EXHIBIT 10.126
LEASE AGREEMENT WITH TRANSOCEAN DEEPWATER OFFSHORE DRILLING, INC. FOR A
PORTION OF THE TRANSOCEAN HOUSTON BUILDING
LEASE AGREEMENT
BETWEEN
BROADFIELD ASSOCIATES, L.P.
AS LANDLORD
AND
TRANSOCEAN OFFSHORE DEEPWATER DRILLING INC.
AS TENANT
AND
TRANSOCEAN SEDCO FOREX INC.
AS GUARANTOR
TABLE OF CONTENTS
Page
----
Article 1 Leased Premises, Term, and Use ................................................. 1
1.01 Leased Premises ................................................................ 1
1.02 Term ........................................................................... 2
1.03 Use ............................................................................ 2
Article 2 Rental ......................................................................... 2
2.01 Base Rental .................................................................... 2
2.02 Operating Expenses ............................................................. 2
2.03 Parking ........................................................................ 8
2.04 Payment of Rent ................................................................ 8
Article 3 Landlord's Services ............................................................ 9
3.01 Services to be Furnished by Landlord ........................................... 9
3.02 Access by Tenant Prior to Commencement of Term ................................. 12
3.03 Condition of Building and Leased Premises ...................................... 12
3.04 Repair and Maintenance by Landlord ............................................. 14
Article 4 Tenant's Covenants ............................................................. 15
4.01 Payments by Tenant ............................................................. 15
4.02 Certain Taxes .................................................................. 15
4.03 Repairs by Tenant .............................................................. 15
4.04 Care of the Leased Premises .................................................... 15
4.05 [Intentionally Deleted] ........................................................ 15
4.06 Assignment of Lease ............................................................ 15
4.07 Alterations, Additions, Improvements ........................................... 18
4.08 Compliance with Laws and Usage; Building Rules and Regulations; Liens .......... 19
4.09 Access by Landlord ............................................................. 19
4.10 Landlord's Mortgagee ........................................................... 19
4.11 Estoppel Certificate ........................................................... 20
Article 5 Mutual Covenants ............................................................... 21
5.01 Condemnation, Loss or Damage ................................................... 21
5.02 Fire or Other Casualty; Certain Repairs ........................................ 21
5.03 Holding Over ................................................................... 22
5.04 Assignment by Landlord ......................................................... 22
5.05 Control of Common Areas and Parking Facilities by Landlord ..................... 22
5.06 Default by Tenant .............................................................. 22
5.07 Non-Waiver ..................................................................... 25
5.08 Independent Obligations ........................................................ 25
5.09 Time of Essence ................................................................ 25
5.10 Remedies Cumulative ............................................................ 25
5.11 Insurance, Liability, Indemnity, Subrogation and Waiver ........................ 26
-i-
Page
----
5.12 Venue; Governing Law ........................................................... 27
5.13 Notice ......................................................................... 28
5.14 Entire Agreement, Binding Effect, Severability ................................. 28
5.15 Right of Reentry ............................................................... 28
5.16 Number and Gender; Captions; References ........................................ 28
5.17 Delinquent Payments; Handling Charge ........................................... 29
5.18 Quiet Enjoyment ................................................................ 29
5.19 Signs .......................................................................... 29
5.20 Brokerage ...................................................................... 29
5.21 Limitation of Implied Warranty ................................................. 29
5.22 Environmental and Land Use Matters ............................................. 30
5.23 Newpark Agreements ............................................................. 30
5.24 Parent Company Guarantee ....................................................... 31
Addendum and Exhibits
---------------------
"A" - Leased Premises Floor Plans
"B" - Legal Description
"C" - Commencement Date Memorandum
"D" - Reserve Parking Plan
"E" - Janitorial Service Specifications
"F" - Landlord Improvements
"G" - Workletter
"H" - Subordination, Attornment and Non-Disturbance Agreement
"I" - Building Rules and Regulations
"J" - Parking Rules and Regulations
"K" - Sublease Termination Agreement
-ii-
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") is entered as of the 18th day of April,
2001 ("Effective Date"), between Broadfield Associates, L.P., a Texas limited
partnership ("Landlord"), Transocean Offshore Deepwater Drilling Inc., a
Delaware corporation ("Tenant"), and Transocean Sedco Forex Inc., a Cayman
Islands corporation ("Guarantor").
Article 1
Leased Premises, Term, and Use
1.01 Leased Premises.
(a) Upon the terms, provisions and conditions hereof, Landlord hereby
leases to Tenant and Tenant hereby leases from Landlord the premises reflected
on the floor plans set forth in Exhibit "A" hereto in the building known as the
Park 10 Center ("Building"). Such premises, together with any other space in the
Complex leased by Tenant pursuant hereto, are herein called the "Leased
Premises." References in this Lease to the "Complex" shall mean the Building,
the parking garage ("Garage") adjacent to and servicing the Building and all
other facilities, parking areas, improvements, structures, and landscaping areas
relating to or servicing the Building and Garage and located on or installed in
or to be located on or installed in the land ("Land") described in Exhibit "B"
hereto. Landlord also grants to Tenant, its licensees and invitees, the
non-exclusive right to use the Common Areas (as hereinafter defined).
(b) Initially, the Leased Premises consists of the entirety of the first
(1st), second (2nd), third (3rd) and fourth (4th) floors of the Building
("Initial Leased Premises"). The "Rentable Area" of the Initial Leased Premises
is hereby stipulated and agreed for all purposes to be 103,260 rentable square
feet ("Initial Leased Premises Rentable Area"), comprising of 25,590 rentable
square feet on the first (1st) floor and 25,890 rentable square feet on each of
the second (2nd), third (3rd) and fourth (4th) floors. Tenant understands that
the Rentable Area is greater than the square footage of the area contained
within the Leased Premises (the "add-on factor"), and includes an amount
attributable to areas within the Building not specifically leased or held for
lease by Tenant such as i) lobbies, foyers, corridors, restrooms and all other
areas of the Building available for non-exclusive use by tenants of the Building
("Common Areas"), and ii) machine rooms, mechanical rooms, electrical rooms,
telephone and equipment rooms, janitor rooms and other similar facilities
("Service Areas"), for purposes of this Lease. For purposes of calculating any
additional space leased by Tenant in the Building, Landlord agrees to calculate
the add-on factor of each single and multi-tenant floor utilizing the Building
Owners and Managers Association's definition -- ANSIZ65.1-1996, ("BOMA
Definition"). If and when Tenant exercises either of its options to lease the
Additional Premises or the Expansion Space (as those terms are defined in the
Addendum hereto, paragraph 2), the Leased Premises shall include the Initial
Leased Premises and either the Additional Premises or Expansion Space, as
applicable.
Notwithstanding the above, for the purposes of this Lease Agreement,
Tenant and Landlord agree that for the duration of this Lease Agreement
(including any renewal periods) that the "Rentable Area" of the Building is
155,040 square feet ("Building Rentable Area"). In the event any future
modification to the Building would result in a change of the Rentable Area
of the Building or the Leased Premises using the BOMA Definition, then the
Rentable Area of the Building and/or Leased Premises shall be adjusted utilizing
the BOMA Definition.
1.02 Term.
(a) Subject to the terms, provisions and conditions hereof, this Lease
shall commence on the Premises Delivery Date (as that term is defined in Section
3.03(a)), (such commencement date being subject to adjustment as provided in
Sections 3.03(b) and (c), and being hereinafter called the "Commencement Date")
and ending on the 31st day of March, 2011 (as the same may be extended pursuant
to Section 1.02(b) below, the "Expiration Date"), such period being referred to
as the "Term".
(b) Tenant shall have the right to extend the Term hereof for an
additional period, not less than one (1) month nor greater than twenty-four (24)
months (the "Extended Term") by written notice given to Landlord on or before
December 31, 2001. Base Rental during the Extended Term will be equal to $23.50
per square foot of Rentable Area for the entire Leased Premises, and all other
terms and conditions of this Lease shall apply.
(c) Within thirty (30) days following the Commencement Date, Landlord and
Tenant agree to execute a memorandum in the form attached hereto as Exhibit "C"
which specifies the exact Commencement Date and Term of the Lease.
1.03 Use. Tenant (and its permitted assignees and sublessees, if any) will
occupy and use the Leased Premises solely for general business office and other
ancillary uses of Tenant (including, but not limited to, training rooms, IT and
data rooms) and for no other purpose.
Article 2
Rental
2.01 Base Rental. Tenant shall pay as Base Rental during the term of this
Lease, monthly rental in the amounts set forth in the Addendum hereto, Paragraph
1.
2.02 Operating Expenses. In addition to Base Rental, Tenant shall pay, as
additional rent, Tenant's Proportionate Share of Actual Operating Expenses in
excess of the Base Operating Expenses Rate.
(a) The "Base Operating Expenses Rate" is stipulated to be $7.89 per
square foot of Rentable Area of the Leased Premises on an annual basis.
(b) The term "Actual Operating Expenses" shall mean, with respect to each
calendar year during the term of this agreement, the actual Operating Expenses
for that year computed in accordance with the provisions of Section 2.02 (e) and
(f). The "Actual Operating Expenses Rate" for each such calendar year during the
term hereof shall be calculated by dividing the Actual Operating Expenses for a
calendar year by the Rentable Area in the Building. The term "Tenant's
Proportionate Share of the Actual Operating Expenses" shall mean, with respect
to each calendar year, an amount equal to the product of (i) the difference
between the Actual
2
Operating Expenses Rate in the calendar year and the Base Operating Expenses
Rate, multiplied by (ii) the Rentable Area of the Leased Premises.
(c) In the event the Actual Operating Expenses Rate, as calculated above,
during any calendar year during the term of this Lease shall be greater than the
Base Operating Expenses Rate, Tenant shall be obligated to pay to Landlord, in
addition to the Base Rental, and Parking Rental (if any, pursuant to the terms
and conditions of Section 2.03 of this Lease Agreement), as additional rent, an
amount equal to Tenant's Proportionate Share of the Actual Operating Expenses.
In order to implement the above, Landlord shall provide to Tenant within ninety
(90) days, or as soon thereafter as reasonably possible (but not later than one
hundred eighty (180) days), after the end of the calendar year in which the
commencement of the term of this agreement occurs, a statement of the Actual
Operating Expenses for the prior calendar year, the Actual Operating Expenses
Rate for the prior calendar year and Tenant's Proportionate Share of the Actual
Operating Expenses.
(d) At the time Landlord gives the annual statement of Actual Operating
Expenses for each year during the term of this agreement, Landlord may, at
Landlord's option, provide Tenant a schedule of projected Operating Expenses for
the next calendar year expressed as an expense per net rentable square foot in
the project on an annual basis (herein referred to as the "projected Operating
Expenses Rate"). Tenant shall thereafter pay an adjusted monthly rental which
shall include the Base Rental stated in Section 2.01 and an amount (herein
referred to as a "projected Operating Expenses Installment") equal to
one-twelfth (1/12th) of an amount equal to the product of (i) the difference
between the projected Operating Expenses Rate for the next calendar year and the
Base Operating Expenses Rate, multiplied by (ii) the Rentable Area in the leased
premises. Landlord shall provide Tenant a statement, within ninety (90) days (or
as soon thereafter as reasonably possible but not later than one hundred eighty
(180) days) after the end of each calendar year during the term of this
agreement, showing the Actual Operating Expenses and the Actual Operating
Expenses Rate for such calendar year, as compared to the projected Operating
Expenses and the projected Operating Expenses Rate for the calendar year. In the
event Tenant's Proportionate Share of the Actual Operating Expenses for such
calendar year shall exceed the aggregate of the projected Operating Expenses
Installments actually collected by Landlord from Tenant for such calendar year,
Tenant shall pay to Landlord within thirty (30) days following Tenant's receipt
of a statement, the amount of such excess. If, however, Tenant's Proportionate
Share of the Actual Operating Expenses for the calendar year is less than the
aggregate of the projected Operating Expenses installments actually collected by
Landlord from Tenant, for the calendar year, Landlord shall pay to Tenant within
thirty (30) days after the giving of the statement to Tenant, the amount of the
overpayment of the projected Operating Expenses Installments. If the expiration
or termination of this Lease occurs other than on the last day of a calendar
year, the amount to be paid by Tenant or reimbursed to Tenant hereunder shall be
a pro rata amount based on the ratio of the number of days of the term of this
agreement in such last calendar year to 365 days.
(e) Except for the exclusions from Actual Operating Expenses in Section
2.02 (f), "Actual Operating Expenses" shall mean the operating expenses of the
Complex and all expenditures by Landlord to own, maintain and operate the
Complex. All operating expenses shall be determined on an accrual basis in
accordance with generally accepted accounting
3
principles which shall be consistently applied. Such operating expenses shall
include all expenses, costs and disbursements of every kind and nature which
Landlord shall pay or become obligated to pay because of or in connection with
the ownership, operation, and maintenance of the Complex, including, but not
limited to, the following:
(1) Wages and salaries of all employees engaged in direct operation
and maintenance of the Complex, employer's social security taxes,
unemployment taxes or insurance and any other taxes which may be levied on
such wages and salaries, and the cost of disability and hospitalization
insurance for such employees;
(2) Cost of leasing or purchasing all supplies, tools, equipment and
materials used in the operation, maintenance and ownership of the Complex;
(3) Cost of all utilities for the Complex, including the cost of
water and power, sewage, heating, lighting, air-conditioning and
ventilating for the Complex;
(4) Cost of all maintenance and service agreements for the Complex
and surrounding grounds, including but not limited to janitorial service,
security service, equipment leasing, energy management system leasing,
landscape maintenance, alarm service, window cleaning and elevator
maintenance;
(5) Cost of all insurance relating to the Complex, including, but not
limited to, casualty insurance, rental insurance and liability insurance
applicable to the Complex and Landlord's personal property used in
connection therewith as well as any deductible sum required by any such
policies and actually paid by Landlord;
(6) All taxes and assessments and governmental charges (including but
not limited to mortgage taxes and other taxes and assessments passed on to
Landlord by a mortgagee holding a lien on the Complex), 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, association dues and assessments
attributable to the Complex or its operation excluding, however, income
taxes, estate and inheritance taxes, excess profit taxes, franchise taxes,
taxes imposed on or measured by the income of Landlord from operation of
Complex, sales and other taxes imposed on amounts paid by Tenant hereunder
(including, without limitation, sales taxes imposed on the Parking Rentals,
as hereinafter defined), and taxes imposed on account of a transfer of
ownership of the Complex or the Land;
(7) Cost of repairs and general maintenance (excluding such repairs
and general maintenance paid by insurance proceeds or by Tenant or other
third parties and alterations attributable solely to tenants of the
Building other than Tenant);
(8) Legal expenses and accounting expenses incurred with respect to
the Complex;
(9) Fees for management services, whether provided by an independent
management company, by Landlord or by any affiliate of Landlord;
4
(10) Costs in order to comply with federal or state laws or municipal
ordinances or codes or regulations promulgated under any of the same;
(11) Amortization of the cost of installation of capital investment
items which are primarily for the purpose of reducing (or avoiding
increases in) operating costs (not to exceed the savings actually realized
from such investments), or which may be required by governmental authority.
The costs of such capital investment items under this Section 2.02(e )(11)
shall include costs incurred in financing the purchase of such items,
including loan fees and interest. All costs of such capital investment
items shall be amortized over the reasonable life of such items with the
reasonable life and amortization schedule being determined in accordance
with generally accepted accounting principles and in no event to extend
beyond the reasonable life of the Complex;
(12) Replacement of fluorescent lamps in Building Standard and Tenant
specified fluorescent light fixtures and incandescent bulb or fluorescent
lamp replacement in public toilet and restroom areas, Complex common areas
and stairwells;
(13) Rent or rental value of Landlord's leasing and management
offices on or near the Building (provided, in the event Landlord's leasing
and management offices are located outside the Building, such rent or
rental value shall be prorated);
(f) Actual Operating Expenses shall not include (i) expenditures
classified as capital expenditures for Federal income tax purposes (except as
set forth in Section 2.02(d)(11), (ii) costs for which Landlord is entitled to
specific reimbursement by Tenant, any other tenant of the Building, or any other
third party, (iii) allowances for expenses to be incurred by Landlord for
improvements to the premises of which the Leased Premises are a part, (iv)
leasing commissions, and all non-cash expenses (including depreciation), and (v)
debt service on any indebtedness secured by the Complex (except debt service on
indebtedness to purchase or pay for items specified as permissible Basic
Operating Costs under Section 2.02(e)(1) through (13)), (vi) unless otherwise
permitted pursuant to this Lease, the cost of any improvements, repairs,
alterations, additions, changes, replacements, equipment, tools and other items
which under generally accepted accounting principles are required to be
classified as capital expenditures, (whether incurred directly or through a
lease or service contract or otherwise) other than amortization of the cost of
capital (and the installation thereof) items which are reasonably expected to
reduce operating costs for the benefit of all of the Building's tenants or which
may be required by any governmental authority (all of such costs, including
interest costs, shall be amortized over the reasonable life of the capital
items, with a reasonable life and amortization schedule being determined by
Landlord according to generally accepted accounting principles), (vii)
depreciation of the Building, and all equipment, fixtures, improvements and
facilities used in connection therewith, except as provided in (vi) above,
(viii) advertising, promotional expenses, leasing commissions, attorneys fees
(unless incurred as a result of Landlord's effort to reduce Actual Operating
Expenses), costs and disbursements and other expenses incurred in connection
with negotiations with tenants or prospective tenants or other occupants in the
Building, (ix) any property taxes, assessments, or other governmental charges to
the extent that Landlord is reimbursed for same by any tenant of the Building
(excluding reimbursements paid through additional rent payments), (x) the cost
of repairs or other work occasioned by any
5
casualty which is covered by insurance, but only to the extent of the insurance
proceeds received by Landlord net of deductibles and cost of adjustment, (xi)
the cost of renovating or otherwise improving or decorating, painting or
redecorating space in the Building which is or normally would be occupied by
tenants, except in connection with general maintenance of the Building, (xii)
Landlord's costs of electricity and other services sold or provided to tenants
in the Building and for which Landlord is reimbursed by such tenants as a
separate additional charge, (xiii) expenses incurred in connection with services
or other benefits which are in excess of the services provided by Landlord
pursuant to Section 3.01 hereof, but are provided to other tenants or occupants
of the Building, (xiv) costs (limited to penalties, fines and associated legal
expenses) incurred due to violation by Landlord of the terms and conditions of
any lease or rental arrangement covering space in the Building, (xv) overhead
and profit increment paid to subsidiaries, partners or other affiliates of
Landlord and salaries and associated costs of Landlord's employees for services
on or to the Building, to the extent only that the cost of such services exceeds
competitive costs of such services were they not so rendered by a subsidiary or
other affiliate of Landlord, (xvi) any compensation paid to clerks, attendants
or other persons in commercial concessions operated by Landlord, (xvii) all
items and services for which tenants reimburse Landlord, but only to the extent
Landlord is reimbursed for same, (xviii) the costs incurred related to
maintaining Landlord's existence, either as a corporation, partnership or other
entity, (xix) the costs incurred in connection with correcting defects in the
construction of the Building or in the Building equipment (except the conditions
resulting from ordinary wear and tear and use shall not be deemed defects for
the purposes of this category), (xx) interest on debt or amortization payments
on any mortgage or mortgages or rental payments under any ground or underlying
leases (except to the extent that same may be made to pay insurance and taxes),
(xxi) interest and penalties due to late payments of taxes, utility bills and
other such costs, (xxii) salaries or other compensation paid to employees of
Landlord above the grade of building manager, (xxiii) the cost of any repairs
occasioned by eminent domain to the extent that such costs are reimbursed to
Landlord by governmental authorities in eminent domain proceedings, (xxiv) costs
(limited to penalties, fines and associated legal expenses) incurred due to the
violation by Landlord of any applicable federal, state and/or local government
laws, codes and similar regulations that would not have been incurred but for
such violations by Landlord, (xxv) transfer tax, and (xxvi) management fees
incurred by Landlord for the management of the Building which exceed three
percent (3%) of gross rentals of the Building, (xxvii) those costs incurred by
Landlord attributable to any calendar year that exceed one hundred five percent
(105%) of the total costs of all Actual Operating Expenses in the preceding
calendar year of the Term, except this limitation shall not apply to those costs
attributable to Section 2.02 (e), (3), (5), (6), (10) and (11), and (xxviii)
notwithstanding any provision herein, costs of removing hazardous materials or
asbestos or of correcting any other conditions in order to comply with any
environmental law. In addition, any costs associated with the operation and
maintenance of the Building Garage, which costs shall be a part of the overall
operating expenses of the Complex, shall be offset by any parking revenue
received by Landlord from parking permits issued in the Building Garage.
(g) Notwithstanding any other provision herein to the contrary, it is
agreed that in the event the Building is not fully occupied during any calendar
year or any portion of any calendar year of the Term, an adjustment shall be
made in computing the Actual Operating Expenses for
6
that year (utilizing the same methodology each year) so that certain expenses
(limited to janitorial services and utilities) shall be increased for that year
to the amount that, in Landlord's reasonable judgment (subject to Tenant's audit
rights prescribed below), would have been incurred had the total Rentable Area
of the entire Building been ninety-five percent (95%) occupied during the
entirety of that year ("Gross Up Factor"). It is the intent of this Section that
Landlord shall not be required to bear any portion of the Actual Operating
Expenses which exceed the Base Operating Expenses Rate for any calendar year or
partial calendar year of the Term of this Lease.
(h) If Tenant desires that Landlord contest any ad valorem taxes, Tenant
shall provide Landlord written notice thereof, expressly requesting that
Landlord contest such ad valorem taxes, providing a reasonable basis for such
request. If Tenant's notice is submitted to Landlord at such time so as to
permit Landlord to timely contest, Landlord shall contest the amount or
validity, in whole or in part, of any ad valorem taxes, by appropriate
proceedings. In the event Landlord does not notify Tenant within fifteen (15)
days following receipt of Tenant's written notice (or such shorter time if the
deadline for filing any such contest is sooner) that Landlord intends to contest
the ad valorem taxes, then Tenant will have the right to contest such ad valorem
taxes which have been identified by Tenant in its written notice to Landlord;
provided, however, that Tenant will make timely payment of Tenant's
Proportionate Share, as provided in this Lease, of the ad valorem taxes
notwithstanding the pendency of any such contest. Tenant will notify Landlord
within five (5) days after the commencement of any such contest. Costs incurred
by Landlord pursuant to this Section 2.02(h) will be included as Actual
Operating Expenses.
(i) Provided that Tenant is not in default under this Lease, and subject
to this paragraph, Tenant, at its sole expense, shall have the right, upon
giving reasonable notice, to audit Landlord's books and records relating to any
increased or additional rental payable hereunder for the immediately preceding
calendar year for the purpose of determining whether the provisions of this
Section 2.02 have been followed. If Tenant elects to exercise this right, Tenant
must do so within one hundred twenty (120) days after the date Landlord delivers
to Tenant the statement described in Section 2.02(b) or Tenant shall be deemed
to have accepted the Actual Operating Expenses as presented by Landlord. If
Tenant elects to audit Landlord's books and records, such audit shall be
conducted by a certified public accountant licensed in Texas. Should Tenant's
audit reveal that Landlord's determination of Actual Operating Expenses exceeded
Actual Operating Expenses by an amount exceeding five percent (5%), then,
provided Landlord's reputable "third party" CPA reasonably agrees with the
conclusions reached by Tenant's CPA, Landlord shall reimburse Tenant for the
reasonable costs of performing such audit and shall further promptly reimburse
to Tenant the total excess amount paid; provided, however, nothing herein shall
preclude Tenant from seeking reimbursement of any contested amount it claims to
have paid to Landlord irrespective of whether Landlord's reputable "third party"
CPA is in agreement with such audit results. Notwithstanding the foregoing, in
the event of an unresolved dispute between Landlord as to the Base Operating
Expense Rate or Actual Operating Expenses, either Landlord or Tenant may elect
(upon written request to the other party) to submit such unresolved dispute to
binding arbitration, pursuant to the procedures set forth in Paragraph 7 of the
Addendum.
7
2.03 Parking. Landlord hereby agrees to make available to Tenant without charge,
during the Term of this Lease, up to four (4) parking permits for each 1,000
rentable square feet leased by Tenant, to be provided first in the Building
Garage twenty-five percent (25%) of which permits shall be assigned, reserved
permits located in the covered portion of the Building Garage as detailed on
Exhibit "D", and second (i.e., if not available in the Building Garage) in the
surface parking areas surrounding the Building. Subject to the foregoing, Tenant
may, at its option, from time to time upon at least thirty (30) days notice to
Landlord, reduce (or subsequently increase) the parking permits it takes
pursuant to this section. Tenant acknowledges that the foregoing ratio of 4
permits per 1000 rentable square feet includes a 15% oversale, exclusive of any
reserved permits which will be provided to Tenant on an actual basis. Such
oversale (meaning 15% more spaces than actually exist) shall be consistently
applied to all tenants in the Building. In addition, if during the Term of this
Lease Landlord provides assigned, reserved parking permits in the covered
portion of the Building Garage to other tenants in a ratio greater than that
granted Tenant hereunder, Landlord will provide Tenant with additional assigned,
reserved spaces in the covered portion of the Parking Garage so that Tenant's
ratio of assigned, reserved parking spaces in the covered portion of the
Building Garage is as high as any other tenant in the Building. With the
exception of Tenant's assigned, reserved permits in the covered portion of the
Building Garage, all of Tenant's permits shall be provided on an unassigned,
first come, first served basis.
Tenant agrees to comply with Landlord's Parking rules and regulations as
described in Exhibit "J." Any additional assigned or unassigned parking permits
granted Tenant as a result of an expansion of the Leased Premises shall be
provided at the same ratios provided herein and at no charge during the Term.
Any parking spaces leased during any renewal period shall be charged to Tenant
at a rate that is not greater than the prevailing monthly rate offered by
comparable office buildings in the Park Ten area of Houston, Texas, including
the Building; provided, however, if the other tenants in the Building are not
being charged for parking in the Garage, neither shall Tenant.
2.04 Payment of Rent. The term "Rent" as used herein shall mean the Base
Rental, the Tenant's proportionate Share of Actual Operating Expenses in excess
of the Base Operating Expenses Rate, the Parking Rentals and all other amounts
provided for in this Lease to be paid by Tenant, all of which shall constitute
rental in consideration for this Lease and the leasing of the Leased Premises.
The term "Additional Rent" as used herein means Rent exclusive of Base Rental.
The Rent shall be due and payable in advance in monthly installments on the
first (1st) day of each calendar month after the Rent Commencement Date (defined
in the Addendum) during the Term hereof, in legal tender of the United States of
America to Landlord at the address shown in Section 5.16 or to such other person
or at such other address as Landlord may from time to time designate in writing.
The Rent shall be paid without notice, demand, abatement, deduction or offset
except as otherwise expressly provided for in the Lease. In no event shall the
Landlord accept or be bound by any payment of Rent more than thirty (30) days in
advance, unless otherwise agreed to in writing between Landlord and Tenant. If
the Term commences or ends on other than the first or last day of a calendar
month, then the installment of Base Rental and the Parking Rentals for such
partial month shall be appropriately prorated. If the Term commences or ends at
any time other than the first day of a calendar year, the Tenant's
8
Proportional Share of Actual Operating Expenses in excess of the Base Operating
Expenses Rate shall be prorated for such year according to the number of days of
the Term during such year. In no event shall Base Rental or monthly installments
thereof be less than the amounts specified in Section 2.01 (subject to Tenant's
abatement rights as set forth in Section 3.01(c) and Section 5.02 of this Lease
Agreement).
Article 3
Landlord's Services
3.01 Services to be Furnished by Landlord.
(a) Subject to Section 3.01(c) of this Lease Agreement, Landlord shall
furnish the following services ("Landlord Services"):
(1) Air-conditioning and heating in season, during Normal Building
Operating Hours (hereafter defined), at such temperatures and in such
amounts as are considered to be standard for other Class A office
buildings in Houston, Texas;
(2) Hot and cold water for lavatory and drinking purposes in
amounts considered to be standard for other Class A office buildings in
Houston, Texas.
(3) Janitor service in and about the Building and the Leased
Premises five (5) days per week (as stipulated and detailed on Exhibit
"E" attached hereto and made a part hereof), and semi-annual window
washing; however, Tenant shall pay, as additional Rent upon presentation
of a statement therefor by Landlord, the additional costs attributable to
the cleaning of improvements within the Leased Premises other than
Building Standard (hereinafter defined) improvements;
(4) Elevators for access to and egress from the Leased Premises on
a non-exclusive basis 7 days per week, 24 hours per day;
(5) Electrical facilities (seven (7) days per week, twenty-four
(24) hours per day) to furnish sufficient power for typewriters,
calculating machines, photocopying machines, fax machines, computers and
other machines of similar low voltage electrical consumption such that
the total electrical power connected load shall not exceed six and
one-half (6 1/2) xxxxx per square foot of the Rentable Area contained
within the Leased Premises; but not including electricity required for
electronic data processing equipment, special lighting in excess of
Building Standard (defined as one (1) 2'x4' fluorescent fixture per
seventy-five (75) usable square feet), and any other electrical equipment
which requires a voltage other than 110/120 volts single phase (other
than photo duplication machines, which shall be considered building
standard so long as the connected load does not exceed 6.5 xxxxx per
square foot of rentable area continued within the Leased Premises. If the
installation of said electrical equipment requires additional air
conditioning capacity above that provided by the Building Standard
system, then the additional air conditioning installation and operating
costs will be the obligation of Tenant. Landlord, at its option and at
Tenant's expense, may cause an electric current
9
meter or such similar device to be installed in or near the Leased
Premises so as to measure the amount of electric current consumed by
Tenant.
(6) Electrical facilities (seven (7) days per week, twenty-four
(24) hours per day) to furnish power to operate Tenant's Building
standard lighting and other equipment that operates on 480/277 volts
(collectively, the "High Power Equipment"), provided that the total
connected load for the High Power Equipment shall not exceed two (2)
xxxxx per square foot of the Rentable Area contained in the Leased
Premises.
(7) Replacement of fluorescent lamps in Building Standard light
fixtures and incandescent bulb or fluorescent lamp replacement in public
toilet and restroom areas, Complex common areas and stairwells; and
(8) Equipment and personnel to limit access to the Building after
normal business hours which shall consist of an unmanned security cardkey
access system similar in design and quality found in similar buildings in
the Park Ten area; PROVIDED, HOWEVER, SO LONG AS LANDLORD IS PROVIDING
THE AFOREMENTIONED SECURITY CARDKEY ACCESS SYSTEM, LANDLORD SHALL HAVE NO
FURTHER RESPONSIBILITY TO PREVENT, AND SHALL NOT BE LIABLE TO TENANT FOR,
AND SHALL BE INDEMNIFIED BY TENANT AGAINST, LIABILITY OR LOSS TO TENANT,
ITS AGENTS, EMPLOYEES AND VISITORS ARISING OUT OF LOSSES DUE TO THEFT,
BURGLARY, OR DAMAGE OR INJURY TO PERSONS OR PROPERTY CAUSED BY PERSONS
GAINING ACCESS TO THE BUILDING, GARAGE OR THE LEASED PREMISES, AND TENANT
HEREBY RELEASES LANDLORD FROM ALL LIABILITY RELATING THERETO, EXCEPT TO
THE EXTENT SUCH LOSSES ARE CAUSED IN WHOLE OR IN PART BY THE WILLFUL
MISCONDUCT OF LANDLORD. Landlord shall furnish an adequate number of
cardkeys for the Leased Premises (not to exceed 4 cardkeys per 1,000
square feet of Rentable Area), and any additional cardkeys will be
furnished at a charge equal to Landlord's actual cost on an order signed
by Tenant or Tenant's authorized representative. All such cardkeys shall
remain the property of Landlord. No additional locks shall be allowed on
any door of the Leased Premises without Landlord's permission, and Tenant
shall not make or permit to be made any duplicates of such cardkeys,
except those furnished by Landlord. Upon termination of this Lease,
Tenant shall surrender to Landlord all the cardkeys for the Leased
Premises, and give to Landlord the explanation of the combination of all
locks for safes, safe cabinets, and vault doors, if any, in the Leased
Premises.
(b) "Normal Building Operating Hours" shall be from 7:00 a.m. to 6:00
p.m. Monday through Friday, and 7:00 a.m. to 1:00 p.m. Saturday, exclusive of
Sundays and "Holidays". "Holidays" shall refer to New Year's Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Friday following
Thanksgiving Day, Christmas Day, and other holidays commonly observed by a
majority of the tenants of the Building. If the holiday occurs on Saturday or
Sunday, the Friday preceding or the Monday following may, at Landlord's
discretion, be observed as a Holiday.
10
(c) Failure by Landlord to any extent to furnish services hereunder or
any cessation thereof shall not render Landlord liable in any respect for
damages to either person or property, nor be construed as an eviction of Tenant,
nor work an abatement of Rent (except as provided for herein), nor relieve
Tenant from fulfillment of any covenant or agreement hereof. Should any of such
services be interrupted, Landlord shall use reasonable diligence to restore the
same promptly, but Tenant shall have no claim for rebate of Rent, damages, or
eviction on account thereof, and Tenant waives all rights it may have at law or
in equity, including any rights Tenant may have arising from implied warranties
of suitability. Notwithstanding the above, Landlord acknowledges that there are
certain Essential Landlord Services. For purposes herein, "Essential Landlord
Services" shall be defined, and strictly limited to, air conditioning and
heating, hot and cold water (for laboratory, lavatory and drinking purposes
only), elevator service, sewer service and electrical power in the absence of
which Tenant would not be able to conduct business in or utilize the Leased
Premises for the purpose they were let. In the event Essential Landlord Services
are interrupted, and such interruption is not caused by the act or omission of
Tenant, and such interruption continues for a period of five (5) consecutive
business days, then commencing upon the sixth (6th) consecutive business day
Tenant (as its sole and exclusive remedy) shall be entitled to an abatement of
Base Rental and Additional Rent until such time as the Essential Landlord
Services are restored. Notwithstanding the foregoing, in the event Essential
Landlord Services are interrupted and unavailable to Tenant for more than
seventy-five (75) consecutive days, and such interruption has not been caused by
the willful acts of Tenant, Tenant shall have the right to terminate this Lease
upon payment of all Rent due hereunder through the date that rental abatement
due to interruption of Essential Landlord Services first occurred.
(d) Tenant shall pay to Landlord, monthly as billed, as Additional Rent
hereunder, such charges for additional electrical services (in excess of the
electrical allowances provided to Tenant in Section 3.01) as may be separately
metered for (i) any utility services utilized by Tenant for computers, data
processing equipment or other similar electrical equipment; (ii) extra lighting;
(iii) air-conditioning, heating and other services in excess of that stated in
Sections 3.01 hereof; or (iv) other air-conditioning, heating and services not
standard for the Building or provided at times other than Normal Building
Operating Hours. Tenant shall pay all costs associated with providing separate
utility meters to the Leased Premises. In the event separate utility meters are
provided to the Leased Premises, Landlord may elect to have all charges for the
utilities separately metered to the Leased Premises, and if such utility
consumption exceeds the amounts described in Sections 3.01a(5) and (6), Tenant
will be responsible for the costs of utilities in excess of Building Standard
amounts. In the event that Landlord furnishes extra or additional services to be
paid for by Tenant, a failure to pay for such services within ten (10) days
after notice shall constitute an Event of Default and shall further authorize
Landlord, at Landlord's discretion and without notice, to discontinue all such
services. Notwithstanding the foregoing, Landlord will provide, at no cost to
Tenant, 240 hours per calendar year of after hours heating and air-conditioning
to each floor (or portion thereof) in the Leased Premises (the "After Hours HVAC
Allowance"). Unused hours in the After Hours HVAC Allowance may carry over into
the following year, but not beyond the following year. After hours
air-conditioning and heating in excess of the After Hours HVAC Allowance will be
available and provided by Landlord at a charge of $16.50 per hour per floor
(subject to future increases equal to the actual
11
increases in Landlord's cost of providing such after hours HVAC service). Except
in cases of unforeseeable emergencies, which Landlord will use reasonable
efforts to accommodate, all requests for after hours heating and
air-conditioning must be received no later than 4:00 p.m. on the day service is
required, and, in the case of weekends or holidays, by 4:00 p.m. on the
immediately preceding business day.
(e) Any services requested by Tenant from Landlord on Sundays, Building
Holidays and outside of Normal Building Operating Hours (to the extent not
provided as a Landlord Service on a seven (7) days per week, twenty-four (24)
hours per day basis) or which are in excess of those Landlord Services to be
provided by Landlord pursuant to Section 3.01(a) (collectively, "Additional
Services") shall be provided only upon Tenant's request and agreement in advance
to bear the cost of operations attributable to such Additional Services, not to
exceed Landlord's actual cost plus a reasonable repair/depreciation charge.
3.02 Access by Tenant Prior to Commencement of Term. Landlord shall permit
Tenant and its employees, agents and suppliers to enter the Leased Premises
prior to, and after, the Commencement Date to enable Tenant to do such things as
may be required by Tenant to make the Leased Premises ready for Tenant's
occupancy. Such parties will not interfere with or delay the performance of any
typical and normal office use activities by Landlord or other occupants of the
Building. Landlord may withdraw such permission upon twenty-four (24) hours
notice to Tenant if Landlord determines that any such interference or delay has
been or may be caused. Any such entry into the Leased Premises shall be at
Tenant's risk and neither Landlord nor Landlord shall be liable in any way for
personal injury, death, or property damage which may be suffered in or about the
Leased Premises or the Building by Tenant or its employees, agents, contractors,
suppliers or workmen, and Tenant hereby indemnifies Landlord therefrom except
for those personal injuries, deaths or property damages caused by the willful
misconduct of Landlord.
3.03 Condition of Building and Leased Premises.
(a) The Initial Leased Premises shall be delivered to Tenant no later
than the date which is ten (10) days from the Effective Date (such date being
hereinafter called the "Premises Delivery Date"). On the Premises Delivery Date,
the leasehold improvements and tenant finish set forth and described on Exhibit
"F" attached hereto ("Landlord Improvements") will be completed on the first
(1st), second (2nd) and third (3rd) floors of the Leased Premises at Landlord's
sole cost and expense. The portion of the Leased Premises located on the fourth
(4th) floor will be delivered in its as-is condition as of the Effective Date.
Notwithstanding the provisions of Exhibit "G" ("Workletter"), the cost of all
installation (to be performed by Landlord) of any improvements to the Leased
Premises in addition to the Landlord Improvements requested by Tenant following
the Premises Delivery Date (calculated at Landlord's actual cost plus an
additional charge of five percent (5 %) to cover overhead) shall be for Tenant's
account and at Tenant's cost (and Tenant shall pay ad valorem taxes thereon),
which cost shall be payable by Tenant to Landlord as a part of the Rent
hereunder promptly upon being invoiced therefor, and failure by Tenant to pay
such cost in full within thirty (30) days after the date of billing shall
constitute failure to pay Rent when due and an Event of Default by Tenant
hereunder giving rise to all remedies available to Landlord under this Lease.
12
(b) Subject to Section 3.03(c), if on the Premises Delivery Date any of
the Landlord Improvements have not been substantially completed as reasonably
determined by Tenant's designated architect, or if Landlord is unable to tender
possession of the Leased Premises to Tenant on the Premises Delivery Date, then
the Commencement Date (and the Rent Commencement Date) shall be postponed until
such work to be performed in the Leased Premises at Landlord's expense is
substantially completed as reasonably determined by Tenant's designated
architect or until Landlord is able to tender possession of the Leased Premises
to Tenant, as the case may be. The deferment of installments of Rent and
postponement of the Commencement Date pursuant to this Section 3.03(b) shall,
except as provided below, be Tenant's exclusive remedy for Landlord's delay of
completion of Landlord Improvements to the Leased Premises or failure to tender
possession of the Leased Premises to Tenant and Tenant shall have no claim
against Landlord because of any such delay in completion of the Landlord
Improvements or failure to deliver the Leased Premises.
(c) No delay in the completion of the Leased Premises resulting from (i)
delay or failure on the part of Tenant in furnishing information or other
matters required in, by or in connection with Exhibit "F", or (ii) changes
ordered by Tenant in the Landlord Improvements (hereinafter defined) shall delay
the Commencement Date, or Rent Commencement Date. If prior to the Commencement
Date Tenant shall enter into possession of all or any part of the Leased
Premises, (other than an entry with Landlord's consent pursuant to Section 3.02)
then the Term, and all obligations of Tenant to be performed during the Term
shall commence on, and the Commencement Date shall be deemed for all purposes to
be, the date of such entry, provided that no such early entry shall operate to
change the expiration date provided herein. Notwithstanding the above, if the
Landlord Improvements have not been completed by May 1, 2001, Tenant shall have
the right, by written notice delivered to Landlord no later than May 15, 2001 to
terminate this Lease Agreement
(d) Subject to the provisions of Section 4.07 of this Lease Agreement,
unless otherwise agreed to in writing between Landlord and Tenant, all
alterations, physical additions, or improvements in or to the Leased Premises
(including fixtures) shall, when made, become the property of Landlord and shall
be surrendered to Landlord upon termination of this Lease, whether by lapse of
time or otherwise; provided, however, this clause shall not apply to trade
fixtures (including any and all filing systems), moveable equipment or furniture
owned by Tenant or any other party.
(e) Upon the Premises Delivery Date, Landlord represents and warrants
that the Leased Premises, as same shall be constructed or improved in accordance
with this Lease, including Exhibit "F", will be in compliance with all
applicable building codes, rules, regulations and applicable laws governing
occupancy of the Building ("Applicable Laws") including Title III of the
Americans with Disabilities Act of 1990, Public Law 101-336, as amplified by the
final rule promulgated by the Department of Justice in Section 28 of the Code of
the Federal Regulations, part 35, as the aforesaid Act of Regulations may be
hereafter modified or amended (the "ADA"). If, subsequent to the Premises
Delivery Date, any Applicable Law or the ADA is modified or new legislation
enacted ("New Applicable Law" or "New ADA") so that the Leased Premises (but not
improvements or modifications to the Building code elements or the Complex) or
any improvements, personal property, fixtures or any other matter or thing
comprising of or
13
located within the Leased Premises must be removed, altered, modified, improved,
reconstructed, added or changed in order to cause the Leased Premises, or any
aspect thereof, to be in compliance with the requirements of such Applicable Law
or the ADA, Landlord shall use reasonable best efforts to notify Tenant of the
same, in which event Tenant shall promptly undertake such removal, alteration,
modification improvement, reconstruction, addition or change at the sole cost of
the Tenant, so that the Leased Premises and all aspects thereof shall be in
compliance with such Applicable Law or the ADA and any other law, code, statute,
regulation or ordinance applicable to the Leased Premises. Prior to commencing
work necessary to cause the Leased Premises to comply with the requirements of
the ADA and all other Applicable Laws, the Tenant shall notify the Landlord of
the work to be undertaken by the Tenant in this regard. The failure of the
Tenant to undertake work necessary to cause the Leased Premises to comply with
the requirements of such New Applicable Law or the New ADA within thirty (30)
days after receipt of notice to undertake such work, whether from the Landlord
or regulatory authority, shall constitute an Event of Default pursuant to the
terms and provisions of this Lease. The cost of improving, altering, modifying,
or otherwise changing the Leased Premises in order to comply with the
requirements of the New ADA shall be the Tenant's cost, notwithstanding the fact
that compliance with such New Applicable Law or the New ADA was necessitated by,
or as a result of, alterations in the Leased Premises, which alterations were or
are to be undertaken by the Landlord at the Landlord's sole cost and expense. In
the event that the Leased Premises, the Building, the Complex or any portion or
aspect of any of them is determined to fail to comply with such New Applicable
Law or the New ADA, and that portions of the Building or the Complex (other than
the Leased Premises) should be improved, altered, modified or otherwise changed
in order to cause the Building or the Complex, or any portion of any of them, to
be in compliance with the requirements of such Applicable Law or the ADA,
Landlord shall undertake such improvements, alterations, modification or changes
to the Building or the Complex as the Landlord deems necessary to cause such
improvements to comply with the requirements of such New Applicable Law or the
New ADA. Notwithstanding anything to the contrary contained in this Lease
following the Commencement Date, all costs and expenses for labor, materials,
architectural fees, engineering fees, overhead, insurance, services or supplies
incurred by the Landlord in causing the Building or the Complex to comply with
the requirements of any New Applicable Law or the New ADA shall constitute
Actual Operating Expenses of the Building even though such costs may be in the
nature of capital improvements or expenses, and shall be reimbursed to the
Landlord as a part of Actual Operating Expense in accordance with the terms and
provisions of this Lease.
3.04 Repair and Maintenance by Landlord. Landlord shall provide cleaning and
maintenance of the public portions of the Complex in a first class manner,
including painting and landscaping around the Complex. Landlord shall perform
and make such maintenance, repairs, replacements and improvements to the Complex
in a first class manner, including the base mechanical and electrical systems,
as may be required during the Term to keep the same in good condition and repair
in a manner consistent with other comparable Class A office buildings in
Houston, Texas. Except as required of Landlord above, after the Commencement
Date, Landlord shall not be required to make any improvements or repairs of any
kind or character to the Leased Premises. This Section 3.04 shall not apply in
the case of damage or destruction by fire or other casualty (as to which Section
5.02 shall apply), or in the case of latent or structural
14
defects to the Complex or Leased Premises (including, but not limited to the
roof and curtain wall), which Landlord shall repair, or damage resulting from an
eminent domain taking (as to which Section 5.01 shall apply). Except to the
extent not reasonably avoidable in connection with temporary construction,
renovation, repair, maintenance or other necessary activities of Landlord in the
Building, and except in connection with the exercise of remedies it may have
against Tenant in the event of default by Tenant under this Lease, Landlord
shall conduct its business and control its agents, employees and contractors in
such manner as not to create any nuisance, or interfere with, annoy or disturb
Tenant in its occupancy of the Leased Premises.
Article 4
Tenant's Covenants
4.01 Payments by Tenant. Tenant agrees to timely pay the Rent and all rents
and sums provided to be paid to Landlord hereunder at the times and in the
manner herein provided.
4.02 Certain Taxes. Tenant shall pay all ad valorem taxes on all improvements
installed in the Leased Premises that are in excess of those installed by
Landlord from time to time as Building Standard and in excess of the items to be
installed by Landlord at Landlord's cost under Exhibit "F" or specified in
Section 3.03(a) hereof.
4.03 Repairs by Tenant. Tenant shall, at its cost, repair or replace any
damage to the Building, or any part thereof, caused by Tenant or Tenant's
agents, employees, invitees or visitors; provided if Tenant fails to make such
repairs or replacements promptly, Landlord may, at its option, make such repairs
or replacements and the cost thereof (plus five percent (5%) for overhead to
Landlord) shall be payable by Tenant on demand as a part of the Rent hereunder,
and failure of Tenant to pay such costs within thirty ( 30 ) days, following
written notice from Landlord, shall constitute a failure to pay Rent when due
and an Event of Default by Tenant hereunder.
4.04 Care of the Leased Premises. Tenant shall maintain the Leased Premises in
a clean, attractive condition, and not commit or allow any waste or damage to be
committed on or to any portion of the Leased Premises, and at the expiration or
termination of this Lease shall deliver up the Leased Premises to Landlord in as
good condition as at date of possession by Tenant, ordinary wear and tear and
damage from casualty or condemnation excepted.
4.05 [Intentionally Deleted]
4.06 Assignment of Lease.
(a) Tenant shall not assign this Lease or sublease the Leased Premises
or any part thereof or mortgage, pledge or hypothecate its leasehold interest or
grant any concession or license within the Leased Premises (any such assignment,
lease, mortgage, pledge, hypothecation, or grant of a concession or license
being hereinafter referred to in this Section 4.06 as a "Transfer") without the
prior express written permission of Landlord, which will not be unreasonably
withheld or delayed; provided, however, that Landlord's right to terminate this
Lease as to any space for which Tenant requests permission to make a Transfer
shall not be
15
limited, qualified or in any way affected by or subject to the agreement that
permission will not be unreasonably withheld, it being understood and agreed
that if Tenant requests Landlord's permission to make a Transfer, Landlord shall
have the right, in its sole discretion, for any reason or for no reason, to
terminate this Lease as to the space so affected as hereinafter provided unless
such transfer is to a subsidiary, affiliate or successor of Tenant pursuant to
Section 4.06(f) whereby Landlord will not have the right prescribed herein to
terminate this Lease as to the space so affected. Any attempt to effect a
Transfer without such permission of Landlord shall be void and of no effect.
Tenant acknowledges that any assignment or Lease is also subject to the prior
written consent of any Landlord's Mortgagee (as defined in Section 4.10).
Without limiting the generality of what may constitute reasonable grounds for
withholding permission, it is stipulated and agreed that during the initial
twelve (12) months of the Lease Term, a refusal to permit a Transfer to another
tenant in the Building, or a refusal to permit a Transfer to a proposed assignee
or sublessee with whom Landlord has been negotiating to lease space in the
Building shall be deemed reasonable. Without limiting the foregoing, Landlord
shall have the right to refuse to permit a Transfer to any Transferee that is
engaged in the business of telemarketing call-out services, sexually oriented
businesses, government agencies not typically found in Class A office buildings,
or any other use that is not compatible with the other tenants in the Building.
In order for Tenant to make a Transfer, Tenant must request in writing
Landlord's permission within at least thirty (30) days in advance of the date on
which Tenant desires to make a Transfer, which request will be accompanied by a
detailed term sheet outlining the terms of the Transfer. Landlord and Landlord's
Mortgagees shall then have a period of fifteen (15) calendar days following
receipt of such notice within which to notify Tenant in writing that Landlord
elects (i) to permit Tenant to assign or sublet such space, subject, however, to
the subsequent written approval of the proposed assignee or sublessee by
Landlord, or (ii) to refuse consent (only for those reasons prescribed herein)
to Tenant's requested Transfer and to continue this Lease in full force and
effect as to the entire Leased Premises. If Landlord shall fail to notify Tenant
in writing of such election within said fifteen (15) day period, Landlord shall
be deemed to have elected option (ii) above. If Landlord elects to exercise
option (ii) above, Tenant agrees to provide at its expense, direct access from
any sublet space or concession area to a public corridor of the Building. The
prohibition against a Transfer contained herein shall be construed to include a
prohibition against any Transfer by operation of law.
(b) Notwithstanding that the prior express written permission of Landlord
to a Transfer may have been obtained under the provisions of Section 4.06(a),
the following shall apply:
(1) Tenant shall (i) in the event of an assignment, cause the
assignee to expressly assume in writing and to agree to perform all of the
covenants, duties and obligations of Tenant hereunder, and such assignee
shall be jointly and severally liable therefor along with Tenant; (ii)
cause such assignee or sublessee to grant Landlord an express first and
prior contract lien and security interest in the same manner as the lien
granted by Tenant to Landlord under Section 5.03 hereof; (iii) subordinate
to Landlord's statutory lien and the aforesaid contract lien and security
interest any liens or other rights which Tenant may claim with respect to
any fixtures, equipment, goods, merchandise or other property owned by or
leased to the proposed assignee or sublessee or other party intending to
occupy the Leased Premises; and (iv) agree with Landlord that in the event
16
that the rent or other consideration due and payable by a sublessee or
assignee under any such permitted Lease or assignment exceeds the Rent
for the portion of the Leased Premises so transferred, then Tenant
shall pay Landlord as additional rental hereunder fifty percent (50%)
of such excess rental and other consideration immediately upon receipt
thereof by Tenant from such transferee.
(2) A signed counterpart of all instruments relative to a
Transfer (executed by all parties to such transaction with the
exception of Landlord) shall be submitted by Tenant to Landlord prior
to or contemporaneously with the request for Landlord's written
consent thereto; and, Tenant shall reimburse Landlord for all
reasonable attorney's fees incurred in connection with Landlord's
review and approval of such instruments;
(3) No usage of the Lease Premises different from the usage
herein provided to be made by Tenant shall be permitted without the
prior written consent of the Landlord, and all of the terms and
provisions of this Lease shall continue to apply after a Transfer; and
(4) In the event Landlord consents to a Transfer, Tenant will
nevertheless remain directly and primarily liable for the performance
of all the covenants, duties and obligations of Tenant hereunder
(including, without limitation, the obligation to pay all Rent herein
provided to be paid), and Landlord shall be permitted to enforce the
provisions of this Lease against the undersigned Tenant or any
transferee, or both, without demand upon or proceeding in any way
against any other persons. Notwithstanding the foregoing, in the event
Tenant assigns the Lease to a third party which is reasonably
acceptable to Landlord and which is publicly traded, has a market
capitalization of at least $10 billion and whose price/earnings ratio
as of the business day immediately preceding the date of such
assignment is not greater than the average price/earnings ratio for
the stocks comprising the Standard & Poors 500 index as of the same
date, then, in such case, Tenant shall be relieved of all liability as
Tenant hereunder following the date of such assignment.
(c) If Tenant is a corporation then any transfer of this Lease by merger,
consolidation or dissolution or any change in ownership or power to vote a
majority of the voting stock in Tenant outstanding at the time of execution of
this Lease shall constitute a Transfer for the purposes of this Lease; provided,
however, that acquisition of all stock of a corporate tenant by any corporation,
the stock of which is registered pursuant to the Securities Act of 1933 or the
merger of a corporate tenant into such a corporation, the stock of which is so
registered, shall not be deemed to be a violation of Section 4.06(a). For
purposes of this Section 4.06(c), the term "voting stock" shall refer to shares
of stock regularly entitled to vote for the election of directors of the
corporation involved.
(d) If Tenant is a general partnership having one or more corporations as
partners or if Tenant is a limited partnership having one or more corporations
as general partners, the provisions of Section 4.06(c) shall apply to each of
such corporations as if such corporations alone had been the Tenant hereunder.
If Tenant is a general or limited partnership, joint venture,
17
or other form of association, the transfer of a majority of the ownership
interests therein shall constitute a Transfer for the purposes of this Lease.
(e) The consent by Landlord to a particular Transfer shall not be deemed a
consent to any other subsequent Transfer. If this Lease, the Leased Premises or
the Tenant's leasehold interest therein, or if any portion of the foregoing is
transferred, or if the Leased Premises are occupied in whole or in part by
anyone other than Tenant without the prior consent of Landlord as provided
herein, Landlord may nevertheless collect rent from the transferee or other
occupant and apply the net amount collected to the Rent payable hereunder, but
no such transaction or collection of rent or application thereof by Landlord
shall be deemed a waiver of the provisions hereof or a release of Tenant from
the further performance by Tenant of its covenants, duties and obligations
hereunder.
(f) Notwithstanding anything to the contrary, no approval or consent shall
be required for a Transfer to a "subsidiary", "affiliate" or a "successor" of
Tenant.
For purposes of this Section 4.06, a "subsidiary", "affiliate" or a "successor"
of Tenant shall mean the following:
(1) An "affiliate" shall mean any corporation which, directly or
indirectly, controls or is controlled by or is under common control with
Tenant. For this purpose, "control" shall mean the possession, directly or
indirectly, or the power to direct or cause a direction of the management
and policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
(2) A "subsidiary" shall mean any corporation not less than fifty
percent (50%) of whose outstanding stock shall, at the time, be owned
directly or indirectly by Tenant.
(3) A "successor" of Tenant shall mean; (i) a corporation with which
Tenant, its corporate successors or assigns, is merged or consolidated in
accordance with applicable statutory provisions for merger or consolidation
of a corporation, or (ii) a corporation acquiring the lease hereby demised
in conjunction with such corporation's acquisitions of all or substantially
all of the assets of Tenant, its corporate successors or assigns, or (iii)
any corporate successor to a successor corporation becoming such by either
of the methods described in (i) or (ii). Notwithstanding anything to the
contrary contained herein, in the event of a Transfer to an affiliate,
subsidiary or successor (as defined herein) all excess rental or other
consideration shall be for the sole benefit of Tenant. Landlord's right to
terminate this Lease as to the space so affected as described in 4.06(a)(i)
shall be null and void.
4.07 Alterations, Additions, Improvements. Tenant will make no alteration,
change, improvement, repair, replacement or addition to the Leased Premises
without the prior written consent of Landlord, which consent will not be
unreasonably withheld or delayed. Tenant may remove its trade fixtures, office
supplies and movable office furniture and equipment not attached to the Building
provided (i) such removal is made prior to the termination or expiration
18
of the Term; (ii) Tenant is not then in default in the timely performance of any
obligation or covenant under this Lease; and (iii) Tenant promptly repairs all
damage caused by such removal. All other property and the Leased Premises and
any alteration or addition to the Leased Premises and any other articles
attached or affixed to the floor, wall, or ceiling of the Leased Premises is a
part of the property of Landlord and shall be surrendered with the Leased
Premises as part thereof at the termination or expiration of this Lease, without
payment or compensation therefor. If, however, Landlord so requests in writing,
Tenant will, prior to termination or expiration of this Lease, remove any and
all alterations, additions, fixtures, equipment and property placed or installed
by Tenant or installed by Landlord at Tenant's expense in the Leased Premises
and will repair any damage caused by such removal, so long as Landlord
stipulates in writing the removal or such items to be removed contemporaneously
with Landlord's approval of any requested alterations, additions or improvements
by Tenant.
4.08 Compliance with Laws and Usage; Building Rules and Regulations; Liens.
Tenant, at its cost, shall comply with all federal, state, municipal and other
laws and ordinances applicable to the Leased Premises and the business conducted
therein by Tenant (including, but not limited to, all statutes, rules and
regulations covering the use, storage, transportation and disposal of hazardous
substances, including petroleum and other petrochemicals), and with the Building
Rules and Regulations attached hereto as Exhibit "I" hereto as such rules and
regulations are modified and supplemented by Landlord from time to time, and
such other rules and regulations as may be adopted by Landlord from time to
time, which when sent by Landlord to Tenant in writing shall be thereafter
carried out and observed by Tenant (so long as such rules and regulations, and
any changes or modifications thereto, are uniformly and consistently applied to
all Tenants of the Building); will not engage in any activity which would cause
landlord's fire and extended coverage insurance to be canceled or the rate
thereof to be increased (or, at Landlord's option, will pay any such increase);
and will not commit any act which is a nuisance or annoyance to Landlord or to
other tenants in the Building or which might, in the reasonable judgment of
Landlord, appreciably damage Landlord's goodwill or reputation, or tend to
injure or depreciate the value of the Complex. Tenant has no authority to
encumber the Complex or Leased Premises with any lien, and Tenant shall not
suffer or permit any such lien to exist. Should any such lien hereafter be
filed, Tenant shall promptly discharge the same at its sole cost.
4.09 Access by Landlord. Tenant shall permit Landlord and its agents or
representatives to enter into and upon any part of the Leased Premises at all
reasonable hours with reasonable prior advance written notice (emergencies
excepted) to inspect same; to clean (after Normal Building Operating Hours); to
make repairs, alterations or additions thereto, as Landlord may deem necessary
or desirable; to show the Leased Premises to prospective purchasers or tenants
(only during the last 9 months of the Term); or for any other purpose deemed
reasonable by Landlord; and Tenant shall not be entitled to any abatement or
reduction or Rent by reason thereof. In connection with the foregoing, Landlord
will minimize interference with Tenant's business to the extent reasonably
possible.
4.10 Landlord's Mortgagee. Contemporaneously with the execution hereof, Tenant
and American National Insurance Company, the current mortgagee under the
mortgage constituting the current and only mortgage lien on the Complex or the
Leased Premises ("Landlord's Mortgagee") have executed a Subordination,
Non-Disturbance and Attornment Agreement in the
19
form attached hereto and made a part hereof as Exhibit "H." Tenant agrees with
Landlord and with the mortgagee of any mortgage or the beneficiary of any deed
of trust hereafter placed against and constituting a lien on the Complex or the
Leased Premises ("Landlord's Future Mortgagee") that any Landlord's Future
Mortgagee shall have the right at any time to elect, by notice in writing given
to Tenant, to make this Lease superior to the lien of such mortgage or deed of
trust and upon the giving of such notice to Tenant, this Lease shall be deemed
prior and superior to the mortgage or deed of trust in respect to which such
notice is given; and at Landlord's Mortgagee's request Tenant shall execute a
recordable instrument establishing this Lease as superior to such lien; or
Landlord's Future Mortgagee may, by like notice, make this Lease subordinate to
such mortgage or deed of trust. If Landlord's Future Mortgagee shall elect to
make this Lease subordinate to such mortgage or deed of trust, Tenant agrees to
attorn to such Landlord's Future Mortgagee so long as such Landlord's Future
Mortgagee also agrees to not disturb Tenant's possession under this Lease in the
event such Landlord Future Mortgagee becomes the owner of the Building through
foreclosure or otherwise. In confirmation of such subordination, attornment and
non-disturbance agreement, Tenant shall execute promptly any reasonable
Subordination, Attornment and Non-Disturbance Agreement that Landlord or such
Landlord's Future Mortgagee may request. Without limiting the foregoing, Tenant
agrees to enter into a Subordination, Non-Disturbance and Attornment Agreement
substantially in the form attached as Exhibit "H." Tenant further agrees that
any Landlord's Mortgagee or Landlord's Future Mortgagee may demand the payment
of Rent and performance of this Lease at any time. Tenant hereby constitutes
Landlord as Tenant's attorney-in-fact to execute such Subordination, Attornment
and Non-Disturbance Agreement for and on behalf of Tenant should Tenant fail to
execute such agreement within fifteen (15) days after written request to do so.
In the event of the enforcement by Landlord's Mortgagee or Landlord's Future
Mortgagee of the remedies provided for by law or by such mortgage or deed of
trust, Tenant will, upon request of any person or party succeeding to the
interest of Landlord as a result of such enforcement, automatically become the
Tenant of such successor in interest without change in terms or other provisions
of such lease provided, however, that such successor in interest shall not be
(i) bound by any payment of Rent for more than one month in advance except
payments in the nature of security for the performance by Tenant of its
obligations under this Lease; (ii) subject to any offset, defense or damages
arising out of a default (except as provided for in Section 3.01(c) and Section
5.02 of this Lease Agreement) or any obligations any preceding Landlord; or
(iii) bound by any amendment or modification of this Lease made without the
written consent of such successor in interest, provided Tenant has been given
prior notice of the identity of such successor in interest. Upon request by such
successor in interest, Tenant shall execute and deliver reasonable instruments
confirming the attornment provided for herein.
4.11 Estoppel Certificate. At Landlord's request from time to time, Tenant will
within ten (10) days, without further consideration, execute an estoppel
certificate addressed to Landlord's Mortgagee or to such party as Landlord may
designate certifying to such notice provisions and other matters as Landlord's
Mortgagee or as the other party designated by Landlord may reasonably request.
At Landlord's request from time to time, Tenant will within ten (10) days
execute, without further consideration, a certificate stating the commencement
and expiration dates of the Term, the rental then payable hereunder, that (to
its actual knowledge) there are no defaults on the part of Landlord or claims
against Landlord hereunder (or if there are any, stating
20
the same with particularity), and such other information pertaining to this
Lease as Landlord may reasonably request, addressed to such party as Landlord
may designate.
Article 5
Mutual Covenants
5.01 Condemnation, Loss or Damage. If the Leased Premises, Complex, or any
part thereof shall be taken or condemned for any public purpose (or conveyed in
lieu or in settlement thereof) to such an extent as to render the remainder of
the Building or Leased Premises, in the opinion of an independent architect
selected by Landlord, not reasonably suitable for occupancy, this Lease shall,
at the option of Landlord, forthwith cease and terminate (and if the Leased
Premises, including access thereto, shall be taken or condemned, or conveyed in
lieu or in settlement thereof, to such an extent as to render the remainder of
the Leased Premises, in Tenant's opinion, unsuitable for its occupancy, this
Lease shall, at the option of Tenant, forthwith cease and terminate), and all
proceeds from any taking or condemnation of the Building and the Leased Premises
shall belong to and be paid to Landlord; provided, however, any award for
Tenant's personal property and improvements in excess of Building Standard shall
be paid to Tenant. If this Lease is not so terminated, Landlord shall repair any
damage resulting from such taking, to the extent and in the manner provided in
Section 5.02, and Base Rental and Additional Rent hereunder shall be abated to
the extent the Leased Premises are rendered untenantable during the period of
repair and thereafter be adjusted on an equitable basis considering the areas of
the Leased Premises taken and remaining. Nothing contained herein shall preclude
the Tenant from seeking a separate damage award from the condemning authority.
5.02 Fire or Other Casualty; Certain Repairs.
(a) In the event of a fire or other casualty in the Leased Premises, to
the extent that the Building or Leased Premises shall be partially destroyed by
fire or other casualty so as to render the Leased Premises untenantable in whole
or in part in the opinion of Landlord and Tenant, or if, as a result of such
fire or other casualty, Tenant is denied access to the Leased Premises, the Base
Rental and Additional Rent provided for herein shall xxxxx as to the portion of
the Leased Premises rendered untenantable until such time as the Leased Premises
are made tenantable as determined by Landlord and Landlord agrees to commence
and prosecute such repair work promptly and with reasonable diligence, or if
such destruction results in the Leased Premises being untenantable in
substantial part for a period reasonably estimated by Landlord to be six (6)
months or longer after the date of the destruction, or in the event of total or
substantial damage or destruction of the Building where Landlord decides not to
rebuild, then all Rent owed up to the date of such damage or destruction shall
be paid by Tenant and this Lease shall terminate upon notice thereof to Tenant.
Landlord will give Tenant written notice of its decisions, estimates or
elections under this Section 5.02 within sixty (60) days after any such damage
or destruction. If Landlord elects to rebuild following the damage or
destruction of the Leased Premises in accordance with this Section 5.02, then if
such repairs are not completed within nine (9) months after the date of such
damage or destruction, Tenant shall have the right to cancel this Lease
Agreement upon payment to Landlord of all Rent due and owing through the date of
such damage or destruction.
21
(b) Should Landlord elect to effect any repairs under Sections 5.01 or
5.02(a), Landlord shall only be obligated to restore or rebuild the Leased
Premises to a Building Standard condition, and then only to the extent that
insurance proceeds are actually available to Landlord therefor, plus (i) an
amount equal to Landlord's deductible under each applicable insurance policy,
and (ii) the amount that would have been available under an insurance policy
that should have been applicable but proceeds from which are not available due
to Landlord's failure to maintain the policy as and to the extent required under
this Lease. In the event the Base Rental and Additional Rent or any portion of
the Base Rental and Additional Rent is abated under Sections 5.01 or 5.02(a),
the expiration date of the Term specified in Section 1.02 shall be extended for
the period of such abatement. If insurance proceeds are insufficient to rebuild
and Landlord elects not to rebuild with other funds, this Lease will terminate
effective the date of destruction.
5.03 Holding Over. If Tenant should remain in possession of the Leased
Premises after the termination or expiration of the Term without written consent
of Landlord, then Tenant shall be deemed to be occupying the Leased Premises as
a tenant-at-sufferance, subject to all the covenants and obligations of this
Lease, except that the daily Rent shall be one hundred fifty percent (150%) the
Base Rental in effect immediately prior to such expiration or termination, but
such holding over shall not extend the Term.
5.04 Assignment by Landlord. Landlord shall have the right to transfer and
assign, in whole or in part, all its rights and obligations hereunder and
property referred to herein, and upon any such transfer of assignment and
assumption of Landlord's obligations by such assignee, no further liability or
obligation shall thereafter accrue against Landlord hereunder.
5.05 Control of Common Areas and Parking Facilities by Landlord. All public
lobbies, foyers, corridors and restrooms, all automobile parking areas including
(without limitation), the Garage, driveways, entrances and exits thereto, and
other facilities furnished by Landlord, including all parking areas, truck way
or ways, loading areas, pedestrian walkways, ramps, landscaped areas, stairways
and other areas and improvements provided by Landlord for the general use, in
common, of tenants, their officers, agents, employees, invitees, licensees,
visitors and customers shall be at all times subject to the exclusive control
and management of Landlord; Landlord shall have the right, in its reasonable
discretion and at any time, to change or modify any of the facilities and areas
mentioned in this Section so long as such change or modification does not unduly
interfere or disrupt Tenant's use of this Leased Premises under Section 1.03 and
Section 5.18 of this Lease Agreement; and Landlord shall have the right from
time to time to establish, modify and enforce reasonable rules and regulations
(herein called the "Building Rules and Regulations") with respect to all
facilities and areas mentioned in this Section; the initial Building Rules and
Regulations are set out in Exhibit "I" hereto and are of equal dignity herewith
(which shall be consistently and uniformly applied to all tenants and visitors
of the Building).
5.06 Default by Tenant.
(a) Each of the following occurrences relative to Tenant shall
constitute an "Event of Default:"
22
(1) Failure or refusal of Tenant to make the timely payment of any
Rent payable under this Lease within five (5) business days following
written notice from Landlord, that the same is due and payable, but not yet
received by Landlord;
(2) The filing or execution or occurrence of a petition in bankruptcy
or other insolvency proceeding by or against Tenant or petition or answer
seeking relief under any provision of the Bankruptcy Act; or as assignment
for the benefit of creditors or composition; or a petition or other
proceeding by or against the Tenant for the appointment of a trustee,
receiver or liquidator of Tenant or any of Tenant's property; or a
proceeding by any governmental authority for the dissolution or liquidation
of Tenant or any guarantor of Tenant;
(3) Failure by Tenant in the performance or compliance with any of the
agreements, terms, covenants or conditions provided in this Lease, other
than those referred to in (1) and (2) above, for a period of thirty (30)
days (or longer so long as Tenant is diligently pursuing any compliance or
cure) after notice from Landlord to Tenant specifying the items in default.
(b) This Lease and the Term and estate hereby made are subject to the
limitation that if and whenever any Event of Default shall occur, Landlord may,
at its option and without further written notice to Tenant, in addition to all
other remedies given hereunder or by law or equity, do any one or more of the
following:
(1) Terminate this Lease, in which event Tenant shall immediately
surrender possession of the Leased Premises to Landlord;
(2) Enter upon and take possession of the Leased Premises and
expel or remove Tenant and any other occupant and all property therefrom
with or without having terminated the Lease; and
(3) Alter locks and other security devices at the Leased Premises so
that Tenant will not have access to the Leased Premises (other than to
retrieve files, chattels and personal belongings, which Landlord shall
provide access to the Leased Premises for such purposes during the normal
business hours of the Building). Landlord may take these actions without
incurring any liability and without relinquishing Landlord's right to Rent
or any other right given to Landlord hereunder or by operation of law;
Tenant hereby waiving any right to claim damage for such re-entry expulsion.
(c) Once all applicable written notices are given, cure periods have elapsed
and an Event of Default has occurred, any right of Tenant to receive notice of
Landlord's intent to exercise any of its remedies is hereby waived.
(d) Exercise by Landlord of any one or more remedies shall not constitute
an acceptance of surrender of the Leased Premises by Tenant, it being understood
that such surrender can be effected only by the written agreement of the
Landlord and Tenant, with the prior written consent of any Landlord's Mortgagee
(as defined in Section 4.10).
23
(e) If Landlord terminates this Lease by reason of an Event of
Default, Tenant shall pay to Landlord the sum of all Rent and other indebtedness
accrued hereunder to the date of such termination, the amounts stated in Section
5.06(f) hereof, plus, as liquidated damages, an amount equal to the then present
value of the Rent and all other indebtedness as would otherwise have been
required to be paid by Tenant to Landlord during the period following the
termination of the Term measured from the date of such termination to the date
of expiration stated in section 1.02, less the then present fair market rental
value of the Leased Premises for such period as reasonably determined by
arbitration proceedings.
(f) If Landlord repossesses the Leased Premises without terminating
the Lease, then Tenant shall pay to Landlord all Rent and other indebtedness
accrued to the date of such repossession, plus Rent and other sums required to
be paid by Tenant during the remainder of the Term, diminished by any net sums
thereafter received by Landlord through reletting the Leased Premises during
said period (after deducting expenses incurred by Landlord as provided below);
reentry by Landlord will not affect the obligations of Tenant for the unexpired
Term. Tenant shall not be entitled to any excess of any Rent obtained by
reletting over the Rent herein reserved. Actions to collect amounts due by
Tenant may be brought on one or more occasions, without the necessity of
Landlord's waiting until expiration of the Term.
(g) In case of an Event of Default, to the extent the same were not
paid or deducted, as appropriate, under Section 5.06(e) or (f), Tenant shall
also pay to Landlord: (i) broker's fees incurred by Landlord in connection with
reletting the whole or any part of the Leased Premises; (ii) the cost of
removing and storing Tenant's or any other occupant's property; (iii) and the
cost of repairing, altering, remodeling or otherwise putting the Leased Premises
into condition acceptable to a new tenant or tenants; and (iv) all reasonable
expenses incurred by Landlord in enforcing Landlord's remedies, including
reasonable attorney's fees and court costs. Notwithstanding the above, Tenant's
obligation pursuant to this Section (g) shall be limited to the total of items
(i), (ii), (iii) and (iv) multiplied by the percentage obtained by dividing the
remainder of Tenant's Lease Term by the substitute tenant(s) lease term.
(h) Upon termination or repossession of the Leased Premises for an
Event of Default, Landlord shall use reasonable efforts to relet the Leased
Premises, or any portion thereof, and to collect rental after reletting. In the
event of reletting, Landlord may relet the whole or any portion of the Leased
Premises for any period, to any tenant, and for any use and purpose. In no event
shall Landlord be required to extend any preference to the reletting of the
Leased Premises or any portion thereof over other vacant space in the Building.
Notwithstanding the above, Landlord shall not discriminate against the Leased
Premises over the leasing of other vacant space in the Building.
(i) Any and all property which may be removed from the Leased Premises
by Landlord pursuant to the authority of this Lease or of law, to which Tenant
is or may be entitled, may be handled, removed and stored, as the case may be,
by or at the direction of Landlord at the risk, cost and expense of Tenant, and
Landlord shall use reasonable efforts to safeguard such property. Tenant shall
pay to Landlord, upon demand, any and all expenses incurred in such removal and
all storage charges against such property so long as the same shall be in
Landlord's possession or under Landlord's control. Any such property of Tenant
not retaken by Tenant
24
from storage within thirty (30) days after removal from the Leased Premises
shall, at Landlord's option, be deemed conveyed by Tenant to Landlord under this
Lease as by a xxxx of sale without further payment or credit by Landlord to
Tenant.
(j) If Tenant should fail to make any payment or perform any obligation
hereunder, and such failure continues beyond any applicable cure period allowed
hereunder, Landlord, without obligation to do so and without thereby waiving
such failure or default, may make such payment and/or perform such obligation
for the account of Tenant (and enter the Lease Premises for such purpose), and
Tenant shall pay upon demand all costs, expenses and disbursements (including
reasonable attorneys' fees) incurred by Landlord in taking such remedial action,
plus interest thereon at the highest rate of interest permitted by law.
(k) In addition to the foregoing, if Tenant abandons or fails to occupy
the Leased Premises (without the payment of rent), or any significant portion
thereof, Landlord may, at its election, terminate this Lease.
5.07 Non-Waiver. Neither acceptance of rent by Landlord nor failure by a
party to complain of any action, non-action or default of the other shall
constitute a waiver of any of the first party's rights hereunder. Waiver by
either party of any right for any default of the other shall not constitute a
waiver of any right for either a subsequent default of the same obligation or
any other default. Notwithstanding anything contained herein to the contrary,
should Tenant default under this Lease and subsequently cure such default to
Landlord's satisfaction, Landlord shall acknowledge such cure in writing, and
Landlord agrees no further action shall be taken against Tenant as a consequence
thereof.
5.08 Independent Obligations. The obligation of Tenant to pay all Rent and
other sums hereunder provided to be paid by Tenant and the obligation of Tenant
to perform Tenant's other covenants and duties hereunder constitute independent
unconditional obligations to be performed at all times provided for hereunder,
save and except only when an abatement thereof or reduction therein is
hereinabove expressly provided for and not otherwise. Tenant waives and
relinquishes all rights which Tenant might have to claim any nature of lien
against or withhold, or deduct from or offset against any Rent and other sums
provided hereunder to be paid Landlord by Tenant.
5.09 Time of Essence. In all instances where any act is required at a
particular indicated time or within an indicated period, it is understood and
stipulated that time is of the essence.
5.10 Remedies Cumulative. Either party may restrain or enjoin any breach or
threatened breach of any covenant, duty or obligation of the other herein
contained without the necessity of proving the inadequacy of any legal remedy or
irreparable harm. The remedies of the parties hereunder shall be deemed
cumulative and no remedy of either party, whether exercised by the party or not,
shall be deemed to be in exclusion of any other.
25
5.11 Insurance, Liability, Indemnity, Subrogation and Waiver.
(a) Tenant shall maintain at its sole expense fire and extended coverage
insurance with vandalism, malicious mischief and theft endorsements and with the
additional of the all other peril coverage (formerly known as all risk) and a
sprinkler leakage endorsement and flood coverage (where applicable), on all of
its personal property, including removable trade fixtures, located in the Leased
Premises and on non-Building Standard leasehold improvements and all additions
and improvements made by Tenant in excess of Building Standard leasehold
improvements.
(b) Tenant shall, at its sole expense, maintain in effect at all times
commercial general liability insurance, including contractual liability
coverage, naming Landlord as an additional insured, issued by and binding upon
some solvent insurance company authorized to do business in Texas and
satisfactory to Landlord and with an A.M. Best rating of at least A-VI, with
bodily injury and property damage limits of no less than $1,000,000.00 combined
single limit for each occurrence and $3,000,000.00 in the aggregate for all
liability including products and completed operations coverage. Tenant shall
provide to Landlord (i) copies of such insurance policies prior to the
Commencement Date of the Term, (ii) upon written request from Landlord,
certificates of renewal at least thirty (30) days prior to the expiration date
of any such policies, and (iii) copies of new policies at least thirty (30) days
prior to terminating, or changing insurance companies for, any such policies.
(c) Tenant agrees to release, indemnify, defend and hold harmless
Landlord and Landlord's partners, agents, directors, officers, employees,
invitees and contractors, from and against any and all liabilities, claims,
demands, expenses, fees, fines, penalties, suits, proceedings, actions and
causes of action of any and every kind and nature (including, but not limited
to, legal and investigative costs and all other reasonable costs, expenses and
liabilities from the first notice that any claim or demand is to be made or may
be made) arising or growing out of or in any way connected with Tenant's use,
occupancy, management or control of the Leased Premises, Tenant's use of the
Complex, Tenant's operations or activities in the Building or the Complex, any
breach of this Lease by Tenant or the negligence or intentional misconduct of
Tenant, or its agents, directors, officers or employees. Landlord agrees to
release, indemnify, defend and hold harmless Tenant, and Tenant's partners,
agents, directors, officers, employees, invitees and contractors, from and
against any and all liabilities, claims, demands, expenses, fines, penalties,
suits, proceedings, actions, and causes of action of any kind and every kind and
nature (including, but not limited to, legal and investigative costs and all
other reasonable costs, expenses and liabilities from the first notice that any
claim or demand is to be made or may be made) arising or growing out of or in
any way connected with Landlord's use, occupancy and management or control of
the Leased Premises, Landlord's use of the Complex, Landlord's operations or
activities in the Building or the Complex, any breach of this Lease by Landlord,
or the negligence or intentional misconduct of Landlord, or their respective
agents, directors, officers or employees. This obligation to indemnify shall not
be limited in any way by any limitation of the amount or type of damages,
compensation or benefit payable under applicable worker's compensation acts,
disability benefit acts or other employee benefit acts. The provisions of this
paragraph shall survive the termination of the Lease with respect to any claim
arising before such termination.
26
(d) ANYTHING HEREIN TO THE CONTRARY NOTWITHSTANDING, TENANT AND
LANDLORD HEREBY RELEASE AND WAIVE ALL CLAIMS, RIGHTS OF RECOVERY AND CAUSES OF
ACTION THAT EITHER PARTY OR ANY PARTY CLAIMING BY, THROUGH OR UNDER EITHER PARTY
BY SUBROGATION OR OTHERWISE MAY NOW OR HEREAFTER HAVE AGAINST EACH OTHER OR
THEIR RESPECTIVE PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS FOR ANY LOSS
OR DAMAGE THAT MAY OCCUR TO THE COMPLEX, LEASED PREMISES, TENANT IMPROVEMENTS OR
ANY OF THE CONTENTS OF ANY OF THE FOREGOING BY REASON OF FIRE OR OTHER CASUALTY,
OR ANY OTHER CAUSE INCLUDING GROSS NEGLIGENCE, WILLFUL MISCONDUCT, OR NEGLIGENCE
OF LANDLORD OR TENANT, LANDLORD'S OR TENANT'S PARTNERS, DIRECTORS, OFFICERS,
EMPLOYEES, OR AGENTS (THE "INSURED CLAIMS"), TO THE EXTENT SUCH INSURED CLAIMS
ARE COVERED BY INSURANCE POLICES REQUIRED TO BE MAINTAINED UNDER THE TERMS OF
THIS LEASE.
(e) Tenant and Landlord agree that each shall not be responsible or
liable to the other or to their agents, customers or invitees, for bodily injury
(fatal or non-fatal) or property damage occasioned by the acts or omissions of
any other tenant or such tenant's employees, agents, contractors, customers or
invitees within the Complex, or 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 beyond the control of either party, or for
any inconvenience or loss to either party (other than as may arise as a result
of breach of covenant under this Lease) in connection with any of the repair,
maintenance, damage, destruction, restoration or replacement referred to in this
Lease, provided the party causing such inconvenience or loss uses reasonable
efforts to avoid or minimize the same.
(f) Landlord Insurance. Landlord covenants and agrees that it maintain
or cause to be maintained in full force and effect, at all times, "all risk"
fire and extended coverage insurance covering the Building and the Building
Standard leasehold improvements in amounts equal to ninety-five percent (95%) of
the insurable value thereof (actual replacement value without deduction for
physical depreciation) and rental abatement insurance in an amount sufficient to
cover rentals from the Building (except non-continuing charges). Landlord agrees
to maintain throughout the Term comprehensive general public liability and broad
form property damage insurance with a Best rating of at least A-VI, in such
amounts as shall be appropriate for a first-class office building project
similar to the Building, but in any event with limits of not less than One
Million and No/100 Dollars ($1,000,000.00) for injury to or death of any one
person, Five Million and No/100 Dollars ($5,000,000.00) for injury to or death
of any number of persons in any one occurrence, and One Million and No/100
Dollars ($1,000,000.00) for damage to or destruction of property for any one
occurrence. Landlord will maintain employer's liability insurance with a minimum
limit of One Million and No/100 Dollars ($1,000,000.00) for bodily injury.
5.12 Venue; Governing Law. This Lease shall be governed by the laws of the
State of Texas. All monetary and other obligations of Landlord and Tenant are
performable exclusively in Houston, Xxxxxx County, Texas.
27
5.13 Notice. Any notice which may or shall be given under the terms of this
Lease shall be in writing and shall be either delivered by hand (with receipt of
notice verified by signature) or sent by United States Registered or Certified
Mail, postage prepaid, if for Landlord to c/o Fidinam Capital, 00000 Xxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, Attn: Xxxxxxx X. Xxxx; if for Tenant
to Attn: Xxxxx Xxxxxx, Vice President - Human Resources at the Leased Premises.
Such addresses may be changed from time to time by either party by giving notice
as provided above. Notice shall be deemed given when delivered (if delivered by
hand) or when postmarked (if sent by mail).
5.14 Entire Agreement, Binding Effect, Severability. This Lease and any written
addenda and all exhibits hereto (which are expressly incorporated herein by this
reference) shall constitute the entire agreement between Landlord and Tenant; no
prior written or prior or contemporaneous oral promises, inducements,
representations or agreements not embodied herein shall be binding or have any
force or effect. Landlord's agents do not and will not have authority to make
any promises, agreements, or representations not expressly contained in this
Lease, and Tenant will make no claim on account of any representation
whatsoever, whether made by a renting agent, broker, officer or other
representative of Landlord, or which may be contained in any circular,
prospectus or advertising relating to the Leased Premises, the Building, the
Complex or otherwise, unless the same is specifically set forth in the Lease.
This Lease shall not be amended, changed or extended except by written
instrument signed by both parties hereto. 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 restrictions on assignment and subletting applicable to Tenant hereunder. If
any provision of this Lease or the application thereof to any person or
circumstance shall at any time or to any extent be held invalid or
unenforceable, and the basis of the bargain between the parties hereto is not
destroyed or rendered ineffective thereby, the remainder of the Lease or the
application of such provision to persons or circumstances other than those as to
which it is held invalid or unenforceable shall not be affected thereby.
5.15 Right of Reentry. Upon the expiration or termination of the Term for
whatever cause, Landlord shall have the right to immediately reenter and
reassume possession of the Leased Premises and remove Tenant's property
therefrom, and Tenant expressly acknowledges such right. In connection with the
exercise of Landlord's remedies hereunder, Landlord agrees to store Tenant's
property, either on the Leased Premises or elsewhere, that Tenant has left in
the Leased Premises following the expiration or termination of the term of this
Lease, for thirty (30) days after the expiration or termination of the term of
this Lease. Landlord shall use reasonable efforts to safeguard Tenant's property
during such period, but shall have no other obligation to ensure that it is
maintained or otherwise cared for during such thirty (30) day period. In the
event Tenant fails to remove such property at the expiration of thirty (30) day
period, Landlord shall be free to dispose of the property by whatever means and
in whatever manner it deems appropriate.
5.16 Number and Gender; Captions; References. Pronouns, where used herein, of
whatever gender, shall include natural persons, corporations, and associations
of every kind and character, and the singular shall include the plural and vice
versa where and as often as may be appropriate. Article and section headings
under this Lease are for convenience of reference and
28
shall not affect the construction or interpretation of this Lease. Whenever the
terms "hereof," "hereby," "herein," or words of similar import are used in this
Lease, they shall be construed as referring to this Lease in its entirety rather
than to a particular section or provision, unless the context specifically
indicates to the contrary. Any reference to a particular "Article" or "Section"
shall be construed as referring to the indicated article or section of this
Lease.
5.17 Delinquent Payments; Handling Charge. Any payments required of Tenant
hereunder, whether as Rent or otherwise, shall bear interest from the time due
(subject to the grace periods as provided in Section 5.06 of this Lease
Agreement) until paid at the maximum rate of interest permitted by law.
Furthermore, should Tenant fail to timely pay any installment of Rent hereunder,
Landlord shall have the option to charge Tenant, as additional Rent hereunder, a
fee equal to five percent (5%) of the delinquent installment to reimburse
Landlord for its cost and inconvenience incurred in dealing with Tenant's
delinquent payment. In no event, however, shall the charges imposed under this
Section 5.20 and elsewhere in this Lease, to the extent the same are considered
to be interest under applicable law, exceed the maximum rate of interest
allowable under applicable law.
5.18 Quiet Enjoyment. Tenant, on paying all sums herein called for and
performing and observing all of its covenants and agreements hereunder (subject
to the compliance or cure periods as provided in Section 5.06 of this Lease
Agreement), shall and may peaceably and quietly have, hold, occupy, use, and
enjoy the Leased Premises during the Term subject to the provisions of this
Lease and applicable governmental laws, rules, and regulations; and Landlord
agrees to warrant and forever defend Tenant's right to such occupancy against
the claims of any and all persons whomsoever lawfully claiming the same or any
part thereof, by, through, or under Landlord, but not otherwise, subject only to
the provisions of this Lease and all applicable governmental laws, rules, and
regulations.
5.19 Signs. Unless otherwise specifically permitted pursuant to the Lease, no
signs, symbols or identifying marks shall be placed in or upon the Complex, in
the halls, elevators, staircases, entrances, or exterior of the Building or
Garage, or upon the doors or walls of the Leased Premises without prior written
approval of Landlord. Landlord agrees to provide and install, at Tenant's cost,
all letters or numerals on doors in the Leased Premises. All such letters and
numerals shall be in the Building Standard graphics, and no others shall be used
or permitted on the Leased Premises without written permission from Landlord.
5.20 Brokerage. Tenant represents and warrants that it has dealt with no
broker, agent or other person in connection with this transaction and that no
broker, agent or other person brought about this transaction, other than Trione
& Xxxxxx, L.L.P., and Tenant agrees to indemnify and hold Landlord harmless from
and against any claims by any other broker, agent or other person claiming a
commission or other form of compensation by virtue of having dealt with Tenant
with regard to this leasing transaction. The provision of this Paragraph, in
addition to all of Tenant's indemnities and covenants expressly set forth in
this Lease, shall survive the termination of this Lease.
5.21 Limitation of Implied Warranty. Landlord's duties and warranties are
limited to those expressly stated in this Lease and shall not include any
implied duties or implied warranty now
29
or in the future. LANDLORD HAS NOT MADE, AND TENANT MAY NOT RELY ON, ANY
REPRESENTATION OR WARRANTIES WITH REGARD TO THE BUILDING, LEASED PREMISES OR
OTHERWISE, EXPRESSED OR IMPLIED, EXCEPT AS STATED IN THIS LEASE. IN PARTICULAR,
LANDLORD HAS NOT AUTHORIZED ANY AGENT OR BROKER TO MAKE A REPRESENTATION OR
WARRANTY INCONSISTENT WITH THE TERMS OF THIS LEASE AND TENANT MAY NOT RELY ON
ANY SUCH INCONSISTENT REPRESENTATION OR WARRANTY.
5.22 Environmental and Land Use Matters. Landlord represents and warrants that,
after diligent inquiry, it has no knowledge of the existence of asbestos in the
Complex, or other Hazardous Materials in, on, under or about the Complex (except
in quantities that do not violate Environmental Laws or constitute a threat to
human health, or that could require remediation were such existence known to
applicable governmental authorities). In the event asbestos or other Hazardous
Materials were used in the construction of the Complex, and, as a consequence,
applicable Environmental Laws require removal or abatement, Landlord will comply
with such Environmental Laws at its sole cost and expense and such cost shall
not be part of the Actual Operating Expenses of the Building under Section
2.02(e). Neither Landlord nor Tenant shall use, store, treat, transport,
manufacture, refine, handle, produce or dispose of hazardous materials on, or
affecting the Leased Premises in any manner that violates federal, state or
local laws, ordinances, rules, regulations or policies governing the use,
storage, treating, transportation, manufacture, refinement, handling, production
or disposal of Hazardous Materials (collectively, "Environmental Laws"). For
purposes of this agreement, "Hazardous Materials" shall mean any flammable
substances, explosives, radioactive materials, hazardous wastes, toxic
substances, pollutants, pollution, or related materials specified in any of the
Environmental Laws. Tenant indemnifies Landlord against, and agrees to hold
Landlord harmless from, any and all loss, cost or expense that Landlord may
incur as a result of violations by Tenant or any of its agents, employees or
invitees, of Environmental Laws in connection with the use of the Leased
Premises which violations occurred in the period in which Tenant leased the
Leased Premises, and such indemnity shall survive the term of this agreement and
any and all renewal terms. Landlord indemnifies Tenant against, and agrees to
hold Tenant harmless from, any and all loss, cost or expense that Tenant may
incur as a result of violations by Landlord, or any of its agents, employees, or
invitees, of Environmental Laws in connection with the use of the premises of
which the Leased Premises are a part which violations occurred in the period in
which Landlord leased such premises under the Lease, and such indemnity shall
survive the term of this agreement and any and all renewal terms. The
indemnities of this Section 5.22 shall expire on a date five (5) years after the
termination of the Term unless the indemnified party has notified the indemnitor
party before such date that a violation or suspected violation had been
discovered or claimed, in which case the indemnity will survive as to the
claimed or suspected violation to the maximum extent permitted by law.
5.23 Newpark Agreements. The parties hereto acknowledge that Tenant is an
existing sublessee of Newpark Drilling Fluids, L.L.C. ("Newpark") of certain
space in the Building pursuant to Sublease Agreement dated February 15, 2000
(the "Newpark Sublease"). The Newpark Sublease will be terminated effective the
Commencement Date hereof (pursuant to Exhibit "K"). It is the intent of the
parties that no interruption in rent payments covering the space described in
the Newpark Sublease shall occur.
30
5.24 Guaranty. Guarantor agrees to guarantee payment and performance of all of
Tenant's obligations, including, but not limited to, payment of Rent hereunder.
This guaranty obligation is absolute and unconditional. If Tenant defaults
hereunder, and as a result an Event of Default occurs, Guarantor is primarily
liable for all of Tenant's obligations hereunder and Landlord shall have the
right to make demand on, and bring an action directly against Guarantor, and
will not be required to first exhaust its remedies against Tenant. This guaranty
obligation will not be limited, reduced or affected by any amendment to this
Lease (whether or not approved by Guarantor), any waiver by Landlord of any
default or remedy hereunder, or by the bankruptcy, dissolution or any other
event that may occur with respect to Tenant. Guarantor acknowledges that
Landlord is relying primarily upon the credit of Guarantor, but for this
guaranty agreement, would not enter into this Lease with Tenant.
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.
31
5.25 EXECUTED in multiple counterparts, each of which shall have the force and
effect of an original on the date first above written.
"LANDLORD"
BROADFIELD ASSOCIATES, L.P.,
a Texas limited partnership
By: Broadfield Management, L.L.C.,
A Texas limited liability company,
its general partner
By: /s/ Xxxxxxx Xxxx
-----------------------------------
Name: Xxxxxxx Xxxx
---------------------------------
Title: President
--------------------------------
"TENANT"
TRANSOCEAN OFFSHORE DEEPWATER DRILLING
INC., a Delaware corporation
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx
Vice President - Human Resources
"GUARANTOR"
TRANSOCEAN SEDCO FOREX INC., a Cayman
Islands corporation
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Xxxxx Xxxxxx
Vice President - Human Resources
[Signature page to Lease Agreement dated April 18, 2001 between Broadfield
Associates, L.P., a Texas limited partnership, as Landlord, Transocean Offshore
Deepwater Drilling Inc., a Delaware corporation, as Tenant, and Transocean Sedco
Forex Inc., a Cayman Islands corporation, as Guarantor.]
32
ADDENDUM TO LEASE BETWEEN
BROADFIELD ASSOCIATES, L.P., AS LANDLORD,
AND TRANSOCEAN OFFSHORE DEEPWATER DRILLING INC., AS TENANT
1. BASE RENTAL
Tenant shall pay monthly Base Rental beginning on the Rent Commencement
Date for the Leased Premises pursuant to the following schedule:
---------------------------------------------------------------------------------------------------
Premises Period Annual Base Rental/
Rentable Square Foot
1/st/ & 2/nd/ Floors RCD - 08/31/05 $22.50
09/01/05 - 03/31/11 $23.50
3/rd/ Floor ("RCD") - 08/31/03 $18.50
09/01/03 - 08/31/05 $19.75
09/01/05 - 03/31/11 $20.75
4/th/ Floor Commencement Date - 08/31/03 $18.00
09/01/03 - 08/31/05 $19.25
09/01/05 - 03/31/11 $20.75
5th Floor (if leased RCD - 08/31/03 $18.50
pursuant to Additional 09/01/03 - 08/31/05 $19.75
Premises Option) 09/01/05 - 03/31/11 $20.75
5/th/ Floor (If leased RCD - 08/31/05 $19.75
pursuant to Expansion Option) 09/01/05 - 03/31/11 $20.75
6/th/ Floor RCD - 08/31/05 $22.50
09/01/05 - 03/31/11 $23.50
Entirety of the Leased
Premises During Extended Term $23.50
---------------------------------------------------------------------------------------------------
Base Rental shall be payable monthly on the first (1st) day of each month during
the Term of the Lease beginning on December 1, 2001 (the "Rent Commencement
Date" or the "RCD"); provided, however, if the Commencement Date is delayed due
to circumstances described in Sections 3.03(b) or (c) of the Lease, the Rent
Commencement Date will be delayed by a like number of days. Notwithstanding the
foregoing, Tenant's obligation to pay Rent for the 25,890 rentable square feet
of space on the fourth (4th) floor of the Building shall commence effective the
Commencement Date hereof, and Tenant shall not be granted any abatement of Rent
for the Leased Premises on the fourth (4/th/) floor if the Commencement Date is
delayed.
1
2. ADDITIONAL PREMISES OPTION; EXPANSION OPTIONS.
(a) Tenant will have the option (the "Additional Premises Option"), which
may be exercised (in writing to Landlord) at any time after the Effective Date
of the Lease and before December 31, 2001, to expand the Initial Leased Premises
to include all of the space, being 25,890 square feet of Rentable Area, on the
fifth (5/th/) floor of the Building (the "Additional Premises"). In exercising
the Additional Premises Option, the following will apply:
Tenant may exercise the Additional Premises Option as to all or a
portion of the fifth (5th) floor in a single exercise. However, the
minimum space taken by Tenant on the fifth (5th) floor pursuant to the
Additional Premises Option shall be 2,500 square feet of Rentable Area
and, except for an exercise of the Additional Premises Option covering all
of the fifth (5th) floor, no exercise of the Additional Premises Option
covering a portion of the fifth (5th) floor shall cover more than 24,890
square feet of Rentable Area. Furthermore, no space in the Additional
Premises occupied by Newpark (currently 5,940 square feet of Rentable
Area) may be taken by Tenant pursuant to the Additional Premises Option
until all of the other space in the Additional Premises is taken by Tenant
hereunder. The Additional Premises will be leased on the same terms as the
Initial Leased Premises hereunder. For purposes of clarification, no
Landlord Improvements will be required of Landlord with respect to the
Additional Premises. The Base Rental for the Additional Premises is set
forth in paragraph 1 of this Addendum. Landlord shall deliver the
Additional Premises to Tenant in its current (as of the Effective Date
hereof) "as-is" condition (including, but not limited to, restrooms and
related fixtures and plumbing, all permanent millwork and doors, hot water
heaters, sinks, ice machines, dishwashers, refrigerators, electrical
equipment and facilities and supplemental HVAC systems). Space in the
Additional Premises that is not occupied by Newpark (currently 00,000
xxxxxx xxxx xx Xxxxxxxx Xxxx) will be delivered to Tenant within thirty
(30) days after Landlord receives Tenant's notice of exercise of the
Additional Premises Option. The balance of the space in the Additional
Premises will be delivered to Tenant within one hundred twenty (120) days
after Landlord receives Tenant's notice of exercise of the Additional
Premises Option. The Additional Premises will be delivered to Tenant with
all personal property of Newpark removed therefrom and the Additional
Premises broom-cleaned and vacuumed.
(b) To the extent that Tenant does not exercise the Additional Premises
Option with respect to all of the Additional Premises pursuant to clause (a)
foregoing, Tenant will have the option (the "Fifth Floor Expansion Option"),
which may be exercised (in writing to Landlord) at any time or times after
December 31, 2001 and before August 31, 2009, to expand the Leased Premises to
include all of the remaining space in the Additional Premises not leased by
Tenant under the Additional Premises Option ("Expansion Space"). In exercising
the Fifth Floor Expansion Option, all the following will apply:
(i) Tenant will not have the right to exercise the Fifth Floor
Expansion Option as to the portion of the Fifth Floor Expansion
Space occupied by
2
Newpark on the Effective Date unless it has previously or
concurrently exercised the Fifth Floor Expansion Option
as to the remainder of the Fifth Floor Expansion Space
not occupied by Newpark on the Effective Date.
(ii) Tenant may exercise the Fifth Floor Expansion Option on
multiple occasions as to a portion of the Fifth Floor
Expansion Space; provided, however, the minimum space
taken by Tenant on the fifth (5th) floor pursuant to the
Fifth Floor Expansion Option shall be 2,500 square feet
of Rentable Area, and after the initial exercise, each
subsequent exercise of the Fifth Floor Expansion Option
shall cover Fifth Floor Expansion Space that is
contiguous to space on the fifth floor that was the
subject of a previous exercise of the Fifth Floor
Expansion Option by Tenant (so long as contiguous space
on the fifth floor is available), and further provided,
no exercise of the Fifth Floor Expansion Option covering
a portion of the fifth (5th) floor shall result in less
than 1,000 square feet of contiguous Rentable Area, with
access to Building Common Areas, remaining available for
lease to third parties.
(iii) All of the space occupied by Newpark in the Fifth Floor
Expansion Space as of the Effective Date must be taken,
if at all, in a single exercise of the Fifth Floor
Expansion Option.
(iv) Notwithstanding the foregoing provisions of this clause
(b), at any time after December 31, 2002, and unless and
until Landlord receives Tenant's notice of exercise of
the Fifth Floor Expansion Option, Landlord (and/or
Newpark) will, subject to the right of first refusal
allowed Tenant under paragraph 3 of this Addendum, be
free to sublease and/or lease space in the Fifth Floor
Expansion Space to third parties, and to the extent that
occurs, such space will be removed from space available
to Tenant under the Fifth Floor Expansion Option without
the necessity of further act. Provided, however, if such
space that was leased or subleased by Landlord or Newpark
on the fifth floor to third parties subsequently becomes
vacant anytime before August 31, 2009, such space will,
upon becoming vacant, become subject to Tenant's Fifth
Floor Expansion Option.
The Fifth Floor Expansion Space leased under the Fifth Floor Expansion Option
will be leased on the same terms as the Leased Premises hereunder. The Base
Rental for the Fifth Floor Expansion Space is set forth in paragraph 1 of the
Addendum. The Fifth Floor Expansion Space will be delivered to Tenant in the
condition it is in as of the Effective Date (including, but not limited to,
restrooms and related fixtures and plumbing, all permanent millwork and doors,
hot water heaters, sinks, ice machines, dishwashers, refrigerators, electrical
equipment and facilities and supplemental HVAC systems, to the extent such
improvements currently exist on the fifth (5th) floor), reasonable wear and tear
excepted, and except to the extent of modifications made by Newpark thereto as
permitted in its existing Lease with Landlord in effect as of the date
3
hereof, being Lease Agreement dated May 28, 1998, as amended by Amendment dated
April 19, 2001 (the "Newpark Lease"), within one hundred and twenty (120) days
from the date of Tenant's notice, with all personal property of Newpark removed
therefrom and the Fifth Floor Expansion Space broom-cleaned and vacuumed.
Notwithstanding the foregoing, any Fifth Floor Expansion Space that was leased
or subleased by Landlord or Newpark to a third party pursuant to the provisions
of paragraph (b)(iv) foregoing, and subsequently became vacant before August 31,
2009, and thereafter was the subject of the exercise of a Fifth Floor Expansion
Option by Tenant, will be delivered to Tenant in its then-existing, as-is
condition, with all personal property of third parties removed therefrom and
broom-cleaned and vacuumed. If any improvement described in the foregoing
parenthetical clause currently exists on the fifth (5th) floor, Newpark shall
not remove the same unless it substitutes equivalent improvements therefor.
(c) If, but only if, either (i) Tenant has taken all of the space on
the fifth floor of the Building pursuant to either clause (a) or (b) foregoing,
or paragraph 3 below, or (ii) Landlord and/or Newpark has leased or subleased to
third parties all of the space on the fifth floor not taken by Tenant, Tenant
will have the option (the "Sixth Floor Expansion Option") to expand the Leased
Premises to include all of the space on the sixth (6/th/) floor of the Building
("Sixth Floor Expansion Space"). In exercising the Sixth Floor Expansion Option,
all the following will apply:
(i) All of the Sixth Floor Expansion Space must be taken, if
at all, in a single exercise of the Sixth Floor Expansion
Option;
(ii) The Sixth Floor Expansion Space leased under the Sixth
Floor Expansion Option will be leased on the same terms as
the Leased Premises hereunder. The Base Rental for the
Sixth Floor Expansion space is set forth in paragraph I of
the Addendum. The Sixth Floor Expansion Space will be
delivered to Tenant in the condition it is in as of the
Effective Date (including, but not limited to, restrooms
and related fixtures and plumbing, all permanent millwork
and doors, hot water heaters, sinks, ice machines,
dishwashers, refrigerators, electrical equipment and
facilities and supplemental HVAC systems, to the extent
such improvements currently exist on the sixth (6th)
floor), reasonable wear and tear excepted, and except to
the extent of modifications made by Newpark thereto as
permitted in the Newpark Lease. If any improvement
described in the foregoing parenthetical clause currently
exists on the sixth (6th) floor, Newpark shall not remove
the same unless it substitutes equivalent improvements
therefor.
(iii) The Sixth Floor Expansion Option may be exercised, if at
all, by written notice given Landlord by Tenant no earlier
that April 1, 2002, and no later than August 31, 2009.
Landlord shall deliver the Sixth Floor Expansion Space in
the condition described in clause (c)(iii) hereof, to
Tenant within nine (9) months from the date of Tenant's
notice, with all personal property of Newpark removed
therefrom and the Sixth Floor Expansion Space
broom-cleaned and vacuumed.
4
(iv) Notwithstanding the foregoing provisions of this clause
(c), at any time after August 31, 2005, and unless and
until Landlord receives Tenant's notice of exercise of the
Sixth Floor Expansion Option, Landlord (and/or Newpark)
will, subject to the right of first refusal allowed Tenant
under paragraph 3 of this Addendum, be free to sublease
and/or lease space in the Sixth Floor Expansion Space to
third parties, and to the extent that occurs, such space
will be removed from space available to Tenant under the
Sixth Floor Expansion Option without the necessity of
further act. Provided, however, if such space that was
leased or subleased by Landlord or Newpark on the sixth
floor to third parties subsequently becomes vacant anytime
before August 31, 2009, such space will, upon becoming
vacant, become subject to Tenant's Sixth Floor Expansion
Option.
(d) The lease term for the Additional Premises, Fifth Floor
Expansion Space or Sixth Floor Expansion Space, as applicable, shall commence
(including all monetary obligations) on the earlier to occur of (i) the date
that Tenant occupies the Additional Premises, Fifth Floor Expansion Space or
Sixth Floor Expansion Space, as applicable, or (ii) the date that is one hundred
twenty (120) days after Landlord delivers the Additional Premises, Fifth Floor
Expansion Space or Sixth Floor Expansion Space to Tenant and shall be
coterminous with the Term of the Lease.
3. RIGHT OF FIRST REFUSAL
Without limiting Tenant's rights under paragraph 2 foregoing, Tenant
will have the continuing and reoccurring right of first refusal throughout the
Term ("Right of First Refusal") to expand the Leased Premises to include any
space on the fifth (5th) and sixth (6/th/) floors of the Building (to the extent
not leased by Tenant hereunder) that is offered to a third party (the "ROFR
Space"). In that regard, in the event Landlord receives a bona fide third party
offer to lease any portion of the ROFR Space which Landlord intends to accept
("Third Party Offer"), Landlord will deliver notice to Tenant accompanied by a
written summary of the economic and all other material terms of such offer.
Tenant shall have ten (10) business days to deliver written acceptance of the
terms of such offer to Landlord. If Tenant fails to deliver written acceptance,
within said ten (10) day period, Landlord shall be free to Lease the space
covered by the Third Party Offer to the third party on terms no more favorable
to the third party than the Third Party Offer. In the event Landlord does not
consummate the execution of a lease with the third party on such basis within
one hundred eighty (180) days after Tenant's rejection of the Third Party Offer,
Tenant's Right of First Refusal shall again apply. In the event that the term of
the Third Party Offer expires before the Expiration Date, Tenant will have the
right to extend the term of the ROFR Space to be conterminous with the Term
hereof, with the rent during any extension period of the term of the ROFR Space
being at the highest per square foot rental rates to be paid by Tenant under
this Lease during such period. If the term of the Third Party Offer expires
after the Expiration Date, Tenant will have the right to lease the ROFR Space
for a term conterminous with the Term hereof, providing Landlord the right to
extend an equivalent proration of any monetary allowances provided by Landlord
in the Third Party Offer. Notwithstanding anything in this lease to the
contrary, Tenant will have the same leasehold improvements allowance as the
third party offeree, if Tenant exercises the rights herein granted.
5
4. LEASEHOLD IMPROVEMENTS ALLOWANCE
Landlord will construct and install the improvements described on Exhibit
"F" to the Lease ("Landlord Improvements") on the first (1/st/), second (2/nd/)
and third (3/rd/) floors of the Leased Premises at no cost or charge to Tenant,
subject to the provisions of Section 3.03(a) and Section 3.03(b) of this Lease
Agreement. Tenant currently occupies the fourth (4th) floor pursuant to the
Newpark Sublease and no Landlord Improvements are required therein, except to
the extent such Landlord Improvements were not provided as specifically required
under the Newpark Sublease.
In addition, subject to the provisions of Exhibit "G" ("Workletter"),
Landlord will provide a Leasehold Improvements Allowance to Tenant equal to
$28.00 per rentable square foot of the first (1/st/), second (2/nd/) and third
(3/rd/) floors of the Leased Premises as an allowance for the costs of Tenant's
Leasehold Improvements over and above the Landlord Improvements, which will
include fees of design professionals, labor and materials costs, permit fees,
signage, cabling and other telecommunication costs, moving expenses and related
costs, which may be applied to any improvements desired by Tenant within the
Initial Leased Premises or Additional Premises. In the event Tenant does not use
the entire Leasehold Improvements Allowance, Tenant shall have the right to
apply such unused portion to the first Base Rental payments due hereunder. If
Tenant exercises either the Additional Premises Option or the Fifth Floor
Expansion Option, Landlord will provide a Leasehold Improvements Allowance equal
to $28.00 per rentable square foot for the fifth (5/th/) floor, provided,
however, if such exercise occurs after December 31, 2002, the fifth (5/th/)
floor Tenant Improvements Allowance will be prorated to equal the result
obtained from the following calculation:
$724,920 x A = Prorated full fifth floor Tenant Improvements Allowance
-
B
where
A = the number of days between the date the term commences for
either the Additional Premises or Expansion Space with respect
to the fifth floor and March 31, 2011; and
B = the number of days between December 31, 2002 and March 31, 2011.
The foregoing formula provides a full fifth (5th) floor prorated Tenant
Improvements Allowance. In the event Tenant exercises the Additional Premises
Option or the Fifth Floor Expansion Option as to less than all of the space in
the fifth (5th) floor, the prorated Tenant Improvements will be further prorated
to reflect the total number of rentable square feet taken by Tenant thereunder.
6
No Leasehold Improvement Allowance will be given for space on the fourth (4/th/)
floor of the Leased Premises but the Leasehold Improvements Allowance may be
utilized for any improvements made by Tenant to the fourth (4/th/) floor,
provided such improvements are made within ten (10) months after the
Commencement Date.
In the event Tenant exercises the Sixth Floor Expansion Option, Landlord will
provide a Leasehold Improvements Allowance equal to $5.00 per rentable square
foot on the sixth (6/th/) floor ($129,450), provided, however, if the lease term
for the Sixth Floor Expansion Space commences after March 31, 2006, the sixth
floor Tenant Improvements Allowance will be prorated to equal the result
obtained from the following calculation:
$129,450 x A = Prorated sixth floor Tenant Improvements Allowance
-
B
where
A = the number of days between the date the lease term
commences for the Sixth Floor Expansion Space and March 31,
2011; and;
B = the number of days between March 31, 2006 and March 31,
2011.
5. SIGNAGE
Tenant shall have the right to (i) non-exclusive monument signage (more
prominent than that of any tenant in the Complex, including Newpark), or (ii) an
exclusive monument sign, plus exclusive signage affixed to the upper most
portion of the Building on the east and/or south sides thereof. The location,
size and design of the exclusive monument or Building signage will be agreed
upon by Tenant and Landlord, in their reasonable judgment, prior to its
erection. The parties agree that Tenant's existing Building monument signage
will be modified to be the uppermost signage position, provided that Tenant
chooses the option of non-exclusive monument signage. The monument signage will
be at Landlord's expense (unless Tenant desires an exclusive monument sign, in
which case such signage will be at Tenant's expense). The Building signage will
be at Tenant's expense. Any subsequent signage desired by Tenant, subject to
Landlord's approval, will be at Tenant's expense.
6. RENEWAL OPTIONS
(a) Provided an Event of Default does not exist on the part of Tenant
hereunder, Tenant will have the option to renew the Lease in its entirety, or at
a minimum for one full floor, for either (i) two terms of five years, or (ii)
one term of ten years, at Tenant's option (each a "Renewal Option"). In order to
exercise such option, Tenant must give Landlord written notice of its intention
to exercise at least nine (9) months prior to the expiration of the Term. The
renewal notice will specify which Renewal Option Tenant has selected and the
amount of space covered thereby. All of the terms and conditions of this Lease
shall continue into the renewal period except that Base Rental for the renewal
period will be equal to the Prevailing Market Rental Terms.
7
(b) Landlord will advise Tenant of its opinion of Prevailing Market
Rental Terms within thirty (30) days after receipt of Tenant's renewal notice.
If Landlord and Tenant do not agree on Prevailing Market Rental Terms, the
parties will negotiate in good faith and attempt to reach agreement. If Landlord
and Tenant cannot agree on the determination of the Prevailing Market Rental
Terms within sixty (60) days after the date Landlord receives Tenant's renewal
notice, the unresolved dispute shall be submitted to arbitration within five (5)
days after the end of such sixty (60) day period. If Tenant is not satisfied
with the decision of the arbitrators, Tenant shall have the right to rescind any
exercise of an option to renew the lease for which the Prevailing Market Rental
Terms were determined within ten (10) business days following the decision of
the Arbitration Panel.
(c) For purposes hereof, the term "Prevailing Market Rental Terms" means
the rental rate and other economic terms (including tenant inducements such as
allowances and rental abatement) that a willing tenant would pay and a willing
landlord would accept in arm's length, bona fide negotiations for a new lease of
the space for which the Prevailing Market Rental Terms is being determined to be
executed at the time of determination and to commence on the commencement of
Tenant's lease of that space under this Lease. The determination of the
Prevailing Market Rental Terms will be based upon other lease transactions made
in the Building and other comparable office buildings in the market area, and
will take into consideration the terms of the Lease (including any leasehold
improvements allowance to be provided to Tenant under the terms of the Lease),
and all relevant terms and conditions of any comparable leasing transactions,
including, without limitation: (i) location, quality and age of the Building;
(ii) use and size of the space in question; (iii) location and/or floor level
within the Building; (iv) extent of the leasehold improvement allowances; (v)
the amount of any abatement of rental or other charges; parking charges or
including of same in rental; (vi) lease takeover/assumptions; (vii) club
memberships; (viii) relocation allowances; (ix) refurbishment and repainting
allowances; (x) any and all other concessions or inducements; (xi) extent of
services provided or to be provided; (xii) distinctions between "gross" and
"net" leases; (xiii) base year or dollar amount for escalation purposes (for
both operating costs and ad valorem/real estate taxes); (xiv) any other
adjustments (including by way of indexes) to base rental rate; (xv) credit
standing and financial stature of the tenant; and (xvi) length of term.
7 ARBITRATION
Any determination of the Prevailing Market Rental Terms, Base Operating
Expense Rate or Actual Operating Expenses ("Arbitral Dispute(s)") that is
submitted to arbitration shall be made under procedures set forth below. Pending
the final determination of any dispute, Tenant shall continue to pay the
amount(s) equal to the amounts paid by Tenant for rent during the last month of
the Term; in the event of a final determination, Landlord or Tenant shall refund
to the other party any overpayment. The determination of any Arbitral Dispute
shall be submitted to an "Arbitration Panel" comprised of three (3) members,
each of whom shall be a licensed real estate broker, with no less than ten (10)
years experience in negotiating office leases in Houston. As a condition to
selection, each panel member must also have negotiated at least one (1) major
office lease (50,000 square feet or more) in West Houston during the thirty-six
(36) months preceding his or her selection to the arbitration panel. No more
than one (1) panel member may be with the same brokerage firm. No panel member
may have an economic interest in the
40
outcome of the arbitration, other than a reasonable fee (not to exceed
$2,000.00). Landlord and Tenant shall each bear the expense of the panel member
of its own selection, and shall equally share the expense of the Third Panel
Member.
The Arbitration Panel shall be selected as follows:
A. Within ten (10) business days after submission of the determination of
the Prevailing Market Rental Terms, Base Operating Expense Rate or Actual
Operating Expenses to the Arbitration Panel, Tenant shall select its panel
member meeting the criteria established above (`Tenant's Panel Member"). If
Tenant fails to timely select the Tenant Panel Member, Landlord may notify
Tenant in writing of such failure, and if Tenant fails to select the Tenant
Panel Member within five (5) business days from Landlord's notice, then Landlord
may select the Tenant Panel Member on Tenant's behalf, at Tenant's expense.
B. Within ten (10) business days after the Tenant Panel Member is selected,
Landlord shall select its panel member meeting the criteria established above
("Landlord's Panel Member"). If Landlord fails to timely select the Landlord
Panel Member, Tenant may notify Landlord in writing of such failure, and if
Landlord fails to select the Landlord Panel Member within five (5) business days
from Tenant's notice, then Tenant may select the Landlord Panel Member on
Landlord's behalf.
C. Within ten (10) business days after the Landlord Panel Member is
selected, the Tenant Panel Member and the Landlord Panel Member shall jointly
select a third panel member meeting the criteria of Paragraph (i) above (`the
Third Panel Member"). If the Landlord Panel Member and the Tenant Panel Member
fail to timely select the Third Panel Member and such failure continues for more
than five (5) business days after written notice of such failure is delivered to
the Landlord Panel Member and Tenant Panel Member by either Landlord or Tenant,
either Landlord or Tenant may request the managing officer of the American
Arbitration Association to appoint the Third Panel Member.
D. Within ten (10) business days after the selection of the three member
Arbitration Panel, Landlord and Tenant shall each submit to the Arbitration
Panel a written statement identifying the specific items in dispute bearing upon
the computation of the Prevailing Market Rental Terms, Base Operating Expense
Rate or Actual Operating Expenses. The Arbitration Panel shall make its decision
within twenty (20) days after submission of such written statement of
particulars. The Arbitration Panel shall select either Landlord's determination
or Tenant's determination of the above item under Arbitral Dispute, whichever in
the panel's judgment most closely resembles the actual Prevailing Market Rental
Terms, Base Operating Expense Rate or Actual Operating Expenses. The Arbitration
Panel shall reach its decision by majority vote and shall communicate its
decision by written notice to the parties.
E. The decision by the Arbitration Panel shall be final and conclusive and
shall be nonappealable and enforceable in any court having jurisdiction. All
hearings and proceedings held by the Arbitration Panel shall take place in
Houston, Texas.
9
F. The determination of any Arbitral Dispute resolution procedure described
in this Paragraph shall be governed by the Commercial Rules of the American
Arbitration Association, subject to the Texas General Arbitration Act, to the
extent such act is applicable hereto.
G. Until the Prevailing Market Rental Terms, Base Operating Expense Rate or
Actual Operating Expenses have been finally determined, Tenant shall pay Rent
equal to the amounts Landlord claims are due by Tenant, and an appropriate
refund shall be made to the other party within thirty (30) days after a final
determination of the item under Arbitral Dispute is made. Notwithstanding the
foregoing, if Landlord and Tenant disagree with the Prevailing Market Rental
Terms for any extended Term under Tenant's Renewal Option and Tenant elects to
submit same to arbitration under this Paragraph, Tenant shall continue to pay
the Rent due hereunder during the last month of the Term, until a final
determination of the Prevailing Market Rental Terms is made.
H. Tenant shall bear all fees, costs and expense of the Tenant Panel Member
and Landlord shall bear all fees, costs and expenses of the Landlord Panel
Member. Each party shall bear the fees, costs and expenses of its own attorneys
and consultants. Each party shall also bear the fees, costs and expenses
(equally) of the Third Panel Member and all other costs and expenses of the
Arbitration Panel in conducting the arbitration.
8. TECHNOLOGY
So long as no Event of Default on the part of Tenant exists under the
terms of this Lease, Tenant shall be granted the right during the Term to
install, repair, maintain and replace (i) whip and dish antennas and related
equipment on the roof of the Building, (ii) a back-up generator (with fuel tank)
in the main Building mechanical room (if feasible), or in a mutually agreed
location in the Garage, and (iii) cabling from the antennas and equipment
(described herein) to the Leased Premises, utilizing the Building's conduits,
chases and risers, and (iv) fiber optic service (termination tie-in) in the
phone room on the first (1/st/) floor of the Building, all at no additional
rental, fee or charge. All of the foregoing is referred to as the "Technology
and Communication Equipment". All installation, repair, maintenance and
replacement of the Technology and Communication Equipment will be done at
Tenant's sole cost and expense, and such work will be coordinated with and
supervised by Landlord (such supervision being at no charge to Tenant)
Notwithstanding the foregoing, Landlord will be responsible and pay for the
costs of extending and maintaining the fiber optic service to the Building's
phone room on the first (1st) floor. Tenant will be obligated to engage
Landlord's roofing contractor (at a reasonable charge) to perform any
penetrations or modifications. Tenant will indemnify and hold Landlord harmless
from and against any damages to the Complex, or to any other tenant's leased
premises in the Building caused by the installation, repair, maintenance
replacement and operation of the Technology and Communication Equipment. If, as
a result of the operation of Tenant's Technology and Communications Equipment,
Landlord experiences an increase in Operating Expenses, Tenant will reimburse
Landlord, on demand, for all of the actual increase in Operating Expenses
attributable to such Technology and Communications Equipment so long as Landlord
advises Tenant promptly (i) upon request by Tenant, of any such increases that
it anticipates
10
given its understanding of Tenant's proposed installation and operation of any
such equipment, and (ii) of such increases as they are actually incurred.
9. ADDITIONAL SECURITY
Tenant shall have the right, at its sole cost and expense, to provide
additional security service (i.e., equipment and personnel) for the Leased
Premises at any time during the Term ("Additional Security"). Tenant will be
obligated to provide Landlord with written notice of its election to provide
such Additional Security at least thirty (30) days in advance, unless such
security is, in Tenant's reasonable opinion, required and necessary in the case
of an emergency situation, whereby Tenant will not be required to provide
Landlord notice in advance. Tenant shall only hire reputable "third party"
security service providers, to be approved in writing by Landlord, which such
approval shall not be unreasonably withheld or delayed. Tenant will indemnify
and hold Landlord harmless from and against all claims, liability, damages,
expenses and costs (including reasonable legal fees) asserted against or
incurred by Landlord arising out of the acts or omissions of the Additional
Security personnel provided by Tenant hereunder.
10. DEFAULT BY LANDLORD
If Landlord shall fail to perform any of its obligations under this Lease
and such failure (i) materially adversely affects Tenant's use and enjoyment of
the Leased Premises, or (ii) results in a substantial likelihood of personal
injury or material damage to Tenant's personal property situated in the Leased
Premises, and such failure continues for thirty (30) days after written notice
thereof from Tenant to Landlord and Landlord's mortgagee of which Tenant had
notice, then Tenant shall have the right to cure such default and thereafter
seek recovery of the sums spent to cure such default from Landlord; provided,
however, Tenant shall not be entitled to offset the cost of such cure against
future payments of Rent or any other obligations due from Tenant under this
Lease, unless and until a final, non-appealable judgment is rendered against
Landlord which is not paid in the time permitted therefore (or, if no time for
payment is provided for, within thirty (30) days after the date such
non-appealable judgment is rendered), in which event Tenant shall be entitled to
offset only the amount of such judgment against Rent or other obligations
hereunder.
11. BROKERAGE FEES
Pursuant to a separate agreement between Landlord and Trione & Xxxxxx,
L.L.P. ("Broker") dated January 4, 2001 ("Commission Agreement"), Landlord has
agreed to pay Broker a commission as therein provided ("Commission"). Landlord
hereby agrees that if Landlord fails and/or refused to timely pay such
Commission, as it becomes due and payable under the Commission Agreement, then
Tenant shall have the right to offset any unpaid Commission against the next
installment(s) of Rent due and payable under this Lease and extend such funds to
Broker as payment of any unpaid Commission, until such unpaid Commission is paid
in the manner described in the Commission Agreement.
11
12. MANAGEMENT AND OTHER SERVICES
Landlord will provide building management consisting of (i) a full time
on-site property manager, full time on-site engineer and a full time on-site
xxxxxx Monday through Friday during regular Building hours, and (ii) an on-site
security guard between the hours of 4:00 p.m. and midnight. If Tenant is
dissatisfied with the quality of any management or service (including, but not
limited to, janitorial and security services) being provided to the Complex by
companies retained by Landlord for such services ("Service Providers"), Tenant
may given Landlord written notice of its dissatisfaction and reason therefor. If
Landlord is unable to remedy the situation giving rise to Tenant's
dissatisfaction within thirty (30) days, Landlord and Tenant will jointly
interview one or more other Service Providers to provide such services to the
Complex. Upon Landlord's and Tenant's agreement on a new Service Provider to
provide such services, Landlord agrees to terminate the current Service Provider
and retain the Service Provider mutually acceptable to Landlord and Tenant,
provided, however, all termination penalties, charges or damages payable to the
terminated Service Provider under its contract or applicable law will be
included as part of the Actual Operating Expenses, and if the cost of the new
Service Provider exceeds the costs which are customarily being paid for such
service by building owners of buildings similar to the Building to third party
service providers in the Greater Houston Market area, Tenant shall bear and be
responsible for all of such excess costs.
12
DECLARATION OF LEASE COMMENCEMENT DATE
WHEREAS, Broadfield Associates, L.P. ("Landlord") and Transocean
Deepwater Offshore Drilling Inc. ("Tenant") entered into a Lease Agreement dated
April 18, 2001 (the "Lease Agreement"), covering certain Leased Premises
described as 103,260 rentable square feet of the Park 10 Centre Building, whose
address is 0000 Xxxxxxxxxx, Xxxxx 000, in the City of Houston, Xxxxxx County,
Texas; and
NOW, THEREFORE, Landlord and Tenant do hereby declare and stipulate
that Landlord's Improvements (as that term is defined in the Lease) were
completed on April 28, 2001. They do further stipulate and declare that the
Commencement Date of said Lease Agreement is April 28, 2001, and the Rent
Commencement Date is December 1, 2001. The Term of the Lease will expire on
March 31, 2011.
EXECUTED in duplicate counterparts this 14/th/ day of June, 2001.
Landlord: BROADFIELD ASSOCIATES, L.P.
By: Broadfield Management, L.L.C.,
its general partner
By: /s/ XXXXXXX XXXX
---------------------------
Title: President
------------------------
Tenant: TRANSOCEAN DEEPWATER OFFSHORE
DRILLING INC.
By: /S/ [ILLEGIBLE]
-------------------------------
Title: VICE PRESIDENT
----------------------------
