the Project; (xi) any lease payments made by Landlord for any
equipment used in the operation or maintenance of the Project,
excluding, however, any part of such lease payments that constitutes a
Capital Cost and could not be included as an Operating Expense under
clause (vi) of this Section 3.4(a); (xii)an allocation for Landlord's
corporate, executive and home office personnel of up to $10,000 per
year; and (xiii) Landlord's (or Landlord's managing agent's)
accounting and audit costs and attorneys' fees applicable to the
Project, including without limitation, the cost of providing audited
statements of Operating Expenses to all tenants as required by Section
3.3(b) above (provided that costs charged hereunder shall not include
any such costs incurred in connection with preparation of tax returns
or internal ownership accounting); and (xiv)any and all other expenses
necessary or appropriate for operation, maintenance, repair, security
or management of the Project consistent with the standards for
Comparable Buildings (as hereafter defined).
(b) Notwithstanding the foregoing, the following items shall be expressly
excluded from Operating Expenses: (i) repairs or other work occasioned
by fire, windstorm or other casualty, to the extent that the costs of
which are reimbursed to Landlord by insurers or by governmental
authorities in eminent domain; (ii) costs, expenses and fees relating
to negotiating with or entering into leases for space in the Building,
or in connection with disputes with and/or enforcement of agreements
with prospective tenants, tenants or other occupants of the Project,
including leasing commissions and attorneys' fees; (iii)costs incurred
in renovating or otherwise improving, decorating or redecorating space
for tenants or other occupants in the Building or vacant Leasable
Space in the Building, or for more than $18,000 of costs incurred by
Landlord in the initial build-out of the Building management office,
which costs shall be amortized over the initial term hereof at an
interest cost of ten percent (10%) per annum; (iv) Landlord's cost of
electricity and other services sold to tenants and which are not
standard for the Building, for which Landlord is reimbursed or
entitled to be paid by tenants as an additional charge or rental; (v)
Costs of a capital nature, including, but not limited to, capital
additions, capital improvements, capital alterations, capital
replacements, capital equipment and capital tools, and/or capital
redesign, all in accordance with generally accepted accounting
principles, consistently applied, giving due regard for the
materiality of any such expenditures ("Capital Costs"), except as
provided for in Section 3.4(a) above; (vi) expenses in connection with
services or other benefits of a type which are not standard for the
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Building and which are not available to Tenant without specific charge
therefor, but which are provided to another tenant or occupant and for
which such tenant or occupant is specifically charged by Landlord;
(vii)principal, finance charges and interest on debt or amortization
payments on any mortgage, or mortgages, and rental under any ground or
underlying lease, or leases, except to the extent the same may be made
to pay or reimburse, or may be measured by, ad valorem taxes,
insurance or other amounts that would otherwise be included in
Operating Expenses; (viii) advertising and promotional expenses; (ix)
depreciation and amortization, except as set forth in clause (vi) of
Section 3.4(a) above; (x) Fines, penalties and legal fees incurred due
to the violation by Landlord, its employees, agents and/or
contractors, any tenant or other occupant of the Building, of any
terms and conditions of this Lease or of the leases of other tenants
in the Building, and/or of any valid, applicable laws, rules,
regulations and codes of any federal, state, county, municipal or
other governmental authority having jurisdiction over the Building
that would not have been incurred but for such violation by Landlord,
its employees, agents and/or contractors, tenants or other occupants
of the Building; (xi) Penalties for late payment, including, without
limitation, penalties for late payment of taxes, equipment leases,
etc.; (xii)Payments to any subsidiary or Affiliate of Landlord for
services (other than the management fee) on or to the Building and/or
the Land, or for goods, supplies or other materials, to the extent
that the costs of such services, goods, supplies and/or materials
exceed the costs that would have been paid had comparable services,
goods, supplies or materials been provided by parties unaffiliated
with Landlord; (xiii) To the extent that a separate allocation has
been made therefor by the applicable taxing authority, real estate
taxes allocable to the leasehold improvements of tenants in the
Building (in excess of Building standard); (xiv)Except as set forth in
Sections 3.4(a)(xii) and (xiii), wages, salaries, benefits and
expenses attributable to Landlord's or its property management
company's executive personnel above the level of building manager or
central office administrative personnel; (xv) Costs or expenses
incurred with respect to the purchase, ownership, leasing, showing,
promotion and/or repairs of sculptures, paintings or other works of
art; maintenance (as opposed to repairs) of any such sculptures,
paintings or other works of art shall be included in Operating
Expenses; (xvi)Costs for which Landlord is compensated through or
reimbursed by insurance or other means of recovery; (xvii) Costs of
correcting or repairing defects, including latent defects, in the
construction of the Building (and/or any associated parking
facilities, and/or equipment or the replacement of defective
equipment, to the extent such costs are covered by warranties in
effect of manufacturers, suppliers or contractors, or are otherwise
borne by parties other than Landlord); (xviii) Contributions to
operating expense reserves; (xix)Contributions to charitable
organizations (other than for up to $500.00 of such contributions made
with Tenant's prior written approval); (xx) Costs incurred in removing
the property of former tenants and/or other occupants of the Building;
(xxi)Consulting costs and expenses incurred by Landlord except to the
extent same relate to the management, repair, maintenance, security or
operation of the Project; (xxii) The costs of any "tap fees" or
one-time lump sum sewer or water connection fees for the Building;
(xxiii) Costs or fees relating to the defense of Landlord's title to
or interest in the Building and/or the Land, or any part thereof;
(xxiv) Unless Tenant's prior written approval has first been obtained,
costs incurred in installing, operating, maintaining and/or owning any
specialty facilities or specialty services not customarily installed,
operated and/or maintained in Comparable Buildings, such as an
observatory, beacon(s), broadcasting facilities (other than the
Building's music system, life support and security systems), luncheon
club, athletic or recreational club, helicopter pad, child care
center, kiosks, concierge or similar facilities or services.
Notwithstanding the foregoing, the costs of providing standard
Building services to any of the foregoing shall not be excluded from
Operating Expenses provided that the tenant or occupant thereof pays
its proportionate share of the costs of such services for the Project
as a whole; and (xxv)Any expenditure of a type that is not
specifically included hereunder and that is not of the type necessary
or appropriate for the operation, maintenance, repair, security or
management of the Project consistent with the standards for Comparable
Buildings.
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(c) Notwithstanding any other provision herein to the contrary, if less
than ninety-seven and one-half percent (97.5%) of the Net Rentable
Area in the Building is occupied and fully provided with Building
standard services during any partial year or any full calendar year,
an adjustment shall be made in computing each component of Operating
Expenses (other than the items described in Section 3.4(a)(viii)) for
such year so that Operating Expenses shall be computed for such year
as though ninety-seven and one-half percent (97.5%) of the Net
Rentable Area leased or held for lease in the Building had been
occupied and provided with Building standard services during such
partial or full year. Any such adjustment shall be made in a manner
consistent with the predominant practice of landlords of Comparable
Buildings.
(d) Landlord shall maintain or cause to be maintained complete and
accurate records of all Operating Expenses. As long as an Event of
Default by Tenant is not then continuing under the Lease, Tenant, at
its sole cost and expense, shall have the right not more than once per
calendar year during the Term to audit Landlord's books and records
relating to the Operating Expenses for any preceding calendar year for
the sole purpose of determining whether this Lease and generally
accepted accounting principles have been followed and consistently
applied. This audit must take place during reasonable normal business
hours at Landlord's office at the address specified in the preamble
paragraph of this Lease (or such other address as may be designated by
Landlord from time to time). If Tenant elects to exercise this right,
Tenant must do so within two (2) years after the date Landlord
delivers to Tenant the statements described in Section 3.3, or Tenant
shall be deemed to have accepted the Operating Expenses as presented
by Landlord; provided, that if Tenant exercises its audit right within
such two (2) year period and discovers an error in Landlord's
calculation of such Operating Expenses, Tenant shall be permitted to
go back one (1) additional year for the sole purpose of determining
whether the same error(s) were made in such prior year as well, in
which event Landlord shall also have the opportunity to review such
additional one (1) year period and to charge Tenant for any Operating
Expenses for which Tenant was incorrectly not charged. Tenant
acknowledges that Landlord shall not be required to consider any claim
that Landlord has charged Tenant more than Tenant's Proportionate
Share of Operating Expenses based on an audit by (i) any party (other
than a "Big 6" accounting firm) performing such audit on or under a
contingency fee arrangement or otherwise basing its fees on the
savings produced for Tenant from such audit, or (ii) any party other
than a "Big 6" accounting firm or other regional certified public
accounting firm reasonably approved by Landlord in advance. In the
event that Tenant asserts an error by Landlord on the basis of
Tenant's audit, Landlord shall have the right to review Tenant's audit
report and to perform its own investigation of Tenant's findings.
If an audit performed by Tenant and confirmed by Landlord reveals an
overcharge in the Operating Expenses paid by Tenant of 3% or more of
the amount actually due from Tenant, Landlord shall reimburse Tenant
for all out of pocket costs incurred by Tenant in connection with such
audit. Any shortfalls or excess revealed by Tenant's inspection or
audit and verified by Landlord shall be paid to the applicable party
within thirty (30) days after such party is notified of such shortfall
or excess.
3.5 Reduced Services. To the extent Operating Expenses are reduced due to the
fact that one or more full floors within the Premises are not being occupied
(without implying that Tenant must remove its furniture, fixtures and equipment
from such space), any savings in Operating Expenses actually realized (as
reasonably estimated by Landlord) by Landlord shall be passed on to Tenant.
3.6 Tax Protests. Except as provided herein, Tenant hereby waives any and all
rights under applicable law to an administrative or judicial review of any
determination of the appraised value of the Project, including without
limitation, any rights applicable under the Texas Tax Code (as amended);
provided, that if Landlord does not otherwise intend to review or contest the
appraised value of the Project during any calendar year, Landlord agrees, upon
such request by Tenant, to undertake such review and/or protest, with the cost
thereof being an Operating Expense of the Project.
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ARTICLE IV
Landlord Services
4.1 Services to be Provided by Landlord. Landlord shall operate and maintain the
Project in accordance with the standards customarily followed in the operation
and maintenance of Comparable Buildings, and shall furnish to Tenant as long as
Tenant and its permitted sublessees and assigns are occupying the Premises, the
following services, which services shall be in keeping with the services
customarily provided in first-class office buildings in the area of Houston,
Texas, bounded by Xxxxx Xxxxxxx 0, Xxxxxxxxxx Xxxxxxx 00 (including the
properties immediately adjacent to both sides of such freeway), Kirkwood and
Briar Forest ("Comparable Buildings"):
(a) hot and cold domestic water at those points of supply provided for
general use of tenants in the Building;
(b) heating, ventilation and air conditioning ("HVAC Service") in season,
subject to curtailment required by governmental laws, rules, or
regulations, in such amounts as are reasonably required in Landlord's
judgment for the comfortable use and occupancy of the Premises and
consistent with the provisions of the Outline Plans and Specifications
attached hereto as Exhibit "G" (the "Outline Plans and
Specifications"). Landlord shall furnish HVAC Service to Tenant
between the hours of 7:00 a.m. and 7:00 p.m. Monday through Friday,
and 8:00 a.m. and 2:00 p.m. Saturdays (herein referred to as "Normal
Business Hours"), excluding the following holidays: New Year's Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving
Day, Friday following Thanksgiving Day, Christmas Eve, Christmas Day
and one additional day per year if designated by Tenant on or before
November 1 of the immediately preceding calendar year ("Holidays");
(c) routine maintenance and standard electric lighting service for all
public areas and service areas of the Project;
(d) janitorial service on a five (5) day week basis, exclusive of Holidays
and generally in accordance with the janitorial specifications set
forth in Exhibit "K" attached hereto; provided, that if Tenant's floor
coverings or other improvements are other than Building standard, or
if Tenant requires such janitorial service to be performed at times
different than the times such service is typically provided to the
other tenants in the Project, Tenant shall pay the net additional
cleaning cost, if any, attributable thereto. If Tenant reasonably
determines that Landlord's cleaning contractor is not providing
janitorial service to the level required hereby, and Landlord is not
able to correct such performance within thirty (30) days following
Tenant's notice thereof (specifying in reasonable detail any such
deficiencies) and consistently maintain such level thereafter, then
Tenant shall have the right to cause Landlord to engage a new cleaning
contractor reasonably satisfactory to Tenant to provide such services
for the Project; provided, that Tenant may not exercise such right
more often than once every two (2) calendar years during the Term.
(e) equipment or personnel designed to limit access to the Project in
accordance with the standards of Comparable Buildings, which services
shall include at least one (1) on-site security person on a full-time
(24-hour) basis performing generally the services outined in Exhibit
"M" attached hereto, limited (e.g., by card-key) access to the
Building after Normal Business Hours, and limited (e.g., by card-key)
access for automobiles entering into the non-visitor portion of the
Garage. Any reasonable services in excess of such level requested by
Tenant shall be provided, but at Tenant's sole cost and expense.
LANDLORD SHALL HAVE NO RESPONSIBILITY TO PREVENT, AND SHALL NOT BE
LIABLE TO TENANT FOR AND SHALL BE INDEMNIFIED BY TENANT AGAINST,
LIABILITY OR LOSS OF TENANT, ITS AGENTS, CONTRACTORS, CUSTOMERS,
EMPLOYEES, INVITEES, LICENSEES, SERVANTS, AND VISITORS ARISING OUT OF
LOSSES DUE TO THEFT, BURGLARY, OR DAMAGE OR INJURY TO PERSONS OR
PROPERTY CAUSED BY PERSONS GAINING ACCESS TO THE PROJECT, THE GARAGE
OR THE PREMISES, AND TENANT HEREBY RELEASES LANDLORD FROM ALL
LIABILITY RELATING THERETO, REGARDLESS OF WHETHER SUCH LOSSES ARE
CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF LANDLORD; LIKEWISE,
NEITHER TENANT NOR ITS SUBTENANTS SHALL HAVE RESPONSIBILITY TO
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PREVENT, AND SHALL NOT BE LIABLE TO LANDLORD FOR, LIABILITY OR LOSS TO
LANDLORD, ITS AGENTS, CONTRACTORS, CUSTOMERS, EMPLOYEES, INVITEES,
LICENSEES, SERVANTS, AND VISITORS ARISING OUT OF LOSSES DUE TO THEFT
OR BURGLARY OR DAMAGE OR INJURY TO PERSONS OR PROPERTY CAUSED BY
PERSONS GAINING ACCESS TO THE PROJECT, THE GARAGE OR THE PREMISES, AND
LANDLORD HEREBY RELEASES TENANT FROM ALL LIABILITY RELATING THERETO,
REGARDLESS OF WHETHER SUCH LOSSES ARE CAUSED IN WHOLE OR IN PART BY
THE NEGLIGENCE OF TENANT;
(f) electrical capacity sufficient to service a total connected load of
not less than seven (7) xxxxx per square foot of Net Rentable Area
within the Premises (exclusive of Building standard lighting and
base-Building air handlers), plus sufficient additional electrical
capacity to operate Building-standard lighting and base-Building air
handlers, calculated separately for each floor on which portions of
the Premises are located. Landlord will provide all electrical
distribution equipment (including but not limited to feeders, meters,
K-rated transformers, low voltage panel boards with 20 AMP single pole
circuit breakers) required to provide a minimum low voltage
(208Y/120V) connected load of five (5) xxxxx per square foot and a
minimum high voltage (480Y/277V) connected load of two (2) xxxxx per
square foot. There shall be no less than one (1) transformer per
floor. Electricity will be made available to Tenant twenty-four (24)
hours per day, seven (7) days per week; however, Tenant shall pay to
Landlord, monthly as billed, such charges as may be separately metered
for Tenant's electrical consumption exceeding .85 kilowatt hours per
square foot of Net Rentable Area per month. Any such meters will be
installed, operated and maintained by Landlord, and Tenant shall
reimburse Landlord for the actual and reasonable out-of-pocket costs
for such installation, operation and maintenance. Metered consumption
at Tenant's expense shall be charged at a per kilowatt-hour cost equal
to the Building average cost per Kilowatt-hour calculated by dividing
the total effective Building electricity charges for the month the
metered electricity was supplied, by the total number of
Kilowatt-hours used by the Building. Landlord will coordinate the
installation of such meters with Tenant so as not to unreasonably
interfere with the operation of Tenant's business or the construction
of the Initial Tenant Improvements, as applicable. Should the total
electrical capacity of Tenant's machines and equipment located in the
Premises exceed low voltage (208Y/120V) connected load of five (5)
xxxxx per square foot or high voltage (480Y/277V) connected load of
two (2) xxxxx per square foot of Net Rentable Area of the Premises and
such excess capacity necessitates installation by Landlord of
additional electrical equipment in excess of Building standard, the
same shall be installed, operated and maintained by Landlord, and
Tenant shall reimburse Landlord for the actual and reasonable
out-of-pocket costs for such installation, operation and maintenance.
If the heat generated by the operation of Tenant's electrical
equipment requires air conditioning in excess of Building standard air
conditioning, the same shall be installed (subject to Landlord's prior
approval of location and compatibility with Building systems, which
approval shall not be unreasonably withheld or delayed) and maintained
by Tenant, at Tenant's expense, and Tenant shall pay all expenses
attributable thereto.
(g) all Building standard fluorescent bulb and ballast replacement in all
areas and all incandescent bulb replacement in public areas, toilet
and restroom areas and stairwells;
(h) nonexclusive passenger elevator service to the Premises twenty-four
(24) hours per day and nonexclusive freight elevator service during
normal Business Hours (and after Normal Business Hours, if properly
scheduled with Landlord); and
(i) periodic extermination services as shall be reasonably appropriate.
Except as otherwise provided above, water, electricity and lighting in public
areas of the Project shall be provided twenty-four (24) hours a day, seven (7)
days a week.
Landlord shall retain or cause to be retained at least one (1) full-time
property manager with no less than five (5) years experience in the management
of suburban office buildings to be in charge of managing the Building, and shall
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maintain or cause to be maintained one (1) full time engineer at the Building.
The property manager may (but shall not be obligated to) split his time between
the Building and no more than one other building (which other building shall be
in the Galleria or other west-Houston area) that he is managing at the same
time.
4.2 Interruption of Services.
(a) To the extent the services described in Section 4.1 require
electricity, gas or water supplied by public utilities, Landlord's
covenants thereunder shall only impose on Landlord the obligation to
use its reasonable efforts to cause the applicable public utilities to
furnish the same. Failure by Landlord to any extent to furnish the
facilities, utilities or services described in Section 4.1, or any
cessation in the furnishing of same, shall not render Landlord liable
in any respect for damages to either person or property, nor be
construed as an eviction of Tenant, nor constitute a breach of any
covenant or implied warranty hereunder, nor work an abatement of Rent,
nor relieve Tenant from fulfillment of any covenant or agreement under
this Lease. Landlord shall use all commercially reasonable efforts
under the circumstances to restore such services as quickly as
possible. In addition to the foregoing, should any of the equipment or
machinery break down, cease to function properly for any cause, or be
intentionally turned off for testing or maintenance purposes, Tenant
shall have no claim for abatement or reduction of Rent or damages on
account of an interruption in service occasioned thereby or resulting
therefrom; provided, however, Landlord agrees to use all commercially
reasonable efforts under the circumstances to promptly repair said
equipment or machinery and to restore said services as quickly as
reasonably possible.
(b) Notwithstanding the foregoing, except with respect to a casualty or
condemnation (which casualty or condemnation shall be governed by
Article VII below and not by this Section 4.2(b)) or interruption
caused by the actions of Tenant or its employees, agents,
representatives, or contractors, if (i) there occurs an interruption
in the HVAC, electricity, water or elevator services (the "Essential
Services") to the Building or Premises; (ii) such interruption renders
a Significant Portion (hereinafter defined) of the Premises
Untenantable (hereinafter defined); and (iii) such interruption
continues to render a Significant Portion of the Premises Untenantable
for five (5) consecutive business days (or for more than five (5)
business days in a ten (10) consecutive business day period), then
Rent shall xxxxx as to that portion of the Premises that is rendered
Untenantable. The abatement shall commence on the sixth (6th) day of
such interruption and continue for so long as the interruption
continues; provided, however, if the interruption of Essential
Services continues to render more than fifty percent (50%) of the
Premises Untenantable for forty-five (45) consecutive days, Tenant
shall have the right, but only if exercised during the period such
interruption shall continue to exist, to terminate this Lease
effective as of the date of such notice, in which event Tenant will be
relieved of all obligations arising after such date hereunder. In lieu
of such termination, if Landlord is not using all commercially
reasonable efforts to cure such failure, Tenant shall have the right
to cure such Essential Services failure and Landlord shall reimburse
Tenant (which reimbursement Tenant may effect through the withholding
of Rent) for all reasonable sums expended in so curing such failure.
As used in this Lease, the term "Significant Portion" shall mean at
least one thousand (1,000) square feet of Net Rentable Area, and the
term "Untenantable" shall mean the condition whereby Tenant is unable,
on a reasonable basis, to use the Premises or a portion thereof for
the conduct of its business therein and, in fact, does not use the
Premises (or such portion thereof) for such purposes as a result
thereof. In consideration of the terms of this Section 4.2(b), Tenant
waives any and all other rights and remedies Tenant may have at law or
in equity, including without limitation any rights Tenant may have
arising from implied warranties of suitability, as a result of the
circumstances described in this Section 4.2.
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4.3 Payment for Non-Standard Services.
(a) Landlord shall provide HVAC Service for such additional times as
Tenant shall request; provided, that Tenant shall (i) give Landlord
notice of any evening HVAC Service required not later than 5:00 p.m.
on the date such service is required and not later than 5:00 p.m. on
Friday or the prior business day for any weekend or Holiday service,
and (ii) pay to Landlord for providing such HVAC Services an amount
equal to Landlord's actual cost for providing same, excluding any
management fee or administrative charge; provided, that in no event
shall the charge to Tenant for such overtime HVAC operation (prior to
the proration set forth below) exceed the respective prevailing hourly
rates for cooling and heating charged from time to time to other
tenants in the Building. Further, in the event there are other tenants
sharing a Floor with Tenant and such other tenant(s) or occupant(s) of
such Floor request utilization of the same air handling system at the
same time as Tenant, the charges to Tenant shall be reduced pro-rata
(on a rentable square foot basis) based on the relative area of the
tenants using such same system. To eliminate the necessity of the
notices to Landlord as described above, Landlord shall during the
design stage for the Building review the possibility of installing as
part of the base Building, a card-reader allowing Tenant to program
its own after-hours air conditioning. If such equipment will not
result in an increase in base Building costs by more than $5,000,
Landlord shall install same at Landlord's sale cost and expense; if
such equipment will result in a greater increase, Landlord will notify
Tenant and give Tenant the option to reimburse Landlord for such
incremental costs. If Tenant elects not to cover such incremental
costs, Landlord shall not be required to install such additional
equipment.
(b) Tenant shall also pay Landlord, upon demand, such additional amounts
as are necessary to recover additional costs incurred by Landlord in
performing or providing additional janitorial, maintenance, security
or other services or requirements of Tenant in excess of those set
forth as standard in Section 4.1 or in performing any services (and in
paying additional taxes) as to any non-Building standard installations
in the Premises (in excess of the cost of such work for the
corresponding Building standard installations, if any). Tenant shall
pay Landlord upon demand, actual or estimated costs for all
electricity in excess of the amounts required to be provided by
Landlord to Tenant pursuant to Section 4.1(f) above and all electrical
capacity required to supply such excess amounts or as otherwise
requested by Tenant, plus six percent (6%) for overhead.
4.4 Keys and Locks. Landlord shall initially furnish Tenant with one card key
per employee of Tenant as of the Commencement Date (plus fifteen (15) visitor
card keys) for all Building standard card key locks to exterior entrance doors
to the Premises, at Landlord's expense. Additional card keys will be furnished
by Landlord upon an order signed by Tenant and at Tenant's expense equal to
Landlord's cost. In the event that Landlord changes the keys or security devices
with regard to access to the Project, Landlord will furnish without direct cost
to Tenant (but as part of Operating Expenses) one access device or card key for
each of Tenant's then-employees. All keys furnished to Tenant by Landlord shall
remain the property of Landlord. No additional locks shall be allowed on any
door of the Premises without Landlord's consent, and Tenant shall not make or
permit to be made any duplicate keys, except those furnished by Landlord.
Notwithstanding the foregoing, Tenant, at Tenant's sole cost and expense, shall
have the right to change or replace any locks within the Premises or place
additional locks within the Premises provided such locks conform to the Building
key system and Landlord is provided keys therefor. Upon termination of this
Lease, Tenant shall surrender to Landlord all keys to any locks on doors
entering or within the Premises, and shall give to Landlord the explanation of
the combination of all locks for safes, safe cabinets, and vault doors, if any,
left in the Premises.
4.5 Graphics and Building Directory.
(a) Landlord shall initially provide and install all signage, letters or
numerals at the entrance to the Premises and a strip containing a
listing of Tenant's name on the Building directory board to be placed
in the main lobby of the Building. Tenant shall be provided listings
on the directory board for Tenant's offices and major departments, and
Tenant's name shall be prominently displayed thereon. All such
signage, letters and numerals shall be in the Building standard
graphics. Landlord shall not be liable for any inconvenience or damage
occurring as a result of any error or omission in any directory or
graphics.
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(b) As long as no Event of Default by Tenant exists hereunder and Tenant
(excluding any assignees or sublessees that are not Affiliates of
Tenant) continues to lease and occupy at least two (2) full floors in
the Building, the Building shall be officially named the "Cabot Oil &
Gas Corporation Building." In the event Tenant changes its name or
assigns this Lease to an entity that is approved by Landlord or as to
which no such approval is required by Landlord pursuant to Section
9.1(c)(iii), Tenant shall have the right to change the name of the
Building to Tenant's new name or to Tenant's assignee or successor
entity subject to Landlord's prior written approval with respect
thereto, which approval shall not be unreasonably withheld; provided,
that all costs incurred by Landlord in connection with any such change
(including without limitation, any such expenses Landlord is required
to reimburse other tenants of the Building) shall be reimbursed by
Tenant to Landlord within thirty (30) days following Landlord's
request therefor.
(c) Tenant shall be permitted to install, at Tenant's sole cost and
expense, appropriate signage, including its corporate logo, on the
walls of all floors in the Building where Tenant occupies the entire
floor, and on any partial floor occupied by Tenant, subject in the
case of any such partial floor to obtaining Landlord's prior approval
with respect thereto, which approval shall not be unreasonably
withheld.
(d) As long as no Event of Default by Tenant exists hereunder and Tenant
(excluding any assignees or sublessees that are not Affiliates of
Tenant) continues to lease and occupy at least two (2) full floors in
the Building, Tenant shall have the right to install a sign, at
Tenant's sole cost and expense, in the lobby of the Building and an
illuminated monument sign on the exterior grounds of the Project
compatible with the design of the Building. The size, location,
lighting and design of such signs shall be subject to Landlord's
reasonable approval with respect thereto, which approval shall not be
unreasonably withheld. As long as Tenant continues to have such
signage rights, no other tenant in the Building shall be permitted to
install any signage in the lobby of the Building or on the exterior
grounds of the Project. Landlord shall also provide, at Tenant's sole
cost and expense, three (3) flagpoles at the front entry area of the
Building in a location mutually satisfactory to Landlord and Tenant.
(e) Except as expressly provided in this Section 4.5, no signs, numerals,
letters or other graphics shall be used or permitted on the exterior
of, or which may be visible from outside, the Premises, unless
approved in writing by Landlord. All graphics installed in, on and
around the Premises, Building and/or Project shall comply in all
respects with all covenants, restrictions, ordinances, laws, codes and
regulations applicable to the Project. All of the graphics and other
improvements made to the Project pursuant to Paragraphs (b) - (d) of
this Section 4.5 shall be maintained by Tenant at Tenant's sole cost
and expense, and shall be removed by Tenant at the expiration or
earlier termination of this Lease, in which event Tenant shall repair
any damage caused thereby and restore the Project to the condition it
was in prior to the installation of such signs and improvements,
reasonable wear and tear accepted. Tenant will, at Tenant's expense,
indemnify and defend Landlord against all losses, costs, damages,
liabilities, attorneys' fees and other expenses which Landlord may
sustain or incur arising out of or in any way connected with any claim
that any name or xxxx set out on the signage of the Project at the
request of Tenant constitutes an infringement of any third party
rights.
(f) Notwithstanding the foregoing, in addition to the Tenant Allowance (as
defined in Exhibit "F" attached hereto), Landlord agrees to pay for or
reimburse Tenant for up to $89,000 of the costs and expenses incurred
by Tenant in connection with the design, fabrication and installation
of the signage described in this Section 4.5. Any costs in excess of
such amount shall be paid by Tenant. All such graphics work shall be
part of the Initial Tenant Improvements. If Tenant elects to have the
Base Building Contractor construct the Initial Tenant Improvements,
Tenant shall reimburse Landlord for any such excess costs within
thirty (30) days following demand from Landlord therefor. If Tenant
elects to use the Tenant Contractor to install the Initial Tenant
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Improvements, Tenant shall, upon completion of such installation but
not later than sixty (60) days following the Commencement Date,
deliver to Landlord copies of invoices and other reasonable evidence
of such costs and expenses and Landlord shall reimburse Tenant for
such costs (subject to the maximum amount set forth above) within
thirty (30) days thereafter.
ARTICLE V
Use and Care of the Premises
5.1 Use. The Premises shall be used and occupied by Tenant (and its permitted
assignees and subtenants) solely for general office purposes and for other
ancillary legally permitted uses consistent with the character of first-class
office buildings in the Houston Energy Corridor and for no other purpose.
Without limiting the foregoing, the Premises shall not be used for any purpose
which would (i) tend to lower the quality or character of the Building, (ii)
exceed the utility (including water, wastewater, electricity or gas) capacity
limits of the Building, create unreasonable structural or elevator loads, or
otherwise interfere with standard Building operations, (iii) violate any
applicable Legal Requirements (as hereinafter defined), (iv) create any public
or private nuisance, or interfere with or pose any threat to the use, health or
safety of, any other tenant of the Building (including without limitation, any
such interference that may be caused by smells, noise, vibration or visual
conditions), (v) create within the Premises (or any portion thereof) a working
environment with a density of greater than four (4) persons per 1,000 square
feet of Net Rentable Area (averaged over the entire Premises), or (vi) increase
the existing rate of insurance on the Project or any portion thereof or cause
any cancellation of any insurance policy covering the Project or any portion
thereof.
During the Term and only on weekends, Holidays (as hereafter defined) and
between the hours of 6:00 p.m. and 7:00 a.m. on weekdays (other than Holidays),
Tenant shall have the right to use the Building lobby and/or exterior grounds,
without charge, for any Tenant sponsored social event (without prohibition of
alcohol), provided that: (a) Tenant gives Landlord reasonable prior written
notice of the date, time and nature of the event, (b) the date and time of the
event do not conflict with another previously scheduled event, and (c) Tenant
restores such area to the same condition it was in prior to such event, and (d)
Tenant reimburses Landlord for any direct out-of-pocket expenses Landlord incurs
in connection with the event (including, without limitation, personnel charges,
utility charges and security charges), plus a reimbursement to Landlord of an
additional six percent (6%) of such costs to reimburse Landlord for its overhead
relating thereto.
5.2 Care of the Premises. Tenant shall not commit and shall use reasonable
efforts to prevent any party under Tenant's reasonable control from committing
any waste or damage to any portion of the Premises or the Project, and at the
termination of this Lease, by lapse of time or otherwise, Tenant shall surrender
and deliver up the Premises to Landlord in as good condition as existed on the
date of possession by Tenant, ordinary wear and tear, alterations and additions
permitted to be made and removed under the terms of this Lease, damage arising
by fire or other casualty, and condemnation, excepted. Upon such termination of
this Lease, Landlord shall have the right to reenter and resume possession of
the Premises.
5.3 Entry for Repairs and Inspection. Landlord and its contractors, agents, or
representatives shall have the right to enter into and upon any part of the
Premises at all reasonable hours, to inspect or clean the same, make repairs,
alterations or additions, and unless Tenant has elected (deemed or otherwise) to
renew or extend the Term of this Lease, to show the Premises to prospective
tenants during the final twelve (12) months of the Term of this Lease, show the
same to prospective tenants, purchasers, lenders or for any other purpose, as
Landlord may deem reasonably necessary or appropriate, and Tenant shall not be
entitled to any abatement or reduction of Rent or other claim against Landlord
by reason thereof. In exercising this right, Landlord agrees to give Tenant
reasonable prior notice of any such unscheduled or non-routine entries, except
in the case of an emergency, and to use reasonable efforts not to interfere with
the conduct of Tenant's business in the Premises. Except in the event of an
emergency, all repairs, alterations or additions that would interfere in any
material respect with Tenant's use and enjoyment of the Premises shall be made
after normal business hours. Unless otherwise requested by Tenant in writing,
Landlord shall not enter into any areas previously designated in writing by
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Tenant as high security areas unless (a) Landlord shows cause therefor and
provides Tenant with not less than forty-eight (48) hours' advance written
notice thereof, or (b) in the event of an emergency, in which event Landlord
shall use reasonable efforts to notify Tenant's emergency response team (which
Tenant shall supply to Landlord in the event that Tenant designates any high
security areas) and in either such case, in no event shall Landlord enter into
any such high security areas without notifying and being accompanied by one of
Tenant's on-site security personnel.
5.4 Tenant's Compliance with Laws and Regulations; Rules of Building. Tenant
shall comply with, and Tenant shall cause its agents, contractors, customers,
employees, invitees, licensees, servants, and visitors to comply with, all laws,
ordinances, orders, rules, regulations (of state, federal, municipal, and other
agencies or bodies having any jurisdiction thereof) and restrictive covenants
relating to the use, condition, or occupancy of the Premises, or the conduct of
Tenant's business therein, including environmental laws, and all amendments
thereto (collectively, the "Legal Requirements"), with the Rules and Regulations
set forth on Exhibit "D" attached hereto ("Rules and Regulations") and with such
other rules and regulations as are reasonably adopted by Landlord from time to
time for the safety, care or cleanliness of the Premises, the Building or the
Project, or for preservation of good order therein, all of which will be sent by
Landlord to Tenant in writing and shall be thereafter consistently applied by
Landlord and carried out and observed by Tenant, its agents, contractors,
customers, employees, invitees, licensees, servants and visitors. Such Rules and
Regulations shall prohibit tenants and their visitors and invitees from bringing
firearms into the Building and smoking inside the Building or the Garage or in
the immediate vicinity of the entrances to either, but shall provide for smoking
a covered area on the Building grounds or in the Garage in a location mutually
agreeable to Landlord and Tenant. In the event of a conflict between the
Building Rules and Regulations and the provisions of this Lease, the provisions
of this Lease shall control. In particular, Tenant shall bear the cost of and be
responsible for the Tenant Improvements and subsequent leasehold improvements
made by Tenant in the Premises being designed so as to be in compliance with the
provisions of the 1990 Clean Air Act, the Americans With Disabilities Act
(Public Law 101-336, July 26, 1990) (the "ADA"), the Texas Architectural
Barriers Act (Article 9102, Tex. Rev. Civ. Stat.), all as amended from time to
time, and any applicable building codes.
5.5 Landlord's Compliance with Laws. Landlord shall be responsible for all
consultation, architectural and engineering charges, and to otherwise make (or
cause to be made) alterations, additions, improvements and/or renovations to the
common areas of the Building and path(s) of travel to and from the Building
(other than as required solely by Tenant's design of the Tenant Improvements in
the Premises), including any associated parking facilities, core restrooms,
drinking fountains, fire alarm systems, exit signs and elevator lobbies during
the Term, such that same, to the extent required, shall be in compliance with
the provisions of 1990 Clean Air Act, the ADA, the Texas Architectural Barriers
Act, all as amended from time to time, and any other applicable law, ordinance
or regulation, including applicable building codes, whether or not Tenant is the
sole occupant of the floor in question. Except as otherwise provided in Section
3.4(b)(v) above, all such expenses shall be Operating Expenses of the Project.
5.6 Hazardous Substances.
(a) Without limiting any of the foregoing provisions of this Article V,
Tenant shall not generate or cause to be released (whether by way of
uncapping, pouring, spilling, spraying, spreading, attaching, leaking
or otherwise) into or onto the Premises, the Building, the Project or
the surrounding areas (including the ground and ground water
thereunder and the sewer and drainage systems therein) any hazardous
substances (as defined or established from time to time by applicable
local, state or federal law) other than in compliance with law and
normal practices in Comparable Buildings. The term "hazardous
substances" includes, among other things, hazardous waste. Tenant
shall immediately notify Landlord if any such release occurs, and, as
to any such release that has been caused by Tenant: (i) Tenant shall
immediately and entirely remove such released hazardous substance at
Tenant's expense, and such removal shall be in a manner fully in
compliance with all laws pertaining to the removal and storage or
disposal thereof; and (ii) Tenant hereby agrees to indemnify hold
harmless Landlord, Landlord's mortgagee, Landlord's management
company, and their partners, officers, directors, employees and agents
(collectively, the "Landlord Indemnified Parties") of and from any
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liability, public or private, resulting to Landlord as a result of
such release and agrees to, and does hereby, indemnify such Landlord
Indemnified Parties from and against any expense or cost incurred by
Landlord, of any nature whatsoever, which results, in whole or in
part, directly or indirectly, from a release of a hazardous substance
which is caused or permitted by Tenant.
The provisions of this Section 5.6 shall survive the expiration or
termination of this Lease for any reason.
(b) Without limiting any of the foregoing provisions of this Article V,
Landlord shall not generate or cause to be released (whether by way of
uncapping, pouring, spilling, spraying, spreading, attaching, leaking
or otherwise) into or onto the Premises, the Building, the Project or
the surrounding areas (including the ground and ground water
thereunder and the sewer and drainage systems therein) any hazardous
substances (as defined or established from time to time by applicable
local, state or federal law) other than in compliance with applicable
law and normal practices in Comparable Buildings. As to any such
release that has been caused by Landlord: (i) Landlord shall
immediately and entirely remove such released hazardous substance at
Landlord's expense, and such removal shall be in a manner fully in
compliance with all laws pertaining to the removal and storage or
disposal thereof; and (ii) Landlord hereby agrees to indemnify hold
harmless Tenant and Tenant's partners, officers, directors, employees
and agents (collectively, the "Tenant Indemnified Parties") of and
from any liability, public or private, resulting to Tenant as a result
of such release and agrees to, and does hereby, indemnify such Tenant
Indemnified Parties from and against any expense or cost incurred by
Tenant, of any nature whatsoever, which results, in whole or in part,
directly or indirectly, from a release of a hazardous substance which
is caused or permitted by Landlord. The provisions of this Section 5.6
shall survive the expiration or termination of this Lease for any
reason.
5.7 Parking.
(a) Landlord hereby agrees to make available to Tenant, and Tenant hereby
agrees to take, during the full Term of this Lease, four (4) permits
per 1,000 square feet of Net Rentable Area in the Premises (including
in such number Tenant's Proportionate Share of the visitor and
disabled parking spaces for the Building), with one (1) permit per
1,000 square feet of Net Rentable Area in the Premises (not including
visitor and disabled parking) out of such total parking to be marked
"Cabot Reserved" and reserved for use by Tenant's employees. Each
permit shall permit one (1) automobile to be self-parked in the
Garage. Tenant shall not be required to pay any rent for such parking.
Notwithstanding the foregoing, Tenant may, upon exercising any option
for a Renewal Term, reduce the number of spaces leased hereby during
such Renewal Term.
(b) The locations of the "Cabot Reserved" parking spaces shall be mutually
agreed to by Landlord and Tenant prior to the Commencement Date. All
parking spaces shall be not less than nine feet in width; provided,
that Tenant shall have the right to increase the width of reserved
parking spaces to more than nine feet by reducing the number thereof
so that in the aggregate Tenant's reserved parking area in the Garage
is the same or less than it would have been with the more numerous but
narrower spaces.
(c) Landlord shall provide at least fifty (50) visitor parking spaces
(which number shall exclude disabled parking spaces required by law to
be provided in the Garage) on the first level of the Garage for the
use of visitors to the Project, ten (10) of which will be designated
"Cabot Visitors" and dedicated to the exclusive use of Tenant's
visitors. Landlord and Tenant will cooperate in the future if this
number of exclusive visitor spaces proves to be inadequate or more
than necessary, and increase or decrease such exclusive visitor
parking as reasonably appropriate. Visitors entry shall be restricted
to the first level of the Garage and shall be provided free of charge.
All disabled parking spaces shall be sized vertically as shown on the
Preliminary Plans and Specifications.
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(d) Landlord may make, modify and enforce reasonable rules and regulations
relating to the parking of automobiles in the Garage, and Tenant will
abide by and cause its agents, employees and invitees to comply with
such rules and regulations provided they are uniformly enforced and
Tenant and Garage users are given reasonable notice thereof.
ARTICLE VI
Construction of Project and Leasehold Improvements
6.1 Construction of Project. Landlord, at Landlord's sole cost and expense,
shall construct the Project in accordance with Exhibit "E" attached hereto.
6.2 Construction of Leasehold Improvements. Landlord shall construct Tenant's
Initial Tenant Improvements to the Premises in accordance with Exhibit "F"
attached hereto.
6.3 Alterations, Additions, Improvements. Tenant shall have the right, at its
sole cost and expense and without Landlord's consent, to install within the
Premises any fixtures, equipment, facilities and other improvements, and to make
such alterations, additions or improvements to the Premises, required by Tenant
from time to time for the conduct of Tenant's business on the Premises;
provided, that (i) Tenant shall not make or allow to be made any alterations,
additions or improvements which materially affect or are incompatible with the
structural components and/or operating systems (electrical, plumbing and
mechanical) of the Project without Landlord's prior consent thereto, which
consent shall not be unreasonably withheld; (ii) it shall not be unreasonable
for Landlord to withhold its consent to any such alterations, additions or
improvements if Landlord reasonably believes that Tenant's use thereof will
violate the provisions of Section 5.1 above; (iii)as to the mechanical,
electrical and plumbing portions of any such alterations, additions or
improvements to the Premises requiring Landlord's consent thereto, Landlord
shall also have the right to approve Tenant's contractor for such mechanical,
electrical and plumbing portions only; and (iv) each contractor used by Tenant
for the construction of any material alterations, additions or improvements to
the Premises shall maintain insurance in amounts reasonably determined by
Landlord given the nature and extent of the work to be performed by such
contractor, and comply with all reasonable rules and regulations relating
thereto adopted by Landlord from time to time.
To the extent Tenant causes plans and specifications for any such alterations,
additions or improvements to be prepared, Tenant will deliver copies of the same
to Landlord including without limitation, "as built" plans and specifications
with respect thereto. Tenant shall reimburse Landlord for any costs and expenses
incurred by Landlord in connection with the review and approval of such proposed
alterations, additions or improvements, together with an additional charge of 6%
of such costs to cover Landlord's overhead.
6.4 Property of Landlord. All alterations, physical additions, and improvements
in or to the Premises (including fixtures) shall, when made, become the property
of Landlord and shall be surrendered to Landlord without compensation to Tenant
upon termination of this Lease, whether by lapse of time or otherwise; provided,
that Landlord may require Tenant to remove all of Tenant's personal property
upon the expiration or earlier termination of this Lease or the termination of
Tenant's right to possession of the Premises. Notwithstanding the foregoing to
the contrary, Tenant may remove all trade fixtures, movable equipment or
furniture owned or leased by Tenant and Tenant's special light fixtures (such as
chandeliers), audio visual equipment, shelves and filing systems, as well as
such other fixtures installed by Tenant that Tenant and Landlord agree at the
time of such installation that Tenant shall be permitted to remove same, but
Tenant cannot remove any built-in fixtures, built-in equipment, built-in
furniture, flooring, or wall paneling. Any such removal permitted to be made by
Tenant hereunder shall be made within thirty (30) days after the expiration or
earlier termination of this Lease, or the termination of Tenant's right to
possession of the Premises, or Tenant shall forfeit such removal rights. Tenant
shall bear the costs of all removal of Tenant's property and removal of any
non-Building standard items from the Premises and all repairs to the Premises,
Building or Project caused by such removal.
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6.5 Taxes and Tax Abatement.
(a) Tenant shall be responsible for ad valorem taxes on its personal
property and on the value of the leasehold improvements in the
Premises to the extent that the same exceed Building standard
allowances and the taxing authorities separately assess Tenant's
leasehold improvements.
(b) Landlord agrees to use reasonable efforts to assist Tenant in
obtaining an abatement of ad valorem taxes to be imposed on the
Project by the City of Houston and Xxxxxx County taxing authorities;
provided, that Landlord shall not be required to expend any material
amounts and shall be reimbursed for all out-of-pocket costs incurred
by Landlord in connection therewith. In the event Tenant obtains an
abatement of ad valorem taxes imposed on the interest of Landlord in
the Project by any taxing authority and, as a result thereof, all or a
portion of such taxes are not in fact payable by Landlord to such
authorities (the "Abated Taxes"), Landlord and Tenant agree as
follows: (i) Tenant shall pay on a monthly basis, and Tenant's
Estimated Additional Rental shall include, Tenant's Proportionate
Share of all ad valorem taxes that would have been imposed upon the
Project if no such tax abatement had been granted or existed with
respect to the Project, and (ii) Landlord shall thereafter pay to
Tenant on or before January 31st of each such succeeding year an
amount equal to the Abated Taxes for the proceeding calendar year.
6.6 Repairs by Landlord. Landlord shall keep and maintain in good working order
and repair, and shall make such improvements, repairs or replacements as are
necessary or appropriate to, the exterior walls, all structural components and
elements of the Project, lobbies, stairs, elevators (including without
limitation, cabs and doors), corridors and corridor walls and wall treatments,
carpeting, public restrooms, roofs, plateglass, parking areas, paved areas,
walkways and drives, landscaping, base Building improvements, and all
facilities, systems and equipments relating to the furnishing of services
(including mechanical, electrical, water, heating, ventilating and air
conditioning, life safety and elevators) required to be provided by Landlord
pursuant to this Lease, all at such times, in such manner and to such extent as
is standard in Comparable Buildings. All repairs, alterations or additions that
affect the Project's structural components or major mechanical, electrical, or
plumbing systems shall be made by Landlord or its contractors only, and, in the
case of any damage to such components or systems caused by Tenant or Tenant's
agents, contractors, customers, employees, invitees, licensees, servants, or
visitors, shall be paid for by Tenant in an amount equal to Landlord's cost plus
six percent (6%) for overhead. Unless otherwise provided in this Lease, Landlord
shall not be required to make any improvements to or repairs of any kind or
character to the Premises during the Term or any extensions or renewals thereof,
except such repairs to Building standard improvements as may be necessary or
appropriate for normal maintenance; provided, however, non-Building standard
leasehold improvements shall, at Tenant's written request, be maintained,
repaired, or replaced by Landlord at Tenant's expense, at a cost or charge equal
to Landlord's costs (net of savings effected by not having to maintain, repair
or replace Building Standard improvements), which costs shall be payable within
thirty (30) days after demand. Notwithstanding the foregoing, Landlord shall be
responsible for the repair, at its expense, of any structural and/or latent
defects in the Building and, if Landlord constructed them, the Initial Tenant
Improvements.
6.7 Repairs by Tenant. Subject to Sections 6.6 and 7.7, Tenant shall, at its own
cost and expense, repair, or replace any damage or injury done to its leasehold
improvements or any part thereof caused by Tenant or Tenant's agents,
contractors, customers, employees, invitees, licensees, servants, or visitors.
If Tenant fails to make such repairs or replacements to its leasehold
improvements promptly, Landlord may, at its option, make such repairs or
replacements, and Tenant shall repay Landlord's cost plus a charge of six
percent (6%) for overhead to Landlord on demand.
6.8 Waiver of Landlord Liens. Landlord does hereby waive, relinquish and
discharge all liens and rights (constitutional, statutory, consensual or
otherwise) that Landlord may have on any personal property or fixtures of Tenant
of any kind, and all additions, accessions and substitutions thereto (except for
judgment liens which may hereafter arise in favor of Landlord). This clause
shall be self-operative and no further instrument of waiver need be required by
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any lienholder on such property of fixtures. In confirmation of such waiver,
however, Landlord shall, at Tenant's request, execute promptly any appropriate
certificate or instrument that Tenant may reasonably request.
ARTICLE VII
Condemnation and Casualty
7.1 Condemnation.
(a) If the Premises shall be taken or condemned for any public purpose to
such an extent as to render fifty percent (50%) or more of the
Premises Untenantable, this Lease shall, at the option of either
party, exercised within sixty (60) days following the effective date
of such taking, cease and terminate as of the date of such taking or
condemnation. If any portion of the Building or Project shall be taken
or condemned for any public purpose to such an extent, in Landlord's
reasonable judgment, as to render the continued operation of the
Building impractical or infeasible, this Lease shall, at the option of
Landlord, cease and terminate as of the effective date of such taking
or condemnation; provided, that Landlord agrees that it will not
exercise such termination right solely for the purpose of re-leasing
the Premises to another tenant and if Landlord does exercise such
termination right, it will cease to operate the Building for at least
one (1) full year. Each party shall notify the other of its election
to terminate pursuant to this Section 7.1 within thirty (30) days
after receipt of notice of such taking or condemnation. If only a
portion of the Premises shall be so taken so as not to render the
remainder Untenantable, this Lease shall continue in full force and
effect but all Rent shall xxxxx with respect to the portion so taken.
All amounts awarded upon taking of any part or all of the Project or
the Premises shall belong to Landlord and Tenant shall be entitled to,
and expressly assigns all claims, rights and interests to, any such
compensation to Landlord.
(b) Notwithstanding the foregoing, in the event of a taking of the
Premises, (i) Tenant shall be entitled to the unamortized value of any
improvements, alterations or additions to the Premises and paid for by
Tenant (excluding, however, any improvements, alterations or additions
paid for with the proceeds of any improvements/refurbishment
allowance) and not removable by Tenant at the expiration of the Term;
provided, that if the portion of Landlord's award reasonably allocable
to improvements to the Premises is not sufficient to cover all
expenses of Landlord and Tenant relating to same, Landlord and Tenant
shall share in such portion of the award on a pro rata basis based
upon the relative amount paid by each such party for such
improvements; and (ii) Tenant shall be entitled to prosecute a
separate claim for the value of Tenant's leasehold estate, subject to
the limitations set forth in the last sentence of this Section 7.1,
and for Tenant's relocation and moving expenses. Amortization of any
improvements, alterations or additions made to the Premises during the
primary Term shall be calculated on a straight-line method over the
remainder of the primary Term. Amortization of any improvements,
alterations or additions made to the Premises during a Renewal Term
shall be calculated on a straight-line method over the remainder of
such Renewal Term. In no event shall Tenant be entitled to any
condemnation award for the value of Tenant's leasehold estate under
this Lease, unless the same does not reduce the value of Landlord's
award.
7.2 Damages from Certain Causes. Neither Landlord nor any mortgagee shall be
liable or responsible to Tenant, its agents, contractors, customers, employees,
officers, directors, invitees, licensees, servants or visitors for any loss or
damage to any property or person occasioned by theft, fire, act of God, public
enemy, injunction, riot, strike, insurrection, war, court order, requisition, or
order of governmental body or authority, or any cause beyond Landlord's control,
or for any damage or inconvenience which may arise through repair or alteration
of any part of the Project resulting from the aforementioned causes.
7.3 Fire or Other Casualty.
(a) In the event of a fire or other casualty to the Premises, Tenant shall
immediately give notice thereof to Landlord.
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Within forty-five (45) days following any damage or destruction to the
Project or the Premises, Landlord shall obtain from a responsible
contractor selected by Landlord, an estimate (the "Restoration
Estimate") of the time required to complete the applicable restoration
or rebuilding.
(b) Except as otherwise provided in this Section, if the Premises are
partially destroyed by fire or other casualty so as to render the
Premises Untenantable in whole or in part, the Rent provided for
herein shall xxxxx thereafter as to the portion of the Premises
rendered Untenantable until such time as the Premises are no longer
Untenantable.
(c) Landlord and Tenant shall each have the right to terminate this Lease
if the Premises or any portion thereof is damaged or destroyed and the
Restoration Estimate provides that the repair or restoration of the
Premises with Building standard improvements cannot reasonably be
completed within one hundred eighty (180) days following the
commencement thereof; provided however, the rights of termination
granted under this sentence shall be available to Landlord only if the
damage or destruction occurs during the last three (3) years of this
Lease and there is no Renewal Option then remaining, or if there is a
remaining Renewal Option, Tenant does not exercise the same by written
notice to Landlord delivered within thirty (30) days following receipt
of Landlord's termination notice, which renewal notice shall include
the same information as contained in a renewal notice delivered
pursuant to Exhibit "H" hereto. In the event either Landlord or Tenant
elects to terminate this Lease based upon the provisions of this
Section 7.3, such party must make such election and notify the other
party of such election within thirty (30) days following the date
Tenant receives the Restoration Estimate from Landlord; otherwise,
such party shall be deemed to have elected not to terminate this Lease
as a result of such damage or destruction. In the event that a fire or
other casualty not affecting the Premises gives rise to a termination
right by Landlord under this Section 7.3, Landlord agrees that it
shall not exercise its termination right solely for the purpose of
re-leasing the Premises to another tenant. In the event this Lease is
terminated by either party pursuant to this Section 7.3, Tenant shall
vacate the Premises as soon as reasonably practicable, but in no event
later than one hundred twenty (120) days following the election by
either party to terminate this Lease. Tenant shall pay all Rent owed
up to the time of such damage or destruction, and Tenant shall pay a
pro rata share of Rent on those portions of the Premises occupied (or
deemed occupied) by Tenant following such damage or destruction from
the date of such damage or destruction until Tenant vacates such
portion or portions, as the case may be, of the Premises. Tenant's
occupancy of any portion of a floor shall be deemed for purposes of
this section to be Tenant's occupancy of the entirety of such Floor.
(d) Unless this Lease is terminated as provided in this Section 7.3
hereof, this Lease shall continue in effect following a fire or other
casualty on the same terms and conditions set forth herein, except
that the Rent provided for herein shall xxxxx as to the portion of the
Premises rendered Untenantable until such time as the Premises (or
portion thereof) are no longer Untenantable.
(e) Subject to the rights of Landlord and Tenant to terminate this Lease
as set forth in this Section 7.3, Landlord shall commence and
prosecute any repair work promptly and with reasonable diligence, but
Landlord shall be obligated only to restore or rebuild the Premises to
a Building standard condition; provided, however, if Landlord's
insurance does not provide such coverage, or if Tenant desires
Landlord to rebuild more than Building standard condition, Tenant may
cause Landlord to rebuild or restore the Premises with such greater
improvements (including without limitation, any improvements located
in the Premises prior to such damage or destruction) if Tenant bears
the cost (including rentals which are lost due to any excess
construction time) of such restoration or rebuilding to the extent the
same exceeds the costs Landlord would have incurred had only Building
standard improvements been used.
(f) Notwithstanding anything to the contrary set forth in this Lease, if
the Premises or any other portion of the Building is damaged by fire
other casualty resulting from the intentional misconduct of Tenant or
its agents, contractors, or employees, Tenant shall not be permitted
to exercise any right to terminate this Lease due to such casualty or
damage.
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7.4 Casualty Insurance.
(a) Landlord shall maintain standard fire and extended coverage insurance
on the Project (excluding leasehold improvements) and on all Building
standard leasehold improvements, in the amount not less than their
full replacement cost, with a deductible not in excess of $50,000.
Said insurance shall be issued by and binding upon an insurance
company authorized to do business in Texas with a Best's rating of not
less than A-, XI, at the expense of Landlord (but with the same to be
included in the Operating Expenses, subject to any limitations set
forth in Section 3.4) and payments for losses thereunder shall be made
solely to Landlord. Such insurance shall provide that not less than
fifteen (15) days advance written notice of cancellation or
non-renewal shall be given to Tenant.
(b) Tenant shall maintain at its expense standard fire and extended
coverage (including water damage and sprinkler leakage) insurance on
all of its personal property, including removable trade fixtures,
located in the Premises and on its non-Building standard leasehold
improvements and all other additions and improvements (including
fixtures) made by Tenant and not required to be insured by Landlord
above, in the amount not less than their full replacement cost. Said
insurance shall be issued by and binding upon an insurance company
authorized to do business in Texas with a Best's rating of not less
than A-, XI, and provide that not less than fifteen (15) days advance
written notice of cancellation or nonrenewal shall be given to
Landlord. Tenant shall provide Landlord a certificate of such
insurance prior to the Commencement Date.
(c) If the annual premiums to be paid by Landlord shall exceed the
standard rates because of Tenant's operations or contents within the
Premises or because the improvements to the Premises are above
Building standard, Tenant shall promptly pay the excess amount of the
premiums upon request by Landlord (and, if necessary, Landlord may
allocate the insurance costs of the Project to give effect to this
sentence). Landlord acknowledges and agrees that Tenant's current
operations, contents and improvements within the premises located at
00000 Xxxxxxxx Xxxxx, do not require the payment by Landlord of an
additional insurance premium.
7.5 Liability Insurance. Landlord (with respect to the Project) and Tenant (with
respect to the Premises) shall each, at their respective expense, maintain a
policy or policies of comprehensive general liability insurance with the
premiums thereon fully paid on or before the due dates, issued by and binding
upon an insurance company authorized to do business in Texas with a Best's
rating of not less than A-, XI, and providing that not less than fifteen (15)
days advance written notice of cancellation or nonrenewal shall be given to the
other party. Landlord's liability insurance shall afford minimum protection
(which may be effected by primary and excess coverage) of not less than five
million dollars ($5,000,000) combined single limit bodily injury or property
damage in any one occurrence, and Tenant's liability insurance shall afford
minimum protection (which may be effected by primary and excess coverage) of not
less than five million dollars ($5,000,000) combined single limit bodily injury
or property damage in any one occurrence. Both Landlord's and Tenant's insurance
required by this Section 7.5 shall include contractual liability insurance
sufficient to cover their indemnity obligations hereunder.
7.6 Hold Harmless. Tenant shall not be liable to Landlord, or to Landlord's
agents, contractors, customers, employees, invitees, licensees, servants or
visitors for any damage to person or property caused by any act, omission, or
neglect of Landlord, its agents, contractors, customers, employees, invitees,
licensees, servants or visitors and Landlord agrees, subject to Section 7.7, to
indemnify and hold Tenant harmless from all claims for such damage. Neither
Landlord nor any mortgagee shall be liable to Tenant, its agents, contractors,
customers, employees, invitees, licensees, servants or visitors for any damage
to person or property caused by any act, omission or neglect of Tenant, its
agents, contractors, customers, employees, invitees, licensees, servants or
visitors, and Tenant agrees, subject to Section 7.7, to indemnify and hold
Landlord and any mortgagee harmless from all liability and claims for any such
damage. The provisions of this section shall survive the termination of this
Lease.
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7.7 Waiver of Subrogation Rights. Anything in this Lease to the contrary
notwithstanding, Landlord and Tenant hereby waive any and all rights of
recovery, claim, action, or cause of action, against the other, its agents,
employees, officers, directors, partners, servants, or shareholders, for any
loss or damage that may occur to the Premises, the Building, the Project or any
improvements thereto, or any personal property of such party therein, by reason
of fire, the elements, or any other cause which is insured against under the
terms of the fire and extended coverage insurance policies obtained or required
to be obtained pursuant to this Lease, REGARDLESS OF CAUSE OR ORIGIN, INCLUDING
WITHOUT LIMITATION, ANY SUCH CLAIMS RESULTING FROM THE NEGLIGENCE OF THE OTHER
PARTY HERETO, ITS AGENTS, EMPLOYEES, OFFICERS, DIRECTORS, PARTNERS, SERVANTS, OR
SHAREHOLDERS, and each party covenants that no insurer shall hold any right of
subrogation against such other party.
ARTICLE VIII
Tenant Default
8.1 Default by Tenant.
(a) The occurrence of any one or more of the following events shall
constitute an event of default ("Event of Default") by Tenant under
this Lease: (i) Tenant fails to pay when due any Rent or other amounts
payable hereunder and such failure to pay continues and remains
unremedied for a period of ten (10) days after written notice thereof
given by Landlord to Tenant; provided, that in no event shall Landlord
be required to give more than two (2) such notices during any calendar
year and after the second of such notices is given, an Event of
Default shall occur upon any subsequent failure by Tenant to pay when
due any Rent or other amount required to be paid by Tenant hereunder;
(ii) the failure by Tenant to comply with or perform any of the terms,
provisions, covenants, or conditions which Tenant is required to
observe and to perform hereunder other than those covered by the
remaining subsections of this Section 8.1(a), and such failure or
action continues for a period of thirty (30) days after notice
thereof; provided, however, if the nature of the default is such that
it cannot be cured with the exercise of Tenant's best efforts within
the thirty (30) day period set forth above, and if Tenant undertakes
such curative action promptly following the occurrence thereof and
diligently and continuously proceeds with such curative action using
Tenant's best efforts, Tenant shall have such additional time as is
reasonably necessary to cure such default; (iii)the failure by Tenant
to return the estoppel certificate required by Section 10.3 below
within the time period provided in such Section 10.3 and for an
additional period of fifteen (15) days after written notice thereof is
given by Landlord to Tenant; (iv) if Tenant is a corporation, if
Tenant ceases to exist as a corporation in good standing in the state
of its incorporation; or, if Tenant, is a partnership or other entity,
if Tenant is dissolved or otherwise liquidated; (v) the filing of any
voluntary petition in bankruptcy by Tenant, or the filing of an
involuntary petition by Tenant's creditors, which involuntary petition
remains undischarged or unstayed for a period of sixty (60) days. In
the event that under applicable law the trustee in bankruptcy or
Tenant has the right to affirm this Lease and continue to perform the
obligations of Tenant hereunder, such trustee or Tenant shall, in such
time period as may be permitted by the bankruptcy court having
jurisdiction, cure all defaults of Tenant hereunder outstanding as of
the date of the affirmance of this Lease and prove to Landlord such
adequate assurances as may be necessary to ensure Landlord of the
continued performance of Tenant's obligations under this Lease; (vi) a
general assignment by Tenant for the benefit of one or more of its
creditors, or the admission by Tenant in writing of its inability to
pay its debts as they become due, the filing by Tenant of a petition
seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future
statute, law or regulation, the filing by Tenant of any answer
admitting or failing timely to contest a material allegation of a
petition filed against Tenant in any such proceeding or, if within
sixty (60) days after the commencement of any proceeding against
Tenant seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such proceeding shall
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not have been dismissed; (vii)the attachment, execution, or other
judicial seizure of all or substantially all of Tenant's assets or the
Premises, and such attachment or other seizure remains undismissed or
undischarged for a period of sixty (60) business days after the levy
thereof; and (viii) the employment of a receiver to take possession of
substantially all of Tenant's assets or the Premises, if such
receivership remains undissolved for a period of sixty (60) business
days after creation thereof.
(b) Upon the occurrence of an Event of Default by Tenant, Landlord shall
have the option to pursue any one or more of the following remedies
without any notice (except for such notice expressly required by
Section 8.1(a)) or demand for possession whatsoever (and without
limiting the generality of the foregoing, Tenant hereby specifically
waives notice and demand for payment of Rent or other obligations due
and waives any and all other notices or demand requirements imposed by
applicable law): (i) terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord; (ii) terminate
Tenant's right to occupy the Premises and re-enter and take possession
of the Premises (without terminating this Lease); (iii)enter upon the
Premises and do whatever Tenant is obligated to do under the terms of
this Lease including without limitation, the right to remove and store
any or all of Tenant's property located therein; and Tenant agrees to
reimburse Landlord on demand for any expenses which Landlord may incur
in effecting compliance with Tenant's obligations under this Lease,
and Tenant further agrees that Landlord shall not be liable for any
damages resulting to Tenant or its property from such action; and (iv)
exercise all other remedies available to Landlord at law or in equity,
including, without limitation, injunctive relief of all varieties.
(c) In the event Landlord elects to re-enter and take possession of the
Premises after an Event of Default, Tenant hereby waives notice of
such re-entry and repossession and of Landlord's intent to re-enter
and retake possession. Landlord may, without prejudice to any other
remedy which it may have for possession or arrearages in or future
Rent, expel or remove Tenant and any other person who may be occupying
said Premises or any part thereof. In addition, the provisions of
Section 8.3 hereof shall apply with respect to the period from and
after the giving of notice of such repossession by Landlord. All
Landlord's remedies shall be cumulative and not exclusive. Forbearance
by Landlord to enforce one or more of the remedies herein provided
upon an Event of Default shall not be deemed or construed to
constitute a waiver of such default. Landlord's right to enter the
Premises may be accomplished by Landlord without service or notice or
resort to legal process and without being guilty of any trespass or
becoming liable for any loss or damage and without any liability
therefore.
(d) If Landlord elects to terminate this Lease or terminate Tenant's right
of possession to the Premises without terminating this Lease, there
shall immediately become due and payable (but only at Landlord's
option, in the case of Landlord's termination of Tenant's right of
possession) the amount by which: (i) the present value determined
using a discount rate of ten percent (10%) per annum of the total Rent
and other benefits which would have accrued to Landlord under this
Lease for the remainder of the Term if the terms and provisions of
this Lease had been fully complied with by Tenant, exceeds (ii) the
total fair market rental value determined using a discount rate of ten
percent (10%) per annum of the Premises for the balance of the Term
(it being the agreement of both parties hereto that Landlord shall
receive the benefit of its bargain).
In the event that Landlord elects to terminate Tenant's right of
possession to the Premises without terminating this Lease, and
thereafter Landlord recovers from Tenant all sums payable under this
Section 8.1(d), this Lease shall be deemed terminated as of the date
of such recovery. For purposes of this Section 8.1(d), the fair market
rental value of the Premises shall be the prevailing Market Rate for
Comparable Buildings for a lease term equal to the remaining Term
(without regard to any renewal options). In addition to the amounts
otherwise recoverable by Landlord hereunder, there shall be
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recoverable from Tenant: (i) the reasonable cost of restoring the
Premises to Building standard condition, normal wear and tear and
damage due to casualty or condemnation excepted; (ii) all accrued,
unpaid sums, plus interest at the Applicable Rate for past due sums up
to the date of termination; (iii)Landlord's reasonable cost of
recovering possession of the Premises; (iv) Rent accruing subsequent
to the date of termination pursuant to the holdover provisions of
Section 8.3, if any; and (v) any other sum of money or damages owed by
Tenant to Landlord pursuant to this Lease.
(e) Right to Relet. If Landlord elects to terminate Tenant's right to
possession of the Premises without terminating this Lease, but elects
not to pursue at that time the remedies set forth in Section 8.1(d),
Tenant shall continue to be liable for all Rent and Landlord agrees to
use objectively reasonable efforts to relet the Premises, or any part
thereof, to a substitute tenant or tenants, which reletting may be for
a period of time equal to or lesser or greater than the remainder of
the Term on whatever terms and conditions Landlord, in Landlord's
commercially reasonable judgement, deems advisable. The term
"objectively reasonable efforts" shall mean that Landlord shall, not
more than thirty (30) days after terminating Tenant's possession of
the Premises, place the Premises on Landlord's inventory of available
space, make Landlord's inventory available to brokers on request,
advertise the space (along with Landlord's other inventory) for lease
in a suitable trade journal or newspaper, and show the space to
prospective tenants requesting to see it; provided, that
notwithstanding anything herein to the contrary, objectively
reasonable efforts to relet the Premises shall not (i) require
Landlord to give priority to the Premises over other premises owned or
managed by Landlord or its Affiliates; (ii) require Landlord to relet
for less than market rent; or (iii) require Landlord to relet to a
tenant (or for a use) which is not in keeping with the standards of
Comparable Buildings. Tenant shall be given a credit against the Rent
due from Tenant to Landlord during the remainder of the Term in the
net amount of rent received from the new tenant; however, the net
amount of such rent received from the new tenant shall first be
applied to: (i) all costs incurred by Landlord in reletting the
Premises (including, without limitation, remodeling costs, brokerage
fees, legal fees, advertising costs and the like); (ii) the accrued
sums, plus interest and late charges if in arrears, under the terms of
this Lease; (iii)Landlord's reasonable cost of recovering possession
of the Premises; and (iv) the cost of storing (for a period not to
exceed thirty (30) days unless a longer period is mandated by law or
judicial decree, after which period Tenant acknowledges that Landlord
shall have the right to sell or give such property away and apply any
proceeds therefrom to amounts owed by Tenant to Landlord hereunder))
any of Tenant's property left on the Premises after reentry.
Notwithstanding any such reletting without termination of this Lease,
Landlord may at any time thereafter elect to exercise its rights under
Section 8.1(e) for such previous breach. Notwithstanding any provision
in this Section 8.1(e) to the contrary, upon the default of any
substitute tenant or upon the expiration of the lease term of such
substitute tenant before the expiration of the Term, Landlord may, at
Landlord's election, either relet to still another substitute tenant
or exercise its rights under Section 8.1(d).
(f) Any and all property which may be removed from the Premises by
Landlord pursuant to the authority of this Lease or of law, to which
Tenant is or may be entitled, may be handled, removed and stored, as
the case may be, by or at the direction of Landlord at the risk,
reasonable cost and expense of Tenant (subject to the same limitations
specified in Section 8.1(e)(iv), and Landlord shall in no event be
responsible for the value, preservation or safekeeping thereof. Tenant
shall pay to Landlord, upon demand, any and all reasonable expenses
incurred in such removal and all reasonable storage charges (for a
storage period not to exceed thirty (30) days unless a longer period
is mandated by law or judicial decree) against such property so long
as the same shall be in Landlord's possession or under Landlord's
control. Any such property of Tenant not retaken by Tenant from
storage within thirty (30) days after removal from the Premises shall,
at Landlord's option, be deemed conveyed by Tenant to Landlord under
this Lease as by a xxxx of sale without further payment or credit by
Landlord to Tenant.
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(g) This Section 8.1 shall be enforceable to the maximum extent allowed by
applicable law, and the unenforceability of any portion thereof shall
not thereby render unenforceable any other portion. No act or failure
to act by Landlord or its agents during the Lease Term shall be deemed
an acceptance of an attempted surrender of the Premises, and no
agreement to accept a surrender of the Premises shall be valid unless
made in writing and signed by Landlord. No re-entry or taking of
possession of the Premises by Landlord shall be construed as an
election on Landlord's part to terminate this Lease unless a written
notice of such termination is given to Tenant.
8.2 Non-Waiver. Neither acceptance of Rent by Landlord nor failure by either
Party to declare any default immediately upon occurrence thereof, or delay in
taking any action in connection therewith, shall waive such default but such
non-defaulting party may declare any such default at any time and take such
action as might be lawful or authorized hereunder, either at law or in equity.
Waiver by either party of any right for any default by Tenant shall not
constitute a waiver of any right for either a subsequent default of the same
obligation or any other default. Receipt by Landlord of Tenant's keys to the
Premises shall not constitute an acceptance of surrender of the Premises.
8.3 Holding Over. If Tenant holds over after expiration or termination of this
Lease without the written consent of Landlord, Tenant shall pay as liquidated
damages one and one-half times (150%) the Base Rental and Tenant's Estimated
Additional Rental or Tenant's Additional Rental, as the case may be, then
payable as described in Sections 3.2 and 3.3 for the entire holdover period
calculated and prorated on a daily basis. No holding over by Tenant after the
Term shall be construed to extend this Lease; provided, that at the expiration
of the full Term hereof (other than an early termination by Landlord due to an
Event of Default by Tenant hereunder), Landlord agrees not to commence
proceedings to forcibly remove Tenant from the Premises for thirty (30) days
following the expiration of the Term. In the event of any unauthorized holding
over for more than sixty (60) days, Tenant shall indemnify Landlord (i) against
all claims for damages by any other tenant to whom Landlord may have leased all
or any part of the Premises effective upon the termination of this Lease, and
(ii) for all other losses, costs and expenses, including reasonable attorneys'
fees, incurred by reason of such holding over. Any holding over with the consent
of Landlord in writing shall thereafter constitute this Lease a lease from month
to month.
8.4 Attorneys' Fees. If either party defaults in the performance of any of the
terms, agreements, or conditions contained in this Lease and the other party
places the enforcement of this Lease, or any part hereof, or the collection of
any Rent due or to become due hereunder, or recovery of the possession of the
Premises, in the hands of an attorney who files suit upon the same, and should
such non-defaulting party prevail in such suit, the defaulting party agrees to
pay the other party's reasonable attorneys' fees.
8.5 Limitation of Landlord's Liability. Except as provided in the next sentence,
the liability of Landlord to Tenant for any judgment against Landlord hereunder
or for any tort liability relating hereto shall be limited to Tenant's actual
direct, but not special, consequential or punitive, damages therefor, which
damages shall be recoverable solely from the interest of Landlord in the Project
at the time such liability accrued, it being agreed that neither Landlord (and
its partners, agents, officers, directors, and shareholders) nor any mortgagees
shall ever be personally liable for any such judgment. In the event of a
transfer by Landlord of its interest in the Project after any such liability has
accrued, Tenant may only proceed against Landlord to the extent of the net sales
proceeds received by Landlord from such transfer for the recovery of any claim
that accrued prior to such transfer and only if Tenant gives Landlord written
notice of the claim and commences an action to recover on such claim within
twelve (12) months after consummation of such transfer by Landlord. In the event
that the sale proceeds from any such transfer have been distributed to the
owners (e.g., partners, shareholders, members) of the transferring Landlord
prior to the commencement of Tenant's claim, the liability of each owner for
such claim shall be limited to that portion of the sale proceeds actually
received by such owner. In addition, Tenant also agrees that Tenant shall not be
entitled to recover from Landlord nor any of its agents, employees, officers,
partners, servants or shareholders any indirect, special or consequential
damages Tenant may incur as a result of a default under this Lease or other
action by Landlord, its agents, employees, officers, partners, servants or
shareholders. The foregoing sentence is not intended to, and shall not, limit
any right that Tenant might otherwise have to obtain injunctive relief against
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Landlord or Landlord's successors in interest, or to maintain any suit or action
in connection with the enforcement of rights hereunder or arising herefrom or
the collection of amounts which may become owing or payable under or on account
of insurance maintained by Landlord, or any other action which does not require
Landlord to be personally liable for damages from other than the Project.
8.6 Limitation of Tenant's Liability. Except as otherwise specifically provided
herein in Sections 8.1 and 8.3 above, the liability of Tenant to Landlord for
any judgment against Tenant hereunder or for any tort liability relating hereto
shall be limited to Landlord's actual direct, but not special, consequential or
punitive, damages therefor, it being agreed that none of the partners, agents,
officers, directors or shareholders of Tenant shall ever be personally liable
for any such judgment.
8.7 Arbitration. In the event of any dispute under the Lease, Landlord or Tenant
may resolve such dispute by binding arbitration, excepting the determination of
the MRR (as hereinafter defined), the method of resolution of which shall be as
described herein. Any arbitrator shall, if possible, have recognized expertise
in the subject matter of the arbitration. All arbitrations shall occur at a
location in Houston, Texas, chosen by the arbitrators and shall be conducted
pursuant to the rules of the American Arbitration Association except where
different rules are required by the Texas General Arbitration Act. The party
desiring such arbitration shall give written notice to that effect to the other
party, specifying in said notice the name and address of the person designated
to act as arbitrator on its behalf. Within ten (10) days after the service of
such notice the other party shall give written notice to the first party
specifying the name and address of the person designated to act as arbitrator on
its behalf. If the second party fails to notify the first party of the
appointment of its arbitrator, as aforesaid, within or by the time above
specified, then the appointment of the second arbitrator shall be made in the
same manner as hereinafter provided for the appointment of a third arbitrator in
a case where two arbitrators are appointed hereunder and the parties are unable
to agree upon such third appointment. The arbitrators so chosen shall meet
within thirty (30) days after the second arbitrator is appointed and they shall
appoint a third arbitrator; and in the event of their being unable to agree upon
such appointment within thirty (30) days after the time aforesaid, the third
arbitrator shall be selected by the parties themselves if they can agree thereon
within a further period of five (5) days. If the parties do not so agree, then
either party, on behalf of both, may request such appointment by any United
States District Judge for the Southern District of Texas, Houston Division. In
the event of the failure, refusal or inability of any arbitrator to act, a new
arbitrator shall be appointed in his stead, which appointment shall be made in
the same manner as hereinbefore provided for the appointment of such arbitrator
so failing, refusing or unable to act. The decision of the arbitrators so chosen
shall be given within a period of sixty (60) days after the appointment of such
third arbitrator, and shall be accompanied by conclusions of law and findings of
fact. The decision in which any two arbitrators so appointed and acting
hereunder concur shall in all cases be binding and conclusive upon the parties
and shall be the basis for a judgment entered in any court of competent
jurisdiction. Each party shall pay the fees and expenses of the one of the two
original arbitrators appointed by such party, or in whose stead, as above
provided, such arbitrator was appointed, and the fees and expense of the third
arbitrator, if any, shall be borne equally by both parties.
8.8 Default by Landlord. Except where the provisions of this Lease grant Tenant
an express, exclusive remedy, or expressly deny Tenant a remedy, if: (i)
Landlord fails to pay any amount payable by Landlord hereunder on or before the
date such payment is due and such failure to pay continues and remains
unremedied for a period of ten (10) days after written notice thereof given by
Tenant to Landlord; or (ii) Landlord fails to perform or observe any covenant,
term, provision or condition of this Lease, and such failure continues for a
period of thirty (30) days after written notice thereof given by Tenant to
Landlord; provided, however, if the nature of the default is such that it cannot
be cured with the exercise of Landlord's reasonable and good faith efforts
within such thirty (30) day period, Landlord shall have such additional time as
is reasonably necessary to cure such default, provided Landlord commences such
curative action within such thirty (30) day period and diligently and
continuously proceeds with such curative action using Landlord's reasonable and
good faith efforts; then, Tenant may deliver a second notice to Landlord, and if
such default shall continue uncured by Landlord and/or its mortgagee for an
additional thirty (30) days after the delivery of such second notice (such event
thereby becoming an "Event of Default" by Landlord), Tenant shall have the right
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to exercise one or more of the following options (but not (A) and (B)
simultaneously): (A) Tenant may cure the default in which event Landlord shall
reimburse Tenant (which reimbursement may be effected through the withholding of
or offsetting of such amounts against up to fifty percent (50%) of the Base Rent
due hereunder) for all reasonable sums expended in so curing said default, (B)
if the Event of Default by Landlord causes more than fifty percent (50%) of the
Premises to be Untenantable for a continuous period in excess of one (1) year
from the date of Tenant's initial notice of default, Tenant may terminate this
Lease at any time prior to the date such Event of Default has been cured by
Landlord, and (C) Tenant may pursue all other remedies at law or in equity to
which Tenant may be entitled. No notice to Landlord under this Section 8.8 shall
be effective until a copy thereof is delivered to each Landlord mortgagee for
which Tenant has received a notice address in writing from Landlord or its
mortgagee. The rights of Tenant pursuant to this Section 8.8 shall be subject to
the express provisions of this Lease providing for remedies different from, or
in exclusion of, the remedies above-described. Without limiting the immediately
preceding sentence, the provisions of this Section 8.8 shall not apply to a
default of Landlord under, or the failure of Landlord to provide the services
described in, Section 4.1 of this Lease. Tenant may not terminate this Lease
because of Landlord's default unless specifically permitted pursuant to this
Section 8.8 or unless otherwise specifically provided in this Lease. Tenant
specifically agrees that the cure of any default by any Landlord mortgagee shall
be deemed a cure by Landlord under this Lease.
ARTICLE IX
Transfers
9.1 Assignment or Sublease by Tenant.
(a) If Tenant should desire to assign this Lease or sublet the Premises or
any part thereof following initial occupancy of the Premises by
Tenant, Tenant shall give Landlord written notice of such desire at
least thirty (30) days in advance of the date on which Tenant desires
to make such assignment or sublease. The notice shall include the
identity of the proposed assignee or sublessee, current financial data
of the proposed sublessee or assignee, its nature of business, and
intended use of the Premises, and shall specify the financial terms,
including rental, commissions, tenant build-out allowances and other
inducements, and the term of the proposed sublease or assignment.
Landlord shall then have a period of thirty (30) days following
receipt of such notice within which to notify Tenant in writing that
Landlord elects to either (i) permit Tenant to assign or sublet this
Lease to the party specified in the notice, or (ii) reject the
proposed assignee or sublessee (which it may only do if such party is
not creditworthy, financially responsible or of a kind or type
customarily found in the Building, or whose operations in the Building
or proposed use of the Premises would not be in keeping with and would
detract from, the operations of the Project or the other tenants in
the Building), and continue this Lease in full force and effect as to
the space so affected. If Landlord should fail to notify Tenant in
writing of such election within said period, or, if it elects option
(ii) above, shall fail to state in such notice reasonably specific
reasons for such rejection, Landlord shall be deemed to have elected
option (i) above. Tenant shall be responsible for reimbursing Landlord
for all reasonable costs incurred by Landlord and related to such
proposed assignment or subletting, including without limitation,
administrative costs, any build-out or tenant improvements or
restoration costs incurred by Landlord in connection therewith, and
attorneys' fees, and Tenant shall pay the same to Landlord within
thirty (30) days following Landlord's demand therefor. If the
aggregate rental, bonus or other consideration paid by any such
assignee or sublessee for any such space exceeds the sum of (a)
Tenant's Base Rental and Tenant's Additional Rental or Tenant's
Estimated Additional Rental, as the case may be, to be paid to
Landlord for such space during such period, plus (b) Tenant's costs
and expenses actually incurred in connection with such assignment or
sublease, consisting of reasonable brokerage fees, reasonable costs of
finishing out or renovating the space affected, reasonable market cash
rental concessions, which costs and expenses are to be amortized by
Tenant over the term of the assignment or sublease, then fifty percent
(50%) of such excess shall be paid to Landlord within fifteen (15)
days after such amount is paid to Tenant. Landlord shall have the same
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rights granted to Tenant under Section 3.4(d) to audit Tenant's books
and records relating to the assignment or sublease. In addition, if
such sublet space reverts to Tenant prior to the expiration of the
initial Term and Tenant is unable to resublet such space for the
remainder of the initial Term after using reasonable efforts with
respect thereto and does not intend to use such space for the
remainder of the initial Term, then Tenant shall notify Landlord of
such fact and thereafter be entitled to recalculate the fifty percent
(50%) excess (if any) paid to Landlord in connection with such
subletting so as to include as one of Tenant's costs deducted from
such excess the Base Rent required to be paid by Tenant to Landlord
during the remainder of the initial Term on such sublet space, in
which event Landlord shall refund to Tenant any portion of such excess
that would not have been paid to Landlord had such additional Base
Rent been taken into account in the original calculation thereof;
provided, that (A) in no event shall Landlord ever be required to pay
to Tenant more than the refund of Landlord's share of such excess
profits received by Landlord from the subletting of such space by
Tenant as described above, and (B) Landlord shall have the option, in
lieu of refunding such excess, to recapture such space from Tenant for
the remainder of the Term.
(b) Each sublessee or assignee shall fully observe all covenants of this
Lease, including without limitation, the provisions of Article V, and
no consent by Landlord to an assignment or sublease shall be deemed in
any manner to be a consent to a use not theretofore permitted under
Article V. No assignment or subletting by Tenant shall relieve Tenant
of any obligation under this Lease, and Tenant shall remain fully
liable hereunder. Any attempted assignment or sublease by Tenant in
violation of the terms and covenants of this Section 9.1 shall be void
and shall constitute a default by Tenant hereunder. Any consent by
Landlord to a particular assignment or sublease shall not constitute
Landlord's consent to any other or subsequent assignment or sublease,
and any proposed sublease or assignments by a sublessee of Tenant
shall be subject to the provisions of this Section 9.1 as if it were a
proposed sublease or assignment by Tenant. The restriction against an
assignment or sublease described in this Section 9.1 shall be deemed
to include a restriction against tenant's mortgaging its leasehold
estate, as well as against an assignment or sublease which may occur
by operation of law. If, at the time a default occurs under this
Lease, the Premises or any part thereof have been assigned or sublet,
Landlord, in addition to any other remedies herein provided or
available at law or in equity, may, at its option, collect directly
from such assignee or subtenant all rents due and becoming due to
Tenant under such assignment or sublease and apply such rent against
the Rent due to Landlord from Tenant hereunder, and no such collection
shall be construed to constitute a novation or a release of Tenant
from the further performance of its obligations hereunder or a
recognition of any direct rights of such assignor or subtenant in and
to such space other than by, through and under Tenant.
(c) Notwithstanding anything to the contrary contained within this Article
IX or this Lease, (i) Tenant shall not assign or sublet any portion of
the Premises to any party or affiliate of any party (other than an
Affiliate of Tenant) which is then a tenant in the Building without
Landlord's prior written consent if Landlord then has comparable space
in the Building which could be leased to such party or affiliate, and
any such attempt to the assignment or subletting shall be void and of
no further force and effect, and (ii) Tenant shall be permitted
without obtaining Landlord's prior consent or approval to assign the
Lease or sublease all or a portion of the Premises to an Affiliate (as
hereinafter defined) of Tenant, or to any successor entity by merger,
consolidation, liquidation, reorganization or otherwise, or to any
entity purchasing all or substantially all of the assets of Tenant,
provided, that no such assignment or subletting shall relieve Tenant
of any obligation under the Lease and Tenant shall remain fully liable
hereunder. The term "Affiliate" shall mean and refer to any person or
entity controlling, controlled by or under common control with another
such person or entity. The term "Control" shall mean the possession,
directly or indirectly, of the power to direct or cause the direction
of the management and policies of such controlled person or entity;
the ownership, directly or indirectly, of at least fifty-one percent
(51%) of the beneficial ownership of, or possession of the right to
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vote, in the ordinary direction of its affairs, or at least fifty-one
percent (51%) of the beneficial ownership in, any person or entity
shall be presumed to constitute such control. Nothing in this Lease
shall prohibit Tenant from contracting with a concessionaire for
purposes of the operation of dining or food services within the
Premises operated primarily for the benefit of Tenant, its employees
and invitees.
9.2 Transfer by Landlord. Landlord shall have the right to transfer and assign,
in whole or in part, all its rights and obligations hereunder and in the
Project, and all other property referred to herein, and in such event and upon
such transfer (any such transferee to have the benefit of, and be subject to,
the provisions of Sections 9.3 and 8.6), no further liability or obligations
shall thereafter accrue against Landlord, provided such successor in interest
has agreed to assume (subject to the limitations of Section 8.5 and the other
terms hereof) all of Landlord's obligations accruing under this Lease after the
date of such assignment. Notwithstanding the foregoing, except with respect to
any financing obtained by Landlord with respect to the Project, in no event will
Landlord convey its interest in the Project prior to the Completion Date to
other than an Affiliate of Xxxxxx-Xxxxxx-Xxxxxxxxx Company, and in no event will
Landlord cease to be an Affiliate of Xxxxxx-Xxxxxx-Xxxxxxxxx Company or will
Xxxxx X. Xxxxxx cease to be a Managing Partner thereof (other than as a result
of death or disability) prior to the Completion Date, without Tenant's prior
written consent, it being a material inducement to Tenant to enter this Lease
that Xxxxx X. Xxxxxx control the entity causing construction of the Project.
9.3 Peaceful Enjoyment. Landlord covenants that as of the Commencement Date,
Tenant shall and may peacefully have, hold, and enjoy the Premises subject to
the other terms of this Lease, provided that no Event of Default exists. It is
understood and agreed that this covenant and any and all other covenants of
Landlord contained in this Lease shall be binding upon Landlord and its
successors only with respect to breaches occurring during its and their
respective ownership of the Landlord's interest hereunder.
ARTICLE X
Additional Provisions
10.1 Notices. Any notice or other communications to Landlord or Tenant required
or permitted to be given under this Lease must be in writing and shall be
effectively given if delivered to the addresses for Landlord and Tenant stated
in the preamble paragraph of this Lease or if sent by United States mail,
certified or registered, return receipt requested, to said addresses. Any notice
mailed shall be deemed to have been given on the regular business day next
following the date of deposit of such item in a depository of the United States
Postal Service. Notice effected other than by mail shall be deemed to have been
given at the time of actual delivery. Either party shall have the right to
change its address to which notices shall thereafter be sent by giving the other
party five (5) days prior written notice thereof.
10.2 Subordination. This Lease is subject and subordinate to all mortgages, deed
of trust, and related security instruments which may now or hereafter encumber
the Project and to all renewals, modifications, consolidations, replacements,
and extensions thereof and to each advance made or hereafter to be made
thereunder; provided that Tenant has received from the holder thereof an
agreement in form reasonably satisfactory to Tenant that Tenant will not be
disturbed in its possession of the Premises, or have its rights under the Lease
modified or terminated, except pursuant to the terms of this Lease. In the event
of the enforcement by the trustee or the beneficiary under any such mortgage or
deed of trust of the remedies provided for by law or by such mortgage or deed of
trust, Tenant will, automatically upon the request of any person or party
succeeding to the interest of said trustee or beneficiary, as a result of such
enforcement, become the Tenant of, and attorn to, such successor in interest
without change in the terms or provisions of this Lease; provided, however, that
such successor in interest shall not be bound (i) by any payment of Rent for
more than one month in advance except prepayments in the nature of security for
the performance by Tenant of its obligations under this Lease, or (ii) by any
amendment or modification of this Lease made without the written consent of such
trustee or such beneficiary or such successor in interest. Upon request by such
successor in interest, Tenant shall execute and deliver an instrument or
instruments confirming the subordination and attornment herein provided for. In
addition, Tenant agrees to give to any holder of a mortgage or deed of trust
covering Landlord's interest in the Project of which Tenant has been given
notice and an address for purposes of notices, a copy of any notice of default
given by Tenant to Landlord, addressed to such mortgagee at the address
furnished to Tenant for such purposes.
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10.3 Estoppel Certificate or Three-Party Agreement. At Landlord's request,
Tenant will within fifteen (15) days following Landlord's request therefor
execute either an estoppel certificate or a three-party agreement among
Landlord, Tenant and any third party dealing with Landlord certifying to such
facts (if and to the extent relating to Landlord, known by Tenant to be true) as
such third party may reasonably require in connection with the business dealings
of Landlord and such third party.
10.4 Brokerage. Tenant represents and warrants that Tenant has dealt with, and
only with, Trione & Xxxxxx, Inc. as broker(s) in connection with this Lease, and
that, insofar as Tenant knows, no other broker(s) negotiated this Lease or is
entitled to any commission in connection with this Lease. Tenant and Landlord
shall each indemnify the other from and against all costs, expenses, attorneys'
fees, and other liability for commissions or other compensation claimed by any
broker or agent claiming the same by, through, or under the indemnifying party.
10.5 Disclaimers. LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY
THAT THE PREMISES ARE SUITABLE FOR TENANT'S INTENDED COMMERCIAL PURPOSE.
TENANT'S OBLIGATION TO PAY RENT UNDER THIS LEASE IS NOT DEPENDENT UPON THE
CONDITION OF THE PREMISES, THE PROJECT, OR THE PERFORMANCE BY LANDLORD OF ITS
OBLIGATIONS UNDER THIS LEASE, AND, UNLESS AND EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN THIS LEASE TO THE CONTRARY, TENANT SHALL CONTINUE TO PAY THE RENT,
WITHOUT DEMAND, ABATEMENT, DEDUCTION, SET-OFF OR COUNTERCLAIM, NOTWITHSTANDING
ANY BREACH BY LANDLORD OF ITS DUTIES AND OBLIGATIONS UNDER THIS LEASE, WHETHER
EXPRESS OR IMPLIED.
10.6 Memorandum of Lease. Landlord and Tenant shall at the closing of Landlord's
acquisition of the Land, execute and acknowledge a Memorandum of Lease in the
form attached hereto as Exhibit "L" which may be recorded in the Real Property
Records of Xxxxxx County, Texas. Nothing in such Memorandum of Lease shall
modify or amend any provision of this Lease. Upon the termination of this Lease
and at the request of either party, Landlord and Tenant shall enter into and
record a memorandum evidencing such termination in a form reasonably
satisfactory to each of such parties.
10.7 Publicity. Except as required by Legal Requirements, there shall be no
press releases or other publicity originated by Landlord or Tenant, or any
agents or representatives thereof, concerning the execution of, or terms of,
this Lease without the prior approval of the text thereof by Landlord and
Tenant.
10.8 Effect of Delivery of This Lease. Landlord has delivered a copy of this
Lease to Tenant for Tenant's review only, and the delivery hereof does not
constitute an offer to Tenant or option. This Lease shall not be effective until
executed by both Landlord and Tenant.
10.9 Communications Equipment.
(a) Without liability for rental or any other charges therefor, except as
expressly stated in this Section, Tenant shall have the right, at
Tenant's sole cost and expense, to install, maintain and operate on
the roof of the Building in a location mutually agreeable to Landlord
and Tenant ("Tenant's Equipment Area") one or more satellite dishes
and whip antennae (collectively, the "Communications Equipment");
provided, that (A) the Communications Equipment shall comply with all
applicable Legal Requirements and (B) the exact size and location of
such equipment shall be mutually agreeable to Landlord and Tenant and
in no event shall Tenant be permitted to use space on the roof of the
Building outside of the Tenant Equipment Area. Tenant shall also have
access to the roof of the Building at all times for the purpose of
inspecting, adjusting, repairing and maintaining the Communications
Equipment. Landlord may lease or otherwise allow other tenants of the
Building to use the remaining portions of the roof of the Building for
the installation of similar type communications equipment; provided,
that such equipment will not materially interfere with the
installation, maintenance or operation of the Communications Equipment
by Tenant. Subject to availability and Landlord's prior approval
thereof, not to be unreasonably withheld, and at no cost to Landlord
except as otherwise stated below, Tenant shall have the right to run
cabling from the Communications Equipment to the Premises through
interior Building chases, ducts and flues, and (ii) Landlord will
supply as a Base Building cost secure conduit from two (2)
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telecommunications vendor's point of presence vault to Tenant's
telecommunications facilities and there shall be no cost to Tenant for
the use of such riser space. The exact location and size of such
equipment shall be mutually agreeable and subject to restrictions
applicable to the Land, if any. Roof penetrations must be made by
Landlord's roofer at Tenant's expense.
(b) Tenant shall have the right at no cost to Landlord to obtain
telecommunications services from such suppliers as it shall elect
(which are not suppliers then chosen by Landlord to supply such
services generally to tenants of the Building). Without imposing any
fee or charge for such suppliers, but subject to the availability of
space therefor, Landlord shall permit such suppliers to enter the
Project and install in the Project, in a manner approved by Landlord,
which approval shall not be unreasonably withheld, and in compliance
with any rules and regulations reasonably adopted by Landlord with
respect thereto, and as part of the Communications Equipment, such
conduits, cables and appurtenances as shall be necessary for the
providing of such service to Tenant. If any such supplier shall need
to install equipment in the Project, Landlord shall use reasonable
efforts to identify and provide suitable space therefor (and provide
electricity and other services thereto); provided, that Landlord shall
not be required to pay or incur any costs to provide, enclose,
accommodate, maintain, bring, improve or otherwise allow such
telecommunications or other services to be brought to the Premises,
and all such equipment and appurtenances shall, at Tenant's option at
the termination of this Lease, either remain at the Project (but only
if Landlord shall consent thereto) or be removed by Tenant and the
Project restored to its preexisting condition, reasonable wear and
tear excepted.
(c) The Communications Equipment (including its location and installation)
shall be described in plans and specifications to be submitted to
Landlord by Tenant in connection with (or in the same manner as) the
Initial Tenant Improvements, except that Tenant shall be responsible
for the installation of the Communication Equipment using contractors
approved by Landlord in advance, which approval shall not be
unreasonably withheld; provided, that all roof penetrations shall be
made by Landlord or its designated contractors at Tenant's expense.
Tenant shall be responsible for all repairs and maintenance of the
Communications Equipment, and shall indemnify Landlord for any claims,
damages or expenses (including, without limitation, reasonable
attorneys' fees) incurred by Landlord in connection with the
installation, operation, maintenance or repair of the Communications
Equipment by Tenant (including without limitation, those involving
property damage or personal injury or death of a person), other than
any portion of any such claims, damages or expenses that are
attributable to the affirmative acts of negligence or intentional
wrongdoing by Landlord. Tenant shall, within thirty (30) days
following the expiration or other termination of this Lease, remove
all Communication Equipment from the Building and/or Garage.
10.10 Uninterrupted Power Supply.
(a) The Outline Plans and Specifications contain provisions for an
emergency battery system to provide power for, egress lighting, exit
signs, the Building's fire alarm system and Tenant's security system
in the event of an emergency. Tenant shall have the right, at Tenant's
sole cost and expense, to install an uninterrupted power system
generator ("UPS") to operate Tenant's computer room and other initial
operations. Tenant shall also have the right, by delivering written
notice to Landlord prior to the commencement of construction of the
Project, to cause Landlord to combine such UPS with the emergency
power system for the Building pursuant to plans and specifications
approved in advance by Landlord and Tenant, in which event (i)
Landlord shall take over and be responsible for the maintenance,
operation and repair of the UPS and emergency power system for the
Project, (ii) Landlord and Tenant shall prorate the cost of such UPS,
with Landlord paying for the portion that replaces the emergency power
system that Landlord would have been required to install in the
Project less any redesign or other costs required to replace the
proposed battery system with Tenant's generator system and Tenant
paying for the remainder of the cost thereof, and (iii) such UPS
generator system shall, at Landlord's option, remain with the Premises
upon expiration or earlier termination of this Lease.
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(b) In the event Tenant elects to install such UPS and operate it solely
for Tenant's benefit, and gives notice thereof to Landlord prior to
the commencement of construction, Landlord shall provide to Tenant at
no additional rental charge a place to put such generator in close
proximity to the Building in a location to be mutually agreeable to
Landlord and Tenant. Tenant shall be responsible for all costs and
expenses incurred in connection with the installation, ownership,
maintenance and repair of such generator, including without
limitation, the cost of all screening reasonably required by Landlord
in connection therewith. Upon the expiration of the Lease, Tenant
shall also, at Landlord's option, either leave the UPS at the Project
or remove the UPS and all related equipment from the Project and
restore the Project to its pre-existing condition, reasonable wear and
tear excepted. Tenant shall comply with all Legal Requirements
relating to such generator, and indemnify and hold Landlord harmless
from any and all liabilities, losses, costs, damages and expenses
(including, without limitation, reasonable attorneys' fees) incurred
by Landlord and arising out of any claims or causes of actions
resulting from the installation, operation and/or use thereof. Tenant
shall also comply with any Rules and Regulations adopted by Landlord
from time to time and relating to the operation of such generator.
10.11 Option to Purchase. In the event Landlord desires to sell the Project at
any time prior to or during the Term, Landlord shall first offer to sell the
Project to Tenant. Any such offer to Tenant shall be in writing, shall state the
terms and conditions of the sale that Landlord desires to make of the Project or
portion thereof, and shall give Tenant a period of not less than fifteen (15)
business days to elect to purchase the Project upon the terms and conditions set
forth in such offer; provided, that if any such offer is again made to Tenant
prior to the expiration of the six (6) months period during which Landlord may
sell the Project to third parties on terms previously offered to Tenant, Tenant
shall only have a period of seven (7) days to elect to purchase the Project on
the terms and conditions set forth in such subsequent offer. If Tenant elects
not to purchase the Project upon the terms and conditions set forth in such
offer from Landlord, Landlord may sell the Project or applicable portion thereof
to a third party as long as the terms and conditions of such sale are not
materially more favorable (i.e., having a variance of not more than five percent
(5%)) to the purchaser than those specified in such offer to Tenant. If Landlord
does not consummate the originally proposed transfer within six (6) months after
the expiration of the period during which Tenant shall have the option to elect
to exercise such offer to purchase the Project, then Landlord must re-offer the
Project to Tenant as provided pursuant to this Section as though no written
notice and offer had previously been given. If Tenant elects to accept
Landlord's offer to purchase the Project, Tenant and Landlord shall consummate
the sale and purchase of the Project in accordance with the terms and conditions
of such offer (but in no event shall the closing of each purchase and sale occur
prior to the expiration of a reasonable period of time following Tenant's
election to purchase the Project without Tenant's prior written consent), at
which time this Lease shall, at the option of Tenant, terminate. If such offer
does not contain reasonable periods for due diligence and closing (up to but not
in excess of thirty (30) days for due diligence and thirty (30) days to
closing), Tenant shall have the option to include such provisions in the
purchase contract.
10.12 Purchase of Property. Tenant acknowledges that Landlord is not the current
owner of the Land but has the Land under contract and is intending to close the
purchase of same in the near future. In connection with such purchase, Landlord
and the seller of such property have agreed to encumber the property across the
street from the Land that is currently being used as a lake with restrictions in
substantially the form attached hereto as Exhibit "N" (the "Restrictions").
Landlord agrees that, if the Restrictions are violated by third parties, it
shall at Tenant's request and as an Operating Expense of the Project, take all
reasonable actions (including litigation) as are necessary to try to enforce
such Restrictions.
10.13 Miscellaneous.
(a) This Lease shall be binding upon and inure to the benefit of Landlord,
its successors and assigns, and shall be binding upon and inure to the
benefit of Tenant, its successors and assigns (provided that the
benefits of this Lease shall inure only to the benefit of assignees of
Tenant and Landlord permitted under Article IX).
144
(b) The pronouns of any gender shall include the other genders, and either
the singular or the plural shall include the other.
(c) All rights and remedies of each party under this Lease shall be
cumulative and none shall exclude any other rights or remedies allowed
by law; and this Lease is declared to be a Texas contract, and all of
the terms hereof shall be construed according to the laws of the State
of Texas.
(d) This Lease may not be altered, changed, or amended, except by an
instrument in writing executed by all parties hereto. Further, the
terms and provisions of this Lease shall not be construed against or
in favor of a party hereto merely because such party is the "Landlord"
or the "Tenant" hereunder or such party or its counsel is the
draftsman of this Lease.
(e) The terms and provisions of Exhibits "A" through "L", inclusive,
attached hereto are hereby made a part hereof for all purposes.
(f) Each party (and each individual signing for such party) represents and
warrants that all consents or approvals required of third parties
(including, but not limited to, its Board of Directors or partners)
for the execution, delivery, and performance of this Lease have been
obtained and that each party has the right and authority to enter into
and perform its covenants contained in this Lease.
(g) If any term or provision of this Lease, or the application thereof to
any person or circumstance, shall to any extent be invalid or
unenforceable, the remainder of this Lease, or the application of such
provision to persons or circumstances other than those as to which it
is invalid or unenforceable, shall not be affected thereby, and each
provision of this Lease shall be valid and shall be enforceable to the
extent permitted by law.
(h) All references to days in this Lease and any exhibits or riders
thereto mean calendar days, not working or business days unless
otherwise stated.
(i) Captions and headings herein are for Landlord's and Tenant's
convenience only, and neither limit nor amplify the provisions of this
Lease.
10.14 Restatement. This Lease hereby amends and restates in its entirety that
certain Lease dated as of April 24, 1998 by and between Landlord and Tenant,
which earlier Lease shall be of no further force and effect.
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IN TESTIMONY WHEREOF, the parties hereto have executed this Lease effective
as of the date first set forth above.
LANDLORD:
DNA COG, LTD., a Texas Limited Partnership
By: DNA Sandbridge, L.L.C., a Texas Limited
Liability Company, General Partner
By: Xxxxx X. Xxxxxx Co., Inc., Managing Member
By: Xxxxx X. Xxxxxx, President
TENANT:
CABOT OIL & GAS CORPORATION,
a Delaware corporation
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President, Human Resources
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EXHIBIT A
LAND DESCRIPTION
EXHIBIT B
FLOOR PLANS -- 1ST FLOOR
[DNA]
EXHIBIT C
CERTIFICATE OF COMMENCEMENT DATE
DNA COG, LTD. _______________, 19___
---------------------------
------------, -------------
Ladies and Gentlemen:
Please refer to that certain Lease Agreement (the "Lease") dated April ___,
1998 by and between DNA COG, LTD. ("Landlord") and the undersigned ("Tenant"),
covering office space (the "Premises") in the building commonly known as the
Cabot Oil & Gas Building, located at ______ Enclave Parkway, Houston, Texas,
Xxxxxx County, Texas. Capitalized terms not defined herein shall have the
meaning given to such terms in the Lease. The undersigned hereby certifies,
acknowledges and represents the following to you, all as of the date hereto:
1. The initial Term of the Lease commenced on _________________ and will
expire on _________________.
2. [Except as set forth below] To Tenant's actual knowledge, Landlord is
not in default in the performance of its obligations under the Lease,
and Landlord has performed all obligations to be performed by it under
the Lease through the date hereof, including its obligations under
Exhibit "E" of the Lease. Tenant currently claims no off-sets against
any rentals owed under the Lease [except as set forth below].
3. Tenant is in occupancy of the Premises and acknowledges that it has
accepted the same, subject to the matters noted in Paragraph 2 above,
if any.
4. The Lease has not been amended except as may be set forth at the end
of this letter.
5. The attached Schedule 1 accurately and completely represents the
current status of all free rent, rent abatements, build-out allowances
and other concessions which were or are owing to Tenant from Landlord
in connection with the Premises.
The undersigned hereby agrees that this certificate may be relied upon by
Landlord and its lenders and partners, as well as their respective successors
and assigns.
Very truly yours,
CABOT OIL & GAS CORPORATION
By:
Name:
Title:
147
Amendments to Lease:
Joinder
Landlord hereby joins in the execution of this Certificate solely for
purposes of acknowledging and agreeing to the Commencement Date set forth in
Paragraph 1 above.
LANDLORD:
DNA COG, LTD., a Texas Limited Partnership
By: DNA Sandbridge, L.L.C., a Texas Limited
Liability Company, General Partner
By: Xxxxx X. Xxxxxx Co., Inc., Managing Member
By: Xxxxx X. Xxxxxx, President
148
EXHIBIT D
PROJECT RULES AND REGULATIONS
1. Sidewalks, doorways, vestibules, halls, stairways, freight elevator
lobbies, and other similar areas shall not be used for the disposal of
trash, be obstructed by tenants, or be used by tenants for any purpose
other than entering or leaving the leased premises and for going from one
part of the Building to another. If special trash haulings are required,
please contact the Management Office.
2. No sweepings, rubbish, rags or other unsuitable materials shall be disposed
into plumbing fixtures or appliances. Damage resulting to any fixtures from
misuse by a tenant shall be the liability of said tenant.
3. Movement of furniture or office equipment in or out of the Building, or the
dispatch or receipt of any bulky material, merchandise, or materials which
requires the use of the elevators or the stairways or movement through the
Building entrances or lobby will be restricted to such hours as Landlord
shall reasonably designate. All such movement will be under the supervision
of Landlord and in the manner agreed to between the tenant and Landlord by
prearrangement. Such prearrangement, initiated by the tenant, is subject to
Landlord's control as to the time, method, routing of the movement and as
to limitations for safety or other concerns which may prohibit any article,
equipment or other item(s) from being brought into the Building. The Tenant
is to assume all risks for damage to articles moved or injury to persons
engaged or not engaged in such movement and for any damage to Landlord's
equipment or property or injury to Landlord's personnel as a result of any
act in connection with fulfilling this service for the tenant. Landlord
shall not be liable for any acts of any person(s) engaged in, or any damage
or loss to any of said property of person(s) resulting from, any act in
connection with such service performed for the tenant unless the damage or
injury is caused by the gross negligence or willful misconduct of Landlord.
4. All routine deliveries to a tenant's leased premises during 8:00 a.m. to
5:00 p.m. weekdays shall be made through the freight elevators Passenger
elevators are to be used only for the movement of people, unless an
exception is approved by the Management Office.
5. To insure orderly operation of the Building, no ice, mineral or other
water, towels, newspapers, packages, etc. will be delivered to tenants'
leased premises except by persons appointed or approved by Landlord in
writing (such approval not to be unreasonably withheld).
6. On multiple tenant floors, corridor doors, when not in use, shall be kept
closed.
7. Tenant space that is visible from public areas must be kept neat and clean
and is subject to Landlord's approval.
8. Tenants shall not tamper with or attempt to adjust temperature control
thermostats in the leased premises. Landlord shall adjust thermostats as
required to maintain the Building standard temperature. All window blinds
shall remain down and tilted at a 45 degree angle toward the street to help
maintain comfortable room temperatures and conserve energy.
9. All requests for overtime air conditioning or heating must be submitted in
writing to the Management Office by 5:00 p.m. on the day desired for
weekday requests, by 5:00 p.m. Friday for weekend requests, and by 5:00
p.m. on the preceding business day for holiday requests.
10. The Building hours are from 7:00 a.m. until 7:00 p.m. Monday through
Friday, and from 8:00 a.m. to 2:00 p.m. on Saturday, excluding holidays.
11. Tenants will comply with all security procedures during business hours and
after hours and on weekends.
12. Landlord will provide all locks for doors in the leased premises and no
additional lock(s) will be placed on any door within the leased premises
without Landlord's written consent. All requests for duplicate keys will be
made to the Management Office.
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13. Tenants will cooperate with Landlord's employees in keeping leased areas
neat and clean, unless the tenant is responsible for cleaning and
maintenance personnel. Landlord will in no way be held responsible by any
tenant, its agents, employees or invitees for any loss of property from the
leased premises or public areas or for any damage to any property within
the leased premises even if such loss or damage occurred when the leased
premises were locked against entry.
14. Signs, advertisements, or notices visible in or from public corridors or
from outside the Building shall be subject to Landlord's prior written
approval.
15. Landlord will provide and maintain a directory board for all the tenants in
the main lobby of the Building, and no other directory will be permitted.
16. Proposed plans for alterations within the Building must be approved in
writing by Landlord. This provision will apply to all work performed in the
Building including, but not limited to, installation of telephones,
telegraph equipment, electrical devices and attachments, and all
installations affecting or affixed to floors, walls, woodwork, trim,
windows, ceilings, equipment or any other portion of the Building.
17. Landlord reserves the right to prescribe the weight and positioning of
safes, files, filing systems, and other heavy equipment and written
approval must be obtained from the Management Office before work begins.
All damage done to the Building by the movement of property of the tenant,
or done by the tenant's property while in the Building, will be repaired at
the tenant's expense.
18. Should a tenant require telegraphic, telephonic, annunciator or other
communication service, Landlord will direct the electricians where and how
wires are to be introduced and placed and none shall be introduced or
placed except as Landlord shall direct. Electric current shall not be used
for power or heating without Landlord's prior written permission.
19. Tenants are requested to lock all office doors leading to corridors and to
turn out all lights at the close of their working day.
20. Tenants, their agents, employees and invitees shall observe no smoking, as
per applicable law and municipal ordinance, in all public areas including
elevators, restrooms, etc.
21. No flammable, hazardous or explosive fluids or materials shall be kept or
used within the Building except in areas approved by Landlord, and tenants
shall comply with all applicable laws and building and fire codes relating
thereto.
22. Tenants will not make or permit any improper noises within the Building or
otherwise interfere with other tenants or persons having business within
the Building.
23. No animals shall be brought into or kept in, on or about the Building.
Landlord reserves the right to rescind any of these rules and regulations
and to make such other and further rules and regulations as, in its reasonable
judgment, shall, from time to time, be required for the safety, protection, care
and cleanliness of the Building, the operation thereof, the preservation of good
order therein and the protection and comfort of the tenants and their agents,
employees and invitees. Such rules and regulations, when made and written notice
thereof is given to a tenant, shall be binding upon it in like manner as if
originally herein prescribed.
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EXHIBIT E
CONSTRUCTION OF THE PROJECT
1. Project Architect and Contractor. The architect for the Project shall be
Xxxxxxx Partners Architects (the "Project Architect"). The general
contractor for the Project shall be X.X. Xxxx Construction Company or such
other contractor as may be selected by Landlord in its sole discretion (the
"Base Building Contractor").
2. Project Plans and Specifications.
(a) Attached hereto as Exhibit "G" is a description of the preliminary
plans and specifications for the Project (the "Preliminary Plans and
Specifications"). The Preliminary Plans and Specifications have been
reviewed and are hereby approved by Landlord and Tenant. Landlord has
supplied Tenant with a CAD diskette containing dimensional floor plans
for the Building.
(b) On or before June 29, 1998, Landlord shall supply Tenant with the
complete construction plans and specifications for the base Building,
including without limitation, architectural, structural, mechanical,
electrical and plumbing drawings and specifications relating thereto.
In addition, Landlord shall have the right, from time to time, to
submit to Tenant in advance, one or more portions of such plans and
specifications for Tenant's advance approval (e.g., foundation plans
and specifications) so that Landlord may commence and continue
construction of the Project on a "fast-track" basis.
(c) Tenant shall, as soon as reasonably possible, but in no event later
than five (5) business days following Landlord's submission thereof to
Tenant, review and approve the proposed plans and specifications for
the base Building (or portions thereof submitted in advance by
Landlord as provided above). Tenant's failure to approve or disapprove
any of such proposed items within such period shall be deemed to be
Tenant's approval thereof. If Tenant disapproves any such items
proposed by Landlord, Tenant shall notify Landlord of such disapproval
in writing together with a reasonably specific description of Tenant's
reasons for disapproving such items and, as to any aesthetic items
(such as colors, finishes, etc.), a reasonably specific description of
what modifications or alternatives would satisfy Tenant's objections.
Landlord shall promptly revise any of such proposed items in
accordance with Tenant's objections (or in accordance with any other
alternatives which Landlord reasonably believes will be acceptable to
Tenant based upon such objections by Tenant) and resubmit the same to
Tenant for its approval in the same manner as the original items. Upon
receipt of Tenant's approval therefor (deemed or otherwise), Landlord
shall incorporate such items into the final plans and specifications
for the Project (such final plans and specifications for the Project
in the form approved by Tenant being hereinafter referred to as the
"Project Plans and Specifications"). Notwithstanding anything to the
contrary set forth in this Section, in no event shall Landlord be
required to make any modifications to the Project or any of the plans
and specifications for the Project at Tenant's request which would
violate applicable Legal Requirements, change the scope of the
Project, or otherwise be inconsistent with any previously approved
plans and specifications, or result in an increase in the cost of the
Project by more than $50,000 unless Tenant shall agree to pay the
excess in cash. In the event of a modification which would result in
an increase in the cost of constructing the Project which Tenant does
not pay in cash, Tenant's annual Base Rental shall increase by an
amount equal to 10.3% multiplied by such increased costs.
(d) Landlord shall have the right, from time to time, to make changes and
modifications to the Project Plans and Specifications; provided, that
any material changes by Landlord not being made to comply with
applicable Legal Requirements not in effect when the Project Plans and
Specifications were previously approved shall be subject to the prior
written approval of Tenant, which approval shall be promptly
considered and not be unreasonably withheld (and in no event longer
than five (5) business days) if such requested changes are consistent
with the first-class nature of the Project. The cost of preparing the
Project Plans and Specifications shall be borne solely by Landlord,
except as otherwise provided below.
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(e) Once approved by Tenant, Tenant shall not have the right to request
any further changes to the Project Plans and Specifications (or
previously approved portions thereof) without Landlord's prior
approval, which approval may be granted or withheld in Landlord's sole
discretion; provided, that (i) Tenant shall have the right to reduce
the scope of the Project by eliminating the add on items previously
requested by Tenant and set forth in Exhibit "G-1" attached to the
Lease, in which event Tenant's annual Base Rental shall be reduced by
the net reduction in Landlord's costs (after taking into consideration
any redesign costs and other expenses previously incurred by Landlord
in connection therewith) multiplied by 10.3%; and (ii) Tenant shall
have the right to request changes in the scope of the Project or that
otherwise require changes in the Project Plans and Specifications as
long as (A) such changes do not affect the structure of the Building
or the external pre-cast curtain wall, (B) such changes are approved
by Landlord's lender(s), which approval Landlord shall use good faith
efforts to obtain, (C) Tenant agrees to be responsible for all delays
and expenses incurred by Landlord in connection therewith, and (D)
Landlord and Tenant are able to agree upon an amendment hereto to take
into account all such items. If Tenant shall request a change,
Landlord shall within ten (10) days thereafter identify to Tenant in
writing the delays and expenses anticipated by Landlord in connection
therewith. Tenant shall thereupon either (i) require the change and be
responsible for the delays and expenses thus identified, or (B)
rescind its request for the change, which shall be presumed unless
confirmation of its requirement of the change is delivered to Landlord
within five (5) days after Landlord's notice to Tenant identifying
delays and expenses. Tenant shall not be responsible for delays and
expenses in connection with such change if they either (i) were
reasonably anticipatable by Landlord but not identified to Tenant by
Landlord after Tenant's proposal for the change involved, or (ii) due
to the negligence or intentional misconduct of Landlord. In addition,
Tenant shall reimburse Landlord for all reasonable out-of-pocket costs
incurred by Landlord in evaluating the feasibility of such change,
including without limitation, architectural, engineering and legal
fees relating thereto.
3. Construction Schedule. Landlord will use reasonable efforts to commence
construction of the Project and to cause such construction to be carried
forward with due diligence in accordance with the construction schedules
attached hereto as Exhibit "E-1" (the "Construction Schedule") to final
completion in accordance with the Project Plans and Specifications and
applicable Legal Requirements, subject to Force Majeure and Tenant Delays
(as defined in Exhibit "F").
4. Delays in Construction.
(a) If for any reason other than Force Majeure or Tenant Delay, Landlord
shall fail to commence construction of the Project (as evidenced by
commencement of pouring the foundation footings) on or before July 5,
1998, Tenant shall have the right to terminate this Lease, by giving
written notice thereof on or before July 20, 1998 (provided, that
Landlord has not cured such default by commencing such construction
prior to the giving of such notice by Tenant). If the Lease is
terminated as described in the previous sentence, Tenant shall be
entitled to receive, as Tenant's sole and exclusive remedy for such
failure by Landlord, liquidated damages of $500,000.00 payable to
Tenant within thirty (30) days of Landlord's receipt of such
cancellation notice, the parties agreeing that Tenant's actual damages
would be difficult or impossible to ascertain and that such liquidated
damages are reasonable under the circumstances.
(b) Subject to Tenant Delays but regardless of Force Majeure, if Landlord
has not delivered the Premises for Tenant construction of interior
improvements by an outside date of July 1, 1999, Tenant shall have the
right, as Tenant's sole and exclusive remedies with respect thereto,
to either (i) receive an abatement of Base Rental for two (2) months
following the Commencement Date, or (ii) to terminate this Lease.
"Delivery" of such space as used in the previous sentence shall mean
that such space is dried-in, exterior glass has been installed, and
the space is lockable and is being supplied with conditioned air. Any
such election by Tenant shall be made on or before delivery of such
space for such purposes, and in no event later than July 15, 1999. In
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the event Landlord has not delivered such space prior to July 15,
1999, and Tenant has not elected either of the options set forth in
this paragraph, Tenant shall be deemed to have elected option (i)
above. If Tenant elects option (i) above, Landlord shall continue to
proceed with reasonable due diligence to deliver the Premises for
Tenant's construction of interior improvements as soon as reasonably
possible thereafter. If Landlord thereafter fails to so proceed with
due diligence, Tenant shall be entitled to exercise any and all
remedies at law or in equity Tenant may have for such subsequent
failure by Landlord other than the termination of this Lease, which
termination right Tenant hereby waives in its entirety with respect to
any such breach (other than as provided in Section 8(c) of Exhibit "F"
to the Lease).
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EXHIBIT F
LEASEHOLD IMPROVEMENTS
1. Landlord's Obligations. Landlord, at Landlord's sole cost and expense,
shall complete the construction of the core and shell improvements of the
Premises more particularly described and included in the Project Plans and
Specifications ("Core and Shell Improvements") in accordance with the
Project Plans and Specifications, the Construction Schedule and all
applicable Legal Requirements. All initial leasehold improvements included
in the Premises in excess of that included as a part of the Core and Shell
Improvements are hereinafter referred to as the "Initial Tenant
Improvements".
2. Tenant Plans and Specifications.
(a) The term "Tenant Plans and Specifications" means the complete
architectural drawings and mechanical, electrical, plumbing and
structural drawings and related specifications for any and all Initial
Tenant Improvements desired by Tenant in the Premises (which shall
include such written instructions or specifications as may be
necessary or required to secure a building permit from the City of
Houston for said improvements and to allow construction of said
improvements to commence in due course, and which shall show the full
detailed scope of all improvements to be performed to the Premises,
other than the Core and Shell Improvements). All Initial Tenant
Improvements shall (i) be consistent with the Project Plans and
Specifications, (ii) not structurally impair the Project with respect
to the Premises, impair or be incompatible with the mechanical,
electrical or plumbing systems of the Project, or exceed the utility
capacity (fresh water, wastewater, electricity or gas) limits of the
Project with respect to the Premises set forth in the Project Plans
and Specifications, (iii) not alter the exterior of the Project, and
(iv) be compatible with the permitted uses of the Premises and other
terms and conditions set forth in the Lease. The Tenant Plans and
Specifications shall be prepared by Xxx X. Xxxxx Associates, Inc.
Architects ("Tenant's Architect"), and Tenant shall be responsible for
the preparation thereof.
(b) On or before ninety (90) days after Landlord's delivery to Tenant of
the Project Plans and Specifications, Tenant shall deliver to Landlord
two (2) copies of the proposed Tenant Plans and Specifications for
Landlord's review and approval. Landlord's approval shall not be
unreasonably withheld, but may be withheld if the proposed Tenant
Plans and Specifications do not conform to the criteria set forth in
Section 2(a) above. If the proposed Tenant Plans and Specifications
are not acceptable, Landlord shall notify Tenant within fourteen (14)
days after Landlord's receipt thereof (including specifics as to why
such proposed plans are not acceptable.) Promptly following Tenant's
receipt of any such objections, Tenant shall cause such changes to be
made as shall be necessary to meet such criteria and deliver final
Tenant Plans and Specifications no later than one hundred twenty (120)
days after Landlord's delivery to Tenant of the Project Plans and
Specifications. The dates by which Tenant shall submit final or
substantially completed Tenant Plans and Specifications shall be
extended for any delays caused by Landlord in delivering the Project
Plans and Specifications (or any portion thereof), and any delays
caused by changes made by Landlord in the Project Plans and
Specifications (or any portion thereof) that cause delays in
completion of the Tenant Plans and Specifications by Tenant. The
approval by Landlord of the Tenant Plans and Specifications shall not
constitute a warranty or representation by Landlord of the quality or
suitability of such plans and specifications for Tenant's intended use
thereof, or as to the compliance of such plans and specifications with
Legal Requirements, all of which shall be solely the Tenant's
responsibility.
(c) Subject to Section 9 below, Tenant shall pay and be responsible for
the architectural and engineering fees incurred by Tenant in preparing
the Tenant Plans and Specifications.
(d) Landlord and Tenant shall assist and cooperate fully with one another
in preparation and development of the Tenant Plans and Specifications,
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which assistance and cooperation shall include (i) coordination of
Tenant Plans and Specifications with the Project Plans and
Specifications, (ii) assistance in cost estimates, (iii) regular
meetings of Landlord, Tenant and their respective architects and
engineers to coordinate development of the Tenant Plans and
Specifications, and (iv) identification by Landlord of any High Risk
Items (as hereinafter defined) in a timely manner. "High Risk Items"
means any Initial Tenant Improvements which Landlord, acting in good
faith, believes have a reasonable probability of not being completed
on or before the estimated Completion Date due to limited supplies or
suppliers, length of time to be manufactured, delivered or installed,
or otherwise. Landlord will, not later than fourteen (14) days
following Landlord's receipt of the proposed Tenant Plans and
Specifications, consult with Tenant as requested on High Risk Items,
identify the delay that is likely to be caused as a result of same,
and deliver a definitive list thereof to Tenant with its notice of
required changes to and/or approval of the Tenant Plans and
Specifications. Only Initial Tenant Improvements included on any such
list shall be considered High Risk Items.
3. Submission of Tenant Plans for Pricing. Promptly following Landlord's
approval of the Tenant Plans and Specifications, Landlord shall submit the
Tenant Plans and Specifications for pricing to the Base Building Contractor
and to not more than two (2) other contractors selected by Tenant but
subject to Landlord's approval, not to be unreasonably withheld (the
"Tenant Contractor"). The following would be acceptable Tenant Contractors:
Xxxxx Xxxx Company; LTB Xxxx Constructors, Inc.; Constructors & Associates,
Inc.; Gilbane Building Company; and X.X. Xxxxxxxx Construction. All such
pricing shall assume that all aspects of such construction shall be
performed by such contractor, including without limitation, obtaining a
certificate of occupancy for the Premises. In addition, in the case of the
Base Building Contractor, Landlord shall require as a part of such pricing
letter, assuming that the Premises contains no more than 109,958 square
feet of Net Rentable Area, a $142,945 limit on the Base Building
Contractor's fee (plus a 4.5% fee on all work associated with millwork and
granite/wood veneer floor and wall finishes) and a maximum of $164,937 of
general conditions cost; provided, that if the Premises as designed
contains more than 109,958 square feet of Net Rentable Area, the $142,945
limit shall be increased by $1.30, and the general conditions cost shall
increase by $1.50, per square foot of additional Net Rentable Area in the
Premises. The Base Building Contractor and any Tenant Contractors shall
have a period of fourteen (14) days in which to price the Tenant Plans and
Specifications. Promptly following the receipt by Landlord of pricing of
the Tenant Plans and Specifications by the Base Building Contractor and any
Tenant Contractors, Landlord shall submit same to Tenant for Tenant's
selection of either the Base Building Contractor or any Tenant Contractor
to construct the Initial Tenant Improvements.
4. Selection of Contractor.
(a) Tenant shall have ten (10) days following receipt of the pricing
letters from the Base Building Contractor and any Tenant Contractors
to select the contractor for the construction of the Initial Tenant
Improvements in accordance with the Tenant Plans and Specifications.
(b) If Tenant selects the Base Building Contractor for the construction of
the Initial Tenant Improvements, Landlord shall promptly contract with
the Base Building Contractor for the construction of the Initial
Tenant Improvements based upon the terms set forth in such
contractor's pricing letter. Thereafter, Landlord shall supervise,
manage and administer the construction of the Initial Tenant
Improvements by the Base Building Contractor and cause all Initial
Tenant Improvements to be constructed in compliance with the Tenant
Plans and Specifications; provided, that Landlord shall not be
required to install any portion of the Initial Tenant Improvements
which do not conform to any applicable regulations, laws, ordinances,
codes and rules, or with the terms of this Lease, which conformity
shall be the obligation of Tenant.
(c) If Tenant selects a Tenant Contractor to construct the Initial Tenant
Improvements, then Tenant shall enter into a separate contract with
the Tenant Contractor for the build out of the Initial Tenant
Improvements, which contract shall be subject to Landlord's prior
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approval (not to be unreasonably withheld) and shall provide that the
Tenant Contractor shall comply with the following: (i) conduct its
work in such a manner so as not to unreasonably interfere with other
tenants, project operations, or any other construction occurring on or
in the Project or the Premises; (ii) execute a set of and comply with
all rules and regulations relating to the construction activities in
or on the Project as may be reasonably promulgated and uniformly
enforced from time to time by Landlord or its agents; (iii)maintain
such insurance and bonds in force and effect as required of the Base
Building Contractor or as required by applicable law (but in any event
said bonds shall be in amounts equal to the full value or cost of the
work being done by the Tenant Contractor); and (iv) be responsible for
reaching a reasonable agreement with Landlord and its agents as to the
terms and conditions for all contractor items relating to the
conducting of its work, including but not limited to, those matters
relating to hoisting, systems interfacing, use of temporary utilities,
storage of materials, access to the Premises and the Project, and the
purchase and return of Building standard materials (and Landlord
agrees to cooperate reasonably with Tenant's Contractor in the
coordination of these items).
Landlord shall have the right to approve the subcontractors to be used
by the Tenant Contractor for mechanical, electrical and plumbing work,
which approval shall not be unreasonably withheld. As a condition
precedent to Landlord permitting the Tenant Contractor to commence the
Initial Tenant Improvements, Tenant and the Tenant Contractor shall
deliver to Landlord such assurances or instruments as may be
reasonably requested by Landlord, to evidence the Tenant Contractor's
and its subcontractor's compliance or agreement to comply with the
provision of this Paragraph 4.
(d) If Tenant selects the Tenant Contractor to construct the Initial
Tenant Improvements, Tenant shall construct, at Tenant's sole cost and
expense (but subject to reimbursement to the extent of the Tenant
Allowance), the Initial Tenant Improvements in accordance with the
Tenant Plans and Specifications, this Exhibit "F" and all other
applicable provisions of the Lease. Without in any way limiting the
foregoing provisions of this Section, the following provisions shall
be applicable to Tenant's construction of the Initial Tenant
Improvements or performance of any other work in the Premises by
Tenant or Tenant's Contractors or their respective employees, agents,
or representatives: (i) Tenant shall cause the Initial Tenant
Improvements to be constructed and performed in accordance with all
applicable laws, rules, regulations, and ordinances and otherwise in a
good and workmanlike manner. Without limiting the foregoing, Tenant
shall be responsible for obtaining all permits necessary to commence
construction of the Initial Tenant Improvements. (ii) Tenant and each
of Tenant's contractors (including the General Contractor and each
subcontractor and supplier of General contractor), workmen, mechanics,
engineers, space planners, and other agents and consultants shall
comply with all construction rules and regulations reasonably adopted
and uniformly enforced by Landlord. (iii)The Tenant Contractor and
each of its subcontractors and suppliers shall waive all contractual,
statutory and constitutional liens against the Premises and the
Building as a condition to receipt of final payment and recognize that
Tenant is the owner of a leasehold estate only in the Premises,
pursuant to the terms of the Lease and that nothing in this Exhibit or
other portions of the Lease shall be deemed to confer on Tenant the
power or authority to create a lien on Landlord's interest in the
Building or the Project that is not permitted pursuant to the Texas
Property Code with respect to work installed. (iv) Within thirty (30)
days of completion of the Initial Tenant Improvements and in any event
prior to the final disbursement of the Tenant Allowance, Tenant shall
deliver to Landlord one set of the final record construction plans and
a CADD diskette reflecting the actual conditions and construction of
the Initial Tenant Improvements and copies of all warranties. The
diskette will be in a format of AutoCAD or otherwise reasonably
acceptable to Landlord. (v) Prior to occupancy of any portion of the
Premises, Tenant shall obtain, at Tenant's sole cost and expense, a
certificate of occupancy for such portion of the Premises from the
appropriate governmental agency which will permit Tenant to occupy the
Premises. (vi) Subject to Section 7.7 of the Lease, Tenant shall
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indemnify and hold harmless Landlord from and against any and all
costs, expenses, claims, liabilities and causes of action arising out
of or in connection with work performed by Tenant or Tenant's
Contractors, any subcontractor of Tenant's Contractors or any of their
respective employees, agents or representatives, unless caused by the
negligence of Landlord, its contractors or their respective employees
and agents. (vii)Landlord shall have the right (but not the
obligation) to inspect the Initial Tenant Improvements as they are
being installed and to require Tenant to correct any aspect of such
improvements that have not been installed in substantial compliance
with the Tenant Plans and Specifications or in compliance with
applicable law.
5. Cooperation and Meetings. Landlord and Tenant shall assist and cooperate
fully with each other in completion of the Initial Tenant Improvements and
coordination of the Initial Tenant Improvements with the construction and
completion of the Project, which assistance and cooperation shall include
regular and frequent meetings of Landlord, Tenant and their respective
contractors, architects, engineers and representatives. The parties
recognize the advisability of identifying one or more persons as the point
of responsibility for dealing with the other. Landlord hereby designates Xx
Xxxxxxxxx as the "Landlord's Representative" for such purpose. Tenant
hereby designates Xxxxxxx Xxxxx as the "Tenant's Representative" for such
purpose. Either party, by notice to the other, shall have the right to
change such designations from time to time.
6. Change Orders. Tenant shall have the right, from time to time, to make
changes to the Tenant Plans and Specifications and in the Initial Tenant
Improvements, and Landlord shall cause the same to be made, provided that
any such changes must meet the criteria set forth in Section 2(a) above. In
the event Tenant desires to make any such changes or modifications to the
Tenant Plans and Specifications or Initial Tenant Improvements, Tenant
shall submit a brief description thereof to Landlord in writing. Within
five (5) business days following Landlord's receipt of such proposed
modification, Landlord shall deliver to Tenant Landlord's good faith
estimate of the additional cost and schedule changes required to implement
such proposed change by Tenant, including any potential Tenant Delay.
Tenant shall then have a period of five (5) business days in which to
determine whether to go forward with any such proposed changes. Tenant's
failure to notify the Landlord in writing during such period of its
election to go forward with any such proposed changes shall constitute
Tenant's election not to go forward with such changes. Subject to Sections
2 above and 9 below, Tenant shall pay any net increase, or receive the
benefit of any net decrease, in the cost under such contract as a result of
any such change orders.
7. Tenant Delay.
(a) "Tenant Delay" means (i) delays of Tenant in timely meeting its
obligations pursuant to Exhibits "E" and "F" of this Lease; (ii)
delays caused by changes by Tenant in the Tenant Plans and
Specifications or in the Initial Tenant Improvements made by Tenant
pursuant to Section 6 above; (iii) any delays caused by Tenant's or
Tenant's Contractor's material interference with the construction of
the Project or the Initial Tenant Improvements; and (iv) such
additional time as is required for construction and installation of
High Risk Items identified by Landlord pursuant to Section 2(d) (not
exceeding the estimated delay identified by Landlord pursuant to
Section 2(d)); provided, that (A) Tenant Delay shall not include any
delays of (or caused by) Landlord or the Base Building Contractor; and
(B) Tenant Delay shall not include delays caused by Force Majeure.
(b) "Landlord Delay" means (i) delays of Landlord in timely meeting its
obligations pursuant to Exhibits "E" and "F" of this Lease; (ii)
delays caused by changes in the Project Plans and Specifications not
requested by Tenant; and (iii) delays caused by Landlord's or the Base
Building Contractor's breach of the agreements regarding the
coordination of construction of the Project and the Initial Tenant
Improvements described in Section 4(c)(iv) of this Exhibit "F";
provided, (A) Landlord Delay shall not include any delays of (or
caused by) Tenant or Tenant's Contractor; and (B) Landlord Delay shall
not include delays caused by Force Majeure. For all purposes of this
Lease, Landlord Delay and Tenant Delay shall be netted against each
other in determining whether and how much Landlord Delay or Tenant
Delay exists.
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(c) The term "Force Majeure" means when either party to this Lease shall
be delayed, hindered, or prevented from the performance of any act
required hereunder (other than the payment of money) by reason of acts
of God, strikes, lockouts, labor disputes, inability to produce
materials, inclement weather, failure of power, restrictive
governmental laws or regulations implemented after the date hereof,
riots, insurrections, war, delays by permitting authorities in
obtaining permits for the construction of the Project (in excess of
thirty (30) days following submission thereof), delay or refusal to
perform by the current owner of the Land, or other cause not within
the reasonable control of such party (expressly excepting the
financial inability of such party to perform its obligations
hereunder), then the performance of such acts shall be excused for the
period of such delay and the period for performance of any such act
shall be extended for a period equivalent to the period of such delay;
provided, that any party subjected to any Force Majeure that may
reasonably be expected to delay the performance by such party of an
obligation under this Lease shall, not later than ten (10) days
following the date of which it becomes reasonably apparent that such
event will cause such a delay, give written notice thereof to the
other party hereto.
(d) Notwithstanding anything in this Lease to the contrary, in no event
shall Tenant be entitled to take possession of any portion of the
Premises for the purposes of conducting its business therein prior to
the occurrence of the Completion Date.
8. Completion Date.
(a) The term "Completion Date," shall mean the date upon which each of the
Project and the Initial Tenant Improvements have been substantially
completed in accordance with the Project Plans and Specifications and
the Tenant Plans and Specifications, a temporary certificate of
occupancy has been issued with respect thereto, and Landlord has
received all other governmental consents, licenses and permits
necessary for (i) the occupancy by Tenant of the Premises and the use
of the Garage for the purposes intended hereby, and (ii) the Project
being operational to the extent necessary so that the services
required to be provided hereby to Tenant are capable of being
provided; provided, that in the event Tenant elects to have the
Initial Tenant Improvements constructed by a Tenant Contractor, the
Completion Date for the Initial Tenant Improvements shall be deemed to
occur one hundred and twenty (120) calendar days following delivery of
the Premises to Tenant as described in Section 4(b) of Exhibit "E".
The terms "substantial completion" and "substantially completed", as
used in this Lease, shall mean completion of construction in
accordance with the plans and specifications therefor and in good
order and operating condition except for minor details of
construction, decoration or mechanical adjustments which will not,
interfere in any material respect with Tenant's access to or use or
enjoyment of, the Premises. If Tenant selected the Base Building
Contractor to construct the Initial Tenant Improvements, Landlord
shall cause the Base Building Contractor to complete any such
unfinished minor details of construction, decoration and mechanical
adjustment within thirty (30) days following the Completion Date of
the Premises. Landlord shall also cause any such unfinished minor
details of construction, decoration and mechanical adjustment with
respect to the ground floor lobby and entranceways to be completed
within sixty (60) days following the Completion Date with respect to
the remainder of the Project (subject to Force Majeure). If Tenant
selected the Base Building Contractor to construct the Initial Tenant
Improvements, and if Landlord and Tenant (and the Project Architect
and Tenant's Architect) are unable to agree upon the Completion Date
with respect to the Initial Tenant Improvements, or upon the existence
or completion within the time periods set forth above of any such
punch-list items, for a period of ten (10) business days, either party
may, at its option, submit such items for arbitration in accordance
with the terms of Section 8.7 of the Lease, and the decision reached
as a result thereof shall be binding on Landlord and Tenant. If
Landlord and Tenant are unable to agree upon any such items which
affect the timing of the commencement of Rent payable by Tenant to
Landlord hereunder, Tenant shall, upon resolution of such issues in
accordance with the terms of this Lease, promptly pay any such amounts
determined to be due to Landlord hereunder together with interest
thereon at the prime rate from the date such amounts are determined to
have been due until paid in full.
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(b) The Commencement Date of the Lease, as defined in Section 2.1 of the
Lease, is conditioned in part on the substantial completion of the
Project and the Initial Tenant Improvements (if the Base Building
Contractor is selected by Tenant). The Commencement Date shall not be
postponed by virtue of Tenant Delay. Accordingly, the Commencement
Date shall be accelerated for all purposes by the number of days that
the Completion Date was delayed due to Tenant Delay.
(c) Notwithstanding the foregoing, in the event Tenant selects the Base
Building Contractor to construct the Initial Tenant Improvements and
if for any reason other than Tenant Delay, the Commencement Date has
not occurred with respect to the Premises prior to December 31, 1999,
Tenant may, as its sole and exclusive remedies with respect thereto,
either (i) cancel this Lease by delivering written notice thereof to
Landlord at any time prior to such Commencement Date, or (ii) accept
the Premises upon substantial completion thereof and receive an
abatement of Base Rental for the first two (2) months after the
Commencement Date. Tenant must make such election on or before January
10, 2000. If no such election is made by Tenant prior to such date,
Tenant shall be deemed to have elected option (ii) in the preceding
sentence.
9. Landlord's Expenses. In the event Tenant elects to use a Tenant Contractor
for the construction of the Initial Tenant Improvements, Landlord shall be
entitled to receive a fee for the supervision, construction, management and
administration of the construction of the Initial Tenant Improvements equal
to the lesser of (a) six percent (6%) of the costs thereof, or (b)
$150,000. No other fees or expenses shall be payable by Tenant in
connection with Landlord's construction management of the Initial Tenant
Improvements. The amounts to be paid by Tenant to Landlord pursuant to this
paragraph shall be paid monthly within fifteen (15) days after Landlord's
presentation of an invoice therefor containing the amount of any such
reimbursement.
10. Tenant Allowance.
(a) Landlord hereby agrees to provide to Tenant an allowance (the "Tenant
Allowance") equal to the sum of (i) $30.00 per square foot of Net
Rentable Area in the Initial Premises (the "Initial Allowance") and
(ii) if requested by Tenant in writing not less than ninety (90) days
prior to the commencement of construction of the Initial Tenant
Improvements, up to an additional $5.00 per square foot of Net
Rentable Area in the Initial Premises (the "Additional Allowance"), in
which event Tenant's annual Base Rental shall be increased by the
amount necessary to amortize the Additional Allowance over the Term at
an interest rate of nine percent (9%). The Tenant Allowance shall be
applied by Tenant in Tenant's sole discretion to (i) contractor and
vendor costs associated with the construction of the Initial Tenant
Improvements, (ii) architectural and engineering fees, and (iii) the
physical move of Tenant's offices, including voice/data cabling and
telephone switch ((i) and (ii) or (iii) being hereinafter collectively
referred to as the "Permitted Tenant Allowance Costs"). Such allowance
shall be provided by Landlord in addition to the construction and
installation by Landlord at its sole cost and expense of the Core and
Shell Improvements within the Premises. If the Base Building
Contractor is selected for the construction of the Initial Tenant
Improvements, until the Tenant Allowance is exhausted, Landlord shall
apply such sums as and when due under the contract for the
construction of the Initial Tenant Improvements. If a Tenant
Contractor is selected for the construction of the Initial Tenant
Improvements, Landlord shall disburse the Tenant Allowance from time
to time within thirty (30) days after presentation by Tenant or
Tenant's Architect of invoices or bills for any Permitted Tenant
Allowance Costs, with reasonable evidence supporting the same. Tenant
shall pay the excess, if any, of the cost of the Initial Tenant
Improvements over the Tenant Allowance, as and when due. Any portion
of the Initial Allowance not required to cover any such expenses
incurred prior to the Commencement Date shall be credited against Rent
next coming due.
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(b) In addition to the amounts payable by Landlord under Section 10(a)
above, Landlord shall also pay for any architectural and engineering
costs incurred by Tenant for changes in the Tenant Plans and
Specifications resulting from changes by Landlord to the Initial Plans
and Specifications or the Project Plans and Specifications after
approval thereof by Tenant. Landlord shall pay the same within thirty
(30) days after presentation of bills therefor to Landlord, together
with reasonable evidence supporting the same.
11. Entry into Tenant Area.
(a) Tenant (and its employees, agents, contractors, subcontractors,
architects, space planners, consultants, suppliers and other
representatives) shall be entitled to enter the Project and the
Premises from time to time during the course of construction as may be
reasonably necessary for Tenant's space planning or inspection
purposes, or for the period of time up to one hundred twenty (120)
days prior to the Completion Date, for the installation by Tenant of
its furniture, fixtures or equipment (including telephone,
communications and computer equipment); provided (i) Tenant does not
hinder or interfere in a material manner with construction of the
Project or with the construction of the Initial Tenant Improvements,
and (ii) Tenant takes such reasonable protective precautions or
measures for Landlord and/or Tenant as Landlord may reasonably
request, given the state of construction of the Project and/or the
Premises at the time of such entry.
(b) There shall be no obligation on the part of Tenant to pay any Base
Rental, Basic Costs and/or parking charges by reason of any prior
access pursuant to this Section.
(c) Except as provided below or as part of the bid by the Base Building
Contractor for the construction of the Initial Tenant Improvements,
Landlord shall not charge Tenant, its contractors or their
subcontractors for electricity, heating, ventilation, air
conditioning, exterior hoisting (which hoisting shall not be available
during any move-in period), security and insurance (which security and
insurance are not required to be provided by Landlord to Tenant's
Contractor) and/or taxes during the construction and move-in period,
for the use of the loading dock or elevators (including the freight
elevator), or for the personnel required for the operation thereof,
during the construction of the Initial Tenant Improvements; provided,
that (i) if Tenant requests Landlord to provide loading dock, security
or freight elevator personnel or to provide conditioned air after
Normal Business Hours, Tenant shall reimburse Landlord for Landlord's
reasonable out-of-pocket expenses incurred in connection therewith,
and (ii) if Tenant elects to use Tenant's Contractor for the
construction of the Initial Tenant's Improvements, Tenant or Tenant's
Contractor shall agree to pay ninety percent (90%) of the charges by
the utility company providing electricity to the Project during the
construction period for the Initial Tenant Improvements up to a
maximum amount of $15,000.
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EXHIBIT G
OUTLINE PLANS AND SPECIFICATIONS
EXHIBIT H
RENEWAL OPTION
1. Renewal Option. Provided that no Event of Default is then existing under
this Lease, Tenant shall have the option (the "Renewal Option") to renew
the Lease with respect to all or any portion of the Premises, by delivering
written notice of such election to Landlord not less than twelve (12)
months nor more than fifteen (15) months prior to the expiration of the
initial Term or any previously exercised Renewal Term. If Tenant exercises
any option for less than all of the Premises, such space shall (a) comprise
no less than two (2) full contiguous floors, (b) any additional space
covered by the Renewal Option shall be contiguous space and contiguous to
such two (2) full floors, and (c) any partial floor included by Tenant
shall be reasonably configured so as to leave Landlord with space in a
reasonably leasable configuration based on customary space planning
standards and applicable Legal Requirements. Tenant shall have the right to
exercise any Renewal Option in any combination of five (5) year periods of
up to a total of twenty (20) years plus a one time option to extend for a
one (1) year period (such elected period being the "Renewal Term").
Tenant's notice to Landlord exercising a Renewal Option shall specify the
space to be covered thereby (if less than all of the Premises) and the
length of Tenant's proposed Renewal Term. Failure of Tenant to exercise its
Renewal Option in the time periods set forth herein shall render all
remaining Renewal Options void and of no further force and effect. Within
fifteen (15) days of Landlord's receipt of the notice of the exercise of
the Renewal Option, Landlord shall provide Tenant with written notice of
its estimation of the prevailing MRR for such Renewal Space. Tenant shall
then have fifteen (15) days to notify Landlord in writing that it accepts
or rejects Landlord's determination of MRR and to provide Landlord with
Tenant's estimation of MRR. If the parties cannot agree on a determination
of MRR within fifteen (15) days thereafter, Tenant may (i) withdraw its
election to exercise the Renewal Option or (ii) elect that the MRR be
determined in accordance with the appraisal provisions contained herein.
Once such MRR is determined, within fifteen (15) days thereafter, Tenant
may withdraw its election to exercise the Renewal Option. Any such renewal
of this Lease shall be upon the same terms and conditions of this Lease,
except (i) the Base Rental during the Renewal Term shall be based on
ninety-five percent (95%) of the MRR at the time of determination of the
MRR; (ii) Tenant shall pay the standard rate then being charged for the
Parking Permits to the Garage with respect to all Parking Permits then
issued to Tenant; (iii) Tenant shall have no option to renew this Lease
beyond the expiration of the twenty (20) year renewal period; (iv) the
leasehold improvements will be provided to Tenant in their then-existing
condition (on an "as is" basis) at the time the Renewal Term commences, and
(v) items such as the Landlord's and Tenant's insurance and other
non-rental terms shall be adjusted to amounts and terms then standard for
comparable leases with comparable tenants in Houston, Texas.
2. Market Rental Rate. The term Market Rental Rate ("MRR") shall mean the
annual amount of rental that a tenant would pay and a willing landlord
would accept in arm's length, bona fide negotiations for a lease to be
executed at the time the Renewal Option is exercised, based upon other
lease transactions then being made in the Building and other Comparable
Buildings, taking into consideration all relevant terms and conditions of
such comparable leasing transactions, including, without limitation: (i)
location, quality and age of the building; (ii) use and size of the space
in question; (iii) location and or floor level within the building; (iv)
extent of leasehold improvements and allowances therefor provided; (v) the
amount of any abatement of rental or other charges; (vi) parking charges or
inclusion of same in rental; (vii) lease takeovers/assumptions; (viii)
relocation allowances; (ix) refurbishment and repainting allowances; (x)
distinction between "gross" and "net" leases; (xi) extent of services
provided or to be provided and contributions thereto; (xii) base year or
dollar amount for escalation purposes (both operating costs and ad valorem
taxes); (xiii) credit standing and financial stature of the tenant; and
(xiv) commencement and length of term.
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3. Appraisal. Should Tenant and Landlord be unable to agree upon the fair MRR
applicable in the case of renewal or expansion, Tenant and Landlord shall
each within five (5) days of an election by either party to proceed with
such appraisal, appoint an appraiser who is knowledgeable in commercial
property values in the area in which the Premises are located, and the two
appraisers shall, within ten (10) days after their selection, try to agree
upon the MRR for the Premises. If the two appraisers are unable to agree
upon the MRR, they shall within ten (10) days of their appointment appoint
a third appraiser with the same qualifications and the three appraisers
shall, within ten (10) days thereafter, prepare appraisals of the Premises.
The average of the three appraisals shall be used as the MRR of the
Premises; provided, that if any appraiser's estimate is either (a) less
than ninety percent (90%) of the average figure, or (b) more than one
hundred ten percent (110%) of such average, the MRR for the Premises will
be the average of the remaining figures which are between 90 - 110% of the
average figure even if only one estimate remains. If all figures fall
outside of the range of 90-110%, the middle figure of the three appraisals
shall be the MRR. Tenant and Landlord shall each bear the cost of its
appraiser and shall share equally the cost of the third, if any.
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EXHIBIT I
EXPANSION OPTION
1. Hold Option. Provided that no Event of Default is then existing under the
Lease, Tenant shall have the right, continuing through December 31, 1998,
at Tenant's option (the "Hold Option"), to include under this Lease any
space located on the 1st Floor of the Building other than the up to 1,500
square feet of space to be used by Landlord for the management of the
Building. In the event Tenant desires to exercise all or any part of its
Hold Option, Tenant shall deliver notice to Landlord describing the amount
and preferred location of such available space desired to be leased by
Tenant on or before December 31, 1998; however, the exact location of such
space must be agreeable to both Landlord and Tenant, and shall depend, in
part, upon the amount of space desired to be leased by Tenant. Landlord and
Tenant shall then enter into an amendment to this Lease to cover such space
on the same terms and conditions as applicable to the Initial Premises (and
such space shall thereafter be considered part of the Initial Premises),
and Landlord shall, at its sole cost and expense, provide all necessary
multi-tenant corridors to bring the 1st Floor of the Building into
compliance with all Legal Requirements.
2. Expansion Option. Provided that no Event of Defaults is then existing,
Tenant shall have the option (the "Expansion Option"), effective as of the
fifth (5th) anniversary of the Commencement Date, to lease all (but not
less than all) of the second level of the Building containing approximately
25,000 square feet of Net Rentable Area (the "Expansion Space") to be
exercised with no more than twelve (12) months nor less than nine (9)
months prior written notice to Landlord. The portion of the Expansion Space
to be added to the Premises (the "Expansion Premises") shall be subject to
the same terms, covenants and conditions under the Lease, except that (a)
the Base Rental Rate for the Expansion Premises shall be the prevailing MRR
(as defined in Exhibit "H" above) as of the date such Expansion Space shall
be added to the Premises, (b) the Tenant Allowance for the Expansion
Premises shall be equal to $15.00 per square foot of Net Rentable Area in
the Expansion Premises (and the MRR shall be increased to allow for such
improvement allowance), (c) there shall be no refurbishment allowance
applicable to such Expansion Premises and (d) the term of such lease shall
expire as of the expiration of the Term. Landlord may, on a date
established by at least sixty (60) days' notice to Tenant, deliver the
Expansion Premises to Tenant up to three (3) months prior to the end of the
fifth (5th) anniversary of the Commencement Date, or up to six (6) months
after the end of the fifth (5th) anniversary of the Commencement Date.
Within thirty (30) days of receipt of Tenant's notice of the exercise of
the Expansion Option, Landlord shall provide Tenant with written notice of
its estimation of the MRR for such Expansion Premises. Tenant shall then
have fifteen (15) days to notify Landlord in writing that it accepts or
rejects Landlord's determination of MRR and to provide Landlord with
Tenant's estimation of MRR. If the parties cannot agree on a determination
of MRR within fifteen (15) days thereafter Tenant may either (i) withdraw
its Expansion Option or (ii) elect that such MRR shall be determined in
accordance with the appraisal provisions set forth in Paragraph 3 of
Exhibit "H", which MRR shall then be binding on the parties. Tenant shall
not be required to pay (and the MRR shall so reflect) any amount for
parking for such Expansion Premises, which shall be provided in the same
ratios as provided with respect to the Initial Premises. Tenant's
obligation to commence paying Rent on such space shall commence (A) in the
case of space in the Building not previously built out with tenant
improvements, on the 90th day, and (B) in the case of previously built out
space, on the 30th day, after the availability of such space for the
construction of the tenant improvements therein.
Tenant's rights under this Exhibit shall terminate if (i) this Lease or Tenant's
right of possession of the Premises is terminated, (ii) Tenant assigns any of
its interest in this Lease other than to an Affiliate or sublets more than
50,000 square feet of Net Rentable Area, (iii) to the extent Tenant has
previously leased any Expansion Space pursuant to its other options contained
herein or otherwise, and (iv) Tenant fails to timely exercise its option under
this Exhibit, time being of the essence with respect to Tenant's exercise
thereof.
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EXHIBIT J
FIRST REFUSAL RIGHT
Provided that no Event of Default then exists under this Lease, Tenant
shall have the right (the "Preference Right"), to lease all or any portion of
the space in the Building ("Preference Space") that becomes available to lease
during the term of the Lease or any renewals thereof. When Landlord learns that
any Preference Space will become available for lease, but no more than nine (9)
months prior to the date Landlord expects such Preference Space to become
available (other than in connection with the initial leasing of such space, with
respect to which Landlord shall not be limited by such nine (9) month advance
notice period), Landlord shall deliver Tenant written notice (the "Preference
Notice"), together with the economic terms (Base Rental Rate, term, allowances,
etc.) pursuant to which Landlord desires to lease such space, and the estimated
date of availability. Within fifteen (15) days thereafter, Tenant shall give
Landlord written notice of its election to exercise its Preferential Right to
lease the Preference Space. If Tenant does not exercise its First Refusal Right
within such fifteen (15) day period, then Landlord may offer such space to third
parties and Tenant's Preference Right with respect to such space shall expire.
Such Preference Space shall be leased at the same terms and conditions of the
Lease except that the Base Rental Rate and allowance for such Preference Space
shall be the MRR and shall terminate concurrently with the Premises or at the
end of such shorter term as Tenant shall designate in its election to lease such
space (subject to the minimum requirements set forth below). Landlord shall
provide Tenant no less than sixty (60) days' prior written notice of the date on
which Landlord shall render possession to Tenant. The minimum term of the
Preferential Right space shall be for a period of five (5) years, unless such
space is leased during the last five (5) years of the Lease Term, in which case,
the term shall be for the balance of the remaining term; provided, that if the
term of such lease is less than the period offered by Landlord, the MRR shall be
adjusted to account for such shorter period. Notwithstanding the foregoing, no
Preferential Right space shall be leased during the last thirty (30) months of
the Term unless this Lease is simultaneous renewed pursuant to Exhibit "H"
above. If the term of Preference Space terminates concurrently with the
Premises, all renewal options applicable to the Premises shall be applicable to
the Preference Space as well. If Tenant elects (or is deemed to have elected)
not to lease the Preference Space, Landlord may not lease such space to another
tenant on terms more favorable to the tenant than those offered to Tenant
without first offering such terms to Tenant on the basis above, and if such
space has not been leased within six (6) months after it has become available,
Landlord shall again notify Tenant of its availability and repeat the process
above as if it were new Preference Space.
Tenant's rights under this Exhibit shall terminate if (i) this Lease or
Tenant's right of possession of the Premises is terminated, (ii) Tenant assigns
any of its interest in this Lease other than to an Affiliate or sublets more
than 50,000 square feet of Net Rentable Area, and (iii) Tenant fails to timely
exercise its option under this Exhibit, time being of the essence with respect
to Tenant's exercise thereof.
EXHIBIT K
CLEANING SPECIFICATIONS
EXHIBIT L
MEMORANDUM OF LEASE
EXHIBIT M
SECURITY SERVICES
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