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EXHIBIT 10.3
ONE COMMERCE GREEN
OFFICE LEASE AGREEMENT
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THIS LEASE AGREEMENT ("Lease"), made and entered into on this the 4th
day of January, 1996, between BROOKDALE INVESTORS, L.P., a Delaware limited
partnership ("Landlord"), and FORTUNE PETROLEUM CORPORATION, a Delaware
corporation ("Tenant").
W I T N E S S E T H :
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1. Definitions:
(a) The "Building" shall mean the office building located
upon the real property ("Property") described in Exhibit "A" attached hereto
and incorporated herein. The address of the "Building" is 000 X. Xxxxxx Xxxx,
Xxxxxxx, Xxxxx 00000.
(b) "Premises" shall mean the suite of offices, located on
the seventh (7th) floor, known as Suite 720, located within the Building and
outlined on the floor plans attached to this lease as Exhibit "B", and
incorporated herein. The Premises are stipulated for all purposes to contain
approximately 5,427 square feet of "Rentable Area" (as defined below), being
approximately 4,774 square feet of "Usable Area" (as defined below).
(c) "Base Rental" shall mean the sum of $15.45 per square
foot of Rentable Area within the Premises per annum as adjusted pursuant to
Exhibit "C", attached hereto and incorporated herein. The Base Rental due for
the fifth (5th) month during the "Lease Term" (hereinafter defined) has been
deposited with Landlord by Tenant contemporaneously with the execution hereof.
"Rent" shall mean, collectively, the Base Rental and other sums of money
becoming due and payable to Landlord hereunder. Notwithstanding anything
seemingly to the contrary herein, no Base Rental shall be due and owing for the
first (1st), second (2nd), third (3rd) and fourth (4th) months of the Lease
Term.
(d) "Commencement Date" shall mean the earlier of the date that
Tenant actually occupies the Premises or February 1, 1996 (except as the same
may be delayed pursuant to Paragraph 30 hereof).
(e) "Lease Term" shall mean a term commencing on the
Commencement Date and continuing for sixty-four (64) full calendar months (plus
any partial calendar month in which the Commencement Date falls).
(f) "Security Deposit" shall mean the sum of $21,312.00.
Provided that Tenant is then not in default under this Lease, at the end of the
sixteenth (16th) month of the Lease Term, Landlord shall refund to Tenant
$7,104.00. Furthermore, if Tenant is then not in default under this Lease, at
the end of the twenty-eighth (28th) month of the Lease Term, Landlord shall
refund to Tenant an additional $7,104.00.
(g) "Expense Stop" shall mean the Basic Costs (as defined
in this Lease) per square foot of Rentable Area in the Building for the
calendar year 1996.
(h) "Allowance" shall mean an amount equal to the product
of $16.00 times the number of square feet of Rentable Area included in the
Premises, unless (i) a Turn Key Work Letter is attached hereto as Exhibit "E",
in which event the Allowance shall equal the Turn Key Cost, or (ii) no Work
Letter is attached to this Lease, in which event no Allowance exists and Tenant
is taking the Premises "as is" in its current condition and without benefit of
further improvements.
(i) "Shell Improvements" shall mean (i) lay-in acoustical
ceiling grid with acoustical ceiling tile inventory stored on the floor on
which the Premises are located; (ii) central air conditioning and heating ducts
and diffusers in a placement deemed typical by Landlord and (iii) lay-in
fluorescent light fixtures in a placement deemed typical by Landlord.
(j) "Common Areas" shall mean those areas devoted to
corridors, elevator foyers, restrooms, mechanical rooms, elevator mechanical
rooms, janitorial closets, electrical and telephone closets, vending areas, and
lobby areas (whether at ground level or otherwise), and other similar facilities
provided for the common use or benefit of tenants generally and/or the public.
(k) "Service Areas" shall mean those areas within the
outside walls used for building stairs, elevator shafts, flues, vents, stacks,
pipe shafts and other vertical penetrations (but shall not include any such
areas for the exclusive use of a particular tenant).
(l) "Rentable Area" of the Premises shall mean (1) the
"Usable Area" within the Premises (i.e., the gross area enclosed by the surface
of the exterior glass walls, the mid-point of any walls separating portions of
the Premises from those of adjacent tenants, the slab penetration line of all
walls separating the Premises from Service Areas and the corridor side of walls
separating the Premises from Common Areas) plus (2) a pro rata part of the
Common Areas within the Building, such proration based upon the ratio of the
Usable Area within the Premises to the total Usable Area within the Building
existing as of the date of this Lease, including the area encompassed by any
columns or other structural elements which provide support to the Premises
and/or the Building. Rentable Area shall not include any Service Areas. The
Rentable Area in the Building existing as of the date of this Lease is 339,592
square feet. The estimate of Rentable Area within the Premises and in the
Building set forth above may be revised at Landlord's election if Landlord's
architect determines such estimate to be inaccurate in any material degree
after examination of the final "as built" drawings of the Premises and the
Building, and the Base Rental shall be adjusted accordingly, based upon the
rate per square foot of Rentable Area specified in Paragraph 10 hereof. For the
purposes of this Lease, the factor used to convert usable to rentable shall be
1.1368 for the seventh (7th) floor.
(m) "Normal Business Hours" for the Building shall mean
7 a.m. to 6 p.m. Mondays through Fridays, and 8 a.m. to 1 p.m. on Saturdays,
exclusive of normal business holidays.
(n) "Initial Improvements", when used herein, shall mean
those improvements or remodeling to the Premises, if any, which Landlord shall
agree to provide according to the Work Letter attached hereto as Exhibit "E"
and incorporated herein for all purposes. If no Work Letter is attached hereto,
no Initial Improvements are being provided; and Tenant is taking the Premises
"as is".
(o) "Building Standard" shall mean the type, brand and/or
quality of materials Landlord designates from time to time to be the minimum
quality to be used in the Building or the exclusive type, grade or quality of
material to be used in the Building.
OFFICE LEASE AGREEMENT - Page 1
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(p) "Basic Costs" shall mean all direct and indirect costs
and expenses of operating, maintaining, repairing, managing, and owning the
Building and the Property, as well as the "Exterior Common Area" (as defined in
Exhibit "C" hereto), which are incurred by Landlord in each calendar year.
Basic Costs are more fully described in Exhibit "C" hereto.
(q) "Ready for Occupancy" shall mean that either (i) a
Certificate of Occupancy (or its equivalent) has been issued for the Premises
if Initial Improvements are to be provided, or (ii) if no Initial Improvements
are to be provided the Premises are unoccupied.
2. Lease Grant. Subject to and upon the terms herein set forth,
Landlord leases to Tenant and Tenant leases from Landlord the Premises.
3. Lease Term.
(a) This Lease shall continue in force during a period
beginning on the Commencement Date and continuing until the expiration of the
Lease Term, unless this Lease is sooner terminated or extended to a later date
under any other term or provision hereof.
(b) If the Premises are not available and Ready for
Occupancy by the date specified in Paragraph 1(d) hereof due to omission, delay
or default by Tenant or anyone acting under or for Tenant, Landlord shall have
no liability; and the obligations of Tenant under this Lease (including,
without limitation, the obligation to pay Rent) shall nonetheless commence as
of the Commencement Date.
(c) If, however, this Lease is executed before the Premises
become vacant or otherwise available and Ready for Occupancy and/or any present
tenant or occupant of the Premises holds over and/or Landlord cannot deliver
possession of the Premises prior to the date specified in Paragraph 1(d) hereof
due to default on the part of Landlord, then, as Tenant's sole remedy for the
delay in Tenant's occupancy of the Premises, the Commencement Date shall be
delayed and the Rent herein provided shall not commence until the earlier to
occur of the date of actual occupancy by Tenant or the date on which the
Premises are available and Ready for Occupancy.
4. Use. The Premises shall be used for office purposes and for
no other purpose. Tenant agrees not to use or permit the use of the Premises
for any purpose which is illegal, dangerous to life, limb or property or which,
in Landlord's opinion, creates a nuisance or which would increase the cost of
insurance coverage with respect to the Building.
5. Base Rental.
(a) Tenant agrees to pay the Rent to Landlord during the
Lease Term, without any setoff or deduction whatsoever, for the nonpayment of
which Landlord shall be entitled to exercise all such rights and remedies as
are herein provided in the case of the non-payment of Base Rental. Except as
otherwise provided herein, the annual Base Rental for each calendar year or
portion thereof during the Lease Term, together with any estimated adjustment
thereto pursuant to Exhibit "C" hereof then in effect, shall be due and payable
in advance in twelve (12) equal installments on the first day of each calendar
month during the Lease Term; and Tenant hereby agrees to pay such Base Rental
and any adjustments thereto to Landlord at Landlord's address provided herein
(or such other address as may be designated by Landlord in writing from time to
time) monthly, in advance, and without demand. If the Lease Term commences on a
day other than the first day of a month or terminates on a day other than the
last day of a month, then (i) the installments of Base Rental for such month or
months shall be prorated, based on the number of days in such month, and (ii)
Tenant's share of Basic Costs shall be prorated as specified in Exhibit "C"
hereto.
(b) All installments of Rent not paid within ten (10) days
of the date when due and payable shall bear interest at the maximum lawful rate
until paid.
(c) The Base Rental payable hereunder shall be adjusted
from time to time in accordance with the provisions of Exhibit "C" attached
hereto and incorporated herein for all purposes.
6. Services to be Furnished by Landlord. Landlord agrees to
furnish Tenant the following:
(a) Facilities for hot and cold water at those points of
supply provided for general use of other tenants in the Building, central heat
and air conditioning in season, at such temperatures and in such amounts as are
considered by Landlord to be standard or as required by governmental authority;
provided, however, heating and air conditioning service at times other than for
Normal Business Hours for the Building shall be furnished only upon the written
request of Tenant delivered to Landlord prior to 3:00 p.m. at least one (1)
business days in advance of the date for which such usage is requested. Tenant
shall bear the entire cost of additional service, as such costs are determined
by Landlord from time to time, and shall pay the same as additional Rent upon
presentation of a statement therefor by Landlord.
(b) Routine maintenance and electric lighting service for
all Common Areas and Service Areas of the Building in the manner and to the
extent deemed by Landlord to be standard.
(c) Janitor service, five (5) days per week, exclusive of
normal business holidays; provided, however, if Tenant's floor covering or
other improvements require special treatment, Tenant shall pay the additional
cleaning cost attributable thereto as additional Rent upon presentation of a
statement therefor by Landlord.
(d) Subject to the provisions of Paragraph 12, facilities
to provide all electrical current required by Tenant in its use and occupancy
of the Premises.
(e) All Building Standard fluorescent bulb replacement in
the Premises necessary to maintain the lighting provided as a part of the Shell
Improvements and fluorescent and incandescent bulb replacement in the Common
Areas and Service Areas.
(f) Landlord shall provide limited access to the Building
before and after Normal Business Hours in the form of special limited access
entry cards ("Entry Cards") for Tenant and its employees. An Entry Card shall
not automatically qualify Tenant or any of its employees for an access card to
the "Parking Garage" as defined in and pursuant to the terms of Exhibit "F".
Landlord agrees to provide Tenant with up to, but not in excess of, sixteen
(16) Entry Cards for a refundable deposit of $15.00 per card. However, Tenant
shall pay Landlord for any additional or replacement cards, in such amount as
Landlord shall, from time to time, determine. The current cost required for a
replacement card is $15.00 per card. Landlord shall be entitled to cancel (by
computer entry) any lost or stolen cards of which it becomes aware. Tenant
shall promptly notify Landlord of any lost or stolen cards. Landlord shall have
no liability to Tenant, its employees, agents,
OFFICE LEASE AGREEMENT - Page 2
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invitees, or licensees for losses due to theft or burglary, or for damages
committed by unauthorized persons on the Premises; and neither shall Landlord
be required to insure against any such losses. Tenant shall cooperate fully in
Landlord's efforts to maintain security in the Building and shall follow all
regulations promulgated by Landlord with respect thereto. Tenant further agrees
to surrender all Entry Cards in its possession upon the expiration or earlier
termination of this Lease.
No interruption or malfunction of any utility service shall constitute
an eviction or disturbance of Tenant's use or possession of the Premises or a
breach by Landlord of any of Landlord's obligations hereunder or render
Landlord liable or responsible to Tenant for any loss or damage which Tenant
may sustain or incur if either the quantity or character of any utility service
is changed or is no longer available to or is no longer suitable for Tenant's
requirements or entitle Tenant to be relieved from any of Tenant's obligations
hereunder, including, without limitation, the obligation to pay Rent, or grant
Tenant any right to set-off, abatement, or recoupment. At any time when
Landlord is making such facilities for such utility services available to the
Premises, Landlord may, at Landlord's option, upon not less than thirty (30)
days prior written notice to Tenant, discontinue the availability of any such
utility service. If Landlord gives any such notice of discontinuance, Landlord
shall make all the necessary arrangements with the public utility service
supplying the utility to the area in which the Building is located with respect
to obtaining such utility service to the Premises; but Tenant will contract
directly with such public utility service for the supplying of such utility
services to the Premises. Failure to any extent to make available, or any
slowdown, stoppage, or interruption of, the specified utility services resulting
from any cause, including, without limitation, Landlord's compliance with any
voluntary or similar governmental or business guidelines now or hereafter
published or any requirements now or hereafter established by any governmental
agency, board, or bureau having jurisdiction over the operation of the Building
shall not render Landlord liable in any respect for damages to either persons,
property, or business, nor be construed as an eviction of Tenant or work an
abatement of Rent, nor relieve Tenant of Tenant's obligations for fulfillment
of any covenant or agreement hereof. Should any equipment or machinery
furnished by Landlord breakdown or for any cause cease to function properly,
Landlord shall use reasonable diligence to repair some promptly, but Tenant
shall have no claim for abatement of Rent or damages on account of any
interruption of service occasioned thereby or resulting therefrom.
Notwithstanding the foregoing, in the event that Tenant shall give notice to
Landlord stating correctly that any cessation of a service described in
Subparagraphs 6(a) or 6(d) above (not caused by Tenant, its agents, customers,
servants, contractors, employees, or invitees) shall have rendered all or any
portion of the Premises untenantable, and in the event that such cessation
continues for a period of five (5) or more consecutive days after Landlord
receives such notice from Tenant, and in the further event that Tenant ceases
occupying such portion of the Premises solely on account of such cessation,
then rent shall xxxxx as to such portion of the Premises from and after the
later to occur of (i) the sixth (6th) day following the day Tenant gave such
notice, or (ii) the date Tenant so ceases occupancy, until such service is
restored or Tenant reoccupies such portion of the Premises (whichever date is
earlier).
7. Improvements to be Made by Landlord. Except as otherwise
provided in the Work Letter attached hereto as Exhibit "E", all installations
and improvements now or hereafter placed on the Premises, other than Shell
Improvements, shall be for Tenant's account and at Tenant's cost (and Tenant
shall pay ad valorem taxes and increased insurance thereon or attributable
thereto), which cost shall be payable by Tenant to Landlord upon demand as
additional Rent.
8. Maintenance and Repair of Premises by Landlord. Except as
otherwise expressly provided herein, Landlord shall not be required to make any
repairs to the Premises other than repairs to exterior and load-bearing xxxxx,
floors (but not floor coverings) and the roof of the Building, which may be
required from time to time but only after such required repairs have been
requested by Tenant in writing. In no event shall Landlord be responsible for
the maintenance or repair of improvements which are not composed of Building
Standard materials.
9. Graphics. Landlord shall provide and install, at
Landlord's cost, identification graphics on the exterior of the Premises and a
directory strip on the Building directory board. Any other signage related to
Tenant's occupancy shall require Landlord's prior written consent and shall be
installed at Tenant's cost. All such letters and numerals shall be in the
standard graphics for the Building and no others shall be used or permitted on
the Premises without Landlord's prior written consent.
10. Care of the Premises by Tenant. Tenant shall, at its own cost
and expense, reasonably maintain and repair the Premises, and shall not commit
or allow any waste to be committed on any portion of the Premises, and at the
termination of this Lease to deliver up the Premises to Landlord in as good
condition as at the date of the commencement of the term of this Lease,
ordinary wear and tear excepted.
11. Repairs and Alterations by Tenant. Landlord shall have the
right, at its option, at Tenant's own cost and expense, to repair or replace
any damage done to the Building, or any part thereof, caused by Tenant or
Tenant's agents, employees, invitees, or visitors, and Tenant shall pay the
cost thereof to the Landlord on demand as additional Rent. Tenant agrees with
Landlord not to make or allow to be made any alterations to the Premises,
install any vending machines on the Premises, or place signs on the Premises
which are visible from outside the Premises, without first obtaining the prior
written consent of Landlord in each such instance, which consent may be given
or withheld on such conditions as Landlord may elect. Any and all alterations
to the Premises shall become the property of Landlord upon termination of this
Lease (except for movable equipment or furniture owned by Tenant). Landlord
may, nonetheless, require Tenant to remove any and all fixtures, equipment and
other improvements installed on the Premises or the Building ("Additional
Improvements") beyond the Shell Improvements and Initial Improvements. Tenant
shall be responsible for repairing any damage to the Premises or the Building
resulting from the removal of any Additional Improvements or Tenant's personal
property and for restoring the Premises or the Building, as applicable, to
Building Standard condition. In the event that Landlord so elects, and Tenant
fails to remove the Additional Improvements, Landlord may remove the Additional
Improvements at Tenant's cost, and Tenant shall pay Landlord on demand all
costs incurred in removing the Additional Improvements.
12. Use of Electrical Services by Tenant. Tenant's use of
electrical services furnished by Landlord shall be subject to the following:
(a) Landlord will provide the necessary facilities to
supply (i) two (2) xxxxx per square foot of Usable Area within the Premises, at
277 volts, for Tenant's fluorescent lighting and (ii) three (3) xxxxx per
square foot of Usable Area within the Premises, at 120 volts, for Tenant's
receptacle/equipment loads (including Tenant's dedicated circuits).
Collectively, Tenant's lighting and receptable/equipment shall not have an
electrical design load greater than an average of five (5) xxxxx per square
foot of Usable Area within the Premises ("Standard Building Capacity"). The
electrical costs component of Basic Costs is calculated on the basis of the
Standard Building Capacity.
(b) The electrical facilities in the Building available for
Tenant's use are (i) 277/480 volts, 3 phase, for large equipment loads and
fluorescent lighting; and (ii) 120/208 volts, 3 phase, for small
OFFICE LEASE AGREEMENT - Page 3
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equipment loans and incandescent lighting. Tenant shall notify Landlord, in
writing, of any equipment that has a rated electrical load greater than 500
xxxxx and/or that requires a service voltage other than 120 volts, and
Landlord's written approval shall be required with respect to the installation
of any such high electrical consumption equipment in the Premises.
Notwithstanding the foregoing, Tenant shall be permitted to install a copier
requiring a service voltage of 220 volts.
c. Tenant shall pay for all costs of meters, submeters,
wiring, risers, transformers, electrical panels, air conditioning and other
items required by Landlord, in Landlord's discretion, to accommodate Tenant's
design loads and capacities that exceed Standard Building Capacity, including,
without limitation, the installation and maintenance thereof. Notwithstanding
the foregoing, Landlord may refuse to install and withhold consent for Tenant's
installation of any wiring, risers, transformers, electrical panels, or air
conditioning if, in Landlord's sole judgment, the same are not necessary or
would cause damage or injury to the Building or the Premises or cause or create
a dangerous or hazardous condition or entail excessive or unreasonable
alterations or repairs to the Building or the Premises, or would interfere with
or create or constitute a disturbance to other tenants or occupants of the
Building. In no event shall Landlord incur any liability for Landlord's refusal
to install, or the withholding of consent for Tenant's installation of, any
such electrical facility or equipment.
(d) Tenant shall pay to Landlord, upon demand, the cost of
the consumption of electrical service in excess of the Standard Building
Capacity at rates determined by Landlord which shall be in accordance with any
applicable laws.
(e) Landlord may, at its option, upon not less than thirty
(30) days' prior written notice to Tenant, discontinue the availability of such
extraordinary electrical service. If Landlord gives any such notice, Tenant
will contract directly with the applicable public utility for the supplying of
such electrical service to the Premises.
13. Laws and Regulations. Tenant agrees to comply with
all applicable laws, ordinances, rules and regulations of any governmental
entity or agency having jurisdiction with respect to the Premises.
14. Building Rules: No Smoking. Tenant will comply with the
rules and regulations of the Building as adopted and altered by Landlord from
time to time and will cause all of its agents, employees, invitees and visitors
to do so. All changes to such rules will be sent by Landlord to Tenant in
writing. The current rules and regulations for the Building are attached hereto
as Exhibit "D". In addition to the foregoing and without limitation thereof,
Tenant expressly acknowledges that the Premises, the Common Areas and all other
portions of the Building shall be and remain during the entire Term "smoke
free" and, accordingly, Tenant shall not permit any of its employees, invitees
or others entering into the Premises, to smoke cigars, cigarettes, tobacco or
any other tobacco product in the Premises, Common Areas and other portions of
the Building, all of which are expressly prohibited by this Lease. Landlord
shall not have any liability to Tenant for any failure of any other tenants of
the Building to comply with such rules and regulations. In the event of any
conflict between the rules of the Building and the express terms of this Lease,
the terms of the Lease shall control.
15. Entry by Landlord. Tenant agrees to permit Landlord or its
employees, agents or representatives to enter into and upon any part of the
Premises at all reasonable hours (and in emergencies at all times) to inspect
the same, or to show the Premises to prospective purchasers, mortgagees,
tenants or insurers, to clean or make repairs, alterations or additions
thereto, and Tenant shall not be entitled to any abatement or reduction of Rent
by reason thereof.
16. Assignment and Subletting.
(a) Tenant shall not (i) assign this Lease or any interest
therein, or (ii) sublease the Premises or any portion thereof without the prior
written consent of Landlord, which consent shall not be unreasonably withheld.
Any attempted assignment or sublease by Tenant in violation of the terms and
covenants of this paragraph shall be void. Notwithstanding the foregoing,
Tenant may, upon notice to Landlord but without the necessity of obtaining
Landlord's prior consent thereto, assign, this Lease or sublet the Premises to
an "Affiliate." As used herein, the term "Affiliate" shall mean any entity
under common control of a person or entity which controls Fortune Petroleum
Corporation or which is controlled by Fortune Petroleum Corporation. If Tenant
is not a natural person, the acquisition of a controlling interest in Tenant
shall be deemed to be an assignment for purposes hereof. As used herein, the
phrase "controlling interest" shall mean ownership of in excess of forty-nine
percent (49%) of the voting interest in Tenant. With respect to a request for
Landlord's consent to any assignment or sublease the following reasons for
denial shall, without limitation, be deemed to be reasonable:
i) the proposed assignee or subtenant is a tenant
in the Building; or
ii) any proposed assignment appears to be an
assignment of less than the entire Lease or less than Tenant's entire
interest herein; or
iii) any proposed assignee's or subtenant's use of
the premises in Landlord's opinion might violate the Use clause of the
Lease; or
iv) the proposed assignee or subtenant is either a
governmental agency, a school or similar operation or a medical-related
practice; or
v) in Landlord's judgment, the proposed assignee or
subtenant would diminish the value or reputation of the Building; or
vi) the occupancy of the Premises by the proposed
subtenant or assignee would require substantial alterations to the
Premises or the applicable portion thereof; or
vii) the proposed subtenant's or assignee's use of
the Premises would conflict with any other Building tenants' exclusive
rights; or
viii) the occupancy of the Premises by the proposed
subtenant or assignee would cause Landlord's fire and extended coverage
insurance to be canceled or the rate therefor to be increased; or
ix) an event of default at such time exists; or
x) the proposed assignment or sublease is for any
period other than any period during the initial Term hereof.
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(b) If Tenant requests Landlord's consent to an assignment
of the Lease or subletting of all or part of the Premises, Landlord shall
either (i) approve or deny such sublease or assignment within fifteen (15) days
after receipt of Tenant's request (but no approval of an assignment or sublease
shall relieve Tenant of any liability hereunder), or (ii) negotiate directly
with the proposed subtenant or assignee and (in the event Landlord is able to
reach agreement with such proposed subtenant or assignee) upon execution of a
lease with such proposed subtenant or assignee, terminate this Lease (in part
or in whole, as appropriate) upon thirty (30) days' notice.
(c) All cash or other proceeds of any assignment, sale or
sublease of Tenant's interest in the Lease and/or the Premises, whether
consented to by Landlord or not, shall be paid to Landlord notwithstanding the
fact that such proceeds exceed the Rental called for hereunder, unless
Landlord agrees to the contrary in writing, and Tenant hereby assigns all
rights it might have or ever acquire in any such proceeds to Landlord. This
covenant and assignment shall benefit Landlord and its successors in ownership
of the Building and shall bind Tenant and Tenant's heirs, executors,
administrators, personal representatives, successors and assigns. Any
assignee, sublessee or purchaser of Tenant's interest in this Lease (all such
assignees, sublessees or purchasers being hereinafter referred to as
"Successors"), by occupying the Premises and/or assuming Tenant's obligations
hereunder, shall be deemed to have assumed liability to Landlord for all
amounts paid to persons other than Landlord by such Successor in consideration
of any such sale, assignment or subletting, in violation of the provision
hereof. No assignment or subletting, whether or not with Landlord's consent,
shall ever relieve Tenant of any liability hereunder.
17. Mechanic's Liens. Tenant will not permit any mechanic's
liens or other liens to be placed upon the Premises or the Building and
nothing in this Lease shall be deemed or construed in any way as constituting
the consent or request of Landlord, express or implied, by inference or
otherwise, to any person for the performance of any labor or the furnishing of
any materials to the Premises, or any part thereof, nor as giving Tenant any
right, power, or authority to contract for or permit the rendering of any
services or the furnishing of any materials that would give rise to any
mechanic's or other liens against the Premises. In the event any such lien is
attached to the Premises, then, in addition to any other right or remedy of
Landlord, Landlord may, but shall not be obligated to, discharge the same. Any
amount paid by Landlord for any of the aforesaid purposes shall be paid by
Tenant to Landlord on demand as additional Rent.
18. Property Insurance. In the event that Landlord has placed
or hereafter places a mortgage, deed of trust or other lien on the Building,
then during the existence thereof, Landlord shall maintain such fire and
extended coverage insurance on the Building and the Premises as Landlord's
mortgagees shall require thereunder, and in all other instances Landlord shall
maintain such fire and extended coverage insurance on the Building and the
Premises as Landlord desires in its sole discretion. Such insurance shall be
maintained at the expense of Landlord (as a part of the Basic Costs), and
payments for losses thereunder shall be made solely to Landlord or the
mortgagees of Landlord as their interests shall appear. Tenant shall maintain at
its expense, in an amount equal to full replacement cost, fire and extended
coverage insurance on all of its personal property, including removable trade
fixtures, located on the Premises and in such additional amounts as are
required to meet Tenant's obligations pursuant to Paragraph 22 hereof. Tenant
shall, at Landlord's request from time to time, provide Landlord with a current
certificate of insurance evidencing Tenant's compliance with this Paragraph
18 and Paragraphs 19 and 21 hereof. Tenant shall obtain the agreement of
Tenant's insurers to notify Landlord that a policy is due to expire at least
thirty (30) days prior to such expiration.
19. Liability Insurance. Tenant and Landlord shall (Landlord as
a part of Basic Costs and Tenant at its own expense) maintain a policy or
policies of comprehensive general liability insurance with respect to the
respective activities of each in the Building and on the Property, with the
premiums thereon fully paid on or before the due date, issued by and binding
upon an insurance company approved by Landlord, such insurance to afford
minimum protection of not less than $3,000,000 combined single limit coverage
of bodily injury, property damage or combination thereof. In addition, Tenant
agrees to obtain a fire legal liability endorsement, or other coverage
satisfactory to Landlord which removes the "leased or occupied" property
exclusion from Tenant's liability policy. Landlord shall not be required to
maintain insurance against thefts within the Premises or the Building or the
Property. Tenant's insurance shall contain a provision naming Landlord as an
additional insured and include coverage for the contractual liability of
Tenant to indemnify Landlord pursuant to Paragraph 20 below. Tenant shall
obtain the agreement of Tenant's insurers to notify Landlord that policy is
due to expire at least thirty (30) days prior to such expiration.
20. Indemnity. Landlord shall not be liable to Tenant, or to
Tenant's agents, servants, employees, customers, or invitees for any injury to
person or damage to property caused by any act, omission, or neglect of Tenant,
its agents, servants, employees, invitees, licensees or any other person
entering the Building under the invitation of Tenant or arising out of the
use of the Premises by Tenant and the conduct of its business or out of a
default by Tenant in the performance of its obligations hereunder. Tenant
hereby indemnifies and holds Landlord harmless from all liability and claims
for any such damage or injury.
21. Waiver of Subrogation Rights. Subject to the conditions
hereinafter specified in this Paragraph 21 and only to the extent that and so
long as the same is permitted under the laws and regulations governing the
writing of insurance within the State of Texas with respect to the respective
insurance that is to be carried by either Landlord or Tenant covering losses
arising out of the destruction or damage to the Premises or its contents or
to other portions of the Building or to Tenant's occupancy and operation of
the Premises without invalidating or nullifying any such policy, or providing a
defense to the applicable insurance carrier with respect to the coverage of any
such policy, all such insurance carried by either Landlord or Tenant shall
provide for a waiver of rights of subrogation against Landlord and Tenant on
the part of the insurance carrier. Notwithstanding the foregoing, nothing
contained herein shall require either party to obtain the inclusion of such a
waiver of rights of subrogation in the event that, because of the cost or
premium attributable to such waiver, the obtaining of such waiver is not
feasible and reasonable. Unless such waivers contemplated by this sentence will
invalidate, nullify, or provide a defense to coverage under any such insurance
policy or are not obtainable for the reasons described in this Xxxxxxxxx 00,
Xxxxxxxx and Tenant each hereby waive any and all rights of recovery, claims,
actions or causes of action against the other, its agents, officers, or
employees, for any loss or damage that may occur to the Premises or the
Building, or any improvements thereto, which loss or damage is covered by valid
and collectible insurance policies, to the extent that such loss and damage is
actually recovered under such insurance policy. The waivers set forth in the
immediately preceding sentence shall be in addition to, and not substitution
for, any other waivers, indemnities, or exclusions of liabilities as set forth
in this Lease. Notwithstanding the foregoing, the failure of Tenant to take out
or maintain any insurance policy required under Paragraph 18 hereof shall be a
defense to any claim asserted by Tenant against Landlord by reason of any loss
sustained by Tenant that would have been covered by any such required policy.
22. Casualty Damage. If the Premises or any part thereof
shall be damaged by fire or other casualty, Tenant shall give prompt written
notice thereof to Landlord. In case the Building shall be damaged such that
substantial alteration or reconstruction of the Building shell, in Landlord's
sole opinion, is
OFFICE LEASE AGREEMENT - Page 5
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required (whether or not the Premises shall have been damaged by such casualty)
or in the event any mortgagee of Landlord's should require that the insurance
proceeds payable as a result of a casualty be applied to the payment of the
mortgage debt or in the event of any material uninsured loss to the Building,
Landlord may, at its option, terminate this Lease by notifying Tenant in
writing of such termination within ninety (90) days after the date of such
casualty. If Landlord does not thus elect to terminate this Lease, Landlord
shall commence and proceed with reasonable diligence to restore the Building
shell and Shell Improvements located on the Premises; except that Landlord's
obligation to restore shall not require Landlord to spend for such work an
amount in excess of the insurance proceeds actually received by Landlord as a
result of the casualty. When the repairs described in the preceding sentence
have been completed by Landlord, Landlord shall then complete the restoration
of all improvements in excess of the Shell Improvements which are necessary to
permit Tenant's reoccupancy of the Premises (including the installation of
acoustical ceiling tile) pursuant to the final working drawings and
specifications approved by Landlord pursuant to the Work Letter ("Improvements
Restoration"). Landlord shall not be obligated to expend for the completion of
the Improvements Restoration a sum in excess of a dollar amount equal to the
dollar amount, if any, of the "Allowance" ("Reconstruction Allowance"). Except
for the Reconstruction Allowance, all costs and expense of completing the
Improvements Restoration shall be borne by Tenant and the amount of such
excess, as determined by Landlord, is herein referred to as the "Reconstruction
Excess". Fifty percent (50%) of the Reconstruction Excess (as then estimated by
Landlord) shall be paid by Tenant to Landlord, in cash, prior to commencement
of the Improvements Restoration. After substantial completion of the
Improvements Restoration, but prior to reoccupancy of the Premises by Tenant,
Tenant shall pay Landlord, in cash, an amount equal to ninety percent (90%) of
the then unpaid balance of the Reconstruction Excess (as then estimated by
Landlord). As soon as a final accounting can be prepared and submitted to
Tenant, Tenant shall pay Landlord, in cash, the entire unpaid balance of the
Reconstruction Excess, based on Landlord's final cost. Each increment of
the Reconstruction Excess payable by Tenant to Landlord shall be paid by Tenant
within ten (10) days after a written request therefor by Landlord to Tenant.
Tenant shall not be entitled to receive any credit or payment with respect to
any portion of the Reconstruction Allowance not actually spent upon restoration
of the Premises. Landlord shall not be liable for any inconvenience or
annoyance to Tenant or injury to the business of Tenant resulting in any way
from such damage or the repair thereof, except that, subject to the provisions
of the next sentence, and provided that cash in the amount of each increment of
the Reconstruction Excess shall have been paid to Landlord by Tenant within ten
(10) days after a written request therefor by Landlord to Tenant, Landlord
shall allow Tenant a fair abatement of Rent during the time and to the extent
the Premises are unfit for occupancy (based upon that portion of Base Rental
applicable to the portion of the Premises subject to such casualty); provided,
however, the Premises shall not be considered unfit for occupancy at any time
that (1) such of the Improvements Restoration has been completed so as to
permit occupancy as evidenced by the issuance of a Certificate of Occupancy or
its equivalent for the Premises by the appropriate governmental entity having
jurisdiction over the Premises for the purpose of issuing such certificate, or
(ii) if no such certificate can be issued by any appropriate governmental
entity under applicable laws, ordinances, or regulations, at such time as the
Improvements Restoration have been substantially completed and tendered to
Tenant.
23. Condemnation. If the whole or substantially the whole of the
Building or the Premises should be taken for any public or quasi-public use, by
right of eminent domain or otherwise or should be sold in lieu of condemnation,
then this lease shall terminate as of the date when physical possession of the
Building or the Premises are taken by the condemning authority. If less than
the whole or substantially the whole of the Building or the Premises are thus
taken or sold, Landlord (whether or not the Premises are affected thereby) may
terminate this Lease by giving written notice thereof to Tenant; in which event
this Lease shall terminate as of the date when physical possession of such
portion of the Building or Premises are taken by the condemning authority. If
this Lease is not so terminated upon any such taking or sale, the Base Rental
payable hereunder shall be diminished by an amount representing that portion
of Base Rental applicable to the portion of the Premises subject to such taking
or sale, and Landlord shall, to the extent Landlord deems feasible, restore the
Building and the Premises to substantially their former condition, but such
work shall not exceed the scope of the work done by Landlord in originally
constructing the Building and installing Shell Improvements in the Premises,
not shall Landlord in any event be required to spend for such work an amount in
excess of the amount received by Landlord as compensation for such taking. All
amounts awarded upon a taking of any part or all of the Property, Building or
the Premises shall belong to Landlord, and Tenant shall not be entitled to and
expressly waives all claims to any such compensation.
24. Damages from Certain Causes. Landlord shall not be liable to
Tenant 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 by any
other cause, except as specifically provided in paragraph 33 hereof. Nor shall
Landlord be liable for any damage or inconvenience which may arise through (a)
the leasing of other space within the Building to whomsoever Landlord chooses
for whatever use is allowed by Landlord or (b) repair or alteration of any
part of the Building or Premises or to the construction of leasehold
improvements for other tenants in the Building, it being specifically
acknowledged and agreed by Tenant that Tenant is leasing space in a Building
which is not fully occupied and that Landlord will, as a part of Landlord's
leasing of other space within the Building, be conducting construction work in
order to prepare other space in the Building, from time to time, for other
tenants.
25. Events of Default/Remedies.
(a) The following events shall be deemed to be events of
default by Tenant under this Lease: (i) Tenant shall fail to pay any Rent or
other sum of money due hereunder and such failure shall continue for a period
of ten (10) days after the date such sum is due; (ii) Tenant shall fail to
comply with any provision of this Lease or any other agreement between Landlord
and Tenant (including the Work Letter) not requiring the payment of money, all
of which terms, provisions and covenants shall be deemed material and such
failure shall continue for a period of ten (10) days after written notice of
such default is delivered to Tenant; (iii) the leasehold hereunder demised
shall be taken on execution or other process of law in any action against
Tenant; (iv) Tenant notifies Landlord, at any time prior to the Commencement
Date, that Tenant does not intend to take occupancy of the Premises upon the
commencement of the Lease Term; or Tenant shall fail to promptly move into and
take possession of the Premises when the Premises are Ready for Occupancy or
shall cease to do business in or abandon any portion of the Premises; (v)
Tenant shall become insolvent or unable to pay its debts as they become due, or
Tenant notifies Landlord that it anticipates either condition; (vi) Tenant
takes any action to, or notifies Landlord that Tenant intends to file a
petition under any section or chapter of the Bankruptcy Code, as amended from
time to time, or under any similar law or statute of the United States or any
State thereof; or a petition shall be filed against Tenant under any such
statute; or Tenant or any creditor of Tenant notifies Landlord that it knows
such a petition will be filed; or Tenant notifies Landlord that it expects such
a petition to be filed; or (vii) a receiver or trustee shall be appointed for
Tenant's leasehold interest in the Premises or for all of a substantial part of
the assets of Tenant.
(b) Upon the occurrence of any event or events of default
by Tenant, whether enumerated in this Paragraph or not, 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 Subparagraph 25(a)(ii)] or demand
for
OFFICE LEASE AGREEMENT - Page 6
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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 of 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; 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
the Tenant 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 or take
possession of the Premises after Tenant's default, Tenant hereby waives notice
of such re-entry or repossession and of Landlord's intent to re-enter or 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 Paragraph 27 hereof shall apply with respect to the
period from and after the giving of notice of such repossession by Landlord. In
addition, Landlord may change or alter the locks and other security devices on
the doors to the Premises and/or remove Tenant's master entry cards from the
security and master entry card system; and Tenant hereby waives, to the fullest
extent allowed by law, any requirement that notice be posted on the Premises as
to the location of a key to such new locks and any right to obtain such a key.
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. Tenant hereby expressly waives all rights under Section 93.002 of the
Texas Property Code (Commercial Lockout Statute).
(d) In the event that Landlord elects to terminate this
Lease, then, notwithstanding such termination, Tenant shall be liable for and
shall pay to Landlord the sum of all Rents and other indebtedness accrued to
the date of such termination, plus, as damages, an amount equal to the total of
(i) the cost of recovering the Premises, (ii) the cost of removing and storing
Tenant's and other occupant's property located therein, (iii) the costs of
reletting the Premises, or portion thereof (including, without limitation,
brokerage commissions, (iv) the cost of decorations, repairs, changes,
alterations, and additions to the Premises whether accomplished in one or more
steps or phases, (v) the cost of collecting such amounts from Tenant hereunder,
and (vi) any other sums of money or damages that may be owed to Landlord as the
result of default by tenant or the exercise of Landlord's rights at law or in
equity.
(e) In the event that Landlord elects to take possession of
the Premises and terminate Tenant's right to occupy the Premises without
terminating this Lease, Tenant shall remain liable, and shall pay to Landlord,
from time to time, on demand, any deficiency between the total Base Rental due
under this Lease for the remainder of the Lease Term and rents, if any, which
Landlord is able to collect from another tenant(s) for the Premises, or portion
thereof, during the remainder of the Lease Term ("Rental Deficiency"). In
addition, Tenant shall be liable for and shall pay to Landlord, on demand, an
amount equal to (i) the cost of recovering possession of the Premises, (ii) the
cost of removing and storing Tenant's or any other occupant's property located
therein, (iii) the costs of reletting the Premises, or applicable portion
thereof, and whether accomplished in one or more phases (including, without
limitation, brokerage commissions), (iv) the cost of decorations, changes,
alterations, and additions to the Premises, or applicable portion thereof, and
whether accomplished in one or more phases, (v) the cost of collection of the
rent accruing from any such reletting, (vi) the cost of collecting any sums
billable to Tenant by Landlord hereunder, and (vii) any other sum of money or
damages that may be owed to Landlord as a result of Tenant's default or the
exercise of Landlord's rights at law or in equity. Landlord may file suit to
recover any sums falling due under the terms hereof from time to time, and no
delivery to or recovery by Landlord of any portion of the sums due Landlord
hereunder shall be any defense in any action to recover any amount not
theretofore reduced to judgment in favor of Landlord. Nothing contained herein
shall be deemed to require Landlord to relet the Premises. Any sums received by
Landlord through reletting shall reduce the sums owing by Tenant to Landlord
hereunder, but in no event shall Tenant be entitled to any excess of any sums
obtained by reletting over and above the Base Rental provided in this Lease to
be paid by Tenant to Landlord. For the purpose of such reletting, Landlord is
authorized to decorate or to make any repairs, changes, alterations, or
additions in and to the Premises or applicable portion thereof, that Landlord
may deem necessary or advisable. No reletting shall be construed as an election
on the part of Landlord to terminate this Lease unless a written notice of such
intention is given to Tenant by Landlord. Notwithstanding any such reletting
without termination, Landlord may at any time thereafter elect to terminate this
Lease for such previous default. In the alternative (but only in the event that
Tenant's default constitutes a material breach), Landlord may elect to terminate
Tenant's right to occupy the Premises and to immediately recover as damages, in
lieu of the Rental Deficiency, a sum equal to the difference between (i) the
total Base Rental due under this Lease for the remainder of the Lease term and
(ii) the then fair market rental value of the Premises during such period,
discounted to represent value at a rate determined by Landlord, in it sole
discretion ("Discounted Future Rent"). In such event, Landlord shall have no
responsibility to attempt to relet the Premises or to apply any rentals received
by Landlord as a result of any such reletting to Tenant's obligations hereunder;
and the aggregate amount of all damages due to Landlord, including the
Discounted Future Rent hereunder, shall be immediately due and payable to
Landlord upon demand. To the extent Landlord is obligated by law to mitigate its
damages, mitigation for these purposes shall only mean that Landlord agrees to
list or advertise the Premises for rent in accordance with Landlord's standard
advertising and rental policies, and to rent the Premises to prospective tenants
only if there are no other comparable available leasehold premises in the
Building or in other projects of Landlord or its affiliates in the vicinity of
the Building.
(f) In addition to the remedies set forth in Paragraph 25(b)
of the Lease, upon the occurrence of any event or events of default by tenant
under the Lease with respect to which Landlord elects to either terminate the
Lease, or without terminating the Lease, to terminate Tenant's possession of the
Premises, Landlord shall be entitled to (i) receive a cash payment from Tenant
on demand in an amount equal to all "Reimbursable Costs" (as defined below)
which have not yet vested in Tenant, (ii) terminate any remaining lease
concessions which have not yet accrued under the Lease, and (iii) terminate all
of Tenant's parking and signage rights under the Lease. As used herein, the term
"Reimbursable Costs" shall mean the total of (i) the difference between the
average monthly Base Rental payable by Tenant over the entire Lease Term and the
average monthly Base Rental payable by Tenant from the Commencement Date to the
date of default multiplied by the number of months from the Commencement Date
through the date of default; and (ii) the aggregate dollar amount which has been
paid and/or is payable by Landlord to or on behalf of Tenant under the Lease,
including, without limitation, (x) any brokerage commissions in connection with
the execution of the Lease, and (y) any allowances (for leasehold improvements
or otherwise). Since the Reimbursable Costs were incurred by Landlord in
reliance upon Tenant fully performing Tenant's obligations under the Lease,
Tenant hereby acknowledges that Landlord will be damaged, upon a default by
Tenant, in an amount equal to the aggregate dollar value of the Reimbursable
Costs which have not yet vested in Tenant. Reimbursable Costs shall be deemed to
be vested in Tenant on a pro rata basis for each calendar month during the Lease
Term for which Tenant has paid rent and is not otherwise in default hereunder.
No vesting shall occur with respect to any month for which Tenant has not paid
rent or in
OFFICE LEASE AGREEMENT - Page 7
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which Tenant is otherwise in default hereunder.
(g) This Paragraph 25 shall be enforceable to the maximum
extent not prohibited by applicable law, and the unenforceability of any
portion thereof shall not thereby render unenforceable any other portion. No
act or thing done 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.
(h) Landlord shall be in default hereunder in the event
Landlord has not begun and pursued with reasonable diligence the cure of any
failure of Landlord to meet its obligations hereunder within thirty (30) days
of the receipt by Landlord of written notice from Tenant of the alleged failure
to perform. In no event shall Tenant have the right to terminate or rescind
this Lease as a result of Landlord's default as to any covenant or agreement
contained in this Lease. Tenant hereby waives such remedies of termination and
rescission and hereby agrees that Tenant's remedies for default hereunder and
for breach of any promise or inducement shall be limited to a suit for damages
and/or injunction. In addition, Tenant hereby covenants that, prior to the
exercise of any such remedies, it will give the mortgagees holding mortgages on
the Building notice and a reasonable time to cure any default by Landlord.
26. Peaceful Enjoyment. Tenant shall, and may peacefully have,
hold, and enjoy the Premises, subject to the other terms hereof, provided that
Tenant pays the Rent and other sums herein recited to be paid by Tenant and
performs all of Tenant's covenants and agreements herein contained. This
covenant and any and all other covenants of Landlord shall be binding upon
Landlord and its successors only with respect to breaches occurring during its
or their respective periods of ownership of the Landlord's interest hereunder.
Landlord shall be entitled to cause Tenant to relocate from the Premises to a
comparable space (a "Relocation Space") within the Building at any time upon
ninety (90) days written notice to Tenant. Landlord shall pay all reasonable
costs of accomplishing such relocation. Such a relocation shall not terminate
or otherwise affect or modify this Lease except that from and after the date of
such relocation, "Premises" shall refer to the Relocation Space into which
Tenant has been moved, rather than the original Premises as herein defined.
27. Holding Over. In the event of holding over by Tenant after
expiration or other termination of this Lease or in the event Tenant continues
to occupy the Premises after the termination of Tenant's right of possession
pursuant to Paragraph 25(b) hereof, Tenant shall, throughout the entire
holdover period, pay Rent equal to one hundred fifty percent (150%) of the Base
Rental and additional Base Rental which would have been applicable had the term
of this Lease continued through the period of such holding over by Tenant. No
holding over by Tenant after the expiration of the term of this Lease shall be
construed to extend the term of this Lease.
28. Subordination to Mortgage. Tenant accepts this Lease subject
and subordinate to any mortgage, deed of trust or other lien presently existing
or hereafter arising upon the Premises, or upon the Building and/or the
Property and to any renewals, modifications, consolidations, refinancing, and
extensions thereof, but Tenant agrees that any such mortgagee shall have the
right at any time to subordinate such mortgage, deed of trust or other lien to
this Lease on such terms and subject to such conditions as such mortgagee may
deem appropriate in its discretion. Landlord is hereby irrevocably vested with
full power and authority to subordinate this Lease to any mortgage, deed of
trust or other lien now existing or hereafter placed upon the Premises, or the
Building and/or the Property and Tenant agrees upon demand to execute such
further instruments subordinating this Lease or attorning to the holder of any
such liens as Landlord may request. The terms of this Lease are subject to
approval by the Landlord's permanent lender(s), and such approval is a
condition precedent to Landlord's obligations hereunder. In the event that
Tenant should fail to execute any subordination or other agreement required by
this Paragraph promptly as requested, Tenant hereby irrevocably constitutes
Landlord as its attorney-in-fact to execute such instrument in Tenant's name,
place and stead, it being agreed that such power is one coupled with an
interest. Tenant agrees that it will from time to time upon request by Landlord
execute and deliver to such persons as Landlord shall request a statement in
recordable form certifying that this Lease is unmodified and in full force and
effect (or if there have been modifications, that the same is in full force and
effect as so modified), stating the dates to which Rent and other charges
payable under this Lease have been paid, stating the Landlord is not in default
hereunder (or if Tenant alleges a default stating the nature of such alleged
default) and further stating such other matters as Landlord shall reasonably
require.
29. Estoppel Certificates. Tenant agrees that it will from time
to time upon request by Landlord execute and deliver to such persons as
Landlord shall request a statement in recordable form certifying that this
Lease is unmodified and in full force and effect (or if there have been
modifications, that the same is in full force and effect as so modified),
stating the dates to which rental and other charges payable under this Lease
have been paid, stating that the Landlord is not in default hereunder (or if
Tenant alleges a default stating the nature of such alleged default in
particularity) and further stating such other matters as Landlord shall
reasonably require. Tenant agrees to deliver such statement within ten (10)
business days after written request from Landlord. Failure to timely deliver
such estoppel certificate shall be a default under this Lease and shall entitle
Landlord to pursue any and all remedies it deems appropriate, including the
levying of a $1,000.00 per day fine for each day that such estoppel certificate
is not furnished after the tenth (10th) business day. The parties acknowledge
that such a fine is reasonable under the circumstances, represents a reasonable
estimate of Landlord's probable loss, based upon the anticipated harm to
Landlord from a delay in Tenant's furnishing such an estoppel certificate; such
fine amount is also reasonable in light of the difficulties of proof of loss
and the inconvenience and/or nonfeasibility of Landlord obtaining other
appropriate relief upon such default.
30. Landlord's Lien. Tenant hereby grants to Landlord a lien and
security interest on all property of Tenant now or hereafter placed in or upon
the Premises and such property shall be and remain subject to such lien and
security interest of Landlord for payment of all Rent and other sums agreed to
be paid by Tenant herein. The provisions of this Paragraph relating to such
lien and security interest shall constitute a security agreement under and
subject to the Texas Business and Commerce Code so that Landlord shall have and
may enforce a security interest on all property of Tenant now or hereafter
placed in or on the Premises, in addition to and cumulative of the Landlord's
liens and rights provided by law or by the other terms and provisions of this
Lease. Tenant agrees to execute as debtor such financing statement or
statements as Landlord may now or hereafter request. Landlord may at its
election at any time file a copy of this Lease as a financing statement.
Notwithstanding the above, Landlord shall neither sell nor withhold from
Tenant, Tenant's business records. Tenant hereby waives its lien rights under
Section 91.004 of the Texas Property Code.
31. Attorney's Fees. In the event either party files suit to
enforce the performance of or obtain damages caused by a default under any of
the terms of this Lease, the party against whom a judgment is rendered shall
pay the prevailing party's reasonable costs and attorneys' fees. The
reasonableness of such costs and
OFFICE LEASE AGREEMENT - Page 8
9
attorneys' fees shall be determined by the court and not the jury. With
respect to any monetary claim, in order for a party to prevail, such party must
be awarded at least fifty percent (50%) of the highest amount which such party
claimed at any time in such suit.
32. No Implied Waiver. The failure of Landlord to insist at
any time upon the strict performance of any covenant or agreement herein or to
exercise any option, right, power or remedy contained in this Lease shall not
be construed as a waiver or a relinquishment thereof for the future. No payment
by Tenant or receipt by Landlord of a lesser amount than the monthly
installment of Rent due under this Lease shall be deemed to be other than on
account of the earliest Rent due hereunder, nor shall any endorsement or
statement on any check or any letter accompanying any check or payment as Rent
be deemed an accord and satisfaction, and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
Rent or pursue any other remedy in this Lease provided.
33. Personal Liability. In no event shall Landlord be liable to
Tenant either for (a) any loss or damage that may be occasioned by or through
the acts or omissions of other tenants of the Building or of any other persons
whomsoever or (b) any consequential damages regardless of causation. With
respect to tort claims against Landlord, Landlord shall not be liable to
Tenant or to any other person for any act or omission of Landlord or of its
agents or employees, negligent or otherwise, except for actual damages or costs
incurred as a direct result of and caused directly by the willful misconduct or
gross negligence of Landlord (or of Landlord's agents or employees) in
circumstances in which Landlord is deemed to be liable at law for such acts
or omissions and such liability cannot be waived by Tenant. Nothing contained
in the immediately preceding sentence shall ever be construed as creating
liability in excess of that existing at law or, in any event, increasing the
liability of Landlord, under any theory or cause of action, however
denominated, from that existing at law. Further, the liability of Landlord to
Tenant for (a) any default by Landlord under the terms of this Lease, (b) for
any tort liability of Landlord to Tenant or (c) in any other circumstance in
which Landlord is judicially determined to have some liability to Tenant, for
whatever reason, shall, in each such instance, be limited to the interest of
Landlord in the Building and Property and Tenant agrees to look solely to
Landlord's interest in the Building and the Property for the recovery of any
judgment from the Landlord, it being intended that Landlord shall never be
personally liable for any judgment or deficiency.
34. Security Deposit. The Security Deposit shall be held by
Landlord without liability for interest and as security for the performance
by Tenant of Tenant's covenants and obligations under this Lease, it being
expressly understood that the Security Deposit shall not be considered an
advance payment of Rental or a measure of Tenant's liability for damages in
case of default by Tenant. Landlord may commingle the Security Deposit with
Landlord's other funds. Landlord may, from time to time, without prejudice to
any other remedy, use the Security Deposit to the extent necessary to make good
any arrearages of Rent or to satisfy any other covenant or obligation of Tenant
hereunder. Following any such application of the Security Deposit, Tenant shall
pay to Landlord on demand the amount so applied in order to restore the
Security Deposit to its original amount. If Tenant is not in default at the
termination of this Lease, the balance of the Security Deposit remaining after
any such application shall be returned by Landlord to Tenant. If Landlord
transfers its interest in the Premises during the term of this Lease, Landlord
may assign the Security Deposit to the transferee and thereafter shall have no
further liability for the return of such Security Deposit.
35. Notice. Any notice in the Lease provided for must,
unless otherwise expressly provided herein, be in writing, and may, unless
otherwise in this Lease expressly provided, be given or be served by depositing
the same in the United States mail, postage prepaid and certified and addressed
to the party to be notified, with return receipt requested, or by prepaid
telegram, when appropriate, addressed to the party to be notified at the address
stated in this Lease or such other address notice of which has been given to the
other party. Notice deposited in the mail in the manner hereinabove described
shall be effective from and after the expiration of three (3) calendar days
after it is so deposited.
36. Severability. 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 term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Lease shall be valid and enforced to the fullest
extent permitted by law.
37. Recordation. Tenant agrees not to record this Lease or any
memorandum hereof.
38. Governing Law. This Lease and the rights and obligations of
the parties hereto shall be interpreted, construed, and enforced in accordance
with the laws of the State of Texas.
39. Force Majeure. Whenever a period of time is herein prescribed
for the taking of any action by Landlord, Landlord shall not be liable or
responsible for, and there shall be excluded from the computation of such
period of time, any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, governmental laws, regulations or restrictions,
litigation brought by third parties to enjoin Landlord's activities at the
Building, or any other cause whatsoever beyond the control of Landlord.
40. Time of Performance. Except as expressly otherwise herein
provided, with respect to all required acts of Tenant, time is of the essence
of this Lease.
41. Transfers 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 Building and Property referred to herein, and in such
event and upon such transfer Landlord shall be released form any further
obligations hereunder, and Tenant agrees to look solely to such successor in
interest of Landlord for the performance of such obligations.
42. Transfers by Tenant. Tenant shall not transfer, convey,
mortgage, pledge, hypothecate, or encumber Tenant's leasehold interest
hereunder or grant any license, concession, or other right to occupancy of any
portion of the Premises without the prior written consent of Landlord, which
may be granted or withheld in Landlord's sole discretion. The prohibitions
specified in this Paragraph 42 shall be in addition to, and independent of,
the provisions of Paragraph 16 hereof and shall be construed to include,
without limitation, any such prohibited transfers occurring by operation of
law. Any attempt by Tenant to accomplish a transfer prohibited by the
provisions of this Lease, without having obtained the prior written consent of
Landlord thereto shall be void and of no force or effect and may, at the option
of Landlord, constitute a material default hereunder.
43. Brokerage Fees and Commissions. Tenant represents that it has
dealt with no broker, agent or other person in connection with this Lease other
than CB Commercial Real Estate Group, Inc. and Landlord's Broker ("Brokers")
and that no broker, agent or other person brought about this Lease (except
Broker), and Tenant shall indemnify and hold Landlord harmless from and against
any and all claims, losses, costs or expenses (including attorney's fees and
expenses) by any broker (except those of Brokers), agent, or other person
claiming a commission or other form of compensation by virtue of having dealt
with Tenant with regard to the
OFFICE LEASE AGREEMENT - Page 9
10
transaction contemplated by this Lease. The provisions of this Paragraph 43
shall survive the expiration of the Lease Term or any renewal or extension
thereof.
44. 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 a copy executed by both Landlord and Tenant is delivered to
and accepted by Landlord, and this Lease has been approved by Landlord's
mortgagee.
45. Entire Agreement. This Lease embodies the entire
agreement between the parties hereto with relation to the transaction
contemplated hereby, and there have been and are no covenants, agreements,
representations, warranties or restrictions between the parties hereto with
regard thereto other than those specifically set forth herein.
46. Receipt of Premises. The occupancy of the Premises by Tenant
shall constitute the acknowledgment and agreement of Tenant that Tenant is
fully familiar with the physical condition of the Premises, that Tenant has
received the same in good order and condition, and that the Premises comply in
all respects with the requirements of this Lease and are suitable for the
purposes for which the Premises are hereby Leased. In that regard, Landlord
hereby disclaims, and Tenant hereby waives, any warranty of suitability with
respect to the Premises.
47. Merger of Estates. The voluntary or other surrender of
this Lease by Tenant or a mutual cancellation thereof, shall not constitute a
merger; and upon such surrender or cancellation of this Lease, Landlord shall
have the option, in Landlord's sole discretion, to (i) either terminate all or
any existing subleases or subtenancies, or (ii) assume Tenant's interest in any
or all subleases or subtenancies.
48. Waste Management. Without limiting its obligations under
Paragraph 14 (and the rules and regulations attached to this Lease as Exhibit
"D"), Tenant covenants and agrees to comply with all laws, rules, regulations
and guidelines now or hereafter made applicable to the Premises respecting the
disposal of waste, trash, garbage and other matter a (Liquid or solid),
generated by Tenant, the disposal of which is not otherwise the express
obligation of Landlord under this Lease (it is expressly understood that the
provision of janitorial services by Landlord is not an express obligation of
Landlord under this Lease for the purpose of this Paragraph 48), including, but
not limited to, laws, rules, regulations and guidelines respecting recycling
and other forms of reclamation (all of which are herein collectively referred to
as "Waste Management Requirements"). Tenant covenants and agrees to comply
with Waste Management Requirements applicable to Landlord (i) as owner of the
Premises and (ii) in performing Landlord's obligations under this Lease, if
any. Tenant further covenants and agrees to comply with all rules and
regulations established by Landlord to enable Landlord from time to time to
avail itself of the lowest rate available for the disposal of waste, trash,
garbage and other matter (liquid or solid), generated by Tenant. Tenant
covenants and agrees to indemnify, defend, protect and hold landlord harmless
[in accordance with Paragraph 20] from and against all liability (including
costs, expenses and attorneys fees) that Landlord may sustain by reason of
Tenant's breach of its obligations under this Paragraph 48. Tenant's
obligations under this Paragraph 48 shall survive the termination of this Lease.
49. Americans with Disabilities Act and Texas Architectural
Barriers Act. Tenant agrees to comply with all requirements of the Americans
with Disabilities Act [Public Law 101-336 (July 26, 1990) ("ADA")] and the
Texas Architectural Barriers Act [Article 9102, Tex. Rev. Civ. St. (1991)]
applicable to the Premises, Building and Property to accommodate its employees,
invitees and customers in accordance with the provisions of this paragraph.
Tenant acknowledges that it shall be wholly responsible for any accommodations
or alterations which need to be made to the Premises to accommodate Tenant's
employees, customers and invitees, but Tenant shall not be responsible for
making any additional accommodations or alterations to the Building or the
Property except those accommodations or alterations (i) which need to be made
solely and uniquely to accommodate Tenant's employees, customers and/or
invitees and/or (ii) which are to accommodate Tenant's employees, customers
and/or invitees and which exceed standard ADA requirements for the Building
and/or the Property. Tenant shall be solely responsible for requirements under
Title I of the ADA relating to Tenant's employees. Tenant agrees to indemnify
and hold Landlord harmless from any and all expenses, liabilities, costs or
damage suffered by Landlord as a result of Tenant's failure to fulfill its
aforesaid responsibilities regarding making such accommodations and alterations
referenced in the preceding sentences. No provision in this Lease should be
construed in any manner as permitting, consenting to or authorizing Tenant to
violate requirements under such Act and any provision of the Lease which could
arguably be construed as authorizing a violation of either Act shall be
interpreted in a manner which permits compliance with such Act and is hereby
amended to permit such compliance.
50. Exhibits. The following numbered exhibits are attached
hereto and incorporated herein and made a part of this Lease for all purposes:
Exhibit "A" - Legal Description
Exhibit "B" - Floor Plan
Exhibit "C" - Payment of Excess Basic Costs
Exhibit "D" - Rules and Regulations
Exhibit "E" - Work Letter
Exhibit "F" - Parking
Exhibit "G" - Renewal Option
Exhibit "H" - Right of First Refusal
NOTICE OF INDEMNIFICATION: THE PARTIES TO THIS LEASE HEREBY ACKNOWLEDGE
AND AGREE THAT THIS LEASE (AND ATTACHED EXHIBITS) CONTAINS CERTAIN
INDEMNIFICATION PROVISIONS.
OFFICE LEASE AGREEMENT - Page 10
11
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease in
multiple original counterparts as of the day and year first above written.
LANDLORD:
Address: BROOKDALE INVESTORS, L.P.,
A Delaware limited partnership
000 X. Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000 BY: Brookdale Partners, LLC,
Attn: Property Manager a Georgia limited liability company,
its sole General Partner
by:
-----------------------------------
its Manager
TENANT:
Address Prior to FORTUNE PETROLEUM CORPORATION,
Commencement Date: a Delaware corporation
00000 Xxxxxx Xx.
Xxxxx 000 By: XXXXXX X. XXXXXXXXX
Xxxxxx Xxxxx, XX 00000 ----------------------------------
Attn: Xxxxxx X. Xxxxxxxxx Name: Xxxxxx X. Xxxxxxxxx
Title: President & CEO
Address Subsequent to
Commencement Date:
000 X. Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxx
12
EXHIBIT "A"
TO
OFFICE LEASE AGREEMENT BETWEEN
BROOKDALE INVESTORS, L.P.,
AS LANDLORD, AND
FORTUNE PETROLEUM CORPORATION,
AS TENANT
LEGAL DESCRIPTION
-----------------
Tract I: The full fee simple estate in and to the real property
described on Schedule 1 attached hereto and made a part hereof.
Tract II: The certain easement interest and estate appurtenant to the
real property described on Schedule 1 attached hereto and made
a part hereof and all rights, powers and privileges in
connection therewith granted and demised to One Commerce Green,
Ltd. and Friendswood Development Company, their successors and
assigns, pursuant to that certain instrument recorded in the
Office of the County Clerk of Xxxxxx County, Texas under
Clerk's File No. J266607, including a non-exclusive storm
sewer easement on, over, under, across, along and through the
real property described in Schedule 2 attached hereto and made
a part hereof, said real property described in Schedule 2
attached hereto being owned of record by Xxxx X. Xxxxxx,
Trustee.
13
SCHEDULE 1
TO
EXHIBIT "A"
TO
OFFICE LEASE AGREEMENT BETWEEN
BROOKDALE INVESTORS, L.P.,
AS LANDLORD, AND
FORTUNE PETROLEUM CORPORATION
AS TENANT
METES AND BOUNDS DESCRIPTION FOR 5.9267 ACRES OF LAND BEING ALL OF RESTRICTED
RESERVE "G", GREENS CROSSING, SECTION FOUR, A SUBDIVISION RECORDED IN VOLUME
308, PAGE 2, XXXXXX COUNTY MAP RECORDS, IN XXX X.X.X.X. XX. XXXXXX, XXXXXXX 00,
X-000, XXXXXX XXXXXX, XXXXX.
BEGINNING: At a found 5/8-inch iron rod in the west line of Greens Parkway, a
90-foot right-of-way, said point also being the most easterly northeast corner
of Restricted Reserve "G";
THENCE: S02 degrees 34' 47'' E, along the west line of Greens Parkway, 249.00
feet to a found 5/8-inch iron rod for the southeast corner of the herein
described tract of land;
THENCE: Departing said right-of-way line at a right angle of S87 degrees
25' 13'' W, 103.91 feet to a found 5/8-inch iron rod for corner;
THENCE: S61 degrees 51' 29'' W, 124.20 feet to a found 5/8-inch iron rod for
corner;
THENCE: S87 degrees 25' 13'' W, 73.87 feet to a found 5/8-inch iron rod for
corner;
THENCE: S02 degrees 34' 47'' E, 176.50 feet to a found 5/8-inch iron rod for
corner;
THENCE: S87 degrees 25' 13'' W, 322.75 fee to a found 5/8-inch iron rod for
the southwest corner of the herein described tract of land;
THENCE: N02 degrees 34' 47'' W, 186.50 feet to a found 5/8-inch iron rod for
corner;
THENCE: N87 degrees 25' 13'' E, 16.75 feet to a found 5/8-inch iron rod for
corner;
THENCE: N02 degrees 34' 47'' W, 121.97 feet to a found 5/8-inch iron rod for
corner;
THENCE: N28 degrees 08' 31'' W, 108.90 feet to a found 5/8-inch iron rod for
corner;
THENCE: N02 degrees 34' 47'' W, 112.38 feet to a found 5/8-inch iron rod for
corner in the southerly right-of-way line of West Greens Road, a 100-foot
right-of-way, the northwest corner of the herein described tract of land;
THENCE: N87 degrees 25' 13'' E, along the south line of West Greens Road,
401.74 feet to a found 5/8-inch iron rod being the beginning of a tangent
curve to the right;
THENCE: 70.77 feet along the arc of said curve and right-of-way line (radius
equals 500.00 feet, central angle equals 08 degrees 06' 35'', chord distance
equals 70.71 feet and chord bearing equals S88 degrees 31' 30'' E) to a found
5/8-inch iron rod for a point of reverse curvature;
THENCE: 70.77 feet along the arc of a reverse curve to the left and said
right-of-way line (radius equals 500.00 feet, central angle equals 08 degrees
06' 35'', chord distance equals 70.71 feet, and chord bearing equals S88 degrees
31' 30'' E) to a found 5/8-inch iron rod for a point of tangency;
THENCE: N87 degrees 25' 13'' E, continue along the south line of West Greens
Road, 80.00 feet to a found 5/8-inch iron rod for the most northerly northeast
corner;
THENCE: S02 degrees 34' 47'' E, 10.00 feet to a found 5/8-inch iron rod for
corner;
THENCE: S47 degrees 34' 47'' E, 28.28 feet to the point of BEGINNING and
containing 5.9267 acres of land.
SCHEDULE 1 TO EXHIBIT ''A'' TO OFFICE LEASE AGREEMENT - Page 1
14
SCHEDULE 2
TO
EXHIBIT "A"
TO
OFFICE LEASE AGREEMENT BETWEEN
BROOKDALE INVESTORS, L.P.,
AS LANDLORD, AND
FORTUNE PETROLEUM CORPORATION,
AS TENANT
METES AND BOUNDS DESCRIPTION OF 0.0565 ACRE (2460 SQUARE FEET) OF LAND OUT OF
RESTRICTED RESERVE "C", GREENS CROSSING, SECTION FOUR, A SUBDIVISION RECORDED
IN VOLUME 308, PAGE 2, XXXXXX COUNTY MAP RECORDS, ALSO BEING OUT OF W.C.R.R.
AND COMPANY SURVEY, SECTION 17, A-889, XXXXXX COUNTY, TEXAS:
COMMENCING: At a found 5/8-inch iron rod in the west line of Greens Parkway, a
90-foot right-of-way, said iron rod also being the most easterly northeast
corner of Restricted Reserve "C" and the easterly southeast corner of
Restricted Reserve "G";
THENCE: Departing said Greens Parkway in a westerly direction at right angle,
S87 degrees 25 feet 13 inches W, along the common north boundary line of
Restricted Reserve "C" and the south boundary line of Restricted Reserve "G",
20.00 feet to the point of BEGINNING;
THENCE: Departing said common boundary line of Restricted Reserves "C" and "G"
at right angle, and west of end parallel with said Greens Parkway right-of-way,
S02 degrees 34 feet 47 inches E, 216.00 feet for a corner;
THENCE: Departing said parallel line, N87 degrees 25 feet 13 inches E, 20.00
feet for a corner on the west line of said Greens Parkway, same being the east
line of Restricted Reserve "C";
THENCE: Along said common line of Greens Parkway and Restricted Reserve "C",
S02 degrees 34 feet 47 inches E, 10.00 feet for a corner;
THENCE: Departing said common line at right angle, S87 Degrees 25 feet 13
inches W, 30.00 feet for a corner;
THENCE: Departing said corner, west of and parallel with said Greens Parkway,
N02 degrees 34 feet 47 inches W, 226.00 feet for a corner on the common
boundary line of Restricted Reserves "C" and "G";
THENCE: Along said common boundary line of Restricted Reserves "C" and "G",
N87 degrees 25 feet 13 inches E, 10.00 feet to the point of BEGINNING and
containing 0.0565 acre (2,460 square feet) of land.
SHCEDULE 2 TO EXHIBIT "A" TO OFFICE LEASE AGREEMENT - Page Solo
15
EXHIBIT "B"
TO
OFFICE LEASE AGREEMENT BETWEEN
BROOKDALE INVESTORS, L.P.,
AS LANDLORD, AND
FORTUNE PETROLEUM CORPORATION,
AS TENANT
FLOOR PLAN
[ONE COMMERCE GREEN
ARCHITECTURAL PLAN
HOUSTON, TEXAS
ART]
EXHIBIT "B" TO OFFICE LEASE AGREEMENT -- PAGE SOLO
16
EXHIBIT "C"
TO
OFFICE LEASE AGREEMENT BETWEEN
BROOKDALE INVESTORS, L.P.,
AS LANDLORD, AND
FORTUNE PETROLEUM CORPORATION,
AS TENANT
PAYMENT OF EXCESS BASIC COSTS
1. BASIC COSTS. The Base Rental payable hereunder shall be adjusted from
time to time in accordance with the following provision:
(a) Tenant's Base Rental is based, in part, upon the estimate that
annual "Basic Costs" (as hereinafter defined) will be equal to the "Expense
Stop". During the Lease Term, Tenant shall pay as an adjustment to Base
Rental hereunder an amount (per each square foot of Rentable Area within the
Premises) equal to the excess ("Excess") from time to time of Basic Costs
per square foot of Rentable Area in the Building over the Expense Stop.
Landlord may collect such additional Base Rental in arrears on a yearly
basis. Landlord shall also have the option to make a good faith estimate of
the Excess from time to time for each upcoming calendar year (or remainder
thereof, if applicable) and, upon thirty (30) days' written notice to
Tenant, may require the monthly payment of Base Rental to be adjusted in
accordance with such estimate. Any amounts paid based on such an estimate
shall be subject to adjustment pursuant to Paragraph 2 below when Basic
Costs are available for such calendar year.
(b) "Basic Costs" shall mean all direct and indirect costs and expenses
in each calendar year of operating, maintaining, repairing, managing and
owning the Building and the Property plus all operating costs of the
Exterior Common Area (below defined). Basic Costs shall not include the cost
of capital improvements, depreciation, interest, lease commissions, and
principal payments on mortgage and other non-operating debts of Landlord.
Basic Costs shall, however, include the amortization of capital improvements
which are primarily for the purpose of reducing Basic Costs, or which are
required by governmental authorities. "Exterior Common Areas" shall mean
that portion of the Property (and other tracts of real property comprising
the multi-building project in the event the Building is located in such a
project) which are not located within the Building (or other building in a
multi-building project) and which are provided and maintained for the common
use and benefit of Landlord and Tenants of the Building (or multi-building
project) generally and the employees, invitees and licensees of Landlord and
such tenants; including without limitation, all parking areas (enclosed or
otherwise) and all streets, sidewalks, walkways, and landscaped areas.
2. PROCEDURE. The following additional provisions shall apply to Paragraph
1 of this EXHIBIT "C":
(a) By April 1 of each calendar year during Tenant's occupancy, or as
soon thereafter as practical, Landlord shall furnish to Tenant a statement
of Landlord's Basic Costs for the previous calendar year. If for any
calendar year additional Base Rental was collected for the prior year, as a
result of Landlord's estimate of Basic Costs, in excess of the additional
Base Rental due during such prior year, then Landlord shall refund to Tenant
any over payment (or at Landlord's option, apply such amount against rentals
due or to become due hereunder). Likewise, Tenant shall pay to Landlord, on
demand, any underpayment with respect to the prior year. In no event shall
Basic Costs per square foot of Rentable Area within the Building be deemed
to be less than the Expense Stop, it being the intent of Landlord and Tenant
that Tenant shall at all times be responsible for the payment of, and shall
pay, not less than the amount of Base Rental for the applicable period
(before adjustment) specified in this Lease.
(b) Tenant or a duly authorized and qualified representative of Tenant,
at its expense, shall have the right no more frequently than once per
calendar year and within one hundred and twenty (120) days after the receipt
of Landlord's statement of Basic Costs to perform, at Tenant's expense, an
in-house audit ("Audit") of Landlord's books and records relating to Basic
Costs for the immediately preceding calendar year. Tenant shall not be
entitled to exercise its audit rights under this subparagraph if it is then
in default under this Lease. Tenant acknowledges and agrees that any records
reviewed under this paragraph constitute confidential information of
Landlord, which shall not be disclosed to anyone other than the accountants
performing the review and the principals of Tenant who receive the results
of the review. The disclosure of such information to any other person,
whether or not caused by the conduct of Tenant, shall constitute a material
breach of this Lease. If it is determined as the result of Tenant's in-house
Audit that Basic Costs were overstated by five percent (5.0%) or more and
Landlord does not disagree with such determination then Landlord shall
reimburse Tenant for the reasonable costs of such Audit. If, however,
Landlord disagrees with such determination, then Landlord shall be entitled
to arrange for a second audit ("Second Audit") by an independent certified
public accountant, chosen by Landlord, in its sole discretion, from among
the "Big Six" accounting firms. If it is determined as the result of any
such Second Audit that Basic Costs were overstated by five percent (5.0%) or
more, or by an amount which is at least as great as the amount determined by
the Audit, then Landlord shall pay the costs of the Second Audit; otherwise
Tenant shall reimburse Landlord for the reasonable costs of the Second
Audit. In either event, Landlord or Tenant, as the case may be, shall
reimburse the other party for the amount, if any, of the disputed items
which were incorrectly stated, overstated or understated by Landlord.
(c) Notwithstanding any language in the Lease or in this Exhibit "C"
seemingly to the contrary, Landlord may, at Landlord's sole election,
determine and estimate Basic Costs for any calendar year within the Lease
Term by increasing the variable components of Basic Costs to the amount
which Landlord projects would have been incurred had the Building been
occupied to the extent of ninety-five percent (95%) of the Rentable Area
therein during all of the applicable calendar year. In such event, the term
"Basic Costs", as used in this Exhibit "C" and in the Lease, shall include
(i) the actual Basic Cost incurred during any portion of such calendar year
in which the Building is occupied to the extent of ninety-five percent (95%)
or more of the Rentable Area therein plus (ii) the Basic Costs which would
have been incurred had the Building been occupied to the extent of
ninety-five percent (95%) of the Rentable Area thereof during the portion of
that calendar year in which the actual occupancy of the Building is less
than ninety-five percent (95%) of the Rentable Area therein; and Landlord
shall have the option of making such estimate in advance for any upcoming
calendar year.
(d) In the event that the Lease Term commences on a day other than
January 1 or terminates on a day other than December 31, the Excess for that
part of the first (1st) calendar year or last calendar year during the Lease
Term shall be determined as follows:
EXHIBIT "C" TO OFFICE LEASE AGREEMENT - Page 1
17
(i) The Expense Stop shall be prorated based upon the number of
months in such partial calendar year. With respect to any partial
calendar month occurring during such partial calendar year, the Expense
Stop shall also be prorated based upon the number of days in that
partial calendar month.
(ii) The Excess, if any, for the applicable partial calendar year
shall then be the amount by which (A) actual Basic Costs per square foot
of Rentable Area in the Building for such calendar year, prorated based
upon the number of months and days in the applicable partial calendar
year, exceed (B) the Expense Stop, as prorated pursuant to the
provisions of this Subparagraph 2(d).
(iii) With respect to a proration for the first (1st) calendar year
and in the event that Landlord's estimate of the Basic Costs to be
incurred during such partial calendar year exceeds the Expense Stop, as
prorated pursuant to the provisions of this Subparagraph 2(d), Landlord
may, upon thirty (30) days prior written notice to Tenant, require the
monthly payments of Base Rental occurring during such partial calendar
year to be adjusted in accordance with such estimate.
(iv) The provisions of this Exhibit "C" shall survive the
termination of the Lease Term.
EXHIBIT "C" TO OFFICE LEASE AGREEMENT--Page 2
18
EXHIBIT "D"
TO
OFFICE LEASE AGREEMENT BETWEEN
BROOKDALE INVESTORS, L.P.,
AS LANDLORD, AND
FORTUNE PETROLEUM CORPORATION,
AS TENANT
RULES AND REGULATIONS
1. Sidewalks, doorways, vestibules, halls, stairways, and similar areas
shall not be obstructed nor shall refuse, furniture, boxes or other items be
placed therein by Tenant or its officers, agents, servants, and employees, or
used for any purpose other than ingress and egress to and from the leased
premises, or for going from one part of the Building to another part of the
Building. Canvassing, soliciting and peddling in the Building are prohibited.
2. Plumbing fixtures and appliances shall be used only for the
purposes for which constructed, and no unsuitable material shall be placed
therein.
3. No signs directories, posters, advertisements, or notices shall be
painted or affixed on or to any of the windows or doors, or in corridors or
other parts of the Building, except in such color, size, and style, and in
such places, as shall be first approved in writing by Landlord in its
discretion. Building standard suite identification signs will be prepared by
Landlord at Tenant's expense. Landlord shall have the right to remove all
unapproved signs without notice to Tenant, at the expense of Tenant.
4. Tenants shall not do, or permit anything to be done in or about the
Building, or bring or keep anything therein, that will in any way increase the
rate of fire or other insurance on the Building, or on property kept therein or
otherwise increase the possibility of fire or other casualty.
5. Landlord shall have the power to prescribe the weight and position
of heavy equipment or objects which may overstress any portion of the floor. All
damage done to the Building by the improper placing of such heavy items will be
repaired at the sole expense of the responsible Tenant.
6. A Tenant shall notify the Building manager when safes or other
heavy equipment are to be taken in or out of the Building, and the moving shall
be done after written permission is obtained from Landlord on such conditions as
Landlord shall require.
7. Corridor doors, when not in use, shall be kept closed.
8. All deliveries must be made via the service entrance and service
elevator, when provided, during normal working hours.
Landlord's written approval must be obtained for any delivery after normal
working hours.
9. Each Tenant shall cooperate with Landlord's employees in keeping
their leased premises neat and clean.
10. Tenants shall not cause or permit any improper noises in the
Building, or allow any unpleasant odors to emanate from the leased premises, or
otherwise interfere, injure or annoy in any way other tenants, or persons having
business with them.
11. No animals shall be brought into or kept in or about the Building,
except guide dogs or similar support animals accompanying persons who are
physically disabled.
12. When conditions are such that Tenant must dispose of crates,
boxes, etc., it will be the responsibility of Tenant to dispose of same prior
to, or after the hours of 7:30 a.m. and 5:30 p.m., respectively.
13. No machinery of any kind, other than ordinary office machines such
as typewriters and calculators, shall be operated on the leased premises
without the prior written consent of Landlord, nor shall a tenant use or keep
in the Building any inflammable or explosive fluid or substance (including
Christmas trees and ornaments), or any illuminating materials, except candles.
No space heaters or fans shall be operated in the Building.
14. No bicycles, motorcycles or similar vehicles will be allowed in
the Building.
15. No nails, hooks, or screws shall be driven into or inserted in any
part of the Building except as approved by Landlord.
16. Landlord has the right to evacuate the Building in the event of an
emergency or catastrophe.
17. No food and/or beverages shall be distributed from Tenant's office
without the prior written approval the Building Manager.
18. No additional locks shall be placed upon any doors without the
prior written consent of Landlord. All necessary keys shall be furnished by
Landlord, and the same shall be surrendered upon termination of this lease, and
Tenant shall then give Landlord or his agent an explanation of the combination
of all locks on the doors or vaults. Tenant shall initially be given two (2)
keys to the leased premises by Landlord. No duplicates of such keys shall be
made by Tenants. Additional keys shall be obtained only from Landlord, at a
fee to be determined by Landlord.
19. Tenants will not locate furnishings or cabinets adjacent to
mechanical or electrical access panels or over air conditioning outlets so as
to prevent operating personnel from servicing such units as routine or
emergency access may require. Cost of moving such furnishings for Landlord's
access will be for Tenant's account. The lighting and air conditioning
equipment of the Building will remain the exclusive charge of the Building
designated personnel.
20. Tenant shall comply with parking rules and regulations as may be
posted or distributed from time to time.
EXHIBIT "D" TO OFFICE LEASE AGREEMENT - Page 1
19
21. No portion of the Building shall be used for the purpose of lodging
rooms.
22. Vending machines or dispensing machines of any kind will not be placed
in the leased premises by a Tenant.
23. Prior written approval, which shall be at Landlord's sole discretion,
must be obtained for installation of window shades, blinds, drapes or any other
window treatment of any kind whatsoever. Landlord will control all internal
lighting that may be visible from the exterior of the Building and shall have
the right to change any unapproved lighting, without notice to Tenant, at
Tenant's expense.
24. No Tenant shall make any changes or alterations to any portion of the
Building without Landlord's prior written approval, which may be given on such
conditions as Landlord may elect. All such work shall be done by Landlord or by
contractors and/or workmen approved by landlord, working under Landlord's
supervision.
25. Tenants shall provide plexiglas or other pads for all chairs mounted
on rollers or casters.
26. Landlord reserves the right to rescind any of these rules and make such
other and further rules and regulations as in its judgment shall from time to
time be necessary or advisable for the operation of the Building, which rules
shall be binding upon each Tenant upon delivery to such Tenant of notice
thereof in writing.
27. No tenant, and no employee, invitee or other person entering the
Building to visit a tenant, shall be permitted to smoke cigars, cigarettes,
tobacco or any other tobacco product on the Premises or in any other part of
the Building or the Parking Garage, all of which are expressly prohibited.
20
SCHEDULE "D-1"
TO
EXHIBIT "D"
TO
OFFICE LEASE AGREEMENT BETWEEN
BROOKDALE INVESTORS, L.P.,
AS LANDLORD, AND
FORTUNE PETROLEUM CORPORATION,
AS TENANT
INTERPRETATION OF RULES AND REGULATIONS
1. With respect to Rule #18 of Exhibit "D", Tenant shall be permitted
sixteen (16) keys.
2. With respect to Rule #25 of Exhibit "D", Tenant shall not be required to
provide plexi-glas or other pads for all chairs mounted on rollers and
casters which have been designed to be utilized on carpet.
EXHIBIT "D" TO OFFICE LEASE AGREEMENT - Page 1
21
EXHIBIT "E"
TO
OFFICE LEASE AGREEMENT BETWEEN
BROOKDALE INVESTORS, L.P.,
AS LANDLORD, AND
FORTUNE PETROLEUM CORPORATION,
AS TENANT
WORK LETTER
(Allowance)
This Work Letter ("Work Letter") describes and specifies the rights and
obligations of Landlord and Tenant with respect to certain allowances granted
to Tenant hereunder and rights and responsibilities of Landlord and Tenant with
respect to the design, construction and payment for the completion of the
initial Improvements within the Premises.
1. Definitions. Terms which are defined in the Lease shall have the
same meaning in this Work Letter. Additionally, as used in this Work Letter,
the following terms (when delineated with initial capital letters) shall have
the respective meaning indicated for each as follows:
(a) Basic Construction of the Building shall mean the structure
of the Building as built on the date of this Work Letter, the Shell
Improvements, and all other improvements, fixtures and facilities constituting
a part of the Project, as these exist on the date of this Work Letter if the
Building is complete, or as provided for in Landlord's plans and specifications
for the Building if prior to completion.
(b) Landlord's Architect shall mean the architect designated
by Landlord as its architect, from time to time, to perform the functions of
Landlord's Architect hereunder.
(c) Plans and Specifications shall mean collectively, the
plans, specifications and other information prepared or to be prepared by
Tenant's Architect and, where necessary, by Landlord's electrical, mechanical
and structural engineers, all at Tenant's expense, which shall detail the Work
required by Tenant in the Premises and which shall be approved in writing by
both Tenant and Landlord prior to the commencement of such Work.
(d) Tenant's Architect shall mean Xxxxxxx and Partners who is
an architect licensed to practice in the State of Texas.
(e) Work shall mean all materials and labor to be added to the
Basic Construction of the Building and the Shell Improvements in order to
complete the installation of the Initial Improvements within the Premises for
Tenant in accordance with the Plans and Specifications, including, without
limitation any modification to Basic Construction of the Building or to the
Shell Improvements, any structural modifications to the Building, any
electrical or plumbing work required to meet Tenant's electrical and plumbing
requirements, and any special air conditioning work required to be performed in
the Premises.
(f) Cost of the Work shall mean the cost of all materials and
labor to be added to the Basic Construction of the Building and the Shell
Improvements in order to complete the installation of the Initial Improvements
within the Premises in accordance with the Plans and Specifications.
(g) Landlord's Costs shall mean the sum of (i) the cost of the
Shell Improvements and (ii) that portion of the Cost of the Work up to, but not
in excess of, the aggregate amount of the Allowance.
(h) Tenant's Costs shall mean that portion of the Cost of the
Work in excess of Landlord's Costs.
(i) Change Costs shall mean all costs or expenses
attributable to any change in the Plans and Specifications which, when added to
other costs and expenses incurred in completing the Work, exceed Landlord's
Costs, including, without limitation, (i) any cost caused by direction of
Tenant to omit any item of Work contained in the Plans and Specifications, (ii)
any additional architectural or engineering services, (iii) any changes to
materials in the process of fabrication, (iv) the cancellation or modification
of supply or fabricating contracts, (v) the removal or alteration of any Work
or any plans completed or in process, or (vi) delays affecting the schedule of
the Work.
(j) Working Days shall mean all days of the week other than
Saturday, Sunday, and legal holidays.
2. Procedure and Schedules for the Completion of Plans and
Specifications. The Plans and Specifications shall be completed in accordance
with the following procedure and time schedules:
(a) Design Drawings. Within ten (10) Working Days from
execution of the Lease, Tenant shall submit to Landlord four (4) sets of prints
of design drawings, specifying the intended design, character and finishing of
the Initial Improvements within the Premises. Such package shall include
separate drawings for signs in accordance with Landlord's sign criteria. The
design drawings shall set forth the requirements of Tenant with respect to the
installation of the Initial Improvements within the Premises, and such drawings
shall include, without limiting their scope, a Tenant approved space plan,
architectural design of the space, including office front, plans, elevations,
sections, and renderings indicating materials, color selections and finishes.
(i) After receipt of design drawings, Landlord shall return to
Tenant one set of prints of design drawings with Landlord's suggested
modifications and/or approval.
(ii) If design drawings are returned to Tenant with comments,
but not bearing approval of Landlord, the design drawings shall be immediately
revised by Tenant and resubmitted to Landlord for approval within ten (10)
Working Days of their receipt by Tenant. Unless such action is taken, Tenant
will be deemed to have accepted and approved all of Landlord's comments on the
design drawings.
(b) Completion of Plans and Specifications. All Plans and
Specifications shall be prepared
EXHIBIT "E" TO OFFICE LEASE AGREEMENT - Page 1
22
in strict compliance with applicable Building standards and requirements
as set forth in the Lease, this Work Letter and otherwise, and shall
also adhere to the design drawings approved by Landlord. In order to
assure the compatibility of Tenant's electrical and mechanical systems
and the compatibility of Tenant's structural requirements with the
existing Building and in order to expedite the preparation of Tenant's
electrical, mechanical and structural drawings, Tenant or Tenant's
Architect shall deliver to Landlord's Architect, not later than ten (10)
Working Days from the date of Landlords' approval of design drawings, a
detailed plan setting forth any and all electrical, mechanical and
structural requirements, and Landlord's Architect shall retain, at
Tenant's expense, Landlord's electrical, mechanical and structural
engineerings to prepare all necessary electrical, mechanical and
structural construction drawings which shall be included as a part of
the Plans and Specifications. All construction documents and
calculations prepared by Tenant's Architect shall be submitted by
Tenant, in the form of four (4) sets of blueline prints, to Landlord for
approval within ten (10) Working Days after the date of receipt by
Tenant of Landlord's approval of design drawings. If the Plans and
Specifications are returned to Tenant with comments, but not bearing
approval of Landlord, the Plans and Specifications shall be immediately
revised by Tenant and resubmitted to Landlord for approval within ten
(10) Working Days of their receipt by Tenant.
(i) The fees for Tenant's Architect and any
consultants or engineers retained by or on behalf of Tenant or
Tenant's Architect (including, but not limited to, the
electrical, mechanical and structural engineers required to be
retained under this paragraph) shall be paid by Tenant. Tenant
shall also pay for any preliminary drawings by Landlord's
Architect for review of the design drawings, the Plans and
Specifications, and any revisions to such documents, and the
fees and expenses of Landlord's Architect for inspection of the
Work, as required by Landlord.
(ii) Tenant shall have the sole responsibility for
compliance of the Plans and Specifications with all applicable
statutes, codes, ordinances and other regulations, and the
approval of the Plans and Specifications or calculations
included therein by Landlord shall not constitute an indication,
representation or certification by Landlord that such Plans and
Specifications or calculations are in compliance with said
statutes, codes, ordinances and other regulations. In instances
where several sets of requirements must be met, the requirements
of Landlord's insurance underwriter or the strictest applicable
requirements shall apply where not prohibited by applicable
codes.
Upon completion of the initial improvements, Tenant shall
deliver to Landlord an "as-built" set of Plans and Specifications for
the Premises, together with such other information required by Landlord
to place the information from the "as-built" Plans and Specifications on
to Landlord's data base; the cost of providing the "as-built" Plans and
Specifications and other information, together with Landlord's cost to
place the information on to Landlord's data base, shall be borne solely
by Tenant.
3. Pricing. On or before the date which is ten (10) Working Days
after finalization of the Plans and Specifications, as evidenced by Landlord's
written approval thereof, Landlord shall notify Tenant in writing of the Cost
of the Work. The contract for the Work shall obligate the contractor to
purchase from Landlord all materials and supplies which are held in "stock" by
Landlord and which are required for the Work by the Plans and Specifications.
Within ten (10) Working Days after its receipt of Landlord's written notice
identifying the Cost of the Work, Tenant shall either approve such Cost of the
Work in writing or cause the Plans and Specifications to be revised and
resubmitted to Landlord for Approval. On or before the date which is ten (10)
Working Days from Landlord's receipt of such revised Plans and Specifications,
Landlord shall either approve the revised Plans and Specifications and give to
Tenant a revised Cost of the Work or give to Tenant Landlord's comments on such
revised Plans and Specifications. If for any reason Landlord and Tenant have
not agreed in writing upon final Plans and Specifications and/or the Tenant has
not approved in writing the Cost of the Work on or before the date which is ten
(10) Working Days from the date hereof, then Landlord shall have the right to
terminate the Lease and this Work Letter, without further obligation.
4. Payments. Tenant may use up to $1.00 per square foot of the
Allowance for the payment of fees and expenses payable by Tenant under the
terms of Paragraph 2(b)(i) of this Work Letter. Tenant shall pay the aggregate
amount of Tenant's Costs to Landlord upon demand. Landlord shall determine the
percentage of the Cost of the Work which is allocable to Landlord and the
percentage of the Cost of the Work which is allocable to Tenant. Landlord shall
also revise its determination of such percentages based on any changes in the
Cost of the Work due to change orders affecting the Plans and Specifications.
Within ten (10) days after Tenant's receipt of an invoice from Landlord which
identifies that portion of the Cost of the Work to be incurred, respectively,
by Landlord and Tenant, Tenant shall pay to Landlord the percentage of the Cost
of the Work allocable to Tenant, as Tenant's Costs, as determined by Landlord
from time to time. Landlord's obligation for payment with respect to the Work
shall not exceed the aggregate amount of Landlord's Costs; and after Landlord
has paid Landlord's Costs, Tenant shall thereafter pay all Cost of the Work as
and when invoiced to Tenant by Landlord, including, without limitation, any
Change Costs. The amounts payable to Landlord hereunder shall constitute Rent
due pursuant to the Lease, and failure to make any such payment when due shall
constitute a default under the Lease, entitling Landlord to exercise any or all
of its remedies hereunder, as well as all remedies otherwise available to
Landlord. Any cost savings achieved after completion of the Work shall be
solely the property of Landlord, not Tenant.
5. Performance of Work and Delays. Landlord shall cause the
Contractor to perform the Work in substantial accordance with the Plans and
Specifications. In that regard, Landlord shall perform as construction manager
for the construction of the Initial Improvements in accordance with the Plans
and Specifications; and the Cost of the Work shall include a management fee
payable to Landlord in the amount of five percent (5%) of the cost of the
materials and labor constituting the Work. If a delay shall occur in the
completion of the Work by Landlord as the probable result of (i) any failure to
furnish when due Tenant's design drawings, Tenant's electrical, mechanical
and/or structural requirements, Tenant's Plans and Specifications or any
revision to any such documents, (ii) any change by Tenant in any of the Plans
and Specifications, (iii) any state of facts which gives rise to a change
referred to in the definition of Change Costs or any changes resulting in a
Change Cost, (iv) the fact that materials to be incorporated into the Work
which are non-Building Grade require a lead time (not due to Landlord default
or error) to obtain or construction time to perform, in excess of that required
for Work which is Building Grade, as determined by Landlord, or (v) any other
act or omission of Tenant, its agents or employees, including any violation of
the provisions of the Lease or any delay in giving authorizations or approvals
pursuant to this Work Letter, then any such delay shall not justify any
extension of the Commencement Date of the Lease.
6. Change Orders. All changes and modifications in the Work from
that contemplated in the Plans and Specifications, whether or not such change
or modification gives rise to a Change Cost, must be evidenced by a written
Change Order executed by both Landlord and Tenant. In that regard, Tenant shall
submit to Landlord such information as Landlord shall require with respect to
any Change Order requested by Tenant. After receipt
EXHIBIT "E" TO OFFICE LEASE AGREEMENT - Page 2
23
of requested Change Order, together with such information as Landlord shall
require with respect thereto, Landlord shall return to Tenant either the
executed Change Order, which will evidence Landlord's approval thereof, or the
Plans and Specifications with respect thereto with Landlord's suggested
modification.
7. Punchlist. Within thirty (30) days after the Commencement Date,
Tenant shall give Landlord written notice specifying any details of
construction, decoration or mechanical adjustment which remain to be performed
by Landlord with respect to any Work; and except for the details contained in
such written notice form Tenant, all obligations of Landlord in regard to the
Work shall be deemed to have been satisfied. Landlord shall have the right to
enter the Premises to complete any such unfinished details, and entry by
Landlord, its agents, servants, employee or contractors for such purpose shall
not relieve Tenant of any of its obligations under the Lease or impose any
liability on Landlord or its agents, servants, employees or contractors.
8. Whole Agreement; No Oral Modification. This Work Letter embodies
all representations, warranties and agreements of Landlord and Tenant with
respect to the matter described herein, and this Work Letter may not be altered
or modified except by an agreement in writing signed by the parties.
9. Paragraph Headlines. The paragraph headings contained in this Work
Letter are for convenient reference only and shall not in any way affect the
meaning or interpretation of such paragraphs.
10. Notices. All Notices required or contemplated hereunder shall be
given to the parties in the manner specified for giving notices under the
Lease.
11. Binding Effect. This Work Letter shall be construed under the laws
of the State of Texas and shall be binding upon and shall inure to the benefit
of the parties hereto and their respective permitted successors and assigns.
12. Conflict. In the event of conflict between this Work Letter and
any other exhibits or addends to this Lease, this Work letter shall prevail.
EXHIBIT "E" TO OFFICE LEASE AGREEMENT - Page 3
24
EXHIBIT "F"
TO
OFFICE LEASE AGREEMENT BETWEEN
BROOKDALE INVESTORS, L.P.,
AS LANDLORD, AND
FORTUNE PETROLEUM CORPORATION,
AS TENANT
PARKING
This EXHIBIT "F" ("Parking Exhibit") describes and specifies Tenant's
non-exclusive right to use twelve (12) unreserved parking spaces ("Unreserved
Spaces") and the exclusive right to use four (4) reserved spaces ("Reserved
Spaces") located inside the Building's parking garage ("Parking Garage") upon
the terms and conditions set forth below.
1. Definitions. The terms which are defined in the Lease shall have the
same meaning in this Parking Exhibit.
2. Grant and Rental Fee. Provided no event of default has occurred and
is continuing under the Lease, Tenant shall be permitted the non-exclusive use
of the Unreserved Spaces and the exclusive use of the Reserved Spaces during
the Lease Term at no charge subject to such terms, conditions, and regulations
as are, from time to time, promulgated by Landlord or the manager of the
Parking Garage, as applicable, or applicable to patrons of the Parking Garage
for spaces similarly situated therein.
3. Tenant's Failure to Use Spaces. In the event that Tenant (after the
Commencement Date and at any time during the Lease Term) fails to utilize all
or any of the Spaces, Landlord shall have no further obligation to make
available to Tenant the Spaces not utilized, until and unless Tenant notifies
Landlord in writing at least thirty (30) days prior to the first (1st) day of
any month, of its preference to again use such Space or Spaces beginning on
such month. The failure, for any reason, of Landlord to provide or make
available such Spaces to Tenant or the inability of Tenant to utilize all or any
portion of the Spaces shall under no circumstances be deemed a default by
Landlord under the Lease so as to permit Tenant to terminate the Lease, in whole
or in part.
4. Risk. All motor vehicles (including all contents thereof) shall be
parked in the Spaces at the sole risk of Tenant, its employees, agents,
invitees and licensees, it being expressly agreed and understood that Landlord
has no duty to insure any of said motor vehicles (including the contents
thereof), and that Landlord is not responsible for the protection and security
of such vehicles. Landlord shall have no liability whatsoever for any property
damage and/or personal injury which might occur as a result of or in connection
with the parking of said motor vehicles in any of the Spaces, and Tenant hereby
agrees to indemnify and hold Landlord harmless from and against any and all
costs, claims, expenses, and/or causes of action which Landlord may incur in
connection with or arising out of Tenant's use of the Spaces pursuant to this
Agreement.
5. No Bailment. It is further agreed that this parking Exhibit shall
not be deemed to create a bailment between the parties hereto, it being
expressly agreed and understood that the only relationship created between
Landlord and Tenant hereby is that of licensor and licensee, respectively.
6. Rules and Regulations. In its use of the Spaces, Tenant shall follow
all of the Rules and Regulations of the Building (attached to the Lease as
Exhibit "D") applicable thereto, any rules and regulations promulgated by
Landlord or the manager of the Parking Garage, as applicable, as the same may
be amended from time to time. Upon the occurrence of any breach of such rules,
or default by Tenant under the Lease, Landlord shall be entitled to terminate
this Parking Exhibit, in which event Tenant's right to utilize the Spaces shall
thereupon automatically cease.
7. Access. Landlord shall be entitled to utilize whatever access device
Landlord deems necessary (including but not limited to the issuance of parking
stickers or access cards), to assure that only those persons who have contracted
to use spaces in the Parking Garage are using the parking spaces therein.
Landlord currently limits access to the Parking Garage through the use of a
parking entry card system, the cards for which shall be provided by Landlord.
Landlord agrees to provide to Tenant sixteen (16) parking entry cards for a
refundable deposit of $10.00 per card. Tenant further agrees to surrender all
parking entry cards in its possession upon the expiration or earlier termination
of this Lease. Landlord shall be entitled to cancel any lost or stolen cards of
which it becomes aware. Tenant shall promptly notify Landlord of any lost or
stolen cards. Tenant shall pay Landlord for each additional card(s) or for each
replacement card(s) for any card(s) lost by or stolen from Tenant, in such
amount as Landlord shall, from time to time determine, the present charge for
such lost or stolen cards being $100.00 per card. Tenant acknowledges that the
parking entry card may also be the same as the master entry card used for access
to the Building during other than normal business hours, and to the extent the
cards are the same, agrees that the provisions of Paragraph 6(f) of the Lease
shall also be applicable and in the event of a conflict with the provisions of
this Parking Exhibit, the provisions of Paragraph 6(f) shall control. In the
event Tenant, its agents or employees wrongfully park in any of the Parking
Garage's spaces, Landlord shall be entitled and is hereby authorized to have any
such vehicle towed away, at Tenant's sole risk and expense, and Landlord is
further authorized to impose upon Tenant a penalty of $25.00 for each such
occurrence. Tenant hereby agrees to pay all amounts falling due hereunder upon
demand therefor, and the failure to pay any such amount shall additionally be
deemed an event of default hereunder and under the Lease, entitling Landlord to
all of its rights and remedies hereunder and thereunder.
EXHIBIT "F" TO OFFICE LEASE AGREEMENT - Page 1
25
EXHIBIT "G"
-----------
TO
OFFICE LEASE AGREEMENT BETWEEN
BROOKDALE INVESTORS, L.P.,
AS LANDLORD, AND
FORTUNE PETROLEUM CORPORATION,
AS TENANT
RENEWAL OPTION
--------------
This Exhibit "G" ("Renewal Exhibit") describes and specifies the
option, granted by Landlord to Tenant to extend and renew this Lease. Provided
that, at the time in question, this Lease is then in full force and effect and
there is no uncured event of default under this Lease, Tenant shall have the
option ("Option") to renew this Lease as follows:
1. Defined Terms. For purposes of this Renewal Exhibit, all terms
defined in the Lease will be utilized herein without further definition. Terms
specifically applicable to this Renewal Exhibit shall have the meaning
specified in this Renewal Exhibit and shall be delineated by initial capital
letters.
2. Exercise of Option. Tenant may, by notifying Landlord of its
election in writing not less than nine (9) months nor more than twelve (12)
months prior to the end of the Lease Term, renew this Lease for an additional
term ("Second Lease Term") beginning on the date next following the expiration
date of the Lease Term and continuing for sixty (60) months thereafter. The
renewal of this Lease will be upon the same terms, covenants, and conditions
applicable during the Lease Term, as provided in the Lease, except that (a) the
Base Rental payable during the Second Lease Term shall be an amount equal to
the existing "market rental rate" (as defined below) as of the date on which
the Second Lease Term commences, (b) the defined term "Lease Term" shall be
deemed to include the "Second Lease Term". In addition, Base Rental shall
continue to be adjusted as provided in Exhibit "C" to the Lease, but the
Expense Stop shall be adjusted to reflect market conditions. As used herein,
the phrase "market rental rate" shall mean the rate of base rental being
charged by Landlord to new tenants having a financial condition comparable to
that of Tenant for comparable space within the Building for a term comparable
to the Second Lease Term (but not less than the Base Rental payable with
respect to the final year of the Lease Term).
3. Termination of Option. The failure of Tenant to exercise the
Option herein granted within the time period set forth herein shall constitute
a waiver and termination of such Option. In addition, any termination of this
Lease during the Lease Term or any assignment, subletting, or other transfer by
Tenant, whether or not with the approval of Landlord, shall terminate the
Option contained in this Renewal Exhibit.
EXHIBIT "G" TO OFFICE LEASE AGREEMENT - Page 1
26
EXHIBIT "H"
-----------
TO
OFFICE LEASE AGREEMENT BETWEEN
BROOKDALE INVESTORS, L.P.,
AS LANDLORD AND
FORTUNE PETROLEUM CORPORATION,
AS TENANT
RIGHT OF FIRST REFUSAL
----------------------
This Exhibit "H" ("Refusal Exhibit") describes and specifies the right
of first refusal hereby granted by Landlord to Tenant with respect to the space
within the Building described below, which right of first refusal is being
granted upon the following terms and conditions:
1. Defined Terms. For purposes of this Refusal Exhibit, all terms
defined in the Lease will be utilized herein without further definition. Terms
specifically applicable to this Refusal Exhibit shall have the meanings
specified in this Refusal Exhibit and shall be delineated by initial capital
letters.
2. Grant of Right of First Refusal. Landlord hereby grants to Tenant
a continuous and recurring right of first refusal ("Refusal Right") with
respect to approximately 4451 square feet of Rentable Area contiguous to the
Premises in the Building which is described on Schedule 1 attached hereto and
incorporated herein by reference for all purposes ("Refusal Space") during the
period commencing on the Commencement Date and ending as of the end of the
Lease Term. Notwithstanding the foregoing, the Refusal Right shall not be
applicable during any time when there is an uncured event of default under the
Lease. Notwithstanding anything to the contrary in the foregoing, the Refusal
Right shall be subject to the rights of any tenants presently occupying space
in the Building.
3. Exercise of Refusal Right. In the event that Refusal Space in the
Building becomes available, availability, for purposes hereof, to be at the
sole determination of Landlord, and Landlord receives a bona fide offer from a
third party to lease all or a part of the Refusal Space which Landlord desires
to accept, Landlord shall so notify Tenant and shall include in such notice the
rental rate for the subject Refusal Space, expense stop, term of the proposed
Lease (together with any renewal rights being granted), and any lease
concessions to be granted. Tenant shall have five (5) days from the receipt of
such notice to notify Landlord in writing of the exercise by Tenant of Tenant's
Refusal Right with respect to the subject Refusal Space, which shall be on the
same terms and with respect to the entire space specified in Landlord's notice.
If the Right of First Refusal is exercised prior to November 1, 1996 then the
Commencement Date for the Refusal Space shall be within six (6) months of
exercise, but in no event later than December 31, 1996. If Tenant exercises
this Right of First Refusal after November 1, 1996, however, then the
Commencement Date shall be the same as proposed to the third party tenant. In
the event that Tenant fails to so notify Landlord within such five (5) day
period, Tenant shall be deemed to have irrevocably waived its Refusal Right
with respect to the subject Refusal Space, unless and until Landlord has
another offer to lease said space, and Landlord shall have the right to enter
into a lease with the third party with respect to that Refusal Space. In the
event that Tenant elects to exercise its Refusal Right with respect to the
subject Refusal Space and does in fact exercise such Refusal Right in the
manner and within the time period specified herein, Landlord and Tenant shall,
within thirty (30) days after Tenant delivers to Landlord notice of its
election, enter into a written amendment modifying and supplementing the Lease
and containing such other terms and provisions as Landlord may deem
appropriate. In the event that Tenant fails to enter into said amendment within
such thirty (30) day period, Tenant shall be deemed to have irrevocably waived
its Refusal Right unless and until Landlord has another offer to lease said
space with respect to the subject Refusal Space; and Landlord shall have the
right to enter into a lease with the third party with respect to that Refusal
Space. Except as may be specifically modified in such amendment and except with
respect to the rental, expense stop, lease term, and lease concessions
applicable to the subject Refusal Space, as herein specified, the terms and
provisions of the Lease shall, on the day of delivery of the subject Refusal
Space to Tenant, automatically apply and become applicable to the subject
Refusal Space; and the subject Refusal Space, as of the date of such delivery,
shall automatically and without the necessity of further documentation, become
and be deemed to be a part of the Premises. Effective as of the date of
delivery of the subject Refusal Space to Tenant, the Rentable Area within the
subject Refusal Space shall be included within the determination of Tenant's
prorata share of Basic Costs, as provided in Exhibit "C" to this Lease.
4. Delivery of Refusal Space. Any refusal Space shall be delivered to
Tenant vacant and unoccupied and "as is" without benefit of improvements
(except Shell Improvements, if any) unless the refusal notice specifies that an
allowance is to be granted for the improvement or refurbishment of the subject
Refusal Space, in which event Tenant will receive the allowance specified in
Landlord's notice. In the event that any improvements or restoration work is to
be incorporated into the Premises, the amendment shall contain provisions
reflecting the agreement of Landlord and Tenant with respect thereto. Landlord
shall use reasonable diligence to deliver the subject Refusal Space on the date
specified in Landlord's notice of its availability, but in no event shall
Landlord have any liability for the failure to deliver the subject Refusal
Space to Tenant on such date, nor shall any such failure impair the validity of
the Lease, extend the Lease Term (except with respect to the subject Refusal
Space, which shall be the term specified in Landlord's notice irrespective of
the Lease Term specified in Paragraph 1 of the Lease), or impair any
obligations of Tenant under the Lease, it being understood that the Rent
applicable to the subject Refusal Space shall be abated until possession is
delivered to Tenant in full settlement of all claims that Tenant might
otherwise have against Landlord by reason of the failure to deliver possession
of the subject Refusal Space to Tenant.
5. Termination of Refusal Right. The Refusal Right shall automatically
terminate upon (a) the termination of the Lease Term, whether by Landlord upon
the occurrence of an Event of Default or otherwise, (b) the expiration of the
time period specified in Paragraph 2 above, (c) the failure of Tenant to
exercise the Refusal Right with respect to any Refusal Space as and within the
time period specified in Paragraph 3 above, but only with respect to the
subject Refusal Space, and (d) upon the assignment, subletting, or other
transfer by Tenant, whether or not with the approval of Landlord.
EXHIBIT "H" TO OFFICE LEASE AGREEMENT - Page Solo
27
SCHEDULE 1
TO
EXHIBIT "H"
TO
OFFICE LEASE AGREEMENT BETWEEN
BROOKDALE INVESTORS, L.P.,
AS LANDLORD,
AND
FORTUNE PETROLEUM CORPORATION
AS TENANT
REFUSAL SPACE
[ONE COMMERCE GREEN ARCHITECTURAL PLAN]
SCHEDULE 1 TO EXHIBIT "H" TO OFFICE LEASE AGREEMENT -- Page Solo
28
==============================================
* * * * * *
ONE COMMERCE GREEN
OFFICE LEASE AGREEMENT
BETWEEN
BROOKDALE INVESTORS, L.P.,
AS LANDLORD,
AND
FORTUNE PETROLEUM CORPORATION,
AS TENANT
DATED 1/4 , 1996
---------- --
* * * * * *
==============================================
29
TABLE OF CONTENTS
OFFICE LEASE AGREEMENT
BETWEEN
BROOKDALE INVESTORS, L.P.,
AS LANDLORD
AND
FORTUNE PETROLEUM CORPORATION,
AS TENANT
SECTION PAGE
1. Definitions: ..................................................... 1
(a) "Building" ............................................... 1
(b) "Premises" ............................................... 1
(c) "Base Rental" ............................................ 1
(d) "Commencement Date" ...................................... 1
(e) "Lease Term" ............................................ 1
(f) "Security Deposit" ....................................... 1
(g) "Expense Stop" ........................................... 1
(h) "Allowance" .............................................. 1
(i) "Shell Improvements" ..................................... 1
(j) "Common Areas" ........................................... 1
(k) "Service Areas" .......................................... 1
(l) "Rentable Area" .......................................... 1
(m) "Normal Business Hours" .................................. 1
(n) "Initial Improvements" ................................... 1
(o) "Building Standard" ...................................... 1
(p) "Basic Costs" ............................................ 1
(q) "Ready for Occupancy" .................................... 1
2. Lease Grant ...................................................... 2
3. Lease Term ....................................................... 2
4. Use .............................................................. 2
5. Base Rental ...................................................... 2
6. Services to be Furnished by Landlord ............................. 2
7. Improvements to be Made by Landlord .............................. 3
8. Maintenance and Repair of Premises by Landlord ................... 3
9. Graphics ......................................................... 3
10. Care of the Premises by Tenant ................................... 3
11. Repairs and Alterations by Tenant ................................ 3
12. Use of Electrical Services by Tenant ............................. 3
13. Laws and Regulations ............................................. 4
14. Building Rules; No Smoking ....................................... 4
15. Entry by Landlord ................................................ 4
16. Assignment and Subletting ........................................ 4
17. Mechanic's Liens ................................................. 4
18. Property Insurance ............................................... 4
19. Liability Insurance .............................................. 4
20. Indemnity ........................................................ 5
21. Waiver of Subrogation Rights ..................................... 5
22. Casualty Damage .................................................. 5
23. Condemnation ..................................................... 5
24. Damages from Certain Causes ...................................... 6
25. Events of Default/Remedies ....................................... 6
26. Peaceful Enjoyment ............................................... 7
27. Holding Over ..................................................... 7
28. Subordination to Mortgage ........................................ 7
29. Estoppel Certificates ............................................ 8
30. Landlord's Lien .................................................. 8
i
30
31. Attorney's Fees .............................................. 8
32. No Implied Waiver ............................................ 8
33. Personal Liability ........................................... 8
34. Security Deposit ............................................. 8
35. Notice ....................................................... 8
36. Severability ................................................. 8
37. Recordation .................................................. 8
38. Governing Law ................................................ 9
39. Force Majeure ................................................ 9
40. Time of Performance .......................................... 9
41. Transfers by Landlord ........................................ 9
42. Transfers by Tenant .......................................... 9
43. Commissions .................................................. 9
44. Effect of Delivery of This Lease ............................. 9
45. Entire Agreement ............................................. 9
46. Receipt of Premises .......................................... 9
47. Merger of Estates ............................................ 9
48. Waste Management ............................................. 9
49. Americans with Disabilities Act and Texas
Architectural Barriers Act ................................... 9
50. Exhibits ..................................................... 9
