Exhibit 10.9
LEASE CONTRACT
This Lease Contract (the "Lease") is entered into between GREENWAY PLAZA,
LTD., a Texas limited partnership ("Landlord"), and PHYSIX, INC., a Texas
corporation, ("Tenant"), and is effective as of the "Effective Date" provided in
Paragraph 33. below.
1. PREMISES
A. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord approximately 7,433 square feet of "Rentable Area" (as
hereinafter defined) on the sixth (6th) floor of Two Greenway Plaza
(the "Building"), located on the land described in Exhibit "A" (the
"Land") in Houston, Xxxxxx County, Texas. The area leased in the
Building is hereinafter called "Leased Premises" and is shown outlined
and hatched on Exhibit "B". Landlord shall have the right at any time
and from time to time to change the Building name. The Land, the
Building, together with landscaping, driveways, sidewalks, service
areas, all other improvements located on the Land, and the Building
garage ("Parking Garage") are hereafter collectively called the
"Project".
B. On each floor of the Building on which space rentable to tenants is or
will be leased to one tenant, the Rentable Area for such floor
("Single Tenant Floor") shall be the entire area bounded by the
interior of the exterior walls of the Building on such floor less the
area contained within the Building stairs, vertical ducts, elevator
shafts, flues, vents, stacks, and pipe shafts. All the area on any
Single Tenant Floor that is used for elevator lobbies, corridors,
special stairways, restrooms, mechanical rooms, electrical rooms, and
telephone closets, all vertical penetrations that are included for the
special use by Tenant, columns and other structural portions of the
Building, plus a pro rata portion of the Building's ground floor
lobbies, mechanical rooms and other similar facilities utilized by all
Building tenants, shall be included within the Rentable Area of the
Single Tenant Floor.
C. On each floor of the Building on which space rentable to tenants ir or
will be leased to more than one tenant ("Multi-tenant Floor"), the
Rentable Area attributable to each such lease shall be the total of
(1) the area bounded by the interior of the exterior wall or walls of
the Building bounding such leased premises, the exterior of all walls
separating such leased premises from any public corridors or other
public areas on such floor and the center line of all walls separating
such leased premises from other areas leased or to be leased to other
tenants on the Multi-tenant Floor, and (2) a pro rata portion of the
area covered by the elevator lobbies, corridors, restrooms, mechanical
rooms, electrical rooms, telephone closets, columns and other
structural portions of the Building situated on the Multi-tenant
Floor, plus a pro rata portion of the Building's ground floor
lobbies, mechanical rooms and other similar facilities utilized by all
Building tenants. The Rentable Area for the entire Building shall be
deemed to be 212,232 square feet for the purpose of this Lease.
2. TERM
The term of this Lease shall commence November 1, 1996 ("Commencement
Date"), and shall expire February 28, 2004 ("Expiration Date"). In the event
the Leased Premises should not be ready for occupancy by the Commencement Date
for any reason, Landlord shall not be liable or responsible for any claims,
damages or liabilities in connection therewith or by reason thereof; and the
term of this Lease shall commence at the time that the Leased Premises are ready
for occupancy by Tenant, Landlord and Tenant, at the request of either, will
execute a declaration specifying the square feet of Rentable Area contained
within the Leased Premises, the beginning date of the term of this Lease and
such beginning date will then constitute the Commencement Date. In such event,
rental under this Lease shall commence, subject to a rental abatement period as
provided below, on said revised Commencement Date and the stated term in this
Lease shall thereupon commence, and the Expiration Date shall be extended to
effect a full eighty-eight (88) month term. If the Leased Premises are not
"Substantially Completed" (as hereinafter defined) by February 1, 1997 (the
"Outside Completion Date") [subject to delays due to force majeure, Tenant
delays, or delays beyond the reasonable control of Landlord]; upon written to
Landlord, Tenant shall have the one time right to terminate this Lease within
ten (10) days following the Outside Completion Date. If the Lease is
terminated, all deposits paid to Landlord by Tenant under this Lease shall be
promptly refunded by Landlord to Tenant and neither party shall have any further
obligations or liabilities under this Lease. "Substantial Completion", as said
term is used herein, shall mean that date, as reasonably determined by Landlord
or Landlord's architect, when all of the improvements required to be performed
by Landlord have been completed excepting completion or correction of minor
items which do not significantly impair Tenant's ability to occupy and use the
Leased Premises for the purposes intended.
3. RENT
As "Base Rental" for the lease and use of the Leased Premises, Tenant will
pay Landlord or Landlord's assigns, at the Building office or post office
address of Landlord or such other address as Landlord may hereafter specify in
writing, without demand and without deduction, abatement or setoff (except as
otherwise expressly provided for herein), as follows:
Time Period # of Months Rate Monthly Rent
----------- ----------- ------ ------------
11/01/96-02/28/97 04 $00.00 $ 0.00
03/01/97-08/31/00 42 $12.00 $7,433.00
09/01/00-02/28/04 42 $13.00 $8,052.42
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The Base Rentals outlined above are due and payable on the first day of each
calendar month, monthly in advance, for each and every month in the term of this
Lease, in lawful money of the United States. The Base Rental payable for
partial months occurring at the beginning or end of the Lease term shall be
prorated. The terms "rent" or "rental" shall mean Base Rental and all other
sums to be paid to Landlord by Tenant under the provisions of this Lease.
4. USE
Tenant will use the Leased Premises solely for the purpose of office space
and for no other purpose without the prior written consent of Landlord.
5. SERVICES TO BE PROVIDED BY LANDLORD
A. Landlord shall furnish Tenant, at Landlord's expense subject to
Paragraph 13, the following services during the Lease term:
(1) Air conditioning and heating in season, at such temperatures and
in such amounts as are considered by Landlord to be standard,
from 8:00 a.m. until 6:00 p.m., Mondays through Fridays, and from
8:00 a.m. to 12:00 Noon, on Saturdays, excluding Holidays, as
defined below. Service on Saturdays (after 12:00 Noon), Sundays
and Holidays will be furnished only upon the request of Tenant,
who shall bear the cost thereof. The following days constitute
"Holidays": New Year's Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. Such charges for
after hours air conditioning and heating for the base building
air handling units are currently Tenant and 33/100 Dollars
($10.33) per hour per air handler with a maximum charge of
Twenty-Five and 00/100 Dollars ($25.00) per hour per floor. If
Tenant utilizes supplemental fan coil units, Tenant shall be
responsible for the electric charges (as such rates are set by
Houston Lighting & Power) and chilled water charges which are
currently set at Twenty Cents ($.20) per ton hour. Increases in
the above stated charges shall be based upon actual cost
increases plus reasonable cost of Landlord overhead.
(2) Hot and cold water at those points of general supply provided on
the floor on which the Leased Premises are located.
(3) Janitor service in and about the Building and the Leased Premises
five (5) days per week (excluding Holidays) and periodic window
washing. Tenant shall pay costs attributable to the cleaning of
improvements within
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the Leased Premises other than Building standard improvements.
The term "Building standard improvements" refers to the common
type of building materials, fixtures, and components used by
Landlord in the ordinary build-out of premises for tenants in the
Building.
(4) Building elevators for access to and egress from the Leased
Premises twenty-four (24) hours a day, seven (7) days a week.
(5) Proper facilities to enable the appropriate utility company to
furnish electricity for Building standard lighting, typewriters,
dictating equipment, copiers, calculating machines, personal
computers and other machines of similar low electrical
consumption, but not including electricity required for
electronic data processing equipment, special lighting in excess
of Building standard, or any item of electrical equipment which
single consumes more than 0.25 kilowatts per hour at rated
capacity or requires a voltage other than 120 volts single phase,
regardless of whether such special lighting or other equipment
was paid for out of funds that Landlord may have supplied for the
improvement of the Leased Premises, Tenant shall pay Landlord
monthly [illegible words] separately-metered charges for any
electricity in excess of that stated above (the cost of any such
meter and its installation to be borne by Tenant), or if not
separately metered, the charge for such excess electricity as
Landlord's engineer may compute. Upon approval by Landlord and
Tenant of engineered drawings for the improvements to be made to
the Leased Premises, Landlord shall give Tenant notice if any
such separate meters are required.
(6) Replacement of fluorescent lamps and ballasts in Building
standard ceiling mounted fixtures installed by Landlord and
incandescent bulb replacement in all public areas.
B. Subject to the provisions of Paragraph 5.C. below, no interruption or
malfunction of these services (including, without limitation, acts of
God, or the actions, regardless of the ultimate validity or
enforceability thereof, of any governmental, quasi-governmental,
regulatory or executive authority) shall constitute an eviction or
disturbance of Tenant's use and possession of the Leased Premises or a
breach of any of Landlord's obligations or render Landlord liable for
damages or entitle Tenant to be relieved from any of its obligations
(including the obligation to pay rent). In the event of any
interruption or malfunction, Landlord shall use reasonable diligence
during Landlord's normal business hours to restore service when
restoration is within its reasonable control.
C. Any Landlord's failure to provide the services specified in Paragraph
5.(a)(1), (2) for restrooms only and provided Landlord cannot provide
alternate facilities in the
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Building,] (4) and (5) which results in all or any part of the Leased
Premises being rendered unsafe or in any way unsuitable for use by
Tenant in the ordinary conduct of its business is herein referred to
as a "Constructive Eviction". If a Constructive Eviction occurs and is
not cured within five (5) working days after receipt by Landlord of
written notice from Tenant of the existence of such Construction
Eviction, Tenant shall have the following rights and remedies:
(1) For each day or portion thereof that the Constructive Eviction
continues after the initial five (5) day period, and provided
that Tenant is not using such space in a reasonably normal
manner, specifically recognizing the number of employees
utilizing such space is not a basis for using such space in a
reasonably normal manner, Tenant will be entitled to an equitable
abatement of rent commensurate with that portion of the Leased
Premises to which such Landlord's services have been interrupted,
calculated on a per square foot basis, beginning with the
inception of the sixth (6th) working day and terminating at the
time the Constructive Eviction is completely cured by Landlord
having resumed furnishing the interrupted service or having
rendered the Leased Premises again suitable for use by Tenant for
its intended purposes.
(2) If the Constructive Eviction is caused by Landlord's fault and is
not completely cured within thirty (30) days, or, if the
Constructive Eviction is not caused by Landlord's fault and is
not cured within sixty (60) days, then Tenant, at its option may
terminate this Lease and all of its obligations for the remaining
balances of the term. If Tenant so elects to terminate this
Lease, it shall so notify Landlord in writing at anytime prior to
Landlord curing the Constructive Eviction.
(3) Tenant's remedies for failure to provide services as set out in
this Paragraph 5.C. are limited to those so provided in this
Paragraph 5.C.
D. Should Tenant desire any additional services beyond those described in
subparagraph 5A or rendition of any of such service outside the normal
times they are provided by Landlord, Landlord may (at Landlord's
option), with reasonable prior request from Tenant, furnish such
service; and Tenant agrees to pay Landlord charges as may be agreed on
between Landlord and Tenant, but in no event a charge less than
Landlord's actual cost plus overhead for the additional services
provided. It is agreed that the cost to Landlord of such additional
services shall be excluded from the "Project Operating Cost," as
defined in subparagraph 13B.
6. REPAIR AND MAINTENANCE
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A. Landlord will, at its own cost and expense, except as may be provided
elsewhere herein, make necessary repairs or damage to the Building's
corridors, lobby, structural members, and equipment used to provide
the services referred to in subparagraph 5A unless the damage is
caused by acts or omissions of Tenant, its agents, customers,
employees or invitees, in which event Tenant will bear the cost of
repairs. Tenant will promptly give Landlord written notice of any
damage requiring repair by Landlord.
B. Tenant will not injure the Leased Premises, Building or any other part
of the Project and will maintain the Leased Premises in a clean,
attractive condition and in good repair, except for damage to be
repaired by Landlord, as provided above. Upon expiration or
termination of this Lease, Tenant will surrender the Leased Premises
to Landlord in the same condition in which it existed at the
Commencement Date, excepting only ordinary wear and tear, damage
arising from any cause not required to be repaired by Tenant, and
alterations or additions permitted to remain under subparagraph 10B.
C. This Paragraph 6 shall not apply in the case of damage or destruction
by fire or other casualty which is covered by insurance maintained by
Landlord on the Building (as to which Paragraph 7 shall apply), or
damage resulting from an eminent domain taking (as to which Paragraph
14 shall apply).
7. FIRE OR OTHER CASUALTY
A. Tenant shall give prompt written notice to Landlord of any material
damage caused to the Leased Premises by fire or other casualty as soon
as reasonably possible after learning of the damage. If the Leased
Premises or twenty percent (20%) or more of the floor area of the
Building are damaged or destroyed by fire or other casualty, then
Landlord shall have the option to terminate this Lease by giving a
notice of Lease termination to Tenant within sixty (60) days from the
date of the damage or destruction. In the event this Lease is
terminated by Landlord, Landlord shall refund to Tenant the prepaid
rend (unaccrued as of the date of damage or destruction), less any sum
then owing Landlord by Tenant.
B. If Landlord has no exercised its option to terminate the Lease, the
Lease shall continue in full force and effect, and repairs will be
made by Landlord within a reasonable time thereafter, subject to
delays arising from shortages of labor or material, acts of God, war
or other conditions beyond Landlord's reasonable control. Rent shall
xxxxx proportionately during Landlord's repair period to the extent
the Leased Premises are unfit for use by Tenant in the ordinary
conduct of its business and are not used by Tenant. Landlord's repair
obligation shall be limited to Fifteen & 00/100 Dollars ($15.00) per
square foot of Rentable Area contained within the Leased Premises.
Landlord shall not be liable to Tenant for
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any inconvenience or annoyance to Tenant, or injury to Tenant's
business resulting from the damage or destruction or any subsequent
repair work.
C. If Landlord does not exercise its option to terminate the Lease, as
provided in Paragraph 7.A above, but fails to restore the Leased
Premises to Building standard condition within one hundred eighty
(180) days of the date of the damage, subject to extensions for Tenant
delays, shortages of labor or materials, force majeure or other
conditions beyond Landlord's reasonable control, Tenant shall have the
right to terminate the Lease effective immediately upon such written
notice to Landlord. If Tenant fails to give such notice within thirty
(30) days after the expiration of the above-referenced one hundred
eighty (180) day period (as it may be extended), Tenant shall be
deemed to have elected not to terminate the Lease.
8. COMPLIANCE WITH LAWS AND USAGE
Tenant, at its own expense, will comply with all federal, state, municipal
and other laws, ordinances, rules and regulations applicable to the Leased
Premises (except with respect to pre-existing conditions caused by Landlord) and
the business conducted therein by Tenant (including, without limitation, any
temperature control restrictions); will comply with the Building rules and
regulations attached as Exhibit "C," as such rules and regulations may, from
time to time, be amended by Landlord; and will not commit or permit waste in the
Leased Premises or Building. Landlord agrees to use diligent good faith efforts
to ensure that the Leased Premises are delivered to Tenant free of any
violations, orders or notices of violations of all public or quasi-public
authorities. Tenant will not commit any act which is a nuisance or annoyance to
Landlord or to other tenants, or which might, in the exclusive judgment of
Landlord, appreciably damage Landlord's goodwill or reputation, or tend to
injure or depreciate the Project; will not engage in any activity which would
cause Landlord's fire and extended coverage insurance to be canceled or the rate
therefor to be increased (or, at Landlord's option, will pay any such increase);
and will not paint, erect or display any sign, advertisement, placard or
lettering which is visible in the corridors or lobby of the Building or from the
exterior of the Building without Landlord's prior written approval.
9. LIABILITY AND INDEMNITY
A. Tenant shall defend, indemnify and hold Landlord and Landlord's
designated property management firm and their respective agents,
employees and affiliated entities (collectively, the "Indemnified
Party" [or "Indemnified Parties"]) from all losses, claims, suits,
actions, damages and liability, including costs and expenses of
defending against the foregoing (collectively, the "Claims"), arising
or allegedly arising from: (i) any act or omission of Tenant or
Tenant's agents, employees, assignees, sublessees, licensees,
contractors, subcontractors, customers, invitees or other persons from
time to time in the Leased Premises; (ii)
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Tenant's failure (or the failure of Tenant's agents, employees,
contractors, subtenants, assignees, invitees or other occupants of the
Leased Premises) to comply fully with all laws and regulations that
apply to the Leased Premises) to comply fully with al laws and
regulations that apply to the Leased Premises or the use or occupancy
of the Leased Premises; (iii) Tenant's breach, violation or
nonperformance of any covenant of Tenant under this Lease; and (iv)
any injury to or death of any person or damage to or destruction of
the property of any person occurring in the Leased Premises. Tenant's
obligation stated in this subparagraph shall include, without
limitation, the obligation to defend the Indemnified Parties against
all Claims where it is asserted, alleged or determined that the acts
or omissions of an Indemnified Party; but Tenant shall pay all other
damages.
B. Landlord shall defend, indemnify and hold Tenant and Tenant's agents,
employees and affiliated entities (collectively, the "Indemnified
Party" [or "Indemnified Parties"]) from all losses, claims, suits,
actions, damages and liability, including costs and expenses of
defending against the foregoing (collectively, the "Claims"), arising
or allegedly arising from any injury to or death of any person or
damage to or destruction of the property of any person occurring in
the Building (except for the Leased Premises). Landlord's obligation
stated in this subparagraph shall include, without limitation, the
obligation to defend the Indemnified Parties against all Claims where
it is asserted, alleged or determined that the acts or omissions of an
Indemnified Party, whether or not negligent, may have been a cause
(whether sole, joint or concurrent) of any of such Claims and to pay
the full cost of any settlement reached by Landlord with respect to
any such Claims. Landlord's obligations under this subparagraph will
not include, however, an obligation to pay that portion of any damages
the responsibility for which is attributed by a court of competent
jurisdiction, in a final, nonappealable judgment, to the negligent
acts or omissions of an Indemnified Party; but Landlord shall pay all
other damages.
C. Landlord and Tenant each hereby release and waive all claims, rights
of recovery and causes of action that either party (or any party
claiming by, through or under such party, directly or by subrogation,
or otherwise) may now or hereafter have against the other party (or
any of the other party's directors, officers, employees or agents or,
with respect to Landlord, Landlord's designated property management
firm) for any loss or damage that may occur to the Project, the Land,
the Building, the Parking Garage, the Leased Premises, the leasehold
improvements or any of the contents of any of the foregoing occurring
by reason of fire or other casualty or resulting from the acts or
omissions of any other tenant or occupant of the Project (or such
party's agents, employees, contractors, customers or invitees) or
resulting from any other cause (including, without limitation, the
negligence of the waiving party or the negligence of the other party
or the negligence of either party's directors, officers, employees or
agents or, with respect to Landlord, Landlord's
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designated property management firm) that could have been insured
against under the terms of (1) a standard fire and extended coverage
insurance policy, with vandalism and malicious mischief endorsement
and sprinkler leakage endorsement (where applicable) or all-risk
insurance policy, or (2) any other loss that is covered by insurance
of the party suffering the loss. The waiver and release of Landlord
made by Tenant in this subparagraph will include Landlord's designated
property management firm. The waiver set forth in this subparagraph
shall preclude all rights of recovery of third parties by way of
subrogation, and assignment or otherwise, but shall not apply to any
deductibles on insurance policies carried by Landlord nor to any co-
insurance penalty which Landlord might sustain.
D. Landlord will maintain in force and effect at all times while this
Lease is in force and effect such insurance as is required to be
maintained pursuant to the underlying deeds.
E. Tenant will maintain in force and effect at all times during the term
of this Lease, all risk insurance covering its leasehold improvements
in excess of Fifteen and 00/100 Dollars ($15.00) per square foot
Rentable Area contained within the Leased Premises, furniture,
furnishings and equipment located in the Leased Premises in amounts
equal to at least eighty percent (80%) of insurable value and public
liability and property damage insurance with limits of not less than
One Million Dollars ($1,000,000) for personal injury (including death)
to any number of persons in any one occurrence and Five Hundred
Thousand and 00/100 Dollars ($500,000.00) for damage to or destruction
or property for any one occurrence. Tenant shall furnish reasonably
satisfactory evidence to Landlord of maintenance of such insurance
coverage at any time and from time to time upon request.
10. ADDITIONS AND FIXTURES
A. Tenant shall make no alteration, improvement, repair or replacement to
the Leased Premises (including, without limitation, any mechanical,
electrical or plumbing systems located within or serving the Leased
Premises) without the prior written consent of Landlord. If
Landlord's prior written consent is granted, the work shall be
performed in a good and workmanlike manner at Tenant's expense but by
workmen of Landlord or by workmen approved in advance in writing by
Landlord, in accordance with plans and specifications which have been
previously submitted to, and approved in advance in writing by
Landlord and subject to the Building rules and regulations. Landlord
shall have the right to require certificates of insurance, copies of
building permits, copies of the final certificate of occupancy,
executed lien releases and reimbursement of the expenses incurred by
Landlord in reviewing Tenant's proposed plans and specifications as
conditions to granting its consent to the performance of such work.
Landlord's
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consent shall also be conditioned upon those furnishing labor or
materials for Tenant's job working in harmony and not interfering with
any labor utilized by Landlord or its contractors or by any other
tenant or other tenant's contractors. If those furnishing labor or
materials for Tenant's work cause disharmony or interference,
Landlord's consent may be withdrawn immediately upon notice to Tenant.
Tenant will not permit any mechanic's or materialmen's lien to be
placed on the Leased Premises, improvements or Building during the
Lease term caused by or resulting from any work performed, materials
furnished or obligation incurred by or at the request of Tenant. In
the case of the filing of any lien, Tenant shall cause the same to be
discharged (by bond or otherwise) within twenty (20) days of such
filing. Any failure to do so within this period will give Landlord the
right, but not the obligation (among other rights or remedies of
Landlord), to discharge the same by paying the amount claimed due or
obtaining the discharge of such lien by deposit in court or bonding.
Any amounts paid by Landlord, and all reasonable legal fees and
expenses in defending any such action or the discharge of such lien,
plus interest thereon from the date of Landlord's written notice to
Tenant of such payment until Tenant's reimbursement, at the lesser of
15% per annum or the maximum legally permitted interest rate, shall be
paid by Tenant to Landlord on demand.
B. Tenant may remove its trade fixtures, supplies, movable office
furniture and equipment not attached to the Building provided: (1)
removal is made prior to the expiration or termination of this Lease;
(2) Tenant is not in default of any obligation or covenant under this
Lease at the time of removal; and (3) Tenant promptly repairs all
damage caused by removal. All other property at the Leased Premises
and any alteration or addition to the Leased Premises (including wall-
to-wall carpeting, paneling or other wall covering) and any other
article attached or affixed to the floor, wall or ceiling of the
Leased Premises shall remain upon and be surrendered with the Leased
Premises at the expiration or termination of this Lease, Tenant hereby
waiving all rights to any payment or compensation therefor. If
however, Landlord so requests in writing, Tenant will, prior to
expiration or termination of this Lease, remove any and all
alterations, additions, fixtures, equipment and property placed or
installed by it in the Leased Premises (other than the leasehold
improvements installed prior to the Commencement Date and except to
the extent Landlord requires such removal in connection with its
approval of any subsequent alterations, additions or fixtures) and
will repair any damage caused by such removal.
C. If any property not belonging to Landlord remains t the Leased
Premises after the expiration or termination of the term of this
Lease, Tenant hereby authorizes Landlord to dispose of the property as
Landlord may desire without liability to Tenant if the property
belongs to Tenant. If the property does not belong to Tenant, Tenant
agrees to indemnify and hold harmless from all suits, actions,
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liability, loss, damages and expenses in connection with any removal,
exercise of dominion over and/or disposition of such property by
Landlord.
D. Tenant may, at its expense, install additional locks or security
systems in the Leased Premises provided that (1) such installation
shall comply with applicable provisions of the Building Rules and
Regulations attached hereto as Exhibit "C"; (2) Landlord shall be
furnished with duplicate keys and entry codes to gain entrance where
permitted under this Lease; and (3) Tenant removes such locks and
security systems upon the expiration or earlier termination of the
lease, and repairs all damages and otherwise restores the Leased
Premises to their condition prior to such installation.
11. ASSIGNMENT AND SUBLETTING
A. Neither Tenant nor Tenant's legal representatives or successors in
interest by operation of law or otherwise shall assign this Lease or
sublease the Leased Premises or any part thereof or mortgage, pledge
or hypothecate its leasehold interest or grant any concession or
license within the Leased Premises without the prior written
permission of Landlord. Provided that there is no Event of Default
hereunder (or circumstances which, with the passage of time or giving
of notice, or both, would constitute an Event of Default), Landlord's
permission shall not be unreasonably withheld or delayed to an
assignment of this Lease or to a sublease proposed by Tenant.
However, it is agreed that a withholding or such permission by
Landlord to a proposed assignment or sublease on the grounds that in
Landlord's good faith judgment the usage permitted thereunder would
constitute an "objectionable use" (as defined below), or on the
grounds that the proposed assignee or sublessee does not have the
financial net worth reasonably acceptable to Landlord, shall be deemed
reasonable and shall not be deemed unreasonable. For purposes hereof,
the term "objectionable use" shall refer to any use which would (i)
conflict with the exclusive usage rights granted to any other tenant
in the Building; (ii) diminish the value or reputation or alter the
first class character of the Building; (iii) be inconsistent with the
general use of the Building by other tenants; (iv) be for any other
use not customarily found in comparable Class A office buildings owned
by Landlord in the Xxxxxxxx Xxxxx xxxx xx Xxxxxxx, Xxxxx, including
without limitation eleemosynary or governmental or quasi-government
purposes, a medical or dental practice, an employment office, a school
or training facility or a religious institution; or (v) materially
increase the use of the elevators or common areas of the Project or
the traffic flow of vehicles and/or people in and out of the Building
or parking garages. Any attempt to do any of the foregoing without
the prior written permission of Landlord shall be void. In the event
Landlord's permission is requested for an assignment, sublease or
other transaction, signed copies of all instruments relative thereto
(executed by all parties except Landlord) shall be submitted to
Landlord prior to or
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contemporaneously with the request for Landlord's written permission
(it being understood that no such instrument shall be effective
without the written permission of Landlord). Landlord shall then have
the right (but no obligation), as of the effective date of the
requested transaction, to terminate this Lease for the portion of the
Leased Premises and for that portion of the term of this Lease as to
which Landlord has been requested to permit such transaction. If
Landlord elects to terminate this Lease for that portion of the Leased
Premises and for the portion of the term of this Lease, then the rent
and other charges payable shall be proportionately reduced. If Tenant
attempts to permit anyone to occupy any portion of the Leased Premises
without the prior written permission of Landlord, Landlord shall have
the right to terminate this Lease effective upon fifteen (15) days
notice to Tenant at any time thereafter for either the entire Leased
Premises or only the portion which Tenant has attempted to permit some
other party to occupy. Should Landlord elect to exercise its
termination rights, then the rent shall be proportionately reduced. If
Landlord's permission is granted and the rent payable by the other
party (or a combination of the rent payable plus any bonus or other
consideration) exceeds the rent payable under this Lease, then Tenant
shall pay Landlord fifty percent (50%) of all excess within ten (10)
days following receipt by Tenant (after deducting all reasonable costs
directly incurred by Tenant in connection with such assignment or
sublease, such as tenant improvement costs, moving allowance(s),
architectural fees, and brokerage commissions, but excluding cash
inducements or other consideration paid).
B. If Tenant is a corporation whose stock is not publicly traded, any
change in ownership or power to vote a majority of the voting stock in
Tenant shall constitute an assignment for the purposes of this Lease.
If Tenant is a partnership having one or more corporations as partner,
the provisions of the preceding sentence shall apply to each
corporation as if it alone had been the Tenant. If Tenant is a
partnership (whether or not having any corporation as general
partner), the transfer of a partnership interest constituting a
majority shall constitute an assignment for the purposes of this
Lease.
Notwithstanding any other provision of this Lease to the contrary, the
prohibition on assignments shall not be applicable (and no prior
consent of or notice to Landlord shall be required) with respect to
(i) a merger between Tenant and another entity or (ii a transfer of a
controlling interest of stock in Tenant, provided the surviving entity
(in the case of a merger) or Tenant (in the case of a transfer in
control) has a net worth greater than or equal to the net worth of
Tenant immediately prior to such merger or transfer of control Upon
written request from Landlord, Tenant shall furnish evidence that a
particular assignment complies with the provisions of the preceding
sentence.
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C. If Landlord gives written permission to a particular assignment,
sublease or other transaction, it shall not be deemed as permission to
any other or subsequent transaction or a release of Tenant from its
covenants, duties and obligations under this Lease. If this Lease is
assigned or if the Leased Premises are subleased (whether in whole or
in part) or in the event of the mortgage, pledge or hypothecation of
the leasehold interest or grant of any concession or license within
the Leased Premises without the prior written permission of Landlord,
or if the Leased Premises are occupied in whole or in part by anyone
other than Tenant without the prior written permission of Landlord,
Landlord may nevertheless collect rent from the occupant and apply the
net amount collected to the rent payable hereunder, but no collection
of rent by Landlord shall be deemed a waiver of these provisions or a
release of Tenant from the further performance of its covenants,
duties and obligations hereunder.
D. Notwithstanding the foregoing provisions of this Paragraph 11, Tenant
shall have the right at any time and from time to time, as many times
as may be convenient, to sublet or assign all or part of the Leased
Premises to an "Affiliate" of Tenant (as defined below); provided,
however, that (i) Tenant shall nonetheless give Landlord written
notice of such transfer together with a fully-executed copy of the
transfer instrument and such other supporting documentation as
Landlord may reasonably request, (ii) the undersigned Tenant will
nevertheless remain directly and primarily liable for the performance
of all of the covenants, duties and obligations of Tenant hereunder
(including, without limitation, the obligation to pay all rent and
other sums herein provided to be paid); and (iii) Landlord shall be
permitted to enforce the provision of this instrument against the
undersigned Tenant and/or any assignee without demand upon or
proceeding in any way against any other person. As used herein, the
term "Affiliate" shall mean any person or entity controlling,
controlled by, or under common control with another such person or
entity. "Control" as used herein shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the
management and policies of such controlled person or entity;
ownership, directly or indirectly, of more than fifty percent (50%) of
the voting securities of, or possession of the right to vote, in the
ordinary direction of its affairs, more than fifty percent (50%) of
the voting interest in any person or entity shall be presumed to
constitute such control.
12. SUBORDINATION
Tenant accepts this Lease subject to all matters of record which affect the
Building and subject and subordinate to any mortgage or deed of trust, presently
existing or hereafter placed upon the Project, and to any renewals,
modifications and extensions thereof. Tenant agrees that any such mortgagee
and/or beneficiary of any deed of trust ("Landlord's Mortgagee") shall have the
right at any time to subordinate such mortgage or deed of trust to this Lease,
on terms and conditions Landlord's Mortgagee may deem appropriate in its sole
discretion. Tenant agrees to
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execute such instruments subordinating this Lease as Landlord or Landlord's
Mortgagee may request, upon demand, provided such instruments are in form and
substance customary in the industry for comparable transactions.
13. OPERATING COST
A. If, after the calendar year 1996 ("Base Year"), the Project Operating
Cost (as defined below) increases, then Tenant agrees to pay to
Landlord, as additional rent, its pro rata share of increases in the
Project Operating Cost over and above the amount of the Project
Operating Cost attributable to the Base Year. Tenant's pro rata share
of such increases shall be a fraction of the total increases, the
numerator of which shall be the Rentable Area of the Leased Premises,
and the denominator of which shall be the total Rentable Area of the
Building.
B. "Project Operating Cost" shall consist of the operating expenses of
the Project, reasonably allocable to the Building and Parking Garage,
computed on the accrual basis and determined in accordance with
generally accepted accounting principles which shall be consistently
applied. The term "operating expenses" shall mean all expenses, costs
and disbursements (but not costs of replacement of capital investment
items, nor specific costs especially billed to and paid by specific
tenants, nor rental [line missing] to pay because of, or in connection
with, the ownership, management, maintenance, repair and operation of
the Project, including, but not limited to, the following:
(1) Wages and salaries of all workers and employees engaged in the
direct operation and maintenance of the Project, including taxes,
insurance and benefits relating thereto;
(2) Management fees relating to the direct operation and management
of the Project;
(3) Costs of all supplies and materials used in direct operation,
maintenance and repair of the Project;
(4) Cost of water and power, heating, lighting, air conditioning and
ventilating for the Project;
(5) Cost of all maintenance and service agreements relating to the
Project and all equipment therefor (including, without
limitation, janitorial service, window cleaning and elevator
maintenance);
(6) Cost of casualty and liability insurance applicable to the
Project and Landlord's personal property used in connection
therewith;
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(7) All federal, state, county or municipal taxes, assessments and
other governmental charges, whether by existing taxing
authorities or by others subsequently created, and any other
taxes and improvement assessments attributable to that portion of
the Land allocated to the Building, the Building and the Parking
Garage or their operation (excluding federal and state income
taxes). Tenant will be responsible for ad valorem taxes on its
personal property and on the value of leasehold improvements to
the extent they are separately assessed by any taxing authority;
(8) Cost of repairs and general maintenance (excluding costs of
repairs paid by proceeds of insurance or by Tenant or other third
parties, and alterations attributable solely to tenants of the
Project other than Tenant), including the cost of inspections and
renovations required by governmental authority;
(9) Amortization of the cost of capital investment items and their
installation which are primarily for the purposes of safety,
saving energy or reducing operating costs or which may be
required by governmental authority. All such costs shall be
amortized over the reasonable life of the capital investment
items, with the reasonable life and amortization schedule being
determined in accordance with generally accepted accounting
principles.
C. Tenant shall be obligated to discharge its payment obligation with
respect to increases in the Project Operating Cost in accordance with
the billing procedures used by Landlord. Landlord shall have the
right to invoice Tenant for such increases periodically, as Landlord
may desire, but not less frequently than annually; and Landlord may
alter its billing procedures at any time during the Lease term.
Landlord may (but shall have no obligation to) submit a statement or
invoice to Tenant for each month of the Lease term for one-twelfth
(1/12th) of Tenant's pro rata share of Project Operating Cost
increases, and Tenant shall pay the indicated amount contemporaneously
with Base Rental. The monthly one-twelfth (1/12th) amount stated in
Landlord's monthly statement or invoice shall be Landlord's estimate
of Tenant's monthly pro rata share of Project Operating Cost
increases, and shall be based on the actual Project Operating Cost
incurred during the prior calendar year and Landlord's good faith
business judgment of the estimated Project Operating Cost for the then
current year. Landlord reserves the right to adjust the estimate of
the Project Operating Cost at any time during the then current year if
the actual Project Operating Cost then being incurred varies from
Landlord's prior estimate.
Each calendar year Landlord shall perform computations necessary to
determine the amount of increases in the Project Operating Cost
properly payable by Tenant. If Tenant has overpaid pursuant to
Landlord's periodic billing of such increases,
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then Landlord shall credit Tenant's account for the amount of the
excess; but, if Tenant shall have underpaid pursuant to Landlord's
periodic billing of such increases, then Landlord shall ill Tenant for
the amount of the underpayment (which underpayment shall be due within
thirty (30) days following such billing). Tenant's pro rata share of
such increases in the Project Operating Cost for partial calendar
years and for partial months of the Lease term occurring at the
beginning or end of the Lease term shall be [line missing] as to
reduce the monthly installments of Base Rental payable by Tenant
hereunder below the amount set forth in Paragraph 3 of this Lease.
D. Notwithstanding the foregoing provisions of this Paragraph 13, the
Project Operating Cost for the Base Year shall be equal to actual
operating costs for that calendar year, with those Project Operating
Costs that vary with occupancy being adjusted upward to reflect the
costs of operating the Project at a Building occupancy level of 95%;
however, if the occupancy level of the Building for the Base Year
equals or exceeds 95%, there shall be no upward adjustment. Likewise,
the Project Operating Cost for subsequent calendar years shall be
adjusted upward to reflect a 95% Building occupancy level; however, if
the occupancy level of the Building for any calendar year after the
Base Year equals or exceeds 95%, there shall be no such upward
adjustment and actual costs shall be used to determine the Project
Operating Cost for such year.
E. Within sixty (60) days from the rendition of any such statement,
Tenant may question the amount and propriety of any item appearing or
excluded therefrom. Landlord agrees that, for a period of two (2)
years following expiration of the applicable calendar year, it will
maintain complete and accurate records of all costs and expenses which
shall be paid or incurred by it in connection with the operation of
the Project. Tenant, at its expense, shall have the right at all
reasonable times to audit Landlord's books and records relating to
this Lease for any year for which additional rental payments become
due, insofar as such books and records pertain to costs involved in
rent escalation. Any overpayment by Tenant shall be credited to its
account.
14. EMINENT DOMAIN
A. If any material part of the Project is taken by eminent domain or
voluntarily conveyed to the condemning authorities in settlement of an
eminent domain action, Landlord shall have the option to terminate
this Lease by giving a notice of Lease termination to Tenant within
sixty (60) days from the date of the taking. It is further agreed
that Tenant shall have the right to terminate this Lease if all or a
portion of the Leased Premises is so taken and the remainder of the
Leased Premises is insufficient for the conduct of Tenant's business.
If Tenant so elects to terminate this Lease, it shall notify Landlord
within thirty (30) days after the
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date of taking; otherwise, Tenant shall be deemed to have elected not
to terminate this Lease. If this Lease should be terminated under this
Paragraph 14, rental shall be payable up to the date that possession
is taken by the condemning authority; and Landlord will refund to
Tenant any prepaid unaccrued rent, less any sum then owing by Tenant
to Landlord.
B. If the Lease is not terminated, and the taking involved a portion of
the Leased Premises, rental shall be reduced in proportion to the area
of the Leased Premises taken and Landlord shall repair any damage to
the remainder of the Leased Premises resulting from such taking or any
taking which impacts Tenant's use of the Parking Garage or the common
areas of the Building. Landlord's repair obligation in such
circumstance swill be limited to the performance of construction work
necessary to return the damaged portion of the remaining Leased
Premises to the condition in which such portion was placed by
Landlord, at Landlord's expense, on or before the Commencement Date.
C. All sums awarded or agreed upon between Landlord and the condemning
authority for the taking of the interest of Landlord or Tenant,
whether as damages or as compensation, will be the property of
Landlord without prejudice, however, to claims of Tenant against the
condemning authority for the unamortized cost of leasehold
improvements which were paid for by Tenant and taken by the condemning
authority.
15. ACCESS BY LANDLORD
Landlord, Landlord's Mortgagee, their agents and employees shall have
access to and the right to enter upon the Leased Premises at any reasonable time
after prior notice (except in an emergency) to examine its condition, to make
any repairs or alterations required to be made by Landlord, to show the Leased
Premises to prospective purchasers or tenants and for any other purpose deemed
reasonable by Landlord.
16. LANDLORD'S LIEN
Tenant, as debtor, hereby grants to Landlord, as secured party, a contract
lien and security interest on all fixtures, furniture, equipment, merchandise,
inventory and other property of Tenant (including Tenant's ownership interests,
interests as lessee and options to purchase any of such property) presently
situated at or hereafter placed in the Leased Premises, and upon all proceeds of
any insurance which may accrue to Tenant by reason of destruction or damage to
any such property, as [line missing] and the performance of all other
obligations of Tenant under this Lease. All exemption laws are hereby waived in
favor of such lien and security interest and in favor of Landlord's statutory
lien. This contract lien and security interest may be foreclosed with or
without court proceedings by public or private sale or any other lawful method,
provided that Landlord gives Tenant at least ten (10) days notice of the time
and place of said sale; and
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Landlord shall have the right to become the purchaser, upon being the highest
bidder at such sale. A carbon copy, photographic or other reproduction of this
Lease is sufficient as a financing statement. If any of the obligations of
Tenant under this Lease are guaranteed pursuant to a guaranty instrument, Tenant
hereby consents and agrees to al of the terms and provisions of such guaranty.
Landlord agrees to subordinate its lien rights to a third party providing
furniture, fixtures and/or equipment to Tenant or providing funds for the
acquisition of same, which subordination shall be in writing, signed by all
parties, and in a form reasonably acceptable to landlord.
17. EVENTS OF DEFAULT
A. Each of the following acts or omissions of Tenant or occurrence shall
constitute an "Event of Default":
(1) Failure or refusal by Tenant to timely pay rent within five (5)
days of the due date;
(2) Failure to perform or observe any other covenant or condition of
this Lease within thirty (30) days following written notice from
Landlord of such failure or such longer period as is reasonably
necessary to cure such failure, provided that Tenant shall
commence the cure of said failure within such thirty (30) day
period and shall continuously and diligently pursue the remedy of
such failure; or
(3) Abandonment or vacating of the Leased Premises or any significant
portion thereof while failing to pay Base Rental and other
payments due hereunder when due. Although Tenant continues to
pay rent, if Tenant abandons or vacates fifty percent (50%) or
more of the Leased Premises, Landlord shall have the right to
recapture the Leased Premises, in which event, Tenant shall
thereafter be relieved of its covenants, duties and obligations
under this Lease.
B. Upon any Event of Default, Landlord may, at its option, in addition to
all other rights and remedies given hereunder or by law or equity, do
any one or more of the following:
(1) Terminate this Lease, in which event Tenant shall immediately
surrender possession of the Leased Premises to Landlord;
(2) Enter upon and take possession of the Leased Premises,
terminating Tenant's right to possession of the Leased Premises,
and expel or remove Tenant and any other occupant therefrom, with
or without having terminated the Lease;
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(3) Alter locks and other security devices at the Leased Premises,
remove Tenant's property and the property of other located within
the Leased Premises, and cease providing services. The
provisions of this Paragraph 17 will override and control any
conflicting provisions of Section 93.002 of the Texas Property
Code, as well as any successor statute governing the right of a
landlord to change the door locks of a tenant under a commercial
lease.
C. Exercise by Landlord of any one or more remedies granted under this
Lease or otherwise available shall not be deemed to constitute
Landlord's acceptance of surrender of the Leased Premises by Tenant,
whether by agreement or by operation of law. Such surrender can be
effected only by the written agreement of Landlord and Tenant
hereafter entered into. Tenant acknowledges that if Landlord has
altered locks and other security devices at the Leased Premises after
an Event of Default, Landlord may require full payment of all sums
then due to Landlord under this Lease as a condition to Tenant's
entitlement to a key to new or altered locks that Landlord may have
placed on the Leased Premises after an Event of Default. After any
Event of Default, Landlord's alteration of locks and security devices
and exercise of control over the property of Tenant or others at the
Leased Premises shall not be deemed unauthorized or constitute a
conversion. All claims for damages by reason of reentry, repossession
and/or alteration of locks or other security devices are hereby
waived, as are all claims for damages by reason of any distress
warrant, forcible detainer proceedings, sequestration proceedings or
other legal process. Tenant agrees that any reenty by Landlord may be
pursuant to judgment obtained in forcible detainer proceedings or
other legal proceedings or without the necessity for legal
proceedings, as Landlord may elect, and Landlord shall not be liable
in trespass or otherwise.
D. If Landlord elects to terminate the Lease for an Event of Default,
then, despite such termination, Tenant shall be liable for and shall
pay to Landlord the sum of (x) all rent and other indebtedness accrued
to the date of termination, plus (y) as damages, an amount equal to
the present value (computed as of the date of any such termination
using a discount factor equal to 9% per annum) of the difference
between the amount stated in clause (i), below, and the amount stated
in clause (ii) below, as follows:
(i) the total Base Rental, plus Tenant's share of Project Operating
Cost increases (using such sum for the year of such termination
as the basis for determining the amount thereof which would have
been due each year thereafter for the remainder of the Lease term
had it not been terminated), for the remaining portion of the
Lease term if such term had not been terminated by Landlord prior
to the Expiration Date stated in Paragraph 2; and
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(ii) the fair market rental value of the Leased Premises, computed as
of the date of such termination, for the remaining portion of the
Lease term if such term had not been terminated by Landlord prior
to the Expiration Date stated in Paragraph 2.
If Landlord elects to terminate the Lease for an Event of Default, in
lieu of exercising the rights of Landlord under the preceding portion
of this subparagraph D, or if Landlord elects to terminate Tenant's
right to possession of the Leased Premises without terminating the
Lease, then Landlord may instead hold Tenant liable for (x) all rent
and other indebtedness accrued to the date of Lease termination or the
date on which Tenant's possession is terminated, as the case may be,
plus (y) such Base Rental and Tenant's share of Project Operating Cost
increases (using such sum for the year of such termination as the
basis for determining the amount thereof which would have been due
each year thereafter for the remainder of the Lease term) as would
otherwise have been required to be paid by Tenant to Landlord during
the period following the termination of the Lease or Tenant's right to
possession of the Leased Premises to the date of expiration of the
Lease term stated in Paragraph 2, diminished by any net sums
thereafter received by Landlord through reletting the Leased Premises
during said period (after deducting expenses incurred by Landlord as
provided in subparagraph E). Reentry by Landlord will not affect the
obligations of Tenant for the unexpired Lease term. Actions to
collect amounts due by Tenant may be brought from time to time by
Landlord during the aforesaid period, on one or more occasions,
without the necessity of Landlord waiting until expiration of such
period. Tenant shall not be entitled to any sums obtained by
reletting in excess of the Base Rental provided for in this Lease.
E. In case of an Event of Default, Tenant shall also be liable for and
shall pay to Landlord: broker's fees incurred by Landlord in
connection with reletting the whole or any part of the Leased
Premises; the cost of removing and storing Tenant's or other
occupant's property; the cost of repairing, altering, remodeling or
otherwise putting the Leased Premises into condition acceptable to a
new tenant or tenants; and all other reasonable expenses (including
attorney's fees and court costs) incurred by Landlord in enforcing
Landlord's remedies. Actions to collect amounts due by Tenant may be
brought from time to time by Landlord without the necessity of
Landlord waiting until expiration of the Lease term.
F. Past-due rent and other past-due sums payable by Tenant under this
Lease shall bear interest form the date due until paid at the lesser
of fifteen percent (15%) per annum or the maximum nonusurious interest
rate permitted by law.
G. In the event of termination of the Lease or termination of Tenant's
right to possession of the Leased Premises or repossession of the
Leased Premises for an
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Event of Default, Landlord shall make reasonable efforts to relet the
Leased Premises, or portions thereof, and to collect rental after
reletting; and in the event of reletting, Landlord may relet the whole
or any portion of the Leased Premises for any period, to any tenant,
and for any use and purpose; provided, however, that Landlord shall
have no obligation to relet Tenant's space in preference to other
space which Landlord has available for lease in the building. Tenant
hereby waives and released Landlord from any obligation that may be
otherwise imposed by law which would obligate Landlord to relet the
Leased Premises or attempt to relet the Leased Premises after an Event
of Default. If Landlord, in its sole discretion, elects to relet it,
it can relet the whole or any portion of the Leased Premises for any
period, to any tenant, and for any use.
H. If Tenant fails to make any payment, perform any obligation or cure
any default hereunder within the time permitted, Landlord, without
being under any obligation to do so and without thereby waiving such
failure or default, may make the payment, [line missing] enter the
Leased Premises for such purpose). Tenant agrees to pay Landlord,
upon demand, all costs, expenses and disbursements (including
reasonable attorney's fees) incurred by Landlord in taking such
remedial action.
I. In the event of any default by Landlord, Tenant's exclusive remedy
shall be an action for damages (Tenant hereby waiving the benefit of
any laws granting it a pre-judgment lien upon the property of Landlord
and/or upon rent due Landlord)' but, prior to any such action, Tenant
will give Landlord and Landlord's Mortgagee, as provided in Paragraph
21 below, written notice specifying such default with particularity;
and Landlord shall have a reasonable period (but not less than thirty
(30) days, plus such additional period, as may be required in the
exercise of reasonable diligence) in which to commence to cure any
such default. Unless and until Landlord fails to commence to cure any
default after notice (or, having so commenced, thereafter fails to
exercise reasonable diligence), Tenant shall not have any remedy or
cause of action by reason thereof. All obligations of Landlord
hereunder will be construed as covenants, not conditions; and all
obligations will be binding upon Landlord only during the period of
its ownership of the Building and not thereafter.
J. In connection with either party instituting action seeking judicial
relief at law or in equity in connection with this Lease, the
prevailing party shall be entitled to reasonable attorney's fees and
court costs.
18. NONWAIVER
Neither acceptance of rent by Landlord nor failure by Landlord to complain
of any default of Tenant shall constitute a waiver of any of Landlord's rights
hereunder. Waiver by Landlord of
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any right for any default of Tenant shall not constitute a waiver of any right
for either a subsequent default of the same obligation or any other default.
19. HOLDING OVER
If Tenant remains in possession of the Leased Premises after the expiration
of the term of this Lease without Landlord and Tenant executing a new lease,
then Tenant shall be deemed to be occupying the Leased Premises as a tenant-at-
sufferance, subject to all the covenants and obligations of this Lease
(including, without limitation, the provisions of Paragraph 13 relating to the
Project Operating Cost), but at a daily base rental rate equal to the greater of
(x) the prevailing Building base rental rate, as reflected in Landlord's
published rent schedule then in effect, or (y) 150% of the per diem Base Rental
provided hereunder, computed on the basis of a thirty (30)-day month.
Notwithstanding provisions to the contrary applicable during the original term
or any extension term of this Lease, Landlord shall have the right to terminate
the tenancy-at-sufferance immediately upon deliver of notice to Tenant. The
provisions of this paragraph will not preclude Landlord from recovering from
Tenant all damages suffered by Landlord as a consequence of Tenant's holdover in
the Leased Premises.
20. NOTICE
Any notice which may or shall be given under the terms of this Lease shall
be in writing and shall be either delivered by hand or sent by United States
Certified Mail, Return Receipt Requested, postage prepaid, or by Federal Express
or other expedited courier service where proof of delivery can be obtained, as
follows: if for Landlord, to the Building office; and if for Tenant, to the
Leased Premises. Such addresses may be changed from time to time by either
party by giving notice as provided above. Notice shall be deemed given when
delivered (if delivered by hand) or when postmarked (if sent by mail). Despite
the foregoing, notice given to Tenant by hand will be effectively given wherever
the intended recipient is found and will be deemed received upon the date of
actual receipt.
21. LANDLORD'S MORTGAGEE
At any time the Building is subject to a mortgage and/or deed of trust, and
Tenant gives notice to Landlord alleging default by Landlord, Tenant will also
simultaneously give a xxx of such notice to each Landlord's Mortgagee (provided
Landlord or Landlord's Mortgagee shall have advised Tenant in writing of the
name and address of Landlord's Mortgagee) and each Landlord's Mortgagee shall
have the right (but no obligation) to cure such default during the period that
is permitted to Landlord, plus an additional period of thirty (30) days. Tenant
will accept curative action (if any) taken by Landlord's Mortgagee with the same
effect as if such action had been taken by Landlord. Tenant will, at such time
or times as Landlord, may request, sign a certificate stating whether this Lease
is in full force and effect; whether any amendments or modifications exist;
whether, to Tenant'' knowledge, there are any defaults hereunder; and such other
information and agreements as may be reasonably requested.
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22. CONDITION OF PREMISES
A. Landlord will tender and Tenant agrees to accept the Leased Premise in
an "as is" condition; provided, however, Landlord shall contribute a
sum not to exceed Fifteen & 00/100 Dollars ($15.00) per square foot of
Rentable Area (the "Construction Allowance") toward the cost of
supplying the installing permanent leasehold improvements in the
Leased Premises in accordance with the Project Schedule Agreement
attached hereto as Exhibit "D". Any costs in excess of this amount
shall be borne by Tenant. Payment shall be made directly to
Landlord's contractor performing said work.
B. Landlord shall contribute up to One and 00/100 Dollars ($1.00) per
square foot of Rentable Area toward the cost of Tenant's designated
architect providing space planning services and complete construction
drawings for all leasehold improvements, including mechanical,
electrical and plumbing (MEP) drawings to be prepared by Landlord's
designated engineering firm. Any costs in excess of the above amount
shall be borne by Tenant.
23. MOVING ALLOWANCE
Landlord shall contribute up to One & 50/100 Dollars ($1.50) per square
foot of Rentable Area toward the moving costs incurred by Tenant, including,
without limitation, the costs of relocating Tenant's furniture, equipment and
telephones to the Leased Premises. Such reimbursement shall be made thirty (30)
days after occupancy and receipt of an invoice from Tenant.
24. PARKING
A. For each 1,000 square feet of Rentable Area leased and occupied in the
Leased Premises, Landlord shall make available to Tenant up to three
and one-half (3.5) unreserved parking permits in the Parking Garage in
areas designated by Landlord, which shall be equally prorated through
the Parking Garage unless otherwise directed by Landlord. Landlord
shall use good faith, reasonable efforts (subject to availability), to
provide up to an additional one-half (0.5) unreserved parking permit
per each 1,000 square feet of Rentable Area ("Additional Permits")
leased and occupied on a month-to-month basis with Landlord retaining
the right to recapture said Additional Permits upon thirty (30) days
prior written notice. Such Additional Permits may, at Landlord's
election, be located in the Parking Garage, the One Greenway Garage,
the Greenway East Garage, the Houston City Club Garage, the North
Richmond Garage or in other garages or parking areas (within one (1)
mile of the Project) Landlord may contract for Tenant's use. During
the initial term of the Lease, the charge for said parking permits
shall be $16.50 per permit per month, plus state and local taxes.
During
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the Renewal Period, the charge for said parking permits shall be at
the then prevailing "market" rate, plus state and local taxes.
B. Landlord shall provide for a Tenant validation system for visitor
parking. All charges incurred during the first two (2) hours per
visitor shall be free. Tenant shall be liable for any additional
charges incurred.
C. The driver of each car shall have so-called "in-and-out" privileges.
Landlord shall not be responsible for any loss or damage to any car or
property therein or for personal injury or death occurring in the
parking area or garage, except to the extent caused solely by its own
negligence or that of its own agents or employees in the scope of
their employment.
25. EXPANSION OPTION
A. Provided no uncured Event of Default has occurred under this Lease,
Tenant shall have the option (the "Expansion Option") to lease
approximately 4,386 square feet of Rentable Area (+/- 20%), on the
sixth (6th) floor of the Building, as outlined and hatched on Exhibit
"B" attached (the "Expansion Space"), at the "Fair Market Rental Rate"
(as hereinafter defined). In order to exercise such Expansion Option,
Tenant shall be required to give Landlord written notice thereof
("Expansion Notice") no earlier than September 1, 1997 nor later than
October 31, 1997. However, Landlord shall have the option to tender
possession of the Expansion Space to Tenant on any date between
January 1 and August 31, 1998.
B. In the event Tenant leases space under this Paragraph 25, Tenant's
Cancellation Option(s) as provided in Paragraph 28.A and Paragraph
28.B shall be adjusted to take into consideration the increased Base
Rental and amortization of Contributions provided by Landlord, if any,
for the Expansion Space.
26. PREFERENTIAL RIGHT TO LEASE
A. First Preferential Right to Lease Space
(1) Tenant shall have a Preferential Right to Lease approximately
2,482 square feet of Rentable Area (+/- 20%) contiguous to the
Leased Premises on the sixth (6th) floor of the Building (the
"First Preferential Space"), as outlined and hatched on Exhibit
"B" attached, which becomes available for direct lease to a new
tenant (whether or not a bona fide offer has been made) prior to
November 1, 1988; provided that (i) no Event of Default has
occurred and is continuing, and (ii) Tenant remains in occupancy
of the entire Leased Premises.
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(2) At any time after the First Preferential Space becomes available,
as provided above, but prior to leasing such space to a new
tenant, Landlord shall first offer such space in writing to
Tenant. Such offer notice shall specify the amount and location
of such space, the date of availability, and shall be leased
pursuant to the following provisions:
(a) The rental rate for the First Preferential Space shall be
the rental rate then in effect for the Leased Premises
(subject to increased and at such times as provided in
Paragraph 3 herein); and
(b) Landlord shall contribute a construction and architectural
allowance based upon the number of months remaining in the
initial term of the Lease from the commencement date of the
First Preferential Space multiplied by eighteen cents
($0.18).
(3) Any First Preferential Space shall be leased for the period
commencing upon the earlier of Tenant's possession of the First
Preferential Space or the date of availability specified in
Landlord's offer and expiring upn the last day of the term of the
Lease, including the Renewal Period, if exercised. Rent shall
commence on the earlier of (i) occupancy of the First
Preferential Space by Tenant; (ii) Substantial Completion of the
First Preferential Space; or (iii) forty-five (45) days from
tender of possession of the First Preferential Space. Tenant
shall have five (5) working days from receipt within which to
accept or reject such offer. If Tenant rejects such offer or
fails to accept such offer within the foregoing five (5) working
day period, this First Preferential Right to Lease shall be
deemed waived by Tenant for ninety (90) days during which time
Landlord may lease all or a portion of the First Preferential
Space. If a lease with another tenant(s) is not executed within
said ninety (90) days period following Tenant's rejection or
failure to notify period as provided above, then Tenant's
Preferential Right to Lease with respect to such space shall be
reinstated in full force and effect.
(4) If Tenant accepts Landlord's offer, Tenant shall, no later than
twenty (20) days after Landlord's submission of such offer,
execute an amendment of the Lease adding the First Preferential
Space to the Leased Premises on the terms specified in Paragraph
26.A(2), above.
(5) In the event Tenant leases space under this Paragraph 26.A,
Tenant's Cancellation Option(s) as provided in Paragraph 28.A and
Paragraph 28.B shall be adjusted to take into consideration the
increased Based Rental and amortization of Contributions provided
by Landlord, if any, for the First Preferential Space.
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B. Second Preferential Right to Lease Space
(1) In the event Tenant has leased all space pursuant to its First
Preferential Right to Lease Space hereinabove, Tenant shall have
a Second Preferential Right to Lease approximately 5,616 square
feet of Rentable Area (+/- 20%) contiguous to the Leased Premises
on the sixth (6th) floor of the Building (the "Second
Preferential Space"), as outlined and hatched on Exhibit "B"
attached, which becomes available for direct lease to a new
tenant (whether or not a bona fide offer has been made) prior to
November 1, 1999; provided that (i) no Event of Default has
occurred and is continuing; and (ii) Tenant remains in occupancy
of the entire Leased Premises.
(2) At any time after the Second Preferential Space becomes
available, as provided above, but prior to leasing such space to
a new tenant, Landlord shall first offer such space in writing to
Tenant. Such offer notice shall specify the amount and location
of such space, the date of availability and the Fair Market
Rental Rate for such space. Any Second Preferential Space shall
be leased for the period commencing upon the earlier of Tenant's
possession of the Second Preferential Space or the date of
availability specified in Landlord's offer and shall be leased
for a minimum of sixty (60) months from the commencement date of
the Second Preferential Space. Rent shall commence on the
earlier of (i) occupancy of the Second Preferential Space by
Tenant; (ii) Substantial Completion of the Second Preferential
Space or (iii) forty-five (45) days from tender of possession of
the Second Preferential Space. Tenant shall have five (5)
working days from receipt within which to accept or reject such
offer. If Tenant rejects such offer or fails to accept such
offer within the foregoing five (5) working day period, this
Second Preferential Right to Lease shall be deemed waived by
Tenant for ninety (90) days during which time Landlord may lease
all or a potion of the Second Preferential Space. If a lease
with another tenant(s) is not executed within said ninety (90)
day period following Tenant's rejection or failure to notify
period as provided above, then Tenant's Second Preferential Right
to Lease with respect to such space shall be reinstated in full
force and effect.
(3) If Tenant accepts Landlord's offer, Tenant shall, no later than
twenty (20) days after Landlord's submission of such offer,
execute an amendment of the Lease adding to the Second
Preferential Space to the Leased Premises on the terms specified
in Landlord's offer and extending the term (if necessary) of the
Lease for the entire Leased Premises by the number of months to
be coterminous with the Second Preferential Space term specified
above. The Base Rental for the Leased Premises shall continue
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during the remainder of the original term of the Lease at the
rate(s) in effect under this Lease; thereafter, the rental rate
for such space shall be at the Fair Market Rental Rate then in
effect.
(4) In the event Tenant leases space under this Paragraph 26.B,
Tenant's Cancellation Option(s) as provided in Paragraph 28.A and
Paragraph 28.B shall be adjusted to take into consideration the
increased Base Rental and amortization of Contributions provided
by Landlord, if any, for the Second Preferential Space.
27. FAIR MARKET RENTAL RATE
A. First Cancellation Option
(1) Upon not less than six (6) month's prior written notice to
Landlord given at anytime prior to the end of the forty-second
(42nd) full calendar month following the commencement of Tenant's
Lease and occupancy of the original Leased Premises, the
Expansion Space, the First Preferential Space, and the Second
Preferential Space, as applicable, Tenant shall have the right to
cancel this Lease with respect to all or a portion of the Leased
Premises located on the sixth (6th) floor of the Building,
subject to Tenant's payment of Stipulated Damages calculated
pursuant to Subparagraph 28.A(2) below and the conditions in
Subparagraph 28.A(3).
(2) Stipulated Damages shall be due and payable simultaneous with
Tenant's written notice of intent to cancel under the provisions
of this Paragraph 28.A or Tenant's cancellation rights shall be
null and void. If Tenant exercises its First Cancellation Option
pursuant to this Paragraph 28.A, Tenant shall pay Landlord, as
"Stipulated Damages", the sum of the following:
(a) The unamortized portion of Landlord's contributions, rental
abatement, moving allowance, and any other reimbursement
(collectively "Contributions") applicable to the Leased
Premises. Any costs associated with asbestos abatement in
the Leased Premises shall not be included in Contributions.
For purposes of calculating Stipulated Damages,
Contributions shall be treated as if such were a loan, fully
amortized over the original term of the Lease at twelve
percent (12%) annual interest, compounded monthly.
Stipulated Damages as outlined herein are subject to
adjustment for any Expansion Space and/or Preferential Right
Space leased by Tenant pursuant to Paragraph 25 and
Paragraph 26. Amortization of Contributions attributable to
the Expansion
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Space shall begin upon the commencement date of the
respective additional space leased; plus
(b) An amount equal to three (3) month's Base Rental based on
the Base Rental being paid by Tenant at the time of said
cancellation.
(3) Tenant's First Cancellation Option shall be subject to the
condition that (i) an Event of Default shall not have occurred
and is continuing at the time of exercise, (ii) Tenant is in
occupancy of the entire Leased Premises prior to Tenant's written
notice, (iii) Landlord is unable to accommodate Tenant's growth
by providing additional premises containing no less than fifty
percent (50%) of the then current Rentable Area of the Leased
Premises in one (1) contiguous space to be located in either One,
Two, Eight or Twelve Greenway Plaza or 8800 Buffalo Speedway;
(iv) Tenant has leased and occupied the original Leased Premises,
the Expansion Space, the First Preferential Space and the Second
Preferential Space, in accordance with this Lease; and (v) Tenant
has leased and occupied that portion of the leased Premises being
cancelled for a minimum of forty-two (42) months. Therefore the
Lease and/or any amendment(s) thereto may be terminated
separately depending on the commencement date of the original
Leased Premises, the Expansion Space, the First Preferential
Space, and the Second Preferential Space, as the case may be,
relative to the forty-two (42) month minimum term provided
herein. If Tenant exercises its First Cancellation Option with
respect to any portion of the Leased Premise, Tenant at its sole
cost and expense, shall be responsible for the installation of a
demising partition separating that portion of the Leased Premises
being canceled from any remaining portion of the Leased Premises
not so canceled. Moreover, at all times following the giving of
such notice and prior to the effective date of cancellation of
this Lease with respect to the applicable portion(s) of the
Leased Premises, Tenant shall be bound by and obligated to comply
with the covenants, duties and obligations of Tenant under this
Lease, including without limitation the payment of Base Rental
and all other sums due and payable by Tenant hereunder.
(4) If Tenant exercises its First Cancellation Option with respect to
any portion of the Leased Premises, any option(s) for additional
space outstanding at the time of said cancellation shall become
null and void.
B. Second Cancellation Option
(1) Effective April 30, 2000, Tenant shall have the right to cancel
this Lease with respect to the entirety of the Leased Premises
located on the sixth
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(6th) floor of the Building, subject to Tenant's payment of
Stipulated Damages calculated pursuant to Subparagraph 28.B(2)
below. Tenant must give Landlord written notice of its intent to
exercise this option and on or before July 31, 1999.
(2) Stipulated Damages shall be due and payable simultaneous with
Tenant's written notice of intent to cancel under the provisions
of this Paragraph 28.B or Tenant's cancellation rights shall be
null and void. If Tenant exercises its Second Cancellation
Option pursuant to this Paragraph 28.B, Tenant shall pay
Landlord, as "Stipulated Damages", the sum of the following:
(a) The unamortized portion of Landlord's contributions, rental
abatement, moving allowance, and any other reimbursement
(collectively "Contributions") applicable to the Leased
Premises. The costs of any asbestos abatement shall be
excluded from the calculation of the Contributions. For
purposes of calculating Stipulated Damages, Contributions
shall be treated as if such were a loan, fully amortized
over the original term of the Lease at twelve percent (12%)
annual interest, compounded monthly. Stipulated Damages as
outlined herein are subject to adjustment for any Expansion
Space and/or Preferential Right Space leased by Tenant
pursuant to Paragraph 25 and Paragraph 26. Amortization of
Contributions attributable to the Expansion Space, the First
Preferential Space and/or Second Preferential Space shall
begin upon the commencement of the respective additional
space leased; plus
(b) An amount equal to one (1) month's Base Rental based on the
Base Rental being paid by Tenant at the time of said
cancellation.
(3) Tenant's Second Cancellation Option under this Paragraph 28.B
shall be subject to the condition that (i) an Event of Default
shall not have occurred at the time of exercise and is
continuing, (ii) Tenant relocates its corporate offices outside
of the state of Texas; and (iii) Tenant has occupied the original
Leased Premises, the Expansion Space, the First Preferential
Space, the Second Preferential Space, or any expansion thereof
each for a minimum of forty-two (42) months. Therefore, the
Lease and/or any amendment(s) thereto may be terminated
separately depending on the commencement date of the original
Leased Premises, the Expansion Space, the First Preferential
Space, or the Second Preferential Space, as the case may be,
relative to the forty-two (42) month minimum term provided
herein. If Tenant exercises its Second Cancellation Option with
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respect to any portion of the Leased Premises, Tenant, at its
sole cost and expense, shall be responsible for the installation
of a demising partition separating that portion of the Leased
Premises being canceled from any remaining portion of the Leased
Premises not so canceled. Moreover, at all times following the
giving f such notice and prior to the effective date of
cancellation of this Lease with respect to the applicable
portion(s) of the Leased Premises, Tenant shall be bound by and
obligated to comply with the covenants, duties and obligations of
Tenant under this Lease, including without limitation the payment
of Base Rental and all other sums due and payable by Tenant
hereunder.
(4) If Tenant exercises its Second Cancellation Option with respect
to any portion of the Leased Premises, any option(s) for
additional space outstanding at the time of said cancellation
shall become null and void.
29. RENEWAL OPTION
Provided that Tenant (i) shall not at such time be in default of any of the
terms or provisions of the Lease; (ii) shall be in occupancy of the entire
Leased Premises; and (iii) subject to any existing preferential rights to lease,
renewal options, or rights of refusal; Tenant shall have an option (the "Renewal
Option") to renew the Lease for one (1) additional five (5) year period (the
"Renewal Period"), commencing on the first day following expiration of the
initial term of the Lease, except that the rental rate shall be at the Fair
Market Rental Rate. In order to exercise such Renewal Option, Tenant shall give
written preliminary notice thereof no earlier than thirteen (13) months nor
later than twelve (12) months prior to the end of the initial term of the Lease.
Within fifteen (15) days after the preliminary notice, Landlord shall advise
Tenant in writing f the Fair Market Rental Rate applicable during the Renewal
Period. Within thirty (30) days after Tenant has received such rental
information from Landlord, Tenant shall give Landlord written notice of the
exercise of its Renewal Option. Failure of Tenant to give such notice within
such thirty (30) days period shall cause such Renewal Option to be void and of
no further force and effect. If Tenant exercises this Renewal Option, the First
Cancellation Option provided in Paragraph 28.A above shall be null and void.
30. HOUSTON CITY CLUB
Landlord agrees to pay, out of the Base Rent payable for the first (1st)
month of the term of this Lease for which Base Rent is due, on behalf of Tenant,
the initiation fees in connection with three (3) Athletic Memberships to the
Houston City Club. Such memberships shall be activated on the Commencement Date
(or as soon thereafter as practicable), subject to the prior approval of The
Houston City Club.
31. HAZARDOUS MATERIAL; INDEMNITY
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A. Tenant shall not cause or permit any Hazardous Material (as
hereinafter defined) to be brought upon, kept or used in or about the
Leased Premises or the Project by Tenant or its agents, employees,
contractors or invitees without the prior written consent of Landlord
(which Landlord shall not unreasonably withhold as long as Tenant
demonstrates to Landlord's reasonable satisfaction that such Hazardous
Material is necessary or useful to Tenant's business and will be used,
kept and stored in a manner that complies with all laws regulating any
such Hazardous Material so brought upon or used or kept in or about
the Leased Premises or the Project). If Tenant breaches the
obligations stated in the preceding sentence, or if the presence of
Hazardous Material on the Leased Premises or the Project caused or
permitted by Tenant results in contamination of the Leased Premises or
the Project, or if contamination of the Leased Premises or the Project
by Hazardous Material otherwise occurs for which Tenant is legally
liable to Landlord for damage resulting therefrom, then Tenant shall
indemnify, defend and hold Landlord harmless from any and all claims,
judgments, damages, penalties, fines, costs, liabilities or losses,
including, without limitation, diminution in value of the Leased
Premises, damages, penalties, fines, costs, liabilities or losses
(including, without limitation, restriction on use of rentable or
usable space or of any amenity of the Leased Premises or the Project
[line missing] damages arising from any adverse impact on marketing of
space, and sums paid in settlement of claims, attorney's fees and
expert fees) which arise during or after the term of the Lease as a
result of such contamination. This indemnification of Landlord by
Tenant includes, without limitation, costs incurred in connection with
any investigation of site conditions or any clean up, remedial,
removal or restoration work required by any federal, state or local
governmental agency or political subdivision because of Hazardous
Material present in the soil or ground water on or under the Leased
Premises or the Project. Without limiting the foregoing, if the
presence of any Hazardous Material on the Premises or the Project
caused or permitted by Tenant results in any contamination of the
Leased Premises or the Project, Tenant shall promptly take all actions
at its sole expense as are necessary to return the Leased Premises and
the Project to the condition existing prior to the introduction of any
such Hazardous Material to the Leased Premises or the Project;
provided that Landlord's approval of such actions shall first be
obtained, which approval shall not be unreasonably withheld so long as
such actions would not potentially have any material adverse long-term
or short-term effect on the Leased Premises or the Project. The
indemnification of Landlord by Tenant contained in this Paragraph 30
shall survive the expiration or earlier termination of this Lease.
B. As used herein, the term "Hazardous Material" means any hazardous or
toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State of Texas or the United
States Government, including, but not limited to, any material or
substance that is (i) petroleum, (ii) asbestos, (iii) designated as a
"hazardous substance" pursuant to Section 311
-31-
of the Water Pollution Control Act (33 U.S.C. Section 1321), (iv)
designated as a "hazardous waste" pursuant to Section 1004 of the
Resource Conversation and Recovery Act, 42 U.S.C. Section 6901, (v)
defined as a "Hazardous substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C. Section 9601, or (vi) defined as a "regulated substance"
pursuant to Subchapter IX, Solid Waste Disposal Act, 42 U.S.C. Section
6991.
C. Landlord advises Tenant that, per the building inspection performed by
Law Engineers in 1985 and XxXxxxxxxx Management Services in 1990, the
following materials in Two Greenway Plaza were found to contain
asbestos in amounts greater than one percent (1%): (i) sprayed-on
fireproofing applied to the concrete structure throughout most of the
Building; (ii) cementitious white mud insulation on the heat exchanger
tanks in the basement mechanical room; (iii) pipe fitting and pipe run
insulation (thin white mud-mastic type) on hot and chilled water lines
throughout the Building mechanical rooms; (iv) tar coated pipe fitting
insulation and pipe run insulation (black tar) on the chilled and hot
water lines through the Building mechanical rooms; (v) cementitious
white mud insulation on the condensate drain line in the Building
mechanical rooms; and (vi) tar coating n duct insulation in the
basement mechanical room. The materials noted in (i) through (vi)
above have been removed from floors one through five, seven through
eleven and a portion of six of the Building. If Tenant leases
additional space pursuant to any option or preferential right
contained in this Lease and said additional space contains asbestos,
Landlord, at its sole cost and expense, will cause to have said
asbestos removed.
32. MISCELLANEOUS
A. Provided Tenant complies with its covenants, duties and obligations
hereunder, Tenant shall quietly have, hold and enjoy the Leased
Premises subject to the terms and provisions of this Lease.
B. In any circumstance where Landlord or Landlord's Mortgagee (or their
agents or employees) are permitted to enter the Leased Premises, no
such entry shall constitute an eviction or disturbance of Tenant's use
and possession of the Leased Premises; be a breach by Landlord of any
of its obligations; render Landlord liable for damages; entitle Tenant
to be relieved from any of its obligations; nor grant Tenant any right
of setoff, recoupment or other remedy. In connection with any such
entry incident to performance of repairs, replacement, maintenance or
construction, all of the aforesaid provisions shall be applicable
notwithstanding that Landlord may elect to take building materials in,
to or upon the Leased Premises.
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C. Tenant will not assert any claim or counterclaim against Landlord of
whatever nature or description in any legal proceeding unless during
the pendency of the proceeding Tenant pays to Landlord or into the
registry of the court all rent as it becomes due under this Lease.
D. The remedies of Landlord shall be cumulative; whether exercised by
Landlord or not shall be deemed to be in [line illegible] otherwise
provided in this Lease, granting of consent is within the sole
discretion of the party whose consent is required and withholding of
such consent need not be reasonable or based on good cause.
E. Where Tenant is required to pay any sum or do any act at a particular
time or within an indicated period, it is understood that time is of
the essence.
F. The obligation of Tenants to pay all rent and other sums provided
under this Lease to be paid by Tenant and the obligation of Tenant to
perform Tenant's other covenants and duties under this Lease
constitute independent, unconditional obligations to be performed at
all times provided for under this Lease, save and except only when an
abatement, reduction or offset right is expressly provided in this
Lease, and not otherwise. Tenant waives any right to assert, as
either a claim or defense, that Landlord is obligated to perform or is
liable for the nonperformance of any implied covenant or implied duty
of Landlord not expressly set forth in this Lease. Tenant waives any
implied warranty by Landlord that the Leased Premises are suitable for
their intended commercial purposes; provided that such waiver shall
not relieve Landlord of its express obligations under this Lease,
specifically including without limitation its obligations regarding
construction and maintenance and repair of the Leased Premises. Other
than as expressly set forth in this Lease, Landlord makes no express
warranty nor shall there be any implied warranty regarding the
condition of the Leased Premises. Tenant agrees to perform all of its
obligations hereunder (including, without limitation, the obligation
to pay rent), irrespective of any breach or alleged breach by Landlord
of any such implied warranty; provided that Tenant shall have the
right to bring an action for injunction or for damages caused by such
breach. Tenant agrees that Landlord shall incur no liability to
Tenant by reason of any defect in the Leased Premises, whether
apparent or latent. Tenant waives and relinquishes all rights which
Tenant might have to claim any nature of lien against any rent or
other sums payable by Tenant under this Lease. Notwithstanding the
foregoing, Landlord's contractor will warrant the workmanship of the
construction performed within the Leased Premises for a one (1) year
period from Substantial Completion ("Contractor Warranty"). Landlord
will use good faith efforts to enforce said Contractor Warranty.
-33-
G. Under no circumstances whatsoever shall Landlord or Tenant ever be
liable for consequential damages or special damages. Tenant waives
and relinquishes all rights which Tenant may have to claim any kind of
prejudgment lien against rent owed Landlord or against Landlord's
property.
H. All monetary obligations of Landlord and Tenant (including, without
limitation, any monetary obligation of Landlord or Tenant for damages
for any breach of their respective covenants, duties or obligations)
are performable exclusively in Houston, Xxxxxx County, Texas.
I. If any provision of this Lease shall ever be held to be invalid or
unenforceable, such invalidity or unenforceability shall not affect
any other provision of the Lease, but such other provisions shall
continue in full force and effect.
J. The term "Landlord" shall mean only the owner, for the time being, of
the Building. Landlord reserves the right to transfer, assign or
convey, in whole or in part, the building, the Land, the Project, any
interest in any of the foregoing and its interest in this Lease. In
the event of the transfer by such owner of its interest in the
Project, Building or this Lease, such owner shall thereupon be
released and discharged from all covenants and obligations of the
Landlord thereafter accruing; but such covenants and obligations shall
be binding during the Lease term upon each new owner of the Project or
Building (or assignee of the Landlord's interest under this Lease) for
the duration of such owner's ownership. All liability of Landlord for
damages for breach of any covenant, duty or obligation of Landlord
hereunder shall be satisfied only out of the interest of Landlord in
the Building existing at the time any such liability is adjudicated in
a proceeding as to which the judgment adjudicating such liability is
nonappealable and not subject to further review.
K. Tenant represents and warrants that it has not been represented by any
broker or agent in connection with the negotiation or execution of
this Lease, except for Xxxxx Partners, Inc. Tenant shall indemnify
and hold harmless Landlord and Landlord's designated property
management firm from and against all claims (including costs of
defending against and investigating such claims) of any broker or
agent or similar party claiming by, through or under Tenant in
connection with this Lease.
L. Whenever either party is required to pay for attorneys' fees,
realtors' commissions or other professional fees and expenses on
behalf of the other party, such fees and commissions shall be
commercially reasonable.
33. ENTIRE AGREEMENT AND BINDING EFFECT
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This Lease and any attached exhibits signed or initialed by the parties
constitute the entire agreement between Landlord and Tenant. No prior written
or prior or contemporaneous oral promises or representations shall be binding.
This Lease shall not be amended, except by written instrument signed by Landlord
and Tenant; no agent or employee of Landlord or Tenant has authority to modify
this Lease. Paragraph captions are for convenience only, and neither limit nor
amplify the provisions of this Lease. The provisions of this Lease shall be
binding upon and inure to the benefit of the heirs, executors, administrators,
successors and assigns of the parties, but this provision shall in no way alter
the restriction herein in connection with assignment and subletting by Tenant.
The submission of this Lease by Landlord for examination does not constitute a
reservation of or option for the Leased Premises. This Lease shall become
effective only upon execution by all parties and delivery by Landlord to Tenant.
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EXECUTED by the parties on the respective dates stated below, the later of
which constituting Effective Date of this Lease.
GREENWAY PLAZA, LTD., by its managing partner, J/K-G/P
#1, LTD., but its sole general partner, J/K Holdings,
Inc.
By: /s/ Xxxx Xxxxxx
---------------------------------------
Xxxx Xxxxxx, Senior Vice President
LANDLORD
Date: October 2, 1996
-------------------------------------
PHYSIX, INC., a Texas corporation
By: /s/ Xxx Xxxxxxxxx
---------------------------------------
Name: Xxx Xxxxxxxxx
-------------------------------------
Title: President/CEO
------------------------------------
Date: 9/27/96
-------------------------------------
TENANT
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