L E A S E C O N T R A C T
This Lease Agreement is made and entered into this 22 day of January 1995, by
and between The Penn Mutual Life Insurance Company (hereinafter called
"Lessor"), and 3DX Technologies, Inc., a Texas corporation (hereinafter
called "Lessee"),
W I T N E S S E T H:
In consideration of the mutual covenants as set forth herein, Lessor and
Lessee hereby agree as follows:
1. LEASED PREMISES
Lessor hereby leases to Lessee and Lessee hereby leases from Lessor
approximately 8,603 square feet of Net Rentable Area ("NRA") on floor
two (2), Suite 250 in the building known as Penn Woodbranch
(hereinafter called "Building"), located at 00000 Xxxxxxxxxxx, Xxxxxxx,
Xxxxxx Xxxxxx, Xxxxx. The legal description of said property is
contained in the attached Exhibit "A". The area hereby leased
(hereinafter called "Leased Premises") in the Building is shown
outlined and hatched on the floor plan (s) attached hereto and made a
part hereof as Exhibit "B". Lessor shall have the right at any time and
from time to time to change the name of the Building.
2. NET RENTABLE AREA ("NRA")
The NRA contained in the Leased Premises and the Building have been
determined in accordance with Exhibit "C" hereto. The total NRA in the
Building is hereby stipulated for all purposes hereof to be
approximately 109,950 square feet, whether the same should be more or
less as a result of minor variations resulting from actual construction
and completion of the Building. The NRA of the Leased Premises
represents 7.82% of the total NRA within the Building such percentage
is hereafter referred to as "Tenant's Building Percentage".
3. PARKING
Tenant shall at all times during the Lease Term, lease parking rights
for twenty-six (26) cars pursuant to the terms and conditions described
in Exhibit "D" attached hereto.
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4. LEASE TERM
A. Subject to all and upon the conditions as set forth herein, or any
addenda or exhibits hereto, this Lease shall continue in force for
a term of five (5) years (sixty (60) months) commencing on the 1st
day of March, 1995 and shall terminate on the 29th day of February,
2000.
B. In the event the Leased Premises should not be ready for occupancy
by the Commencement Date stated in Section 4A above, Lessor shall
not be liable 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 Lessee. Should the term of this Lease commence on a
date other than that specified in Section 4A above for any reason,
Lessor and Lessee will at the request of either, execute a
declaration specifying the beginning date of the term of this Lease
Agreement. In such event, rental under this Lease Agreement shall
not commence until said revised Commencement Date, and the stated
term in this Lease Agreement shall thereupon commence and the
expiration date shall be extended so as to give effect to the full
stated term.
5. USE
A. The Premises are to be used and occupied by the Lessee for the
purpose of general office use only and for no other purposes.
B. Lessee agrees not to commit or suffer to be committed on the
Leased Premises any nuisance or other act or thing against public
policy or which violates any law or governmental regulation or
which is disreputable or which may disturb the quiet enjoyment of
any other tenant of the Building of which the Leased Premises are
a part.
C. Lessee will not use, occupy, or permit the use or occupancy of
these Leased Premises for any unlawful, disreputable, immoral or
hazardous purpose; or maintain or permit the maintenance of any
public or private nuisance; or do or permit any act or thing which
may disturb the quiet enjoyment of any other tenant of the
Building; or keep any substance or carry on or permit any
operation which might emit offensive odors into other portions of
the Building or permit anything to be done which would increase
the fire insurance rate of the Building or contents.
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6. BASE RENTAL OVER THE PRIMARY TERM HEREOF
A. Lessee hereby agrees to pay without demand, deduction,
abatement or setoff except as specifically provided for herein a
base annual rental ("Base Annual Rental") equal to $11.00
multiplied by the Net Rentable Area (8,603 NRA) encompassed by the
Leased Premises. The Lessee shall also pay, as additional rent
(hereinafter called "Additional Rent"), all such other sums of
money as shall become due from and payable by Lessee to Lessor
under this Lease. The Lessor shall have the same remedies for
default for the payment of Additional Rent as are available to
Lessor in the case of a default in the payment of Base Rental.
Subject to the provisions of this Lease regarding the prepayment
of Base Rental and other amounts, such Base Rental, together with
any adjustment of rent provided for herein then in effect, shall
be due and payable on the first day of each calendar month during
the term of this Lease and Lessee hereby agrees to so pay such rent to
Lessor at Lessor's address as provided herein (or such other
address as may be designated by Lessor from time to time) monthly in
advance without demand. If the term of this Lease Agreement as
heretofore established commences on other than the first day of a
month, then the installments of Base Rental for such month or
months shall be prorated and the installment or installments so
prorated shall be paid in advance. All past due installments of
rent shall bear interest at the maximum lawful rate per annum
until paid.
7. BASE RENTAL ESCALATION.
A. In the event that the Operating Cost (as hereinafter defined) of
Lessor's operation of the Building during any Lease Year of the
Lease Term shall exceed the total Operating Cost of the Building
for the calendar year 1995 on a per square foot of Net Rentable
Area basis, grossed up to reflect ninety-five percent (95%)
Building occupancy, Lessee shall pay to Lessor, as Additional
Rent, its proportionate share of the increase in such Operating
Cost. The proportionate share of such increase to be paid by
Lessee shall be determined by multiplying the amount of such
increase by Tenant's Building Percentage. Said Additional Rent
shall be paid in the manner and at the times set forth in Section
8 below. The term "Lease Year" shall mean the twelve month period
commencing January 1 and ending December 31.
B. "Operating Cost", as said term is used herein, shall be defined as
the operating expenses of the Building, which shall be computed on
the accrual basis and shall consist of all expenditures by Lessor
to maintain all facilities in operation during each Lease Year and
such additional facilities in subsequent years as may be
determined by Lessor to be necessary. All operating expenses shall
be determined in accordance with generally accepted accounting
principles, which shall be consistently applied. The term
"operating expenses"
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as used herein shall mean all expenses, costs and
disbursements (but not replacement of capital investment items
except those made for the purposes of reducing operating expenses,
nor Lessor's home office expense, nor specific costs specially
billed to and paid, or payable by specific tenants nor rental
commissions) of every kind and nature which Lessor shall pay or
become obligated to pay because of or in connection with the
ownership and operation of the Building, including, but not
limited to, the following:
(1) Wages and salaries of all employees actually engaged in
operation and maintenance of the Building, including taxes,
insurance and benefits relating thereto.
(2) all supplies and materials used in operation and maintenance
of the Building.
(3) Cost of all utilities including electric, gas, water,
heating, lighting, air conditioning and ventilating the
Building.
(4) Cost of all maintenance and service agreements for the
Building and the therein equipment, including security
service, window cleaning, elevator maintenance and janitorial
service.
(5) Cost of casualty and liability insurance applicable to the
Building and Lessor's personal property used in connection
therewith.
(6) All taxes and assessments and governmental charges whether
Federal, State, County or Municipal, and whether they be by
taxing districts or authorities presently taxing the Leased
Premises or by others, subsequently created or otherwise, and
any other taxes and assessments attributable to the Building
or their operation excluding, however, Federal and State
taxes on income.
It is agreed that Lessee will be responsible for ad valorem
taxes on its personal property and on the value of all
special leasehold improvements to the Leased Premises to the
extent same are separately assessed. If any such taxes on
leasehold improvements are paid by Lessor, Lessee will
reimburse Lessor therefor upon receipt of a xxxx from Lessor,
together with a reasonable supporting statement setting forth
Lessor's calculation of the amount of such taxes chargeable
to Lessee's Leasehold Improvements.
(7) Cost of repairs and general maintenance undertaken by Lessor
in its sole discretion on or of the Building (excluding only
repairs and general structural maintenance, foundation and
exterior walls of the Building, repairs and general
maintenance paid by
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proceeds of insurance or by Lessee or other third parties,
and alterations attributable solely to tenants of the
Building other than Lessee).
(8) Cost of capital expenditures made for the specific purpose of
installing equipment, devices, or materials intended to reduce
operating expense of the Building or required by any
governmental authority as a result of any legislation,
ordinance, regulation or building code enacted after the
effective date of this Lease Agreement. Such costs will be
amortized over the reasonable useful life of such equipment,
giving effect to its salvage value, on a straight-line basis
together with interest at the rate of ten percent (10%) per
annum on the unamortized balance. The annual amortization
plus interest shall not exceed an amount determined by (i)
calculating the operating expense as if no such capital
expenditure has been made, and (ii) subtracting therefrom the
actual cost of building operation of the Lease Year in
question.
(9) The Management Fee incurred by Lessor for the Manager of the
Building calculated as a percent of base Rental plus
Additional Rental. Said Management Fee shall be comparable to
other comparable buildings in Houston, Texas.
If any of the factors included in "Operating Cost" are not
payable, billed or otherwise due so as to allow an accurate
calculation of said factors annually (e.g., ad valorem taxes
and long-term contracts), then Lessor, in its sole
discretion, may estimate and prorate said factors on an
annual basis, and said factors shall be properly adjusted by
Lessor when they actually become due and payable.
Notwithstanding anything to the contrary in Section 7.A.B. above, the
following items shall be excluded from the Building Operating Cost in
Lessor's operation of the Building and garage:
(1) Repairs or other work occasioned by fire, windstorm or other
casualty of an insurable nature, excluding deductible, or by
the exercise of the right of eminent domain, to the extent
covered by insurance;
(2) Leasing commission, attorney's fees, costs and disbursement
and other expenses incurred in connection with negotiations
or disputes with tenants/Lessee, other occupants, or
prospective tenants of other occupants, or purchasers or
mortgagees of the Building;
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(3) Expenses incurred in renovating or otherwise improving or
decorating, painting, or redecorating space for
tenants/Lessee or other occupants or vacant space, excluding
Building common areas;
(4) Lessor's costs of electricity and other services sold to
tenants/Lessee and for which Lessor is entitled to be
reimbursed by tenants/Lessee as an additional charge or
rental over and above the basic rent payable under the lease
with such tenant/Lessee;
(5) Except as otherwise provided herein, depreciation and
amortization;
(6) Expenses in connection with services or other benefits of
a type which are not provided Lessee but which are provided
to another tenant or occupant;
(7) Costs incurred due to violation by Lessor or any tenant or
other occupant of the terms and conditions of any lease;
(8) Overhead and profit increment paid to subsidiaries or
affiliates of Lessor for services on or to the real
property, to the extent only that the costs of services
exceed competitive costs of such services were they not so
rendered by a subsidiary or affiliate;
(9) Interest on debt or amortization payments on any mortgage or
mortgages, and rental under any ground or underlying leases
or lease;
(10) Lessor's general partnership overhead, specifically
excluding salaries directly associated with managing the
Building, and Management Fees;
(11) Any compensation paid to clerks, attendants, or other
persons in commercial concessions operated by Lessor;
(12) Advertising and promotional expenditures;
(13) Any costs, fines or penalties incurred due to violations by
Lessor of any governmental rule or authority;
(14) Costs incurred in connection with the sale, refinancing,
mortgaging or selling or change of ownership of the
Building, including brokerage commissions, attorneys' and
accountants' fees, closing costs and interest charges;
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(15) Costs, fines, interest, penalties, legal fees or costs of
litigation incurred due to the late payments of taxes,
utilities, bills and other costs incurred by Lessor's failure
to make such payments when due;
(16) Costs or expenses for owning, leasing and/or maintaining
sculpture, painting or other works of art (but excluding lobby
plants which are leased) installed in and on the Building or
the land;
(17) State, local or federal personal or corporate income taxes
measured by the income of Lessor from all sources or from
sources other than rent alone, estate and inheritance taxes,
franchise, succession and transfer taxes and interest on taxes
and penalties resulting from failure to pay real estate taxes.
Further, the amount of tax expenses paid by Lessee and
attributable to tenant improvements, or tax expenses in
connection with other alterations, additions, substitutions,
and improvements done by or for the tenants in the Building
which is separately assessed to and paid by such other tenants
or directly received by Lessor from such other tenants, shall
be excluded from Operating Costs;
(18) Expenses and costs relating in any way whatsoever to the control,
encapsulation, removal, replacement, repair and abatement of
any hazardous materials within the Building, Leased Premises
and the land;
(19) Costs with respect to Lessor's central office, if any, or its
operations conducted, or employees engaged, therein, except
costs that directly relate to or are otherwise allocable to
the land, the Building, or any portion thereof;
(20) The costs of correcting defects in the construction of the
Building or in the Building equipment, except that conditions
(not occasioned by construction defects) resulting from
ordinary wear and tear will not be deemed defects for the
purpose of this category;
(21) The cost incurred by Lessor or any other tenant of complying with
building codes, any other governmental rule or requirement;
however, the cost of complying with any building code or any
other governmental rule or requirements enacted after this
Lease is signed shall be borne by Lessee only in proportion to
Lessee's Premises' share of the total Building; in no instance
will Lessee pay any fines or penalties incurred by Lessor for
failure to comply with such codes, rules or regulations unless
code violations were committed by Lessee.
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8. MONTHLY PAYMENT OF ESCALATION
A. Lessor shall have the right to estimate and collect monthly in
advance from Lessee the escalations of Operating Cost owned or to
be owned by Lessee under Section 7, said monthly payments (the
"Monthly Escalation Payments") to be in such amounts as are
estimated in good faith by Lessor in its sole discretion. The
Monthly Escalation Payments shall be due and payable at the same
time as the Base Rental is due and payable under Section 6.
X. Xxxxxx shall, within the period of one hundred twenty (120)
days after the close of any Lease Year for which Additional Rent
may be due under the provisions of Section 7, give written notice
thereof to Lessee, which notice shall also contain or be
accompanied by a statement of the actual Operating Cost of Lessor's
operation of the Building during the preceding Lease Year and by a
computation of such Additional Rent. Failure of Lessor to give
Lessee said notice within said time period shall not be a waiver of
Lessor's right to collect said additional rent. When the Lessor
presents Lessee with the statements of amounts due by Lessee for
any escalation set out in Section 7, Lessee shall pay Lessor the
difference between its proportionate share of said escalation and
the amount of Monthly Escalation Payments actually made by Lessee
during the preceding Lease Year, attributable to said escalation;
or Lessee shall receive a credit therefore if Lessee's proportionate
share is less than the amount of Monthly Escalation Payments
actually collected by Lessor during the preceding Lease Year, said
credit to be applied to the next accruing installments of Base
Rental and Additional Rent.
C. Notwithstanding any other provision herein to the contrary, it
is agreed that in the event the Building is not fully occupied
during the initial Lease Year or any subsequent Lease Year, an
adjustment shall be made in computing the operating expenses for
the Operating Cost for such period so that the cost of all
utilities including electricity, gas, water, heating, lighting, air
conditioning and ventilating the Building and the cost of
furnishing the janitorial service to the Building shall be computed
for such period as though the Building had been 95% occupied during
such period.
D. Lessee shall have the right to audit Lessor's books and records
for the previous Lease Year relating to this Lease for which
Additional Rental Payments described in this Section 8 become due.
In the event that Lessee desires to conduct an audit of the
Operating Cost, Lessor agrees to make its books and records
regarding Operating Cost available to Lessee's auditors during
business hours and to cooperate with such auditors. In the event
the results of such audit correctly reflect that Operating Cost
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for the calendar year 1995 (as adjusted for ninety-five percent (95%)
occupancy) were understated by six percent (6%) or more, or that
Operating Costs for any other such previous Lease Year relating to
this Lease for which Additional Rental Payments described in this
Section 8 became due were overstated by six percent (6%) or more,
then Lessor shall pay for the costs of such audit. Any
discrepancies revealed by any such audit shall be adjusted between
Lessor and Lessee within thirty (30) days after the completion of
such audit and the submission of the report.
9. PREPAID RENT AND SECURITY DEPOSIT
On the execution of this Lease Agreement by Lessee, Lessee shall be
required to pay Lessor the sum of $141,949.44 (hereinafter referred to
as "Prepaid Rent"), which sum shall be applied against the initial
eighteen (18) month's Base Rental due hereunder. Lessee hereby agrees
that said Prepaid Rent shall be paid as an inducement for Lessor to
enter into this Lease Agreement with Lessee. The total amount of Prepaid
Rent in addition to the Prepaid Additional Construction Allowance
described in Exhibit "F" Section 2. of this Lease Agreement is
equivalent to the majority of Lessor's up front lease cost Lessor has
incurred in conjunction with this Lease Agreement. In the event Lessee
should default in, or fail to timely perform any of its obligations
contained in this Lease Agreement, or breach any of the terms,
covenants, conditions or agreements herein contained prior to the
expiration of the eighteenth (18th) month of the Lease Term, Lessee
hereby agrees that the then unearned portion of said Prepaid Rent and
Prepaid Additional Construction Allowance shall be retained by Lessor as
a credit against any claims for damages Lessor may have against Lessee
as described in Section 25. of this Lease Agreement. In addition, Lessee
shall deposit, on the date hereof, the sum of $7,886.08 (the "Security
Deposit") as security for Lessee's faithful performance of Lessee's
obligations herein contained. If Lessee defaults in any manner
(including the payment of any rents or other sums due hereunder) in the
performance of Lessee's obligations herein contained, Lessor may use,
apply or retain all or any portion of the Security Deposit for the
payment of any rent or other sum in default or for the payment of any
other sum or expense to which Lessee may become obligated by reason of
such default, or to compensate Lessor for any loss or damage which
Lessor may suffer thereby. Lessor and Lessee agree that the Security
Deposit shall not be an advance payment of rent or other sums due
hereunder, or a measure of Lessor's damages in case of Lessee's default.
If Lessor shall use or apply any or all of the Security Deposit as
herein provided, Lessee shall, on demand, deposit with Lessor the amount
of the Security Deposit so used or applied by Lessor so that Lessor
shall have the full Security Deposit on hand during the entire term of
this Lease. Lessor shall not be required to separately account for the
Security Deposit nor to maintain an escrow or separate account therefor.
If Lessee performs all of Lessee's obligations hereunder, the Security
Deposit, or so much thereof as has not theretofore been applied by
Lessor, shall be returned, without payment of interest or other
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increment for its use, to Lessee (or, at Lessee's option, the last
assignee, if any, of Lessee's interest hereunder) within sixty (60) days
of the expiration of the term hereto, and after Lessee has vacated the
Leased Premises. Lessor's right to so apply the Security Deposit shall in
no manner limit, impair or otherwise affect any of Lessor's remedies set
forth herein.
10. SERVICE TO BE PROVIDED BY LANDLORD
A. Subject to the rules and regulations hereinafter referred to, Lessor
shall furnish Lessee, at Lessor's expense, the following services
during the Lease Term:
(1) Air conditioning and heating, at such temperatures and in such
amounts as are reasonably considered to be standard for buildings
which are comparable to and similarly located in the Katy Freeway
submarket with the Building from 7:00 A.M. to 6:00 P.M. Monday
through Friday, and from 7:00 A.M. to 12:00 noon on Saturday, but
not on Saturday afternoons, Sundays and holidays (meaning New
Year's Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day). Overtime service for same
shall be furnished only upon the request of Lessee, who shall bear
the cost thereof at the standard hourly rate as computed by Lessor
and charged to other tenants in the Building, said standard hourly
rate currently being $26.00 per hour per floor.
(2) Janitor service in and about the Building and the Leased Premises,
five days per week in accordance with the specifications as listed
in Exhibit "H".
(3) Proper facilities to furnish sufficient electrical power for
building standard lighting, typewriters, dictating equipment,
calculating machines, personal computers, printers, copiers 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
other item of electrical equipment which singly consumes more than
0.5 kilowatts per hour at rated capacity or requires a voltage
other than 120 volts single phase. Lessee shall pay to Lessor
monthly as billed, such charges as may be separately metered or as
Lessor's engineer may compute for any electrical service in excess
of that stated above.
(4) Water for drinking, lavatory, and toilet purposes.
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(5) Replacement of ballasts and fluorescent lamps in building standard
ceiling-mounted fixtures installed by Lessor and incandescent
bulb replacement in all public areas of the Building.
B. No interruption or malfunction of any such services shall constitute an
eviction or disturbance of Lessee's use and possession of the Leased
Premises or Building or a breach by Lessor of any of its obligations
hereunder or render Lessor liable for damages or entitle Lessee to be
relieved from any or its obligation hereunder (including the obligation
to pay rent) or grant Lessee any right of setoff or recoupment. In the
event of any such interruption, however, Lessor shall use reasonable
diligence to restore such service.
Notwithstanding anything to the contrary in Section 10.B. above, Lessor
and Lessee agree that there are certain Building services without which
Lessee can not occupy the Leased Premises for the purposes for which it
was originally leased. These services are heating, ventilation, air
conditioning, electrical service, elevator service, water and plumbing
services. Should Lessor fail to provide any one or more of these
services for a continued period of five (5) working days or longer,
then, to the extent that Lessor's failure to provide these services
causes Lessee to be unable to use the Leased Premises for the purpose
for which it was originally leased, rent shall xxxxx (which abatement
shall relate back to the first day on which such services were
interrupted) proportionately to the extent that Lessee is not in
occupancy until such service or services are restored. After a period
of thirty (30) days during which Lessor has failed on a continual basis
to provide any one or more of these services, or has failed to commence
to repair or reinstall these services with due diligence, and such
repair or reinstallation efforts have not been maintained with
continuity, then Lessee, at its option, may cancel this Lease Agreement
upon written notice to Lessor.
X. Xxxxxx shall provide security service for the Building during the
weekends and after normal working hours during the week; however,
Lessor shall have no responsibility to prevent, nor have liability to
Lessee for losses due to theft or burglary or damages done by persons
gaining access to the Leased Premises or the Building.
X. Xxxxxx shall furnish Lessee, free of charge, with two keys for each
corridor door entering the Leased Premises, and additional keys will
be furnished at a charge by Lessor equal to its cost plus 15% on an
order signed by Lessee or Lessee's authorized representative. All such
keys shall remain the property of Lessor. No additional locks shall be
allowed on any door of Leased Premises, and Lessee shall not make or
permit to be made any duplicate keys except those furnished by Lessor.
Upon termination of
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this Lease, Lessee shall surrender to Lessor all key of the Leased
Premises and give to Lessor the explanation of the combination of all
locks for safes, safe cabinets and vault doors, if any, in the Leased
Premises.
E. To provide and install, at Lessor's cost, all identification on the
entry door to the Leased Premises, as set forth in the Work Letter
Agreement (hereinafter defined). All such letters and numerals shall
be in the Building's Standard graphics. Only Building Standard graphics
may be used in any public area or openings on to public areas.
X. Xxxxxx agrees to furnish, at Lessor's cost, a Lobby Directory Board
Strip identifying Lessee on the Lobby Directory Board. The cost of any
changes or additions will be charged to Lessee.
11. IMPROVEMENTS TO BE MADE BY LESSOR
A. In preparing the Leased Premises for occupancy by Lessee, Lessor shall
be required to bear the expense of installing the items (said items
being considered as Building Standard items) listed on the certain Work
Letter Agreement (the "Work Letter" attached hereto as Exhibit "F") by
and between Lessor and Lessee relating to the Leased Premises, only to
the extent that they so not exceed the respective allowances indicated
in the Work Letter.
X. Xxxxxx will endeavor to comply with the mutually determined Lessee
improvement schedule set forth in the Work Letter. After receipt of
approved price estimate and construction drawings, Lessor will
partition and prepare said Leased Premises in accordance therewith;
however, Lessor shall not be required to install any partitions or
improvements which are not in conformity with the plans and
specifications for the Building or which are not approved by Lessor or
Lessor's Architect, and Lessor shall be required to bear the expenses
of installing the items in the Work Letter only to the extent that they
do not exceed the respective allowances indicated in the Work Letter.
Lessor hereby warrants that all improvements made to the Leased
Premises shall be free from material defects in workmanship for a
period of one (1) year after the Commencement Date.
12. REPAIR AND MAINTENANCE
A. Lessor will, at its own cost and expense, except as may be provided
elsewhere herein, make necessary repairs of damage to the building
corridors, lobby, structural members of the Building and equipment used
to provide the services referred to in Section 10
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above, unless any such damage is caused by acts of or omissions of
Lessee, its agents, customers, employees or invitees, in which
event Lessee will bear the cost of such repair. Lessee will
promptly give Lessor written notice of any damage in the Leased
Premises requiring repair by Lessor, as aforesaid.
B. Lessee will not damage the Leased Premises or the Building and
will maintain the Leased Premises in a clean, attractive condition
and in good repair, except as to damage to be repaired by Lessor,
as provided above. Upon termination of this Lease, Lessee will
surrender and deliver up the Leased Premises in good order and
repair, excepting ordinary wear and tear.
13. FIRE OR OTHER CASUALTY
A. The parties hereto mutually agree that if at any time
during the Lease Term if fifty percent (50%) or more of the Leased
Premises or of the Building are destroyed or totally destroyed by
fire or other casualty covered by the fire and extended coverage
insurance to be carried by Lessor under the terms hereof, then
Lessor may, at its option, upon thirty (30) days written notice to
Lessee, repair and restore the Leased Premises and Building as
soon as it is reasonably practicable, to substantially the same
condition in which the Leased Premises and the Building were
before such damage, or it may terminate the Lease; provided,
however, that in the event the Leased Premises are completely
destroyed or so badly damaged that repairs cannot be commenced
within sixty (60) days and completed within six (6) months
thereafter, then this Lease shall be terminable as of the date of
the occurrence of the damage or destruction by either party hereto
serving written notice upon the other, and provided further, that
in any event repairs have not been commenced within sixty (60)
days from the date of said damage and thereafter completed within
a reasonable time, in no case to exceed six (6) months, this Lease
may be immediately terminated by Lessee as of the date of
occurrence of the damage or destruction by serving notice upon the
Lessor.
B. In the event the Leased Premises are completely destroyed or so
damaged by fire or other casualty covered by the fire and extended
coverage insurance to be carried by Lessor under the terms hereof
that it cannot reasonably be used by Lessee for the purposes
herein provided and this Lease is not terminated as above provided,
then there shall be a total abatement of rent until the Leased
Premises are made usable. In the event the Leased Premises are
partially destroyed or damaged by fire or other hazard so that the
Leased Premises can be only partially used by Lessee for the
purposes herein provided, then there shall be a partial abatement
in the rent corresponding to the time and extent to which the
Leased Premises cannot be used by Lessee.
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C. If the Leased Premises shall be damaged by fire or other casualty
resulting from the fault or negligence of Lessee, or the agents,
employees, licensees, or invitees of Lessee, then such damage
shall be repaired by and at the expense of Lessee, under the
direction and supervision of Lessor, and rent shall continue
without abatement subject to the provisions of Section 30.
14. COMPLIANCE WITH LAWS
Lessee will comply with all Federal, State, Municipal and other laws,
ordinances, local restrictive covenants and rules and regulations
applicable to the Leased Premises and the business conducted therein
by Lessee.
Lessor represents that as of the Commencement Date the Building,
excluding all Leased Premises, will be in compliance with all
applicable governmental requirements whose compliance is required as of
the date thereof including, without limitation, the City of Houston
Life Safety Code, the Americans with Disabilities Act of 1990 and the
Clean Air Act, as currently interpreted by Lessor.
15. INDEMNITY AND HOLD HARMLESS
Lessee agrees to indemnify Lessor for, and hold Lessor harmless from
and against all fines, suits, claims, demands, liabilities and actions
(including reasonable costs and expenses of defending against such
claims) resulting or alleged to result from any breach violation or
non-performance of any covenant or condition hereof, or from the use
or occupancy of the Leased Premises, by Lessee or Lessee's agents,
employees, licensees, or invitees, for any injury to person or damage
to property resulting from any act or omission or of negligence of any
co-tenant, visitor or other occupant of the Leased Premises except as
Lessor's own gross negligence may contribute thereto, for which gross
negligence Lessor agrees to indemnify Lessee.
16. ALTERATIONS, ADDITIONS AND IMPROVEMENTS
Lessee covenants and agrees not to permit the Leased Premises to be
used for any purpose other than that stated in the Use clause hereof,
or make or allow to be made any alterations or physical additions in or
to the Leased Premises which are visible from outside the Leased
Premises, or place any signs on the Leased Premises, or place any
safes or vaults (whether movable or not) upon or in the Leased Premises
or make any alterations to the structural, mechanical or electrical
components serving the Leased Premises, without first obtaining the
written consent of Lessor. Any and all alterations, additions, and
improvements, (including
14
without limitations, partitions, wall-to-wall carpeting, paneling, wall
coverings and any other article attached or affixed to the floor, wall,
or ceiling of the Leased Premises, but excluding Lessee's unattached
and removable trade fixtures, office supplies, furniture and equipment
not attached to the Leased Premises) shall immediately upon the
installation or construction thereof or attachment or affixing thereto
become the property of Lessor, at Lessor's option, and shall remain
upon and be surrendered with the Leased Premises as a part thereof at
the expiration or sooner termination of this Lease, without disturbance
or injury, Lessee hereby waiving, all rights to any payment, credit or
compensation therefor. Lessee may remove its unattached and removable
trade fixtures, office supplies, furniture and equipment not attached
to the Leased Premises provided: (a) such removal is made prior to the
expiration or sooner termination of the term of this Lease; (b) Lessee
is not in default of any obligation or covenant under this Lease at the
time of such removal; and (c) Lessee promptly repairs all damage caused
by such removal in a good and workmanlike manner using high quality
materials prior to the expiration or sooner termination of the term of
this Lease; and if Lessee fails to remove the same prior to the
expiration or sooner termination of the term when permitted hereby,
such unattached and removable trade fixtures, office supplies,
furniture and equipment shall automatically become the property of
Lessor, Lessee hereby waiving all right to any payment, credit or
compensation therefor and all rights thereto. Lessor shall have the
option of requiring payment of estimated damage expenses in advance.
If, however, Lessor so requests in writing, Lessee shall, prior to
termination of this Lease, remove any and all alterations, additions,
improvements, fixtures, equipment, and property placed or installed by
Lessee in the Leased Premises and repair any damages caused by such
removal in a good and workmanlike manner using high quality materials,
and if Lessee fails to do so, to pay Lessor the cost incurred by Lessor
in so doing, as additional rent.
17. ASSIGNMENT
A. Lessee shall not assign this Lease or sublease the Leased Premises
or any part thereof or mortgage, pledge, or hypothecate its
leasehold interest without the prior express written permission of
Lessor, and any attempt to do any of the foregoing without the
prior express written permission of Lessor shall be void and of no
effect. No space shall be listed or offered to any Broker for
listing or advertisement, nor shall Lessee advertise for
subletting, without the prior written approval of Lessor. Lessee
must request Lessor's permission at least forty-five (45) days
prior to any such assignment, sublease or other transaction, and
provide Lessor with a copy of the proposed assignment or sublease
and other such information as Lessor might request concerning the
proposed sublessee or assignee to allow Lessor to make informed
judgments as to the financial condition, reputation, operations and
general desirability of the proposed
15
sublessee or assignee. Within thirty (30) days after Lessor's receipt
of Lessee's proposed assignment or sublease, and all required
information concerning the proposed sublessee or assignee then Lessor
shall have the option, at its sole discretion, to either (i) cancel and
terminate this Lease as to the portion of the Leased Premises and the
term of Lease with respect to which Lessor has been requested to permit
such assignment, sublease or other transaction; and if Lessor elects to
cancel and terminate this Lease as to the aforesaid portion of the
Leased Premises and for the term proposed to be assigned or subleased,
then the rent and other charges payable hereunder shall thereafter be
proportionately reduced, (ii) consent to the proposed assignment or
sublease, in which event, however, if the rent due and payable by any
assignee or sublessee under any such permitted assignment or sublease
exceeds the Base Rental and Additional Rent payable under this Lease
for such space, Lessee shall pay to Lessor all such excess rent and
other excess consideration within ten (10) days following receipt
thereof by Lessee after deducting all marketing expenses (brokerage
fees, advertising expenses, renovation cost, architectural fees and
attorney fees), or, (iii) refuse its consent to the proposed assignment
or sublease, which option shall deemed to be elected unless Lessor
gives Lessee written notice providing otherwise.
Notwithstanding anything to the contrary in Section 17.A. above, none
of the provisions of said Section shall be applicable in the case of
sublettings and assignments to Lessee's affiliates or successors of
equal financial standing by merger, for which consent is hereby granted
by Lessor provided Lessee gives Lessor written notice of such
subletting or assignment.
B. In any case where Lessor consents to an assignment or sublease of the
leasehold, the undersigned Lessee will remain liable for the
performance of all of the covenants, duties and obligations hereunder
including, without limitation, the obligation to pay all rent and other
sums herein provided to be paid, and Lessor shall be permitted to
enforce the provisions of this instrument against the undersigned
Lessee and/or any assignee or sublessee without demand upon or
proceeding in any way against any other person.
C. In any case where Lessor consents to any such assignment, sublease
or other transaction, Lessor may require that Lessee pay to Lessor a
reasonable sum as attorney's fees rising incident to such transaction
and that the assignee or subtenant pay Lessor a reasonable sum
incurred by Lessor in moving the assignee or subtenant in and out of
the Leased Premises should Lessor provide such assistance; however,
Lessor is under no obligation to provide such service.
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18. SUBORDINATION
At the execution of this Lease, Lessor represents that neither the Building
nor the land on which it is located is currently subject to a mortgage.
Lessee accepts this Lease subject and subordinate to any mortgage, deed of
trust, or any lien hereafter placed upon the Leased Premises, and to any
renewals and extensions thereof; Lessee agrees that such mortgagee and/or
beneficiary of any deed of trust, or other lien ("Lessor's Mortgagee")
and/or Lessor shall have the right at any time to subordinate such
mortgage, deed of trust, or other lien to this Lease on such terms and
subject to such conditions as such Lessor's Mortgagee may deem appropriate
in its discretion. Lessee agrees upon demand to execute such further
instruments subordinating this Lease as Lessor or Lessor's Mortgagee may
request and such attornment agreements as any such Lessor's Mortgagee shall
request. In the event that Lessee shall fail to execute any such instrument
promptly as requested, Lessee hereby irrevocably constitutes Lessor as
attorney-in-fact to execute such instrument in Lessee's name, place, and
stead, it being stipulated by Lessor and Lessee that such agency is coupled
with an interest in Lessor and is, accordingly, irrevocable.
With respect to any first lien mortgages, deeds of trust, or other liens
entered into by Lessor and any mortgagee and/or beneficiary of any deed of
trust or other lien (Lessor's mortgagee). Lessor shall use its best
efforts to secure within sixty (60) days from the date same are entered
into (or within sixty (60) days of lease commencement, as the case may be)
a non-disturbance agreement in recordable form from Lessor's mortgagee for
the benefit of Lessee that will be executed and delivered by Lessor's
mortgagee to Lessee. The agreement should state that in the event of
foreclosure, foreclosure sale, or deed-in-lieu of foreclosure, the
successor to the Lessor agrees to recognize Lessee's rights under this
Lease Agreement, and further agrees to assume and perform all obligations
of the Lessor under this Lease Agreement.
19. CONDEMNATION AND LOSS OR DAMAGE
If the Leased Premises or any part thereof shall be taken or condemned for
any public purposes to such an extent as to render the remainder of the
Leased Premises, in the opinion of Lessor not reasonable suitable for
Lessee's occupancy, this Lease shall, at the option of either party,
forthwith cease and terminate. All proceeds from any taking or condemnation
of the Leased Premises shall belong to and be paid to Lessor. In addition,
Lessor shall not be liable or responsible to Lessee for any loss or damage
to any property or persons occasioned by theft, fire, act of God, public
enemy, injunction, riot, strike, insurrection, war, court order,
requisition or order of governmental body or authority, or any other cause
17
beyond the control of Lessor, or for any damage or inconvenience which may
arise through repair or alteration of any part of the Building, or failure
to make any such repairs.
20. ACCESS BY LESSOR
Lessor, its agents, and employees shall have the right to enter any portion
of the Leased Premises at all reasonable hours and with reasonable notice
except in emergencies to examine the condition thereof, to make any repairs
or alterations required to be made by Lessor hereunder, to show the Leased
Premises to prospective purchasers or tenants and for any other purpose
deemed reasonable by Lessor.
21. LESSOR'S LIEN
A. In additional to and cumulative of any statutory landlord's lien
provided by law, Lessee hereby grants to Lessor and fixes in Lessor's
favor a lien upon and a security interest in all goods, wares,
equipment, fixtures, furniture, furnishings, improvement, and other
personal property now or hereafter owned by Lessee which is presently
or which may hereafter be situated on the Leased Premises, and all
proceeds therefrom, including insurance proceeds which may accrue to
Lessee in connection with such property, to secure payment of all
rentals and other sums of money becoming due hereunder from Lessee, and
to secure payment of any damages or loss which Lessor may suffer by
reason of the breach by Lessee of any covenant, agreement, or condition
contained herein, or any default of Lessee hereunder, and such property
shall not be removed therefrom without the consent of Lessor until all
arrearages in rent as well as any and all other sums of money then due
to Lessor hereunder shall first have been paid and discharged and all
the covenants, agreements, and conditions hereof have been fully
complied with and performed by Lessee.
B. If Lessee should default in or fail to timely perform any of its
obligations contained in this Lease or breach any of the terms,
covenants, conditions or agreements herein contained, Lessor may, in
addition to any other remedies provided herein, after giving reasonable
notice of the intent to take possession, enter upon the Leased Premises
and take possession of any and all goods, wares, equipment, fixtures,
furniture, furnishings, improvements, and other personal property of
Lessee situated on the Leased Premises, without liability for trespass
or conversion, and sell the same at public or private sale, with or
without having such property at the sale, after giving Lessee
reasonable notice of the time and place of any public sale or of the
time after which any private sale is to be made, at which sale the
Lessor or its assigns may purchase unless otherwise prohibited by law.
Unless otherwise provided by law, and without intending to exclude
18
any other manner of giving Lessee reasonable notice, the
requirement of reasonable notice shall be met if such notice is
given at least five (5) days before the time of sale. The proceeds
from any such disposition, less any and all expenses in connection
with the taking of possession, holding, and selling of the
property (including reasonable attorney's fees and other
expenses), shall be applied as a credit against the indebtedness
secured by the security interest granted in this Section. Any
surplus shall be paid to Lessee or as otherwise required by law
and the Lessee shall pay any deficiencies forthwith. Upon request
by Lessor, Lessee agrees to execute and deliver to Lessor a
financing statement in a form sufficient to perfect the security
interest of Lessor in the aforementioned property and proceeds
thereof under the provisions of the Uniform Commercial Code in
force in the State of Texas. Lessor, at its election, may file a
copy of this Lease as a financing statement. All exemption laws
are hereby waived by Lessee. Lessor shall have and be entitled to
all the rights and remedies afforded to a secured party under the
Uniform Commercial Code enacted and in force in the State of
Texas. The statutory lien for rent is not hereby waived, the
security interest herein granted being in addition and
supplementary thereto.
Notwithstanding anything to the contrary in Section 21.A.B.
above, provided Lessee is not in default of any of the terms,
conditions or covenants of this Lease. Lessor hereby agrees to
subordinate the liens herein retained to Lessee's institutional
lenders from time to time upon request.
22. HOLDING OVER
In the event of holding over by Lessee after expiration or termination
of this Lease without the written consent of Lessor, Lessee shall pay
as liquidated damages one hundred fifty percent (150%) of the Base
Rental Rate for the entire holdover period. No holding over by Lessee
after the term of this Lease shall operate to extend the Lease. In the
event of any unauthorized holding over, Lessee shall indemnify Lessor
against all claims for damages by any other Lessee to whom Lessor may
have leased all or any part of the premises covered hereby effective
upon the termination of this Lease. Any holding over with the consent
of Lessor in writing shall thereafter constitute this Lease a lease
from month to month.
23. ATTORNEY'S FEES
If either party successfully prosecutes an action against the other for
a breach of this Lease then such successful party shall be entitled to
recover its reasonable attorneys fees unless otherwise instructed by
the courts.
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24. ASSIGNMENT
Lessor shall have the right to transfer and assign, in whole or in
part, all its rights and obligations hereunder and in the Building and
property referred to herein, and in such event no further liability or
obligation shall thereafter accrue against Lessor hereunder except that
Lessor shall remain liable to Lessee for any loss by Lessee of the
unearned credit to which it is entitled on account of the Prepaid Rent
and the Prepaid Additional Construction Allowance within the initial
eighteen (18) months of the Term of this Lease.
25. DEFAULT BY LESSEE
If default shall be made in the payment of any sum to be paid by Lessee
under this Lease (no notice being required for default in payment of
Base Annual Rental), or default shall be made in the performance of any
of the other such covenants or conditions which Lessee is required to
observe and to perform, and such non-monetary default shall continue
for twenty (20) days after written notice to Lessee (said notice to be
given pursuant to Section 34), or if the interest of Lessee under this
Lease or any other property of Lessee shall be levied on under
execution, attachment, or other legal process, or if a petition is
filed or other action taken by or against Lessee in connection with a
voluntary or involuntary case under the Federal bankruptcy laws, as
now constituted or hereafter amended, or any other applicable federal
or state bankruptcy, insolvency or similar laws, or if any petition
shall be filed by or against Lessee to delay, reduce or modify Lessee's
debts or obligations, or if any petition shall be filed or other action
taken to reorganize, modify, wind-up, liquidate, or dissolve Lessee's
capital structure if Lessee be a corporation, partnership or other
entity, or if Lessee be declared insolvent according to law, or if
Lessee generally fails to pay its debts as they become due, or if
assignment of Lessee's property shall be made for the benefit of
creditors, or if a receiver, trustee, liquidator, assignee, custodian,
sequestrator (or similar official) is appointed for Lessee or its
property, or if Lessee shall abandon the Leased Premises during the
term of this Lease or any renewals or extensions thereof (which shall
mean that Lessee is absent from the Leased Premises for three (3)
consecutive days [Saturdays, Sundays and holidays excluded] while Lessee
is in default in the payment of any sum to be paid by Lessee
hereunder), then Lessor may treat the occurrence of any one or more of
the foregoing events as a breach of this Lease (provided that no such
levy, execution, legal
20
process or petition filed against Lessee shall constitute a breach of
this Lease if Lessee shall vigorously contest the same by appropriate
proceedings and shall remove or vacate the same within thirty (30) days
from the date of its creation, service or filing) and thereupon, Lessor
at its option, may have any one or more of the following described
remedies in addition to all other rights and remedies provided herein
or at law or in equity, all or which shall be cumulative:
(1) Lessor may terminate this Lease and forthwith repossess the Leased
Premises and expel or remove Lessee or any other person who may be
occupying the Leased Premises, by force if necessary, without
being liable for prosecution or any claim of damages therefor, the
same being waived by Lessee, and Lessee agrees to pay to Lessor,
on demand, and Lessor shall be entitled to recover forthwith, as
liquidated damages, a sum of money equal to the total of (i) the
cost of recovering the Leased Premises (including attorneys' fees
and court costs), (ii) the unpaid rent earned and other sums due
Lessor at the time of termination, plus interest thereon at the
maximum lawful contract rate, (iii) the then present value of the
balance of the rent for the remainder of the term (had such Lease
not been terminated) less the then present value of the then fair
rental value of the Leased Premises for such period (discounted at
the rate of 10 percent per annum) and (iv) any other sum of money
and damages owed by Lessee to Lessor, including the costs incurred
by Lessor in removing Lessee's property and restoring the Leased
Premises as required hereby.
(2) Lessor may terminate Lessee's right of possession (but not the
Lease) and expel or remove Lessee or any other person who may be
occupying the Leased Premises, by force if necessary, without
being liable for prosecution or any claim of damages therefor, the
same being waived by Lessee, or may repossess the Leased Premises
by forcible entry or detainer suit or otherwise, without demand or
notice of any kind to Lessee and without terminating this Lease,
in which event Lessor may, but shall be under no obligation so to
do, relet the same or any part thereof either in Landlord's name
or otherwise, for a term or terms, which at Lessor's option, be
less than or exceed the balance of the term of this Lease, and for
such rent and upon such other terms as shall be satisfactory to
Lessor, and receive the rent therefor and apply such rent to the
rent and other sums due Lessor hereunder, including costs incurred
by Lessor in reletting. For the purpose of such reletting, Lessor
is authorized to decorate or to make any repairs, changes,
alterations or additions in or to Leased Premises that may be
necessary or convenient, and if Lessor shall fail or refuse to
relet the Leased Premises, or if the same are relet and a
sufficient sum shall not be realized from such reletting after
paying the following items (which shall be due to Lessor by
Lessee): (i) the unpaid Base Rent and Additional Rent due
hereunder earned but unpaid at the time of reletting
21
plus interest thereon at the lesser of 18% per annum or the maximum
lawful contract rate, (ii) the cost of recovering possession (including
attorneys' fees and court costs); and (iii) all of the costs and expenses
of such decorations, repairs, changes, alterations and additions and the
expense of such reletting (including broker fees, advertising costs, and
costs incurred in removing and storing Lessee's or other occupants
property) and of the collection of the rent accruing therefrom; to
satisfy the rent and other sums provided for in this Lease to be paid,
then Lessee shall pay to Lessor as damages a sum equal to the amount of
the rental reserved in this Lease for such period or periods, or if the
Leased Premises have been relet, the Lessee shall satisfy and pay any such
deficiency upon demand therefor from time to time and Lessee agrees
that Lessor may file suit to recover any sums falling due under the
terms of this Section 25 (2) from time to time, and that no delivery
or recovery of any portion due Lessor hereunder shall be any defense
to any subsequent action brought for any amount not theretofore reduced
to judgment in favor of Lessor, nor shall such reletting be construed
as an election on the part of Lessor to terminate this Lease unless a
written notice of such intention be given to Lessee by Lessor. In no
event shall Lessee be entitled to any excess of rent (or rent plus
other sums) obtained by reletting over and above the rent and other
sums owed Lessor under this Lease. Notwithstanding any such reletting
without termination, Lessor may at any time thereafter elect to
terminate this Lease for such previous breach.
(3) Alter locks and other security devices at the Leased Premises.
No act or thing done by the Lessor or its agents during the term hereby
granted shall be deemed an acceptance of a surrender of the Leased
Premises, whether by agreement or operation of law, it being understood
that such surrender can be effected only by the written agreement by
Lessor and Lessee. Receipt by Lessor of Lessee's keys to the Leased
Premises shall not constitute an acceptance of surrender of the Leased
Premises. No alteration of security devices and no removal or other
exercise of dominion by Lessor over the property of Lessee or others
at the Leased Premises shall be deemed unauthorized or constitute a
conversion, Lessee hereby consenting after any default by Lessee in its
obligations hereunder or failure of Lessee to timely perform the same
or breach by Lessee of any of the terms, covenants, conditions or
agreements herein contained, to the aforesaid exercise of dominion over
Lessee's property within the Building. All claims for damages by reason
of such re-entry and/or 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. Lessee agrees that
any re-entry by Lessor may be pursuant to judgment obtained, forcible
detainer proceedings or other legal proceedings or without the necessity
for legal proceedings, as Lessor may elect and Lessor shall not
22
be liable in trespass or otherwise. In the event Lessor terminates the
lease or takes possession of the Leased Premises as provided above, the
Lessor shall not be obligated to relet the Leased Premises, nor shall
Lessor be liable in any way whatsoever for failure to relet the Leased
Premises or any part thereof, or in the event that the Leased Premises
are relet, Lessor shall not be liable for failure to collect the rent
thereof under such reletting, but Lessor shall have the option to relet,
or attempt to relet, and in the event of reletting, Lessor may relet
the whole or any part of the Leased Premises for any period, to any
tenant, for any purpose. Lessee hereby expressly waives any and all
rights of redemption granted by or under any present or future laws in
the event of the Lessor's obtaining possession of the Leased Premises.
26. LESSOR'S RIGHT TO PERFORM LESSEE'S OBLIGATION
If Lessee shall fail to perform any one or more of its obligations
hereunder, within the time herein permitted, if any, Lessor, in addition
to its other rights and remedies hereunder, shall have the right,
without being under any obligation to do so and without thereby waiving
such default, to make payment and/or remedy any default for the account
of Lessee (and enter the Leased Premises for such purpose without being
liable for prosecution of any claim for damages therefor) and thereupon
Lessee shall be obligated to, and thereby agrees to, pay Lessor upon
demand, all costs, expenses and disbursement incurred by Lessor in
taking such remedial action, plus an additional amount of fifteen
percent (15%) to cover Lessor's overhead in taking such action, plus
interest thereon at the highest contract rate of interest per annum
permitted by applicable law (or if no rate is applicable, at the rate
of eighteen percent (18%) per annum), from the date of demand until
paid, plus all reasonable legal expenses incurred by Lessor, including
attorney's fees and court costs in connection therewith, and Lessee
further agrees that Lessor shall not be liable for any damages resulting
to Lessee from such action, whether caused by the negligence of Lessor
otherwise.
27. NON-WAIVER
Failure of Lessor to declare any default immediately upon occurrence
thereof, or delay in taking any action in connection therewith, shall
not waive such default, but Lessor shall have the right to declare any
such default at any time and take such action as might be lawful or
authorized hereunder, either in law or in equity.
28. INSURANCE BY LESSOR
Lessor shall maintain fire and extended coverage insurance of net less
than eighty percent (80%) of the replacement value of the portion of
the Building constructed by Lessor. Said
23
insurance shall be maintained in an insurance company authorized to do
business in the State of Texas, and at the expense of Lessor, and
payment for losses thereunder shall be made solely to Lessor, subject,
however, to the rights of the holder of any first lien, mortgage or
deed of trust which may now or thereafter encumber the Building of
which the Leased Premises form a part. If the annual premiums to be
paid by Lessor shall exceed the standard rates because Lessee's
operations result in extra-hazardous exposure, Lessee shall promptly
pay the excess amount of the premium upon the request by Lessor.
29. INSURANCE BY LESSEE
A. Lessee shall at all times during the term of this Lease, at its
own expenses, maintain a policy or policies of insurance with premiums
fully pain in advance, issued by and binding upon a solvent insurance
company approved in writing by lessor, insuring all of Lessee's personal
property located in the Leased Premises and the improvements placed
upon the Leased Premises by Lessee (including all items covered by
Lessee's plans as approved by Lessor) against loss or damage by fire,
explosion or other hazard and contingencies for the full insurable
value thereof.
X. Xxxxxx and Lessee, each at their respective expense, shall
maintain a policy or policies of comprehensive general liability
insurance with the premiums thereon fully paid in advance issued by
and binding upon a solvent insurance company (Lessee's insurance
company to be approved in writing by Lessor), such insurance to
afford minimum protection of not less than $300,000 in respect of
personal injury or death to any one person and not less than
$500,000 in the event of bodily injury or death to any number of
persons in any one occurrence, and with limits of not less than
$300,000 for property damage in any one occurrence, with overlying
umbrella liability insurance coverage of not less than $1,000,000.
Such policy or policies of public liability insurance shall contain
a landlord's protective liability endorsement in favor of Lessor.
C. The policy or policies of insurance to be maintained by
Lessee shall name Lessee and Lessor as co-insured and shall contain
an endorsement that such policies cannot be amended or modified
as to Lessor without fifteen (15) days prior written notice. Lessee
shall deliver duplicate original policies or certificates of
insurance in form satisfactory to Lessor not less than twenty (20)
days prior to the expiration of old policies.
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30. WAIVER OF SUBROGATION RIGHTS
Anything in this Lease to the contrary notwithstanding, Lessor and
Lessee each hereby waives any and all rights of recovery, claim,
action or cause of action against the other, its agents, officers,
or employees, for any loss of damage that may occur to the Leased
Premises, or any improvements thereto, or said Building of which
the Leased Premises are a part, or any improvements thereto, or any
personal property of such party therein, by reason of fire, the
elements, or any other cause which are or, which by the terms of
this Lease are required to be insured against under the terms of
standard fire and extended coverage insurance policies, regardless
of cause or origin including negligence of the other party hereto,
its agents, officers or employees, and covenants that no insurer
shall hold any right of subrogation against such other party.
31. RULES AND REGULATIONS
Lessee shall perform, observe and comply with the Rules and
Regulations of the Building, as attached hereto and made a part
hereof, as Exhibit "G". With respect to the safety, care and
cleanliness of the Leased Premises and the Building, and the
preservation of good order thereon, and, upon written notice
thereof to Lessee, any changes, amendments, or additions thereto as
from time to time shall be established and deemed advisable by
Lessor for tenants of the Building. Lessor shall not have any
liability to Lessee for any failure of any other tenant or tenants
of the Building to comply with such Rules and Regulations.
32. LESSOR'S MORTGAGE
If the Building and/or Leased Premises are at any time subject to a
mortgage and/or mortgage and deed of trust, then in any instance in
which Lessee gives notice to Lessor alleging default by Lessor
hereunder, Lessee will also simultaneously give a copy of such
notice to Lessor's Mortgagee (provided Lessor or Lessor's Mortgagee
shall have advised Lessee of the name and address of Lessor's
Mortgagee) and each Lessor's Mortgagee shall have the right (but
not the obligation) to cure or remedy such default during the
period that is permitted to Lessor hereunder, plus an additional
period of thirty (30) days, and Lessee will accept such curative
or remedial action taken by Lessor's Mortgagee with the same effect
as if such action had been taken by Lessor.
33. ESTOPPEL
Lessee will, at such time or times as Lessor may request, sign a
certificate stating whether this Lease is in full force and effect;
whether any amendments or modifications exist;
25
whether there are any defaults hereunder; and such other
information and agreements as may be reasonably requested.
34. NOTICE
Any notice which may or shall be given under the terms of this
Lease shall, unless otherwise provided herein, be in writing and
shall be either delivered by hand or sent by United States
Registered or Certified Mail, postage prepaid, if for Lessor, to
the Building office; or if for Lessee, to the Leased Premises. Such
addresses may be changed from time to time by either party deemed
given when delivered (if delivered by hand) or when postmarked (if
sent by mail).
LESSOR: The Penn Mutual Life Insurance Company
x/x Xxxxxxxx Xxxx Xxxxxxx, Inc.
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
LESSEE: 3DX Technologies, Inc.
00000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
35. SEVERABILITY
This Lease shall be construed in accordance with the laws of the
State of Texas. If any clause or provision of this Lease is
illegal, invalid or unenforceable, under present or future laws
effective during the term hereof, then it is the intention of the
parties hereto that the remainder of this Lease shall not be
affected thereby, and it is also the intention of both parties
that in lieu of each clause or provision that is illegal, invalid
or unenforceable, there be added as part of this Lease a clause or
provision as similar in terms to such illegal, invalid or
unenforceable clause or provision to make such illegal, invalid or
unenforceable clause or provision enforceable.
36. SIGNS
No signs of any kind or nature, symbol, or identifying xxxx shall
be put on the Building, in the halls, elevators, staircases,
entrances, parking areas or upon the doors or walls, whether plate
glass or otherwise, of the Leased Premises nor within the Leased
Premises so as to be visible from the public areas or exterior of
the Building, without prior written approval of Lessor. All sign or
lettering shall conform in all respects to the sign and/or
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lettering criteria established by Lessor. Lessor hereby grants
permission to Lessee to display a company logo and sign on the
reception room wall within the Leased Premises.
37. QUIET ENJOYMENT
Lessee, on paying the said Rent, and any Additional Rental, and
performing the covenants herein agreed to be by it performed, shall
and may peaceably and quietly have, hold and enjoy the Leased
Premises for the said term.
38. RELOCATION
Throughout the term of this Lease or any renewal or extension
thereof, the Lessor shall have the right and option, upon sixty (60)
days notice to Lessee, to require the Lessee to relocate the Leased
Premises to any substantially similar premises within the Building.
In the event of Lessor's exercise of its option to relocate the
Lessee in the manner hereinabove set forth, all reasonable expenses
of moving the Lessee and of decorating the new Leased Premises
shall be at the expense of the Lessor. In the event that comparable
Leased Premises are not available within the Building, and the
Lessee shall agree to relocate to less desirable premises or to
reduce the size of the Leased Premises, the Lessor and the Lessee
shall agree to a reduction in the amount of the Base Rental and the
percentage of the Total Rentable Area contained within the Leased
Premises so as to effect an equitable adjustment in rentals
commensurate with the relocated Leased Premises.
Notwithstanding anything to the contrary in Section 38, above,
Lessor hereby agrees that Lessor shall not relocate Lessee more than
once and that it shall not relocate Lessee except for the purposes
of leasing Lessee's Leased Premises to a prospective tenant which
would lease at least 25,000 square feet in the Building.
Additionally, in the event that Lessor exercises its option to
relocate Lessee, Lessor hereby agrees to grant Lessee a one (1)
month rental abatement. Said one (1) month rental abatement shall
be applied against the initial month of Lessee's Base Rental for
Lessee's relocated Leased Premises.
39. DEADLINE FOR RENEWAL OPTIONS
Time is of the essence; and all performance due dates, time
schedules, and conditions precedent to exercising a right shall be
strictly adhered to without delay except where otherwise expressly
provided.
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40. TENANT'S RIGHT TO TERMINATE AFTER FORECLOSURE
In the event of foreclosure by any lienholder of the Building, Lessee
shall not have a right to terminate this lease solely as a result of such
foreclosure.
41. SUITABILITY FOR INTENDED PURPOSES
Lessor's duties and warranties are limited to those expressly stated in
this lease and shall not include any implied duties or implied warranties,
now or in the future. No representations or warranties have been made by
Lessor other than those contained in the lease.
42. ENTIRE AGREEMENT AND BINDING EFFECT
This Lease and the Work Letter, together with all addenda or exhibits
thereto, constitute the entire agreement between Lessor and Lessee; no
prior written or prior or contemporaneous oral promises or representations
shall be binding. Paragraph captions herein 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 Lessee.
43. ALTERATION
This Lease may not be altered, changed or amended, except by an instrument
in writing signed by both parties hereto.
EXECUTED in multiple counterparts, together with Exhibits X, X, X, X, X, X,
X and H each of which shall have the force and affect of an original, on
the day and year first written above.
LESSEE:
3D Technologies, Inc., a Texas corporation
WITNESS:
/s/ XXXXXX XXXXXXXXXX BY: /s/ XXXXXXX X. XXXXXX
-------------------------------- ---------------------------------------
NAME: Xxxxxxx X. Xxxxxx
-------------------------------------
TITLE: VP Exploration
------------------------------------
LESSOR:
WITNESS:
/s/ [NAME ILLEGIBLE] BY: /s/ XXXXXXX X. XXXXX
-------------------------------- ---------------------------------------
NAME: Xxxxxxx X. Xxxxx
-------------------------------------
TITLE: Assistant Vice President and
Director, Real Estate Equity
------------------------------------
28
[Letterhead]
March 1, 1995
Xx. Xxxxxxx X. Xxxxxx
Vice President
3DX Technologies
00000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Dear Xx. Xxxxxx:
In conformance with your Lease Agreement dated January 20, 1995 please let
this letter serve to document that the base rental for your facility located
at 12012 Wickchester, Suite 250 accrues as of March 1, 1995. The commencement
date of the Lease Agreement shall be established as March 1, 1995 and shall
continue until February 29, 2000. If you are in agreement with these dates,
please so indicate by signing one copy of this letter and returning the copy
to me.
New tenant rental coupons will be forthcoming for the 1995 calendar year.
Rental coupons for future years will be mailed on an annual basis. Please
enclose a rental coupon with each of your monthly payments to ensure proper
coding.
We are pleased to have you as a valued tenant in the Penn Woodbranch Office
Building. Do not hesitate to call should you have any questions or if we can
be of service in any way.
Very truly yours,
XXXXXXXX XXXX HOUSTON, INC. AGREED AND ACCEPTED:
Office Division
3DX Technologies, Inc.
Xxxxxxxxx X. Xxxxx, CPM By: /s/ Xxxxxxx X. Xxxxxx
Senior Property Manager -------------------------------
Xxxxxxx X. Xxxxxx
Title: Vice President Exploration
Date: March 2, 1995
JLB/kan
