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EXHIBIT 10.3
TWENTY-EIGHTH AMENDMENT OF LEASE CONTRACT
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THIS TWENTY-EIGHTH AMENDMENT OF LEASE CONTRACT ("Twenty-Eighth
Amendment") is entered into between CRESCENT REAL ESTATE FUNDING III, L.P., a
Delaware limited partnership ("Landlord"), and A I M MANAGEMENT GROUP INC., a
Delaware corporation ("Tenant"), with reference to the following:
A. Nine Greenway Venture (predecessor in interest to Landlord)
and Tenant entered into a Lease Contract dated April 14, 1980, First Amendment
of Lease Contract dated January 29, 1981, Second Amendment of Lease Contract
dated November 12, 1982, Third Amendment of Lease Contract dated August 17,
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ of Lease Contract dated April 28, 1986, Fifth Amendment
of Lease Contract dated December 11, 1986, Sixth Amendment of Lease Contract
dated August 6, 1987, Seventh Amendment of Lease Contract dated February 4,
1988, and Eighth Amendment of Lease Contract dated January 6, 1989; and Nine
Greenway, Ltd. (predecessor in interest to Landlord) and Tenant entered into a
Ninth Amendment of Lease Contract dated ▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇▇ Amendment of
Lease Contract dated June 12, 1990, Eleventh Amendment of Lease Contract dated
August 27, 1990, Twelfth Amendment of Lease Contract dated July 15, 1991,
Thirteenth Amendment of Lease Contract dated January 13, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ of Lease Contract dated July 17, 1992, Fifteenth Amendment of Lease
Contract dated July 17, 1992, Sixteenth Amendment of Lease Contract dated
August 10, 1992, Seventeenth Amendment of Lease Contract dated February 25,
1993, Eighteenth Amendment of Lease Contract dated April 22, 1994, Nineteenth
Amendment of Lease Contract dated March 31, 1995, Twentieth Amendment of Lease
Contract dated July 31, 1995, Twenty-First Amendment of Lease Contract dated
August 1, 1995 and Twenty-Second Amendment of Lease Contract dated December 1,
▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ of Lease Contract dated March 18, 1996,
Twenty-Fourth Amendment of Lease Contract dated March 18, 1996, Twenty-Fifth
Amendment of Lease Contract dated June 29, 1996; and Landlord and Tenant
entered into a Twenty-Sixth Amendment of Lease Contract dated November 29, 1996
and Twenty-Seventh Amendment of Lease Contract dated January 16, 1997 (as
amended, the "Lease") covering approximately 284,226 square feet of Rentable
Area consisting of approximately 9,671 square feet of Rentable Area on the
Concourse Level; approximately 4,607 square feet of Rentable Area on the first
(1st) floor, approximately 23,399 square feet of Rentable Area being the
entirety of the sixth (6th) floor; approximately 23,399 square feet of Rentable
Area being the entirety of the seventh (7th) floor; approximately 17,741 square
feet of Rentable Area on the eleventh (11th) floor [of which approximately
10,940 square feet of Rentable Area shall become effective on or about November
16, 1996]; approximately 23,399 square feet of Rentable Area on the twelfth
(12th) floor; approximately 23,829 square feet of Rentable Area being the
entirety of the thirteenth (13th) floor; approximately 14,320 square feet of
Rentable Area on the seventeenth (17th) floor; approximately 23,782 square feet
of Rentable Area being the entirety of the eighteenth (18th) floor;
approximately 23,782 square feet of Rentable Area being the entirety of the
nineteenth (19th) floor; approximately 12,054 square feet of Rentable Area on
the twenty-first (21st) floor; approximately 24,113 square feet of Rentable
Area being the entirety of the twenty-third (23rd) floor; approximately 24,113
square feet of Rentable Area being the entirety of the twenty-fourth (24th)
floor; approximately 24,113 square feet of Rentable Area being the entirety of
the twenty-fifth (25th) floor; and approximately 16,459 square feet of
Rentable Area on the twenty-sixth (26th) floor of the building known as Summit
Tower, Eleven Greenway, Houston, Texas (the "Building").
B. Tenant wishes to lease from Landlord additional space located
in Summit Plaza West, Twelve Greenway Plaza, Houston, Texas ("Building-12").
C. Landlord and Tenant now desire to enter into this
Twenty-Eighth Amendment to lease additional space as outlined herein; adjust
the Base Rental; and incorporate certain new provisions regarding Tenant's
payment of its share of Project Operating Cost and other matters, all as
provided below. Unless otherwise expressly provided herein, capitalized terms
used herein shall have the same meanings as in the Lease.
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which are acknowledged, the parties agree as follows:
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1. Additional Space.
a. Landlord leases to Tenant and Tenant leases from Landlord
approximately 55,860 square feet of Rentable Area being the entirety of the
third (3rd), fourth (4th) and fifth (5th) floors of Building-12, as shown
outlined and hatched on Exhibits "A-1", "A-2" and "A-3" attached hereto
("Expansion Space FF").
b. The lease term for Expansion Space FF shall commence upon
Substantial Completion (as defined in the Construction Agreement described in
Paragraph 5 below) of Expansion Space FF (the "FF Commencement Date") and shall
expire on December 31, 2003, the date of expiration of the Fourth Extension
Period. Commencing on the FF Commencement Date, the term "Leased Premises" as
used herein shall mean and include approximately 340,086 square feet of
Rentable Area, being approximately 284,226 square feet of Rentable Area then
leased and occupied by Tenant, plus approximately 55,860 square feet of
Rentable Area in Expansion Space FF leased hereunder.
c. The parties anticipate that the FF Commencement Date will
occur on or before June 1, 1997. If Expansion Space FF has not been
Substantially Completed by such 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 FF Commencement Date shall occur upon
the earlier of; (i) the time that the entirety of the Expansion Space FF is
Substantially Completed; (ii) the date that Substantial Completion of the
entirety of the Expansion Space FF would have been achieved but for Tenant
Delays (if any); or (iii) Tenant's occupancy of the entirety of the Expansion
Space FF. In such event, Landlord and Tenant shall, promptly upon request,
execute an agreement specifying the FF Commencement Date, with a corresponding
adjustment to the schedule of Base Rental set forth below. In addition to the
foregoing, if any portion of Expansion Space FF is Substantially Completed and
occupied by Tenant prior to the actual FF Commencement Date, then Tenant shall,
upon demand, pay Landlord a prorated amount of Base Rental, together with all
other charges payable by Tenant under the Lease, attributable to the space so
early occupied.
2. Base Rental.
a. Commencing on the FF Commencement Date and continuing through
March 31, 2002, Tenant shall pay Landlord Base Rental for Expansion Space FF in
the sum of Sixty-Two Thousand Eight Hundred Forty-Two and 52/100 Dollars
($62,842.50) per month. Commencing April 1, 2002 and continuing through
December 31, 2003, Tenant shall pay Landlord Base Rental for Expansion Space FF
in the sum of Seventy-Six Thousand Eight Hundred Seven and 50/100 Dollars
($76,807.50) per month.
b. Commencing on the FF Commencement Date, the rent schedule set
forth in Paragraph 4 of the Twenty-Seventh Amendment is deleted in its entirety
and the following rent schedule, which takes into consideration Expansion Space
FF leased hereunder, shall be substituted in lieu thereof:
FROM TO MONTHLY BASE RENTAL
---- -- -------------------
June 1, 1997* December 31, 1997 $387,269.08
January 1, 1998 May 31, 1998 $414,635.82
June 1, 1998 June 9, 2000 $415,622.74
June 10, 2000 December 31, 2000 $427,383.77
January 1, 2001 March 31, 2002 $452,498.39
April 1, 2002 December 31, 2003 $466,463.39
* Anticipated FF Commencement Date
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3. Additions and Fixtures. The following shall be added at the end of the
last sentence of Paragraph 10.B. of the Lease:
"unless, at the time of Landlord's review and approval of Tenant's
installation of any such alteration, addition, fixture, equipment or
property in Expansion Space FF (or any additional space subsequently
leased by Tenant in Building-12), Landlord specifically agrees in
writing, following Tenant's written request, that Tenant may abandon
such item upon the expiration or earlier termination of Tenant's lease
with respect to its applicable premises in Building-12."
4. Project Operating Cost. Tenant agrees to pay to Landlord, as
additional rent calculated in accordance with Paragraph 13 of the Lease (as
previously amended), its pro rata share of increases in operating expenses
attributable to Expansion Space FF and any other space leased in Building-12
(including any renewals or extensions), subject to the following modifications:
a. The term "Building Operating Cost" shall be amended to refer to
"Project Operating Cost." The term "Project" refers to Building-12 and the land
upon which it is constructed, including without limitation all landscaping,
driveways, sidewalks, service areas and other improvements located on such
land, and together with the pro rata share of the parking garages servicing
such building.
b. Tenant's Base Year for Building-12 shall be calendar year 1997.
c. Operating expenses may include the cost of goods and services
purchased by Landlord from its subsidiaries or other affiliated parties to the
extent generally consistent with competitive "market" rates charged by
unaffiliated third parties for similar qualities and quantities (unless
otherwise required in an emergency).
d. The Project Operating Cost for the Base Year shall be equal to
actual operating costs for Building-12 for that calendar year, adjusted upward
to reflect the costs of operating Building-12 at an occupancy level of 95%;
however, if the occupancy level of Building-12 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% occupancy level; however, if the occupancy level of Building-12
for any calendar year after the Base Year equals or exceeds 95%, there shall be
no such upward adjustment and the actual operating costs for Building-12 shall
be used for such year.
5. Condition of Premises. Landlord will tender and Tenant agrees to
accept Expansion Spaces FF in an "as-is" condition. Any construction of
leasehold improvements necessary for the Leased Premises shall be accomplished
and the cost of such construction shall be paid in accordance with a separate
"Construction Agreement" between Landlord and Tenant attached hereto as Exhibit
"C". Except as expressly provided in this Twenty-Eighth Amendment or in the
Construction Agreement Tenant acknowledges that Landlord has not undertaken to
perform any modification, alteration or improvement to the Leased Premises.
6. Parking. Notwithstanding anything to the contrary contained in the
Lease, the following shall govern Tenant's rights and obligations with respect
to parking facilities applicable to Expansion Space FF and any additional space
leased by Tenant in Building-12 pursuant to the provisions of the Preferential
Right to Lease set forth below:
a. For each 1,000 square feet of Rentable Area leased and occupied in
Building-12 by Tenant, Landlord shall provide the following:
(i) Up to two and one-half (2.5) unreserved parking permits
providing access to the garage known as the North Richmond Garage
located to the north of Building across ▇▇▇▇▇▇▇▇ Street in areas
determined by Landlord, in its sole discretion.
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(ii) Up to one-and-one-half (1.5) additional unreserved
permits providing access to other garages or parking areas located in
Phase I or II of the Greenway Plaza or which Landlord may contract for
Tenant's use in reasonable proximity to Greenway Plaza or Phase III of
Greenway Plaza, excluding the Phoenix Tower parking garage and any
parking areas south of the Southwest Freeway (Highway 59).
(iii) Tenant shall pay 70% of the then-current quoted monthly
contract rates for the use of all of such permits located in garages
and/or areas owned by Landlord. For any garages and or areas
contracted for Tenant's use which are not owned by Landlord, except as
provided below, Tenant shall pay Landlord at rates per permit equal to
the actual rate charged by the provider plus Tenant's pro rata share
(on a per-space-rented basis) of Landlord's reasonable overhead,
reasonable administration and other directly related costs. However,
for any parking permits located in any existing or future parking
garages or areas in or adjacent to the Innova Building, ▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, Tenant shall pay for such permits at rates
comparable to Landlord's then-quoted monthly contract rates in
Greenway Plaza.
b. Landlord shall have the right, at any time and from time to
time, to change or re-arrange the location of Tenant's parking permits within
the applicable parking garage and/or parking areas designated in Paragraph 6.a.
above. At such time, Landlord shall have the option to reissue all or a portion
of Tenant's permits to reflect the changes in parking locations. Tenant and its
employees shall use such parking garage only in accordance with Landlord's
Rules and Regulations. Neither Tenant nor its employees shall use any parking
spaces designated for visitors, other occupants of the Project or otherwise
without Landlord's prior written consent. The number of parking spaces
available for Tenant's use shall not exceed that specified above.
c. Tenant shall, within ten (10) days of Landlord's request,
furnish to Landlord a complete list of the license plate numbers of all
vehicles operated by Tenant and Tenant's employees and agents. Landlord shall
not be liable for any damage of any nature whatsoever to, or any theft of,
vehicles, or contents therein, in or about such parking garage, except to the
extent caused by Landlord's gross negligence or willful misconduct. If, for any
reason, Landlord fails or is unable to provide, or Tenant is not permitted to
use, all or any portion of the parking spaces to which Tenant is entitled
hereunder, then Tenant's obligation to pay for such spaces shall be abated for
so long as Tenant does not have the use thereof. In addition, Landlord shall
use commercially reasonable efforts to (i) restore such parking spaces to
Tenant as soon as reasonably possible, and (ii) subject to availability,
provide temporary alternative parking facilities to Tenant in close proximity
to Greenway Plaza.
7. Preferential Right to Lease.
a. At any time prior to December 31, 2001, Tenant shall have a
Preferential Right to Lease space located on the sixth (6th), seventh (7th) or
twelfth (12th) floor(s) of Building-12 (the "Preferential Space"), at such time
as such space becomes "Available", as defined below, for direct lease to a new
tenant; provided that there is no uncured event of default under the Lease by
Tenant and Tenant remains in occupancy of the Leased Premises. For purposes
hereof, the Preferential Space shall be deemed "Available" at such time as such
space is no longer (i) ]eased; (ii) assigned or subleased by the current tenant
of the space; (iii) re-leased, renewed or extended by the current tenant, or
any assignee or sublessee thereof, pursuant to a formal lease provision in
their lease executed prior to the date of this Twenty-Eighth Amendment; (iv)
re-leased, renewed or extended by the then-current tenant, or any assignee or
sublessee thereof, pursuant to a formal lease provision in their lease executed
after Tenant has declined to exercise its preferential rights under Paragraph
7.b. below with respect to such space; or (v) subject to a specific expansion
right, right of first refusal or preferential right existing under any other
tenant leases for the Project as of the date of this Twenty-Eighth Amendment.
With respect to any space which may be subject to specific options as outlined
in clauses (iv) and (v) above, then Tenant shall have a subordinate preferential
right to lease such space under the provisions outlined herein.
b. At such time as any Preferential Space becomes Available and
again prior to leasing such space to a new tenant pursuant to a bona fide
offer, Landlord shall first offer such space in writing to Tenant. Each such
offer notice shall specify the amount and location of such space, the date of
Availability or proposed lease, as applicable, and the rental rate based on
Fair
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Market Value (as defined in Paragraph 26.C. the Lease) payable for such space.
The rental rate based on Fair Market Value shall be based on the assumption of
Landlord providing, at Tenant's option, a construction allowance consistent
with Fair Market Value (but not less than Five Dollars ($5.00) per square foot
of Rentable Area) amortized into the rental rate. The Preferential Space shall
be tendered by Landlord and accepted by Tenant in an "as-is" condition, plus
the allowance requested by Tenant pursuant to the immediately preceding
sentence. Any Preferential Space shall be leased for the period commencing upon
the earlier of Tenant's occupancy of the Preferential Space or 45 days after
the date of Landlord's tender of possession and expiring upon the last day of
the Fourth Extension Period, as it may be extended or renewed.
c. Tenant shall have ten (10) days from receipt within which to accept
or reject Landlord's offer. 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 Preferential Space to the Leased
Premises on the terms specified in Landlord's offer. If Tenant rejects the
offer contained in Landlord's first notice of Availability or fails to accept
such first offer within the applicable ten (10) day period, then, Landlord
shall be entitled to place such space on the market. If Tenant rejects
Landlord's second offer contained in Landlord's notice of its intention to
lease such space pursuant to a bona fide third-party offer or fails to accept
such second offer within the applicable ten (10) day period, then Landlord
shall have one hundred fifty (150) days from the date of Landlord's second
offer within which to lease the offered space to any third-party tenant. If
Landlord has not entered into a new lease for the offered space within such one
hundred fifty (150) days, such space shall again deemed "Available".
8. Hazardous Materials. Based on a study performed by ▇▇▇▇▇▇▇▇▇▇
Management Services on June 25, 1990, Building-12's mechanical rooms and
penthouse contain limited amounts of asbestos. The asbestos material is
primarily found in the thin white mud on the insulation of certain piping and
ductwork. Some 12" x 12" floor tiles and associated mastics in several service
corridors also contain small amounts of asbestos.
9. Cabling Right of Way. Landlord grants Tenant the right, at no
additional charge to Tenant, to install its electronic communications cables in
the plenum of the existing skywalk over Richmond Avenue between the Building
(i.e., Summit Tower) and Building-12 (i.e., Summit Plaza West). However, Tenant
shall pay all costs of installing its cable across such skywalk, including the
cost of preparing plans and obtaining any required permits or licenses in
connection therewith. Upon expiration or earlier termination of the Lease, or
Tenant's vacating of all of its premises in either the Building or Building-12,
Tenant shall, at its expense, promptly remove all of its cabling from the
vacated building(s) and the skywalk, and repair any damage caused thereby.
Prior to any such installation, Tenant shall submit to Landlord plans and
specifications showing its proposed installation methods and other necessary
details for Landlord's review and written approval.
10. Broker. Tenant represents and warrants that it has not been
represented by any broker or agent in connection with the negotiation or
execution of this Twenty-Eighth Amendment, except ▇▇▇▇ ▇▇▇▇▇▇▇ of The Staubach
Company. Tenant shall indemnify and hold harmless Landlord and Landlord's
designated property management, construction and marketing firms from and
against all claims (including costs of defense and investigation) of any other
broker or agent or similar party claiming by, through or under Tenant in
connection with this Second Amendment.
11. Time of the Essence. Time is of the essence with respect to Tenant's
execution and delivery of this Twenty-Eighth Amendment to Landlord. If Tenant
fails to execute and deliver a signed copy hereof to Landlord by 5:00 p.m.,
February 28, 1997, it shall be deemed null and void and shall have no force or
effect, unless otherwise agreed in writing by Landlord. Landlord's acceptance,
execution and return of this document shall constitute Landlord's agreement to
waive Tenant's failure to meet the foregoing deadline.
12. Binding Effect. Except as modified by this Twenty-Eighth Amendment,
the terms and provisions of the Lease shall remain in full force and effect,
and the Lease, as modified hereby, shall be binding upon the parties hereto,
their successors and assigns. This document shall become effective only after
the full execution and delivery hereof by Landlord and Tenant.
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Landlord and Tenant enter into this Twenty-Eighth Amendment as of
February 20, 1997.
CRESCENT REAL ESTATE FUNDING III, L.P.,
a Delaware limited partnership
By: CRE Management III Corp., a Delaware
corporation, its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
Corporate Leasing
LANDLORD
A I M MANAGEMENT GROUP INC., a Delaware
corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇, Senior Vice President
TENANT
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Floor Status FLOOR 3
11 Nov 1994
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SENTERRA DEVELOPMENT
[FLOOR PLAN]
A I M MANAGEMENT GROUP INC.
EXHIBIT "A-1"
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Floor Status FLOOR 4
11 Nov 1994
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SENTERRA DEVELOPMENT
[FLOOR PLAN]
A I M MANAGEMENT GROUP INC.
EXHIBIT "A-2"
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Floor Status FLOOR 5
11 Nov 1994
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SENTERRA DEVELOPMENT
[FLOOR PLAN]
A I M MANAGEMENT GROUP INC.
EXHIBIT "A-3"
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EXHIBIT "C"
CONSTRUCTION AGREEMENT
This Construction Agreement is executed by and between CRESCENT REAL
ESTATE FUNDING III, L.P. ("Landlord") and A I M MANAGEMENT GROUP INC., a
Delaware corporation ("Tenant"), in connection with that certain Twenty-Eighth
Amendment (the "Twenty-Eighth Amendment") executed by the parties on even date
herewith (the "Effective Date") relating to the lease by Landlord to Tenant of
certain Leased Premises in Twelve ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇. All defined
terms used herein, unless otherwise defined herein, shall have the same meanings
given to such terms in the Lease.
1. Approved Construction Documents. No later than March 1, 1997, Tenant
shall submit to Landlord complete, finished and detailed architectural,
mechanical, electrical and plumbing drawings and specifications to include
Tenant's partition layout, reflected ceiling, telephone and electrical outlets
and equipment rooms, doors (including hardware and keying schedule), glass
partitions, windows and doors, critical dimensions, heavy equipment
requirements, millwork and finish schedules, air conditioning and heating
systems, ductwork, and electrical facilities, together with all supporting
information and delivery schedules ("Approved Construction Documents"). If
Tenant fails to deliver all of Approved Construction Documents by such date,
each calendar day of such delay shall be one day of "Tenant Delay".
2. Competitive Bids. Within seven (7) business days after receipt of the
Approved Construction Documents, Landlord shall seek and obtain three (3)
competitive bids from general contractors from Landlord's approved bidding
list. Tenant shall have the option of submitting the names of not more than two
(2) general contractors which it would like to include in the bidding process
so long as such contractors meet Landlord's requirements for selection of
contractors. Only subcontractors from Landlord's approved subcontractor list
shall be allowed to work on the Project. Tenant shall be invited to the bid
opening and allowed to participate in the selection of the successful bidder
and Landlord shall enter into a contract with the successful bidder. Within
three (3) business days after receipt, Tenant shall review the bids and return
written approval thereof to Landlord. If Tenant fails to return the approved
bids within such period, each calendar day of such delay shall be one day of
Tenant Delay.
3. Landlord's Contributions.
(a) Construction Allowance. Landlord will tender and Tenant agrees
to accept the Leased Premises in an "as-is" condition; however, Landlord will
contribute the sum of One Million Five Thousand Four Hundred Eighty and 00/100
Dollars ($1,005,480.00 [$18.00 per square foot of Rentable Area]) [the
"Construction Allowance"] towards the cost of furnishing and installing
permanent leasehold improvements in the Leased Premises in accordance with this
Construction Agreement. Payments shall be made directly to Landlord's
contractor performing the Work. Tenant acknowledges and agrees that a portion
of the Base Rental constitutes repayment of the foregoing allowance, which has
been given to Tenant as partial consideration for Tenant's execution and
performance of the Twenty-Eighth Amendment.
(b) Special Leasehold Allowance. At Tenant's election, Landlord
shall contribute an additional sum not to exceed One Hundred Sixty-Seven
Thousand Five Hundred Eighty and 00/100 Dollars ($167,580.00 [$3.00 per square
foot of Rentable Area]) [the "Special Leasehold Allowance"] towards additional
permanent leasehold improvements Tenant elects to install in the entire Leased
Premises. Tenant's election to use all or a portion of the Special Leasehold
Allowance shall be made no later than thirty (30) days following approved
pricing, at which time Landlord and Tenant will promptly execute an amendment
modifying the Base Rental accordingly. The amount of the Special Leasehold
Allowance actually utilized by Tenant shall be amortized as a additional Base
Rental over the remainder of the Fourth Extension Period at twelve percent
(12.0%) per annum.
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4. Construction.
(a) The Work. Subject to the provisions of this Construction
Agreement, Landlord agrees to construct leasehold improvements (the "Work") in
a good and workmanlike manner in and upon the Leased Premises in accordance
with the Approved Construction Documents. The cost of all space planning and
construction drawings shall not be included in the cost of the Work but shall
be paid directly by Tenant.
(b) General Construction Terms. Landlord will employ an
experienced, licensed contractor to construct the Work and will require in the
construction contract that such contractor construct the Work in a good and
workmanlike manner and in compliance with all Applicable Laws, except as
otherwise provided herein, in the Twenty-Eighth Amendment or in the Lease.
The parties acknowledge that Landlord is not an architect, engineer or
contractor, and that the Work will be performed by independent contractors.
Accordingly, Landlord does not guarantee or warrant that the Work will be
free from defects, and Landlord will have no liability therefor. In the event
of any such defects, Landlord will use reasonable efforts to cooperate in any
action Tenant desires to bring against such parties.
(c) Substantial Completion. All work shall be deemed
"Substantially Completed" when completed in accordance with this Exhibit and
the Approved Construction Documents, to the extent that Tenant would have
access to the Leased Premises and be able to conduct its business in a
reasonable manner and Landlord has obtained final inspection approval from the
City of Houston, even though adjustments or corrections may be necessary and
minor "punch-list" items remain to be completed. As a courtesy, and not as a
condition to Substantial Completion, Landlord shall provide Tenant with a copy
of the final Certificate of Occupancy for Expansion Space FF promptly following
receipt thereof from the City of Houston.
(d) ADA Compliance. Landlord shall be responsible for costs and
implementation associated with compliance with the Americans with Disabilities
Act (the "ADA") for the Project and all points of access into the Project ("the
Landlord's ADA Work"). Tenant shall be responsible for all costs and
implementation associated with ADA compliance within Expansion Space FF,
including all restrooms since each floor comprising Expansion Space FF will be
taken by Tenant as a "Single Tenant Floor", as defined in the Lease. Landlord
shall not be responsible for determining whether Tenant is a public
accommodation under The Americans with Disabilities Act ("ADA") or whether the
Approved Plans comply with such laws and the regulations thereunder. Such
determinations, if desired by Tenant, shall be the sole responsibility of
Tenant.
5. Cost Overruns. Costs incurred by Landlord in excess of any allowance
shall be paid by Tenant to Landlord promptly within thirty (30) calendar days
following delivery of Landlord's invoice. Change orders requested by Tenant and
approved by Landlord which increase the cost of construction over eighteen
dollars ($18) per square foot of Rentable Area shall be paid by Tenant to
Landlord promptly upon demand.
6. Delays. If Landlord is delayed in completing construction of the Work
for any reason other than Tenant Delays, the delay in commencement of Tenant's
obligation to pay rent under the Twenty-Eighth Amendment shall constitute full
settlement of all claims that Tenant may have against Landlord based on the
delay. If Landlord is delayed in completing the Work due to a delay caused by
Tenant or for any other cause related to Tenant's acts or omissions,
Substantial Completion will be deemed to have occurred under the Twenty-Eighth
Amendment on the date upon which Landlord would have delivered possession of
the Leased Premises to Tenant absent such delay.
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