EXHIBIT 10.127
LEASE AGREEMENT WITH NEWPARK DRILLING FLUIDS, INC. FOR A PORTION OF THE
TRANSOCEAN HOUSTON BUILDING
LEASE AGREEMENT
Between
Broadfield Associates, L.L.C
as Landlord
and
Newpark Drilling Fluids, Inc.
as Tenant
and
Newpark Resources, Inc.
as Guarantor
TABLE OF CONTENTS
Page
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1. Article 1 - Leased Premises, Term, and Use ........................................... 1
1.01. Leased Premises ............................................................. 1
1.02. Term ........................................................................ 1
1.03. Use ......................................................................... 2
2. Article 2 - Rental ................................................................... 2
2.01. Base Rental ................................................................. 2
2.02. Operating Expenses .......................................................... 2
2.03. Parking ..................................................................... 7
2.04. Payment of Rent ............................................................. 8
2.05. First Month's Rental ........................................................ 8
3. Article 3 - Landlord's Services ...................................................... 8
3.01. Services to be Furnished by Landlord ........................................ 8
3.02. Access by Tenant Prior to Commencement of Term .............................. 11
3.03. Condition of Building, Premises and Leasehold Improvements .................. 11
3.04. Repair and Maintenance by Landlord .......................................... 14
4. 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. Tenant Floor Plans: See Exhibit "C" ......................................... 15
4.06. Assignment or Sublease ...................................................... 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
5. 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. Recourse Limitation ......................................................... 22
5.07. Control of Common Areas and Parking Facilities by Landlord .................. 22
5.08. Default by Tenant ........................................................... 23
5.09. Right to Relocate ........................................................... 25
5.10. Non-Waiver .................................................................. 26
5.11. Independent Obligations ..................................................... 26
5.12. Time of Essence ............................................................. 26
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5.13. Remedies Cumulative ........................................... 26
5.14. Insurance, Liability, Indemnity, Subrogation and Waiver ....... 26
5.15. Venue; Governing Law .......................................... 28
5.16. Notice ........................................................ 28
5.17. Entire Agreement, Binding Effect, Severability ................ 28
5.18. Right of Reentry .............................................. 29
5.19. Number and Gender; Captions; References ....................... 29
5.20. Delinquent Payments; Handling Charge .......................... 29
5.21. Quiet Enjoyment ............................................... 29
5.22. Signs ......................................................... 29
5.23. Brokerage ..................................................... 30
5.24. Limitation of Implied Warranty ................................ 30
5.25. Environmental and Land Use Matters ............................ 30
5.26. Name of Building and Building Signage ......................... 30
5.27. Guaranty ...................................................... 31
ADDENDUM AND EXHIBITS TO LEASE:
Addendum
A. Leased Premises
B. Legal Description
C. Initial Tenant Improvements
D. Building Description
E. Building Rules and Regulations
F. Parking Rules and Regulations
7. Commencement Memorandum
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LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") is entered as of the 28/th/ day of May,
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1998, between Broadfield Associates, L.L.C., a Texas limited liability company,
("Landlord"), Newpark Drilling Fluids, Inc., a Texas corporation, ("Tenant"),
and Newpark Resources, Inc., a Delaware 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
Newpark Resources Building which will be constructed by Landlord in accordance
with Exhibit "D" hereto ("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.
(b) The "Rentable Area" of the Leased Premises is hereby stipulated and
agreed for all purposes to be the greater of (i) three (3) entire floors within
the Building or (ii) 78,000 rentable square feet ("Minimum Rentable Area").
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 leased or held
for lease such as lobbies, foyers, corridors, restrooms, machine rooms,
mechanical rooms, electrical rooms, telephone and equipment rooms, janitor rooms
and other similar facilities, for purposes of this Lease, Landlord agrees to
calculate the add-on factor of each single and multi-tenant floor utilizing the
Building and Owners Managers Association's definition (ANSIZ65.1-1996).
1.02. Term. Subject to the terms, provisions and conditions hereof, this Lease
shall continue in force for a term ("Term") of one hundred twenty-three (123)
calendar months, beginning on the 1st day of June, 1999 (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
August, 2009. If the Commencement Date is after June 1, 1999, due to the
circumstances described in Section 3.03(b) or (c) hereof, within ten (10) days
following the Commencement Date, Landlord and Tenant agree to execute a
memorandum in the form attached hereto as Exhibit "G" which specifies the exact
Commencement Date and Term of the Lease.
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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
laboratory purposes of a lawful nature and for no other purpose, except as may
be described in the Addendum.
Article 2
Rental
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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 $6.50 per
square foot of net 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). 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 net 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 Operating Expenses Rate in the calendar year and
the Base Operating Expenses Rate, multiplied by (ii) the Rentable Area of the
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, 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, 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. In the event the
Actual Operating Expenses Rate for the prior calendar year is in excess of the
Base Operating Expenses Rate, Tenant shall pay to Landlord within thirty (30)
days after Tenant's receipt of the statement, an amount equal to Tenant's
Proportionate Share of the Actual Operating Expenses for the prior calendar
year. If the term of this agreement commences other than on the first day of a
calendar year, Tenant's Proportionate Share of the Actual Operating Expenses
shall be a pro rata amount based on the ratio of the number of days of the term
of the lease during the first calendar year to 365 days.
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(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) 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 of the lease term is more than ninety
(90) days from the date of the statement, Landlord may, at Landlord's option,
retain the excess and apply same to the next installments of Tenant's projected
Operating Expenses Installment. 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) "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 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 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 and pension or retirement benefits for such
employees;
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(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;
(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 Charge, 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;
(10) Costs in order to comply with federal or state laws or
municipal ordinances or codes or regulations promulgated under any of
the same;
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(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 or which may be required by
governmental authority. The costs of such capital investment items under
this Section 2.02(d)(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 flourescent lamps in Building Standard light
fixtures and incandescent bulb or flourescent 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);
(14) 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 Leased Premises,
(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(d)(1)
through (12)), (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
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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 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.
(15) Notwithstanding any other provision herein to the contrary,
it is agreed that in the event the Building is not fully occupied during
any year or any
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portion of any year of the Term, an adjustment shall be made in computing
the Actual Operating Expenses for that year so that such expenses shall
be increased for that year to the amount that, in Landlord's judgment,
would have been incurred had the total Rentable Area of the entire
Building been fully occupied during the entirety of that year. 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 year or partial year of the Term of this Lease.
(f) 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 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 CPA is in agreement with such audit results.
2.03. Parking. Landlord hereby agrees to make available to Tenant and Tenant
hereby agrees to pay for and take, during the full term of this Lease, 3.5
parking permits for each 1,000 rentable square feet leased by Tenant, of which
up to ninety (90) of such permits may be assigned permits located in the covered
portion of the Building Garage. With the exception of Tenant's assigned 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.
The monthly rate for each of the parking permits for assigned parking
shall be $ 25.00 plus taxes, and for unassigned parking shall be $0.00 plus
taxes. Said rentals shall be due and payable to Landlord as additional Rent
("Parking Rental") on the first day of each calendar month during the term of
this Lease. Failure by Tenant to pay Parking Rentals when due shall constitute
an Event of Default pursuant to Section 5.08(a) herein. Tenant agrees to comply
with Landlord's Parking rules and regulations as described in the attached
Exhibit "F". Notwithstanding the above, Parking Rental for Tenant's assigned
parking permits shall be abated months one (1) through sixty-three (63) of the
Lease Term. Any additional assigned or unassigned parking permits granted Tenant
as a result of an expansion of the Leased Premises shall be provided at the then
prevailing monthly rate offered by comparable office buildings in the Park Ten
area of Houston, Texas, including the Building. Effective upon the expiration of
month sixty-three (63) of the primary Lease Term, Tenant shall have
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the one (1) time option of reducing the number of assigned permits in the
Building Garage. In order to exercise this option, Tenant shall notify Landlord
not later than expiration of month sixty-one (61) of the primary Lease Term, and
shall include in such notice the number and location of assigned permits it
shall pay for and take during the remainder of primary Lease Term.
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 day of each calendar month 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 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.
2.05. First Month's Rental. Landlord hereby acknowledges receipt of
$125,128.00, representing the first month's rental paid in advance, to be
applied to the Rent for the first month of the Term when due. In the event
Tenant leases more area of the Building than the Minimum Rentable Area, then
Tenant agrees to remit the equivalent of one (1) month's rental to Landlord for
the additional space within ten (10) days following the receipt of invoice.
Article 3
Landlord's Services
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3.01. Services to be Furnished by Landlord.
(a) Landlord shall use reasonable efforts to furnish, subject to the
Building Rules and Regulations (hereinafter defined) and Tenant's performance of
its obligations hereunder, the following 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 by Landlord to be standard, and in
accordance with other comparable buildings in the Park Ten area of
Houston, Texas;
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(2) Hot and cold water for laboratory, lavatory and drinking
purposes in amounts considered by Landlord to be standard, and in
accordance with other comparable office buildings in the Park Ten area of
Houston, Texas. If Tenant requires water in excess of such amounts for
laboratory purposes, the costs of furnishing such excess water will be
borne solely by Tenant.
(3) Janitor service in and about the Building and the Leased
Premises five (5) days per week, 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 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 consumption shall not
exceed one and one-half (1 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 ninety (90) rentable 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 Tenant's consumption of electricity does not exceed
1.5 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 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) 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
(7) 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
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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, REGARDLESS OF WHETHER SUCH LOSSES ARE CAUSED IN WHOLE
OR IN PART BY THE NEGLIGENCE OF LANDLORD. Landlord shall furnish an
adequate number of cardkeys for the Leased Premises (not to exceed 3.5
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". Service on Sundays, building holidays and outside of
Normal Building Operating Hours 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. "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.
(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, 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 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. 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
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power. 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.
(d) Tenant shall pay to Landlord, monthly as billed, as Additional
Rent hereunder, such charges 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(5) 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
Building Standard amounts described in Section 3.01a(5), 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.
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 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. If
such permission is granted, such parties will not interfere with or delay the
performance of any 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 Landlord shall not 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.
3.03. Condition of Building, Premises and Leasehold Improvements.
(a) Landlord will cause the Building to be constructed in accordance
with Exhibit "D." The Leased Premises shall be delivered to Tenant at the
Commencement Date with the leasehold improvements and tenant finish set forth
and described on Exhibit "C" attached hereto. The cost of all installation of
improvements to the Leased Premises requested by Tenant following the
Commencement 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
11
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.
(b) Subject to Section 3.03(c), if on the Commencement Date specified
in Section 1.02 the Building has not been completed or any of the work described
in Exhibit "C" that is required to be performed by Landlord at Landlord's
expense has not been substantially completed as reasonably determined by
Landlord, or if Landlord is unable to tender possession of the Leased Premises
to Tenant on the Commencement Date, then the Commencement Date (and commencement
of installments of Rent) shall be postponed until the Building is completed
and/or such work to be performed in the Leased Premises at Landlord's expense is
substantially completed as reasonably determined by Landlord or until Landlord
is able to tender possession of the Leased Premises to Tenant, as the case may
be, and such postponement shall operate to extend the expiration date specified
in Section 1.02 hereof in order to give full effect to the stated duration of
the Term. 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
improvements to the Leased Premises or failure to tender possession of the
Leased Premises to Tenant of Building and/or Tenant shall have no claim against
Landlord because of any such delay in completion of Improvements or failure to
deliver the Leased Premises. Notwithstanding the foregoing, if the Building
and/or Landlord's work for the Leased Premises is not substantially complete by
June 1, 2000, either Tenant or Landlord shall have the right to terminate this
Lease.
(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 "C", (ii) changes ordered
by Tenant in the Leasehold Improvements (hereinafter defined), or (iii) delay or
failure on the part of Tenant to pay any amounts required to be paid by Tenant
for construction of improvements to the Leased Premises, shall delay the
Commencement Date, expiration date, or commencement of payment of Rent. 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, the payment of monthly installments of Rent and all
other 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, and the total amount of Rent shall be increased accordingly,
provided that no such early entry shall operate to change the expiration date
provided herein.
(d) 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, moveable equipment or furniture owned by Tenant or any other
party. Notwithstanding the above, upon request by Landlord, Tenant agrees to
remove all equipment and fixtures from its laboratory facility upon termination
of the Lease.
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(e) Tenant shall indemnify and hold harmless Landlord from and
against all costs (including attorneys' fees and costs of suit), losses,
liabilities, or causes of action arising out of or relating to any alterations,
additions or improvements made by Tenant to the Leased Premises, including but
not limited to any mechanics' or materialmen's liens asserted in connection
therewith.
(f) Tenant shall not be deemed to be the agent or representative of
Landlord in making any such alterations, physical additions or improvements to
the Leased Premises, and shall have no right, power or authority to encumber any
interest in the Complex in connection therewith other than Tenant's leasehold
estate under this Lease. However, should any mechanics' or other liens be filed
against any portion of the Complex or any interest therein (other than Tenant's
leasehold estate hereunder) by reason of Tenant's acts or omissions or because
of a claim against Tenant or its contractors, Tenant shall cause the same to be
canceled or discharged by record of bond or otherwise within thirty (30)
business days after notice by Landlord. If Tenant shall fail to cancel or
discharge said lien or liens, within said thirty (30) business day period, which
failure shall be deemed to be a default hereunder, Landlord may, at its sole
option and in addition to any other remedy of Landlord hereunder, cancel or
discharge the same and upon Landlord's demand, Tenant shall promptly reimburse
Landlord for all costs incurred in canceling or discharging such lien or liens.
(g) Upon the Commencement Date, Landlord represents and warrants that
the Complex and Leased Premises, as same shall be constructed or improved in
accordance with this Lease, including Exhibits "C" and "D" 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
Commencement Date, any Applicable Law or the ADA is modified or new legislation
enacted so that the Leased Premises or any improvements, personal property,
fixtures or any other matter or thing comprising of or 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 Applicable Law or the 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 ADA shall be the
Tenant's cost, notwithstanding the fact that compliance
13
with such Applicable Law or the 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 Applicable Law or the ADA,
such failure of compliance shall not constitute a default or a failure of
performance on the part of the Landlord pursuant to the terms and provisions of
this Lease. In the event that the Landlord determines, in its sole discretion,
that portions of the Building or the Complex 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, it 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
Applicable Law or the 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 Applicable Law or the 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. After the Commencement Date and
completion of Tenant's punch list items, Landlord shall not be required to make
any improvements or repairs of any kind or character to the Leased Premises or
the Complex, other than such repairs as may be required to the Building
corridors and lobbies and structural members of the Building and Garage and as
contained in the Addendum, any damage to the Leased Premises caused by Landlord,
or its contractors, making other space in the Building ready for occupancy by
other tenants, and such repairs and maintenance as may be deemed necessary
solely by Landlord for normal operations for the Complex consistent with the
standards maintained by owners of similar buildings in the Park Ten area. 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 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. Landlord shall not, in its
operation of the Building, cause any strong, unusual, offensive or objectionable
odors, gases or vapors to be produced within, or to migrate to, the Building,
Garage or Leased Premises at such times as they are occupied by Tenant or its
employees or invitees except to the extent not reasonably avoidable in
connection with temporary construction, renovation, repair, maintenance or other
necessary activities of Landlord in the Building. Landlord will make reasonable
efforts to notify Tenant prior to any construction or other activity in the
Building which may temporarily disturb Tenant in its normal business operations.
Landlord agrees it will not engage in construction or other activity in the
14
Building which will interfere unreasonably with Tenant's conduct of business on
the Leased Premises and there will be no core drilling on the floors on which
the Leased Premises are located or on any adjacent floors between the hours of
8:00 AM and 5:00 PM, Monday through Friday.
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 or in excess of the
items to be installed by Landlord at Landlord's cost under Exhibit "C" 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. Tenant Floor Plans: See Exhibit "C".
4.06. Assignment or Sublease.
(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, sublease, 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 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
15
so affected as hereinafter provided. Any attempt to effect a Transfer without
such permission of Landlord shall be void and of no effect. Tenant acknowledges
that any assignment or sublease 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 eighteen (18) 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. At all times a refusal to permit a Transfer that is related to the
creditworthiness or financial condition of the proposed assignee or sublessee
shall be deemed reasonable. In order for Tenant to make a Transfer, Tenant must
request in writing Landlord's permission within at least sixty (60) days in
advance of the date on which Tenant desires to make a Transfer, after which
Landlord shall then have a period of thirty (30) days following receipt of such
notice within which to notify Tenant in writing that Landlord elects (i) to
terminate this Lease as to the space so affected as of the date so specified by
Tenant in which event Tenant will be relieved of all further obligations
hereunder as to such space, (ii) to permit Tenant to assign or sublet such
space, subject, however, to prior written approval of the proposed assignee or
sublessee by Landlord, or (iii) to refuse consent 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 thirty (30) day period, Landlord shall be deemed to have elected
option (iii) 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. Tenant shall not cause or permit any
advertisement for a proposed Transfer to be published without the prior approval
of Landlord, and during the initial eighteen (18) months of the Lease Term, no
advertisement of a rental rate less than that which Landlord is then asking for
similar space in the Building will be permitted.
(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 that the rent
or other consideration due and payable by a sublessee or assignee under
any such permitted sublease or assignment exceeds the Rent for the
portion of the Leased Premises so transferred, then Tenant
16
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 any case where 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.
(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,
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
17
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; provided, however, that Landlord shall have no
obligation to consent to any alteration or change if, in Landlord's sole
opinion, the residual value of the resulting improvements to the Leased Premises
will be less than before such alteration or change, unless Tenant, at its
expense, agrees to reconstruct the Leased Premises to the condition that existed
prior to such alteration, change, improvement, repair, replacement or additions.
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
18
termination or expiration 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.
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 set out in Exhibit "E" 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; 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 or its agents or
representatives to enter into and upon any part of the Leased Premises at all
reasonable hours with reasonable prior advance 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; 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. Tenant agrees with Landlord and with the mortgagee
of any mortgage or the beneficiary of any deed of trust now or hereafter
constituting a lien on the Complex or the Leased Premises ("Landlord's
Mortgagee") that any Landlord's 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;
19
and at Landlord's Mortgagee's request Tenant shall execute a recordable
instrument establishing this Lease as superior to such lien; or Landlord's
Mortgagee may, by like notice, make this Lease subordinate to such mortgage or
deed of trust. If Landlord's Mortgagee shall elect to make this Lease
subordinate to such mortgage or deed of trust, Tenant agrees to attorn to such
Landlord's Mortgagee so long as such Landlord's Mortgagee also agrees to not
disturb Tenant's possession under this Lease in the event such Landlord
Mortgagee becomes the owner of the Building. 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 Mortgagee may request. Without limiting the
foregoing, Tenant agrees to enter into a Subordination, Non-Disturbance and
Attornment Agreement in the form attached as Exhibit "H." Tenant further agrees
that any Landlord's 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 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 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 promptly, 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 promptly execute, without
further consideration, a certificate stating the commencement and expiration
dates of the Term, the rental then payable hereunder, that there are no defaults
on the part of Landlord or claims against Landlord hereunder (or if there are
any, stating 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 a material portion
of the remainder of the Building or Leased Premises,
20
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 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,
Tenant shall immediately give notice thereof to Landlord. If 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 shall 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.
(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. 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%)
21
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 in the
Building 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. Recourse Limitation. Tenant specifically agrees to look solely to the
value of Landlord's equity interest in the Building at the time a cause of
action in favor of Tenant against Landlord accrues, it being agreed that
Landlord (and its partners, officers, directors and shareholders) shall never be
personally liable for any such judgment. In addition, Tenant also agrees that
Tenant shall not be entitled to recover from Landlord nor any of its agents,
servants, employees, partners, officers, directors or shareholders any indirect,
special or consequential damages Tenant may incur as a result of a default under
this Lease or other action by Landlord, its agents, servants, employees,
partners, officers, directors or shareholders. The provisions contained in the
foregoing sentences shall not limit any right that Tenant might otherwise have
to obtain injunctive relief against Landlord, or any other action not involving
the liability of Landlord to respond in monetary damages from assets other than
Landlord's interest in the Building.
5.07. 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 sole
discretion and at any time, to change or modify any of the facilities and areas
mentioned in this Section; 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 "E" hereto and are of equal dignity herewith. Notwithstanding the
above, Landlord shall not have the right to change or modify any of the
facilities and areas in this Section if such change or modification would have
the effect of materially restricting Tenant's access to the Leased Premises.
5.08. Default by Tenant.
(a) Each of the following occurrences relative to Tenant shall
constitute an "Event of Default:"
(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
22
Landlord, that the same is due and payable, but not yet received by
Landlord; provided, in no event shall such notice be required of
Landlord in excess of two (2) times during any twelve (12) month
period;
(2) The filing or execution or occurrence of a petition in
bankruptcy or other insolvency proceeding by or against Tenant or
Guarantor, 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
or Guarantor for the appointment of a trustee, receiver or liquidator
of Tenant or Guarantor or any of Tenant's or Guarantor'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), (2) or (3) above, for a
period of thirty (30) days after notice from Landlord to Tenant
specifying the items in default; or
(4) The occurrence of any other event herein provided to be an
Event of 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.
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.
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(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).
(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
5.08(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
Landlord.
(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 5.08(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 portions of the
Building.
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(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 in no event be responsible for the value, preservation or
safekeeping thereof. 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 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, or any significant portion thereof, Landlord may, at its
election, terminate this Lease.
5.09. Right to Relocate. Notwithstanding anything herein to the contrary,
Landlord shall in all cases retain the right and power to relocate Tenant within
the Building in space which is comparable in size and location and suited to
Tenant's use; such right and power to be exercised reasonably and such
relocation to be made at Landlord's sole cost and expense. Landlord shall not be
liable or responsible for any claims, damages, or liabilities in connection with
or occasioned by such relocation. Landlord's reasonable exercise of such right
and power shall include, but shall in no way be limited to, a relocation to
consolidate the rentable area occupied in order to provide Landlord services
more efficiently, or a relocation to provide contiguous vacant space for a
prospective tenant. Notwithstanding the above, Landlord shall not have the right
to relocate Tenant from the top two (2) floors of the Building, and shall have
the right to relocate Tenant only from the remainder of the Leased Premises, if
any, which is located on a portion of an entire floor of the Building.
5.10. Non-Waiver. Neither acceptance of rent by Landlord nor failure by
Landlord to complain of any action, non-action or default of Tenant shall
constitute a waiver of any of Landlord's rights hereunder. Waiver by Landlord of
any right for any default of Tenant shall not constitute a waiver of any right
for either a subsequent default of the same obligation or any other default.
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.
25
5.11. 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.
5.12. 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.
5.13. Remedies Cumulative. Landlord may restrain or enjoin any breach or
threatened breach of any covenant, duty or obligation of Tenant herein contained
without the necessity of proving the inadequacy of any legal remedy or
irreparable harm. The remedies of Landlord hereunder shall be deemed cumulative
and no remedy of Landlord, whether exercised by Landlord or not, shall be deemed
to be in exclusion of any other.
5.14. 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.
(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
26
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. 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.
(d) Anything herein to the contrary notwithstanding, Tenant hereby
releases and waives all claims, rights of recovery and causes of action that
Tenant or any party claiming by, through or under Tenant by subrogation or
otherwise may now or hereafter have against the Landlord or any of Landlord's
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 except gross negligence or willful misconduct (but including
negligence of Landlord or Landlord's partners, directors, officers, employees,
or agents) that could have been insured against under the terms of (i) any
standard fire and extended coverage insurance policies required under the terms
of this Lease, or (ii) any other loss covered by insurance 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 in connection with any of the repair,
maintenance, damage, destruction, restoration or replacement referred to in this
Lease.
(f) Landlord Insurance. Landlord covenants and agrees that Landlord
will 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 shall 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
27
occurrence. Landlord shall also maintain employer's liability insurance with a
minimum limit of One Million and No/100 Dollars ($1,000,000.00) for bodily
injury.
5.15. 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.
5.16. Notice. Any notice which may or shall be given under the terms of this
Lease shall be in writing and shall be either delivered by hand or sent by
United States 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; or if for Tenant (i) prior to the Commencement Date to Tenant
at 00000 Xxxx Xxx, Xxxxx 000, Xxxxxxx, Xxxxx, ____________, Attn: Xxxx Journey,
V.P. or (ii) subsequent to the Commencement Date to the Leased Premises, attn:
Xxxx Journey, V.P. 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).
5.17. 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.
5.18. 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.
5.19. 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
28
and section headings under this Lease are for convenience of reference and 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.
5.20. Delinquent Payments; Handling Charge. Any payments required of Tenant
hereunder, whether as Rent or otherwise, shall bear interest from the time due
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.
5.21. Quiet Enjoyment. Tenant, on paying all sums herein called for and
performing and observing all of its covenants and agreements hereunder, 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.
5.22. 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.
5.23. 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 X. X.
Xxxxxxxxxx and Company, L.L.C. and Fidinam Investment Consulting, Inc., 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. In the event of a sale or other
conveyance of the Building, Landlord, as Grantor, agrees to obtain and deliver
to X.X. Xxxxxxxxxx
29
& Company L.L.C. a written agreement from the Grantee assuming payment of any
and all commissions then due or any additional commissions, which may become
payable to X.X. Xxxxxxxxxx & Company, L.L.C., at which time Landlord's liability
for such payment of commissions shall be forever relieved.
5.24. Limitation of Implied Warranty. Landlord duties and warranties are
limited to those expressly stated in this Lease and shall not include any
implied duties or implied warranty now 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.
5.25. Environmental and Land Use Matters. Tenant shall not 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 indemnities 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. The indemnity of Landlord shall expire
on a date five (5) years after the termination of the lease term unless Landlord
has notified Tenant 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.
5.26. Name of Building and Building Signage. So long as an Event of Default
shall not exist on the part of Tenant, Landlord and Tenant mutually covenant and
agree that provided Tenant (but not any unrelated subtenant or unrelated
assignee or transferee) leases and occupies more Rentable Area than any other
tenant in the Building, Tenant shall be permitted the non-exclusive use of a
monument sign to be provided by Landlord in a mutually acceptable location which
sign shall be of a size, constructed of materials and affixed in a location
which shall be approved by Landlord prior to erection of same, which approval
shall not be unreasonably withheld. Other than to the extent provided in this
Section, Tenant shall not be permitted to place signage on any part of the
Building exterior except for Tenant's name which shall be of a size, constructed
of materials and affixed in a location which shall be approved by Landlord prior
to erection of same, which approval shall not be unreasonably withheld,
conditioned or delayed. Should an Event of Default occur
30
hereunder, or should Tenant fail to lease and occupy more Rentable Area than any
other tenant in the Building, Landlord hereby reserves and shall have the right
at any time and from time to time to change the name of the Building and remove
Tenant's name from the Building signage and Building as Landlord may deem
advisable, and Landlord shall not incur any liability whatsoever to Tenant as a
consequence thereof. Tenant shall bear all costs associated with the materials
used to affix its identity to the monument sign, and shall bear the entire
expense of erecting its name on the Building exterior.
5.27. Guaranty. Guarantor agrees to guaranty 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, and but for this
Guaranty Agreement, would not enter into this Lease with Tenant.
31
EXECUTED in multiple counterparts, each of which shall have the force
and effect of an original on the date first above written.
BROADFIELD ASSOCIATES, L.L.C.,
a Texas limited liability company
By: /s/ Xxxxxxx Xxxx
--------------------------------
Name: Xxxxxxx Xxxx
------------------------------
Title: Managing General Partner
-----------------------------
"LANDLORD"
NEWPARK DRILLING FLUIDS, INC.,
a Texas corporation
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name: XXXXX X. XXXXXX
------------------------------
Title: President
-----------------------------
"TENANT"
NEWPARK RESOURCES, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxx
--------------------------------
Name: XXXXX X. XXXX
------------------------------
Title: President
-----------------------------
"GUARANTOR"
[Signature page to Lease Agreement dated 28/th/ May 1998 between Broadfield
Associates, L.L.C., a Texas limited liability company, as Landlord, Newpark
Drilling Fluids, Inc., a Texas corporation, as Tenant, and Newpark Resources,
Inc., a Delaware corporation, as Guarantor]
32
ADDENDUM TO LEASE BETWEEN
BROADFIELD ASSOCIATES, LLC, AS LANDLORD, AND NEWPARK DRILLING FLUIDS,
INC., AS TENANT, AND NEWPARK RESOURCES, INC., AS GUARANTOR
1. BASE RENTAL
Tenant shall pay monthly Base Rental for the initial Leased Premises
pursuant to the following schedule:
MONTH MONTHLY BASE RENTAL/RENTABLE SQUARE FOOT
01 $1.6042
02-04 $0.00
05-63 $1.6042
64-123 $1.6708
Upon completion of Tenant's plans and specifications and the
determination of the exact Rentable Area to be leased by Tenant in the
Building, Landlord and Tenant agree to enter into an amendment of this
Lease describing the monthly Base Rental due Landlord during the term
of this Lease, it being understood between the parties that Tenant's
monthly Base Rental shall be calculated pursuant to the above schedule
up to and including 98,000 rentable square feet contained within the
Leased Premises. Base Rental shall be payable monthly on the first day
of each month during the Term of the Lease.
2. AD VALOREM TAX REIMBURSEMENT
The Base Operating Expenses Rate includes a component for ad valorem
taxes in the amount of $2.40 per rentable square foot ("Landlord's
Estimate"). If, during the 1999 and 2000 calendar years ("Tax Years")
the Xxxxxx County Appraisal District assesses the Building below
Landlord's Estimate. Landlord agrees to refund Tenant ("Tenant Refund")
Tenant's proportionate share of the difference between Landlord's
Estimate and the actual taxes due during such Tax Years at the time
such taxes are due to be paid by Landlord to the appropriate taxing
authority. At Landlord's option, such refund, if any, shall be applied
to Tenant in cash, Base Rental abatement, or a combination of both. If
Landlord elects to apply such refund in the form of Base Rental
abatement, Tenant's monthly Base Rental shall be abated commencing
February 1, 2000 (in the event of a 1999 calendar year refund) and
February 1, 2001 (in the event of a 2000 calendar year refund) until
the value of the rental abatement is equivalent to the value of
Tenant's refund, at which time Tenant shall resume payment of monthly
Base Rental.
3. AD VALOREM TAX ABATEMENT
In the event any ad valorem taxes applicable to the Building are abated
by any taxing authority and, as a result, are not in fact payable by
Landlord (the "Abated Taxes"), Tenant and Landlord agree the Actual
Operating Expenses for any calendar year shall include the amount of
Abated Taxes applicable to such year for purposes of computing Actual
Operating Expenses and Tenant's Proportionate Share of Actual Operating
Expenses.
During each year of the Lease Term during which the Building receives
Abated Taxes, Landlord shall pay to Tenant not later than January
31/st/ of each succeeding year an amount equal to the product of the
Abated Taxes for the preceding year multiplied by Tenant's
Proportionate Share of Actual Operating Expenses, or as otherwise
required by any taxing authority. For each subsequent year of the Lease
Term, Landlord shall pay to Tenant not later than January 31/st/ of
each succeeding year the amount of the Abated Taxes due Tenant.
4. TENANT'S RIGHT TO CONTRACT THE LEASED PREMISES
Tenant, (but not any subtenant, assignee or transferee of Tenant other than
an approved subsidiary, affiliate or successor of Tenant as defined in
4.06 (f)(1), (2), (3)) upon not less than twelve (12) months prior written
notice in each instance, shall have two (2) separate options to reduce the
Rentable Area under lease ("Contraction Space"). Tenant's first option to
contract shall be effective upon expiration of month eighty-seven (87) of
the Lease Term. Tenant's second option to contract shall be effective upon
expiration of month ninety-nine (99) of the Lease Term. Upon Tenant's
timely notice and payment of stipulated damages as defined below, Tenant's
obligation to Landlord with respect to the Contraction Space would cease
and be of no further force or effect (excepting Tenant's obligations as
contained in paragraphs 4.03 and 4.04 of the Lease which would survive). In
each instance the Contraction Space shall be limited to and shall not
exceed 12,500 rentable square feet. Unless otherwise approved by Landlord,
the Contraction Space shall be on a single floor and in a single contiguous
unit of space. In no event may the Contraction Space include all or any
portion of Tenant's laboratory or special purpose facilities in the
Building. Simultaneous with Tenant's notice to landlord of its intent to
contract it shall identify the location of the Contraction Space. In the
event Tenant desires to contract on a portion of a floor which is
configured in a single tenant condition then Tenant, at its sole cost and
expense, agrees to construct a Building standard multi-tenant corridor
utilizing materials identical to the remaining multi-tenant floors of the
Building. Simultaneously, Tenant's unreserved parking permits and reserved
parking permits shall be proportionately reduced in the Building Garage.
Tenant's right to contract shall be null and void in the event (i) an Event
of Default on the part of Tenant shall exist as of the date of Tenant's
Notice to Landlord, (ii) Tenant fails to submit Tenant's Notice to Landlord
when due, (iii) Tenant fails to pay stipulated damages when due.
For purposes herein, "stipulated damages" shall be defined as the
unamortized sum, calculated as of the effective date of Tenant's
contraction, of the following: (i) Tenant's Leasehold Improvement
Allowance, (ii) Tenant's Architectural Allowance, (iii) Tenant's
Refurbishment Allowance, (iv) brokerage commissions paid by Landlord and
(v) two (2) month's Base Rental applicable to the Contraction Space. The
sum of items (i), (ii), (iii), (iv) shall be treated as a loan, fully
amortized over the Lease Term (but excluding any month in which monthly
Base Rental is abated), at twelve percent (12%) annual interest, computed
monthly. Stipulated damages shall be due simultaneous with Tenant's notice
of its election to contract.
5. TENANT'S RENEWAL OPTION
Provided an Event of Default does not exist on the part of the Tenant,
Tenant (but not any subtenant, assignee or transferee of Tenant other than
an approved subsidiary, affiliate or successor of Tenant as defined in 4.06
(f) (1), (2), (3)) shall have the option of renewing this Lease for two
(2), successive but independent five (5) year periods under the same terms
and conditions of the Lease with the exception of Base Rental, which shall
be adjusted to ninety-five percent (95%) of the Prevailing Market Rental
Rate, as such is defined below, offered by comparable office buildings
(including the Building) in the Park Ten area of Houston, Texas. With
respect to Tenant's first renewal option, Tenant shall renew not less than
seventy-five percent (75%) of the rentable area leased by Tenant at the
time Tenant exercises its option to renew the Lease. With respect to
Tenant's second renewal option, Tenant shall lease the entire rentable area
then under lease. The location of the Leased Premises renewed by Tenant
shall be in a contiguous location within the Building reasonably acceptable
to Landlord. Unless otherwise approved by Landlord, Tenant agrees to renew
its Lease with respect Tenant's laboratory or special purpose facilities in
the Building. In order to exercise its option, Tenant must notify Landlord
in writing not earlier than fifteen (15) months nor later than twelve (12)
months prior to expiration of the Lease Term. Within thirty (30) days
following receipt of Tenant's notice, Landlord shall provide Tenant with
its determination of the Prevailing Market
Rental Rate. Within thirty (30) days following receipt of the Prevailing
Market Rental Rate as determined by Landlord, Tenant shall notify Landlord
of its acceptance or rejection of the Prevailing Market Rental Rate.
Landlord and Tenant agree to negotiate in good faith concerning the
determination of the Prevailing Market Rental Rate, as defined herein,
however, if Landlord and Tenant are unable to agree as to be the Prevailing
Market Rental Rate within thirty (30) days following the date Tenant
rejects Landlord's determination of the Prevailing Market Rental Rate, the
resolution shall be submitted to arbitration as described in Paragraph 10
herein.
6. DEFINITION OF PREVAILING MARKET RENTAL RATE
The "Prevailing Market Rental Rate" as used herein shall be that rate
charged for comparable space and conditions by comparable office buildings
in the Park Ten area of Houston, Texas (including the Building) taking into
consideration the location, quality and age of the building, floor level,
definition of rentable area, leasehold improvement allowances to be
provided, parking charges, space planning, rentable abatement, lease
takeovers and/or lease assumptions, relocation expenses and other
applicable concessions, brokerage commissions, term of lease, extent of
services to be provided, base year or figure for escalation purposes (both
operating costs and real estate taxes), adjustments to base rental,
applicable distinction between "gross" and "net" leases, credit standing
and financial stature of the tenant, the time the particular rate under
consideration became or is to become effective, or any other relevant term
or condition. It is agreed that written offers to lease comparable space
located elsewhere in the Building from third parties and leases completed
in the Building within six (6) months prior to Tenant's exercise of its
Renewal Option may be used by Landlord as an indication of the Prevailing
Market Rental Rate.
7. TENANT'S PREFERENTIAL RIGHT
So long as not less than twenty-four (24) months remain in the primary
Lease Term or any renewal or extension thereof, and further subject to (i)
the condition that an Event of Default shall not exist on the part of
Tenant or (ii) any option, right or like provision granted to a tenant as a
result of Tenant's waiver of its Preferential Right, Landlord hereby grants
to Tenant (but not any subtenant, assignee or transferee of Tenant other
than an approved subsidiary, affiliate or successor of Tenant as defined in
4.06 (f) (1), (2), (3)) a Preferential Right ("Preferential Right") with
respect to the entire rentable area contained within the Building, such
space being defined herein as the "Subject Space". In the event Landlord
receives interest from a prospective tenant for all or any portion of the
Subject Space, in each instance Landlord shall so notify Tenant
("Landlord's Notice") and shall include in such notice the Prevailing
Market Rental Rate, as such is defined, for the Subject Space. Within seven
(7) business days from the receipt of such notice, Tenant shall notify
Landlord (Tenant's Acceptance Notice") of the exercise or the waiver of its
Preferential Right. In the event Tenant fails to notify Landlord within
such seven (7) business day period, then Tenant shall be deemed as having
waived its Preferential Right and Landlord may enter into a lease with such
third-party tenant. In the event Tenant exercises its Preferential Right,
Landlord and Tenant shall, within ten (10) business days following Tenant's
Acceptance Notice to Landlord (or as soon thereafter as possible), enter
into a written agreement modifying and supplementing this Lease. In the
event Tenant fails to exercise its Preferential Right by timely delivery to
Landlord of the said Tenant's Acceptance Notice, then Tenant shall
conclusively be deemed to have forfeited and waived its Preferential Right
to lease the Subject Space identified in Landlord's Notice. In the event
Tenant exercises its Preferential Right by timely delivery to Landlord of
Tenant's Acceptance Notice, or if Tenant shall by written notice elect to
waive (or by failure to timely deliver to Landlord the said Tenant's
Acceptance Notice, waive) its Preferential Right to lease the Subject Space
contained in Landlord's Notice, then in either such event, Tenant shall not
thereafter by entitled to revoke either such election, or such waiver to
its right to lease the Subject Space. Except as may be
specifically modified in such written agreement and except with respect to
the rent applicable to the Subject Space, the terms and provisions of the
Lease, including the expiration date shall, on the day of delivery of the
Subject Space to Tenant, automatically apply and become applicable to the
Subject Space; and the Subject Space, as of the date of such delivery,
shall automatically and without the necessity of further documentation,
become and be deemed to be a part of the Leased Premises. In the event
Tenant disagrees with Landlord's determination of the Prevailing Market
Rental Rate. Tenant shall still be entitled to exercise its Preferential
Right with respect to the Subject Space: provided, in the event Landlord
and Tenant are unable to agree on the Prevailing Market Rental Rate within
ten (10) days following the date of Tenant's Acceptance Notice, then such
determination shall be submitted to arbitration as described in Paragraph
10 herein. Effective as of the Commencement Date of delivery of the Subject
Space to Tenant, Tenant's Proportionate Share of Actual Operating Expenses
shall be automatically increased so as to include the rentable area within
the Subject Space. Although Landlord shall have no obligation to make any
alterations or install or modify any improvements within the Subject Space,
and by virtue of Tenant's exercise of its Preferential Right it shall be
deemed to have accepted the Subject Space in its present "as-is" condition,
the Commencement Date shall be defined as the earlier to occur of (i)
Tenant's occupancy of all or any portion of the Subject Space or (ii),
sixty (60) days following the date the Subject Space is delivered to Tenant
in a vacant condition.
8. REFURBISHMENT ALLOWANCE
Effective upon expiration of month sixty-three (63) of the Lease Term,
Landlord shall provide Tenant an allowance of up to $3.00 per rentable
square foot contained in the initial Leased Premises, as such is defined in
Paragraph 1.01, toward permanent Leasehold Improvements Tenant elects to
install in the Leased Premises. Tenant's architectural plans and
specifications describing the refurbishment of the Leased Premises shall be
subject to Landlord's prior approval.
9. EXPANSION OPTION
Provided Tenant notifies Landlord in writing not later than June 30, 1998,
Tenant shall have the option of expanding the Leased Premises by up to an
additional 20,000 rentable square feet in a location of the Building
acceptable to Landlord and Tenant, otherwise subject to the same terms and
conditions applicable to the initial Leased Premises.
10. ARBITRATION
Any determination of the Prevailing Market Rental Rate that is submitted to
binding arbitration shall be made under procedures set forth below. Pending
the final determination of any dispute, Tenant shall pay the amount(s)
claimed by landlord; in the event of a final determination in Tenant's
favor, Landlord shall refund to Tenant any overpayment. The determination
of the Prevailing Market Rental Rate 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 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 Rate 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) busines 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.
(iii) 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 Marketing Rental
Rate. 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 proposed Prevailing
Market Rental Rate or Tenant's proposed Prevailing Market Rental Rate,
whichever in the panel's judgment most closely resembles the actual
Prevailing Market Rental Rate. The Arbitration Panel shall reach its
decision by majority vote and shall communicate its decision by written
notice to the parties.
(iv). The decision by the Arbitration Panel shall be final, binding and
conclusive and shall be non-appealable and enforceable in any court
having jurisdiction. All hearings and proceedings held by the
Arbitration Penal shall take place in Houston, Texas.
(v). The Prevailing Market Rental Rate determination 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 extend such act is applicable hereto.
(vi). Until the Prevailing Market Rental Rate has been finally determined,
Tenant shall pay Base Rental based upon Landlord's good faith
determination thereof, and an appropriate refund shall be made to or by
Tenant within thirty (30) days after a final determination of the
Prevailing Market Rental Rate is made.
(vii). Tenant shall bear all fees, costs and expenses 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. The non-prevailing party
shall bear the
fees, and costs and expenses of the Third Panel Member and all other costs and
expenses of the Arbitration Panel in conducting the arbitration.
EXHIBIT "A"
[FLOOR PLAN]
The initial Leased Premises shall be comprised of the top three (3) floors of
the Building. In addition, Tenant may lease a portion of the first (1/st/)
floor, not to exceed 2,000 rentable square feet. In the event additional
rentable area is required to satisfy section 1.01 (b) of the Lease or if Tenant
otherwise increases the rentable area under lease, such premises shall be
contiguous to Tenant's Leased Premises on the upper floors of the Building.
EXHIBIT "B"
LEGAL DESCRIPTION
Metes and Bounds Description of 3.879 Acres of Land out of Reserve "C",
Park Ten, Section Six and Reserve "B", Block Two, Park Ten,
Section Three, Xxxxxx County, Texas.
All that certain 3.879 acres of land out of Reserve "C", Park Ten, Section Six,
according to the correction plat recorded in Vol. 297, Page 91, Xxxxxx County
Map Records, out of Reserve "B", Block Two, Park Ten, Section Three, according
to the plat thereof recorded in Volume 259, Page 122, Xxxxxx County Map Records
and out of the Xxxxx Xxxxxxxxx Survey, A-535, Xxxxxx County, Texas and being
more particularly described as follows:
COMMENCING at a 5/8" iron rod marking the northwest corner of said Park Ten,
Section Three: Thence N 88 42' 37" - 435.09' along the north line of said
Section Three to a point for the northwest corner of said Section Six; Thence S
02 31' 29" E - 564.83' along the west line of said Section Six to a 5/8" iron
rod set for the POINT OF BEGINNING of the herein described tract, said POINT
located in the south right-of-way line of Park Row (width varies);
THENCE the following courses and distances along the south right-of-way line of
Park Row;
N 88 42' 12" E, - 94.03' to the Point of Curvature of a curve to the right,
having a radius of 320.00' a central angle of 11 14' 40" and an arc length of
62.80' to a 5/8" iron rod set for the Point of Tangency;
S 80 03' 08" E - 54.65' to the Point of Curvature of a curve to the left, having
a radius of 320.00', a central angle of 23 04' 59" and an arc distance of
128.92' to a 5/8" iron rod set for cut-back corner;
S 63 20' 15" E - 15.04' along said cut-back corner to a 5/8" iron rod set in the
westerly right-of-way line of Broadfield Boulevard (100' wide);
THENCE S 21 39' 37" E - 316.04' along said westerly right-of-way line to a 5/8"
iron rod set for the Point of Curvature of a curve to the right, having a radius
of 1,250,00' and a central angle of 04 27' 24";
THENCE along said curve to the right and said westerly right-of-way line an arc
distance of 97.23' to a 5/8" iron rod set in the centerline of a 30' wide
Texas-New Mexico pipeline easement recorded in County Clerk File No. X-000000,
Xxxxxx Xxxxxx Xxxx Xxxxxxx;
THENCE S 88 35' 29" W - 486.68' along said centerline to a 5/8" iron rod set for
the southeast corner of a 4.000 acre tract described in a deed from Xxxxx,
Xxxxxx & Company to Servomation Corporation, recorded in County Clerk File No.
F-045265, Xxxxxx County Deed Records.
