ELEVENTH AMENDMENT TO LEASE AGREEMENT
Draft
of 12/14/06
EXHIBIT
10.06
ELEVENTH
AMENDMENT TO LEASE AGREEMENT
THIS
ELEVENTH AMENDMENT TO LEASE AGREEMENT (this “Eleventh
Amendment”)
is
made and entered into as of the 21st day of December, 2006, by and between
TEXAS
TOWER LIMITED, a Texas limited partnership (the “Landlord”),
and
XXXXXXX XXXXXX XXXXXX INC., a Texas corporation (successor in interest to
Xxxxxxx Xxxxxx Xxxxx Inc.) (the “Tenant”).
WITNESSETH
WHEREAS,
by that certain Lease Agreement dated September 22, 1987 (the “Original
Lease”),
Landlord leased to Tenant approximately 8,064 square feet of net rentable area
of office space located on Floor 31 (the “Leased
Premises”),
of
the building now known as JPMorgan Chase Tower, located at 000 Xxxxxx Xxxxxx,
xx
Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000 (the “Building”),
all
as is more fully described in the Original Lease; and
WHEREAS,
Landlord and Tenant have amended the Original Lease pursuant to the following
instruments: (i) First Amendment to Lease Agreement dated October 26, 1990
(the
“First
Amendment”);
(ii)
Second Amendment to Lease Agreement dated December 1, 1990 (the “Second
Amendment”);
(iii)
Third Amendment to Lease Agreement dated May 21, 1991 (the “Third
Amendment”);
(iv)
Fourth Amendment to Lease Agreement dated April 20, 1992 (the “Fourth
Amendment”);
(v)
Fifth Amendment to Lease Agreement dated July 25, 1994 (the “Fifth
Amendment”);
(vi)
Sixth Amendment to Lease Agreement dated September 25, 1996 (the “Sixth
Amendment”);
(vii)
Seventh Amendment to Lease Agreement dated January, 1998 (the “Seventh
Amendment”);
(viii) Eighth Amendment to Lease Agreement dated April 27, 2000 (the
“Eighth
Amendment”);
Ninth
Amendment to Lease Agreement dated September 18, 2000 (the “Ninth
Amendment”);
and
Tenth Amendment to Lease Agreement dated December 7, 2001 (the “Tenth
Amendment”)
(the
Original Lease, as so amended, is collectively referred to herein as the
“Lease”);
and
WHEREAS,
the current area of the Leased Premises is 44,295 square feet of net rentable
area, consisting of 22,222 square feet of net rentable area on Floor 30 of
the
Building, and 22,073 square feet of net rentable area on Floor 31 of the
Building, respectively (collectively, the “Existing
Premises”),
and
the existing Lease term is scheduled to expire on November 30, 2007;
and
WHEREAS,
Landlord and Tenant desire to further amend the Lease, to provide, among other
things, for a relocation of the Leased Premises and an extension of the Lease
term, and the parties are willing to agree to such an amendment upon the terms
and conditions as set forth below.
NOW,
THEREFORE, in consideration of the mutual covenants set forth herein, Ten
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree to
amend, and do hereby amend, the Lease as follows:
1. New
Premises.
Subject
to and upon the terms, provisions and conditions hereinafter set forth and
each
in consideration of the duties, covenants and obligations of the other hereunder
and under the Lease, as amended, Landlord does hereby lease to Tenant and Tenant
does hereby lease from Landlord approximately 67,024 square feet of net rentable
area being the entirety of Floor 57 (22,561 square feet of net rentable area),
Floor 58 (00,000 xxxxxx xxxx xx xxx xxxxxxxx xxxx) and Floor 59 (21,902 square
feet of net rentable area) of the Building (the “New
Premises”),
as
depicted on the floor plans of the New Premises attached hereto and made a
part
hereof for all purposes as EXHIBIT
A.
2. Term.
The
term (the “Term”)
of the
Lease with respect to the New Premises shall be one hundred twenty (120) months
commencing on the later to occur of (i) December 1, 2007 or (ii) the date of
Tenant’s occupancy of the New Premises for the purpose of conducting business
therefrom (the “New
Premises Commencement Date”),
and
expiring on the last day of the full calendar month from and after the New
Premises Commencement Date (the “Expiration
Date”)
(unless sooner terminated, or extended, in accordance with the Lease). Landlord
shall use reasonable efforts to deliver vacant, broom-clean possession of the
New Premises to Tenant on or prior to July 1, 2007 for Tenant’s construction of
leasehold improvements therein. Notwithstanding the foregoing, if Tenant has
not
occupied the New Premises by February 1, 2008 (such date to be extended one
day
for each day of delay beyond July 1, 2007 that Landlord fails to deliver
possession of the New Premises to Tenant), the New Premises Commencement Date
shall be deemed to be February 1, 2008 (or the applicable extended date). In
addition, if Landlord does not deliver vacant, broom-clean possession of the
New
Premises to Tenant on or prior to September 1, 2007, Tenant shall be granted
an
abatement of Base Rental and Lessee’s Additional Rental commencing on the New
Premises Commencement Date (as extended as provided above), equivalent to one
day for each day of delay beyond September 1, 2007 that Landlord fails to
deliver possession of the New Premises to Tenant. Promptly following the New
Premises Commencement Date, the parties shall execute a certificate designating
the New Premises Commencement Date and the Expiration Date (in a form provided
by Landlord and reasonably acceptable to Tenant).
3. Net
Rentable Area.
Article
I, Paragraph I of the Lease is hereby amended to provide that from and after
the
New Premises Commencement Date, and except as provided in Section 5 below,
the
“leased premises” shall be the New Premises and the “net rentable area” of the
leased premises shall be stipulated to be 67,024 square feet.
4. Rent.
(a) Effective
as of the New Premises Commencement Date and continuing through the Expiration
Date, Base Rental payable by Tenant pursuant to Article II, Paragraph 4 of
the
Lease with respect to the New Premises shall be determined according to the
following schedule:
Time
Period
|
Base
Rental Rate
PSF/NRA
|
Annual
Base
Rental
|
Monthly
Base
Rental
|
|||||||
NPCD
- Month 48
|
$
|
15.50
net
|
$
|
1,038,872.00
|
$
|
86,572.67
|
||||
Months
49 - 96
|
$
|
16.50
net
|
$
|
1,105,896.00
|
$
|
92,158.00
|
||||
Months
97 - 120
|
$
|
17.50
net
|
$
|
1,172,920.00
|
$
|
97,743.33
|
-2-
(b) The
Base
Rental rates quoted above are per square foot of net rentable area within the
New Premises per annum. In addition to Base Rental, Tenant shall pay, with
respect to the New Premises, during the Term, Lessee’s Additional Rental,
Lessee’s Forecast Additional Rental, parking rent and all other sums required to
be paid by Tenant pursuant to the terms and conditions of the Lease, in
accordance with such terms and conditions.
5. Continued
Occupancy of Existing Premises; Relinquishment of Existing Premises; Relocation
to New Premises.
The
Base Rental rate payable by Tenant with respect to the Existing Premises shall
decrease to $15.50 per square foot of net rentable area within the Existing
Premises per annum effective as of December 1, 2007 if Tenant has not vacated
the Existing Premises as of such date. Tenant’s obligation to pay Rent with
respect to the Existing Premises shall terminate on the later to occur of:
(i)
the New Premises Commencement Date or (ii) the date Tenant vacates the Existing
Premises and occupies the New Premises. Upon Tenant’s relocation to the New
Premises, Tenant shall vacate the Existing Premises and surrender it to Landlord
in broom-clean condition with all furniture, trade fixtures, equipment and
other
personal property removed therefrom. Upon Tenant’s relocation to the New
Premises, the Lease and all of Tenant’s rights, privileges, duties and
obligations accruing with respect to the Existing Premises (other than those
that expressly or by their nature survive the termination of the Lease),
including, without limitation, Tenant’s right to possession and use thereof,
shall terminate.
6. Condition
of the New Premises.
Landlord agrees to deliver possession of the New Premises on or after July
1,
2007 in its then current condition, i.e., “AS
IS”,
“WITH
ALL FAULTS”
(Landlord’s obligation to perform any required asbestos remediation work and the
Sprinklering Work therein excepted). Tenant’s possession of the New Premises
prior to the New Premises Commencement Date shall be subject to all terms and
conditions of the Lease other than the payment of rent, which obligation shall
not commence until the New Premises Commencement Date. All proposed leasehold
improvements or alterations to the New Premises shall be subject to Landlord’s
prior written approval and shall be constructed by Tenant (utilizing its own
design professionals and contractor(s) reasonably approved by Landlord) in
accordance with and subject to the limitations set forth in Section 7 of the
Sixth Amendment, except that Section 7 hereof shall govern the only improvements
allowance to be provided by Landlord to Tenant in connection with such leasehold
improvements. Landlord and Tenant each agree that this document constitutes
the
entire agreement of the parties and there were no verbal representations,
warranties or understandings pertaining to this Eleventh Amendment. TENANT
FURTHER ACKNOWLEDGES AND AGREES THAT LANDLORD DOES HEREBY DISCLAIM ANY AND
ALL
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THOSE OF FITNESS
FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE EXISTING PREMISES, THE NEW
PREMISES AND/OR THE IMPROVEMENTS LOCATED THEREIN.
-3-
7. Improvements
Allowance.
Landlord hereby agrees to provide Tenant an allowance in the amount of $38.55
per square foot of net rentable area within the New Premises (i.e.,
$2,587,775.20) (the “Improvements
Allowance”)
for
the design and construction of leasehold improvements in the New Premises.
Tenant shall contract directly for the design and construction of such
improvements and shall engage a third-party construction manager; accordingly,
Landlord shall not impose any construction management fee or plan review fee
in
connection with such improvements. The Improvements Allowance may be applied
to
any costs directly related to the design and construction of leasehold
improvements in the New Premises including, without limitation, architectural
and engineering fees, costs of construction and installation of improvements
in
the New Premises, relocation and installation of telecommunications and computer
cabling and equipment, moving expenses, etc. Landlord acknowledges that Tenant
shall stage the construction in phases, and accordingly, Landlord shall fund
the
Improvements Allowance to Tenant or to Tenant’s contractors (at Tenant’s option)
in installments in accordance with Landlord’s reasonable draw requirements
(i.e., presentation of partial (and when applicable, final) lien waivers, ten
percent (10%) retainage, architect’s certifications, reasonable costs back-up
documentation, etc. and an AutoCad
diskette
of the “as-built” plans and specifications for the New Premises following final
completion of the leasehold improvements therein, all as more fully set forth
in
EXHIBIT
C
to this
Eleventh Amendment). If the costs of Tenant’s improvements to the New Premises
exceed the amount of the Improvements Allowance, Tenant shall pay all such
excess costs. If the costs of Tenant’s improvements to the New Premises do not
exceed the amount of the Improvements Allowances, Landlord shall retain any
such
savings as its sole property. During the construction period, Tenant’s
contractors shall have access to the Building’s parking facilities, loading
dock, freight elevators, electrical systems and related facilities in connection
with such improvements at no additional charge to Tenant (other than for parking
spaces utilized by Tenant’s contractors), and scheduling such facilities in
advance with Landlord (i.e., subject to availability of such facilities). Tenant
must utilize the Improvements Allowance on or prior to December 31, 2008 or
Tenant’s right to utilize any remaining portion of the Improvements Allowance
shall terminate in all respects. Landlord will conduct and provide Tenant (at
Landlord’s cost separate from the Improvements Allowance) a copy of an asbestos
survey with respect to the New Premises promptly following the mutual execution
of this Eleventh Amendment.
8. Brokerage
Commission.
Landlord has agreed to pay CB Xxxxxxx Xxxxx, Inc. (“Tenant’s
Broker”)
a real
estate brokerage commission in connection with this Eleventh Amendment pursuant
to a separate commission agreement by and between Landlord and Tenant’s Broker.
Each party hereby represents and warrants to the other that it has not employed
any other agents, brokers, or other parties in connection with this Eleventh
Amendment, and each party agrees to hold the other party harmless from and
against any and all claims of all other agents, brokers and/or other such
parties claiming a commission by or through it in connection with this Eleventh
Amendment.
-4-
9. Parking.
(a) All
parking rights previously granted Tenant pursuant to the Lease are terminated
effective as of the New Premises Commencement Date. Effective as of such date
and continuing through the Expiration Date, Tenant’s parking rights shall be
governed by this Section 9.
(b) Landlord
hereby agrees to make available to Tenant during the Term (i) for lease on
a “must-take and pay” basis throughout the Term, permits to park fifteen (15)
automobiles (collectively, the “Must-Take
Building Parking Permits”)
in
reserved parking spaces located in the basement levels of the Building (the
“Building
Garage”),
(ii) for lease on a month-to-month basis during the Term (cancelable by
either party upon at least thirty (30) days’ prior written notice to the other),
permits to park three (3) automobiles (the “Month-to-Month
Building Parking Permits”)
in
reserved parking spaces in the Building Garage (iii) for lease on a
“must-take and pay” basis throughout the Term, permits to park
(x) sixty-three (63) automobiles in the unassigned parking areas located
throughout the parking garage (the “Block
68 Garage”),
in
the building now known as JPMorgan Chase Center located on Xxxxx 00, Xxxxx
Xxxx
Xxxxxxx Xxxxx, Xxxx of Houston, Xxxxxx County, Texas and (y) fifteen (15)
automobiles in reserved parking spaces in the Block 68 Garage (such
seventy-eight (78) permits being the “Must-Take
Block 68 Parking Permits”)
and
(iv) for lease at Tenant’s option during the Term, permits to park up to
forty-seven (47) additional automobiles in the unassigned parking areas in
the
Block 68 Garage (the “Optional
Block 68 Parking Permits”),
upon
the terms and conditions of this Section 9. The Must-Take Building Parking
Permits and the Month-to-Month Building Parking Permits shall be collectively
referred to herein as the “Building
Parking Permits”.
The
Must-Take Block 68 Parking Permits and the Optional Block 68 Parking Permits
shall be collectively referred to herein as the “Block
68 Parking Permits”.
The
Building Parking Permits and the Block 68 Parking Permits shall be collectively
referred to herein as the “Parking
Permits”.
The
Building Garage and the Block 68 Garage shall be collectively referred to herein
as the “Garage”.
(c) Tenant
shall notify Landlord in writing on or prior to August 31, 2007 as to the number
of Optional Block 68 Parking Permits Tenant will lease during that portion
of
the Term commencing on the New Premises Commencement Date and expiring October
31, 2008. If Tenant does not timely provide such notice, Tenant shall be deemed
to have elected to lease all forty-seven (47) Optional Block 68 Parking Permits
during such period. Thereafter, on or prior to August 31, 2008 and each August
31 thereafter during the Term, Tenant shall notify Landlord in writing as to
the
number of Optional Block 68 Parking Permits Tenant will lease during the next
one year period commencing on November 1 and expiring on the following October
31. If Tenant fails to provide any such notice, Tenant shall be deemed to have
elected to lease the same number of Optional Block 68 Parking Permits Tenant
is
then leasing as of such August 31. In addition, during the Term of this Lease,
Tenant may surrender any Building Parking Permits and/or any Must-Take Block
68
Parking Permits, but when surrendered, Landlord shall have no further obligation
to make the number of surrendered Parking Permits available to Tenant for lease
(except on “as available” basis, in Landlord’s reasonable
discretion).
(d) Tenant
will pay the monthly rental established by the operator(s) of the applicable
Garage from time to time during the Term for each of the Parking Permits Tenant
leases hereunder. The rentals for the Parking Permits shall constitute rent
and
shall be due and payable in advance on the first day of each calendar month.
If
the Term commences on other than the first day of a calendar month or terminates
on other than the last day of a calendar month, then rentals for the Parking
Permits shall be prorated on a daily basis.
-5-
(e) If
the
parking spaces covered by any of the Parking Permits are not available or become
unavailable to Tenant (due to causes beyond the reasonable control of Landlord)
during any portion of the Term, Landlord shall use good faith efforts to make
available to Tenant alternate parking spaces located reasonably near the
Building until the spaces covered by such Parking Permits are made available
to
Tenant. In such event, Tenant’s obligation to pay for Parking Permits shall be
limited to those actually provided to Tenant by Landlord.
(f) Tenant’s
use of the Parking Permits shall be subject to such rules and regulations as
may
be promulgated by the operator(s) of the applicable Garage from time to
time.
(g) If
Tenant
hereafter expands the Leased Premises pursuant to Section 13 hereof, or
otherwise, Tenant shall be entitled to lease additional Block 68 Parking Permits
in the ratio of two and one-half (2.5) unreserved Block 68 Parking Permits
per
each additional 1,000 square feet of net rentable area leased by Tenant (ten
percent (10%) of which, at Tenant’s option, may be converted to reserved Block
68 Parking Permits).
(h) Upon
the
occurrence of an event of default under the Lease by Tenant (i.e., after the
expiration of the applicable cure period for any default by Tenant following
notification thereof by Landlord) for which Landlord terminates the Lease or
Tenant’s right of possession of the Leased Premises, Landlord shall have the
right (in addition to all other rights, remedies and recourse hereunder and
at
law) to suspend any or all of the Parking Permits without prior notice or
warning to Tenant.
10. ADA
Matters; Sprinklering Work; Asbestos Remediation.
(a) Landlord
and Tenant acknowledge and agree that the restrooms, drinking fountains and
stairwell graphics located on Floors 57, 58, and 59 of the Building may not
be
in compliance with the Americans with Disabilities Act of 1990 (as amended,
the
“ADA”)
and
the Texas Architectural Barriers Act (as amended, the “TABA”).
Tenant shall make, at its sole cost and expense (as part of the Improvements
Allowance or otherwise), on or prior to the New Premises Commencement Date,
all
improvements required to be made to such restrooms, drinking fountains and
stairwell graphics in order to bring same into current compliance with the
ADA
and the TABA to the extent not now compliant. Tenant shall also be responsible,
at its sole cost and expense, for all other ADA and TABA compliance matters
with
respect to the New Premises.
(b) If
the
asbestos survey(s) to be provided to Tenant by Landlord at Landlord’s expense
indicate the presence of asbestos within the New Premises, Landlord shall
perform, at Landlord’s expense (separate from the Improvements Allowance), on or
prior to the New Premises Commencement Date, any asbestos remediation work
within the New Premises required in connection with Tenant’s improvements of the
New Premises. In addition, Landlord shall install, at Landlord’s expense (not as
part of the Improvements Allowance), on or prior to the New Premises
Commencement Date, in compliance with applicable code requirements, a
ceiling-mounted fire sprinklering system on Floors 57, 58 and 59 (“Sprinklering
Work”)
according to Building standard specifications and configuration and in
accordance with all applicable laws. Landlord will coordinate the scheduling
of
the Sprinklering Work and any asbestos remediation work with Tenant’s
construction of the leasehold improvements within the New Premises so that
such
work is performed at a mutually convenient time and in accordance with the
Construction Drawings with respect to the New Premises.
-6-
11. Renewal
Options.
(a) Effective
as of the date hereof, any and all renewal options previously granted Tenant
pursuant to the Lease are hereby deleted in their entirety. Tenant shall have
options to extend the Term of this Lease beyond the Term in accordance with
the
terms and conditions of this Section 11.
(b) Tenant
shall have the option (each a “Renewal
Option”)
to
renew and extend the term of this Lease with respect to all of the Leased
Premises then leased by Tenant, or a portion of the Leased Premises (in
contiguous full floor increment(s) only) of at least two (2) contiguous full
floors, at either the highest or lowest portion of the Leased Premises (and
if
Tenant does not hereafter expand and elects not to renew with respect to one
full floor within the Leased Premises, the floor Tenant gives back will be
Floor
57) for two (2) additional periods of five (5) years each or one additional
period of ten (10) years (as designated by Tenant in its first exercise notice)
(as applicable, each a “Renewal
Term”).
Each
Renewal Option may only be exercised by Tenant giving written notice thereof
no
more than fifteen (15) months nor less than twelve (12) months prior to the
Expiration Date, or prior to the expiration of the first five (5) year Renewal
Term, as applicable. If Tenant fails to give notice of exercise of a Renewal
Option within the applicable time period, such Renewal Option shall be deemed
waived and of no further force and effect and this Lease shall terminate upon
the Expiration Date, or upon the expiration of the first five (5) year Renewal
Term, as applicable. In addition, Tenant’s exercise of the second five (5) year
Renewal Option shall be conditioned upon Tenant’s extension of the Term for the
first five (5) year Renewal Term.
(c) Tenant’s
right to extend this Lease as provided for herein can be exercised only if,
at
the time of Tenant’s exercise of the applicable Renewal Option and upon the
commencement of the applicable Renewal Term, (i) no event of default then exists
under this Lease, and (ii) Tenant is in possession of that portion of the Leased
Premises consisting of at least two (2) full floors and all expansion space
in
the Building Tenant hereafter elects to Lease (the “Occupancy
Threshold”)
(unless Landlord, in its sole discretion, elects to waive such condition(s)).
If
either of such conditions are not satisfied or waived by Landlord, such Renewal
Option shall be terminated and of no further force and effect, any purported
exercise thereof shall be null and void, and this Lease shall terminate upon
the
Expiration Date, or upon the expiration of the first five (5) year Renewal
Term,
as applicable. No assignee of Tenant, or sublessee of the Leased Premises,
may
exercise a Renewal Option.
(d) If
Tenant
exercises a Renewal Option (in accordance with and subject to the provisions
of
this Section 11), all of the terms, covenants and conditions provided in this
Lease shall continue to apply during the applicable Renewal Term, except that
(i) the Base Rental payable by Tenant during such Renewal Term shall be the
then
Market Base Rental Rate (as defined in Section 12 below) for the Leased
Premises, and (ii) any terms, covenants and conditions that are expressly or
by
their nature inapplicable to such Renewal Term (including, without limitation,
this Section 11 if the Term is extended for the ten (10) year Renewal Term,
or
second five (5) year Renewal Term, as applicable) shall be deemed void and
of no
further force and effect.
-7-
(e) If
Tenant
elects not to renew with respect to the entire Leased Premises, Tenant will
be
required at its expense to remove all cabling installed by or on behalf of
Tenant in the Building riser(s) serving the floor(s) for which Tenant elect(s)
not to renew, and to pay for the cost of removing the internal stairwell serving
such floor(s), and returning the affected portion(s) of the Leased Premises,
any
slab penetrations and any other base building improvements affected by such
removal to Building standard condition.
12. Market
Base Rental Rate.
(a) As
used
herein, the term “Market
Base Rental Rate”
means
the annual net amount per square foot of net rentable area that a willing tenant
would pay and a willing landlord would accept in arm’s length, bona fide
negotiations for a lease of the Leased Premises (or Expansion Premises) to
be
executed at the time of determination and to commence at the beginning of the
applicable Renewal Term (or on the date that the Expansion Premises becomes
part
of the Leased Premises), determined as hereinafter provided based upon
comparable lease transactions made in the Building and “Class A” office
buildings in the Xxxxxxx Xxxxxxxx Xxxxxxxx xx Xxxxxxx, Xxxxx taking into account
all relevant factors, including without limitation the effect of any allowances
or tenant inducements that Landlord is obligated to provide to Tenant under
the
Lease or provides at its election or, if none are provided, the fact that
Landlord declined to provide any allowances or inducements.
(b) Within
ten (10) business days after receipt of Tenant’s notice of exercise of a Renewal
Option or an Expansion Option, Landlord will notify Tenant in writing of the
Market Base Rental Rate for the Leased Premises (or Expansion Premises) for
the
applicable Renewal Term (or applicable expansion term). If Tenant disagrees
with
Landlord’s determination, Tenant shall have a period of ten (10) business days
after receipt of Landlord’s notice to either (i) withdraw its exercise of the
applicable right or option by written notice to Landlord, in which event the
applicable right or option shall terminate and shall be of no further force
and
effect (and, if the applicable option is a Renewal Option, the Lease shall
terminate upon the Expiration Date, or upon the expiration of the first five
(5)
year Renewal Term, as applicable), or (ii) notify the Landlord that it contests
Landlord’s finding of the Market Base Rental Rate (which contest must be
reasonable and be made in good faith by Tenant), in which event the parties
shall promptly and in good faith endeavor to resolve between themselves their
disagreement as to the Market Base Rental Rate, failing of which the parties
shall submit the determination to the binding dispute resolution procedure
described below.
(c) If
Landlord and Tenant are unable to reach an agreement as to the Market Base
Rental Rate within thirty (30) days after Tenant notifies Landlord in accordance
with clause (ii) of the preceding sentence, Landlord and Tenant shall each
promptly appoint a Qualified Broker (as hereinafter defined) or a Qualified
Appraiser (as hereinafter defined). As soon as reasonably possible following
their appointment, and in any event within thirty (30) days thereafter, the
two
(2) Qualified Brokers (or two (2) Qualified Appraisers, as applicable) selected
by Landlord and Tenant shall each make a separate determination of the Market
Base Rental Rate for the Leased Premises (if the determination is being made
pursuant to a Renewal Option) or the Expansion Premises with respect to which
Tenant exercised an Expansion Option, as applicable, and shall deliver a written
report of its determination (including reasonable detail supporting such
determination) to Landlord and Tenant. If the higher of the two (2) Market
Base
Rental Rate determinations is not more than one hundred five percent (105%)
of
the lower determination, then the average of the two (2) determinations shall
be
used as the Market Base Rental Rate for the Leased Premises (or Expansion
Premises) and shall be binding on Landlord and Tenant. If the higher
determination is more than one hundred five percent (105%) of the lower
determination, then the two (2) Qualified Brokers (or two (2) Qualified
Appraisers, as applicable) shall select a third (3rd) Qualified Broker (or
Qualified Appraiser, as applicable), and as soon as reasonably possible (but
not
to exceed thirty (30) days) thereafter the third (3rd) Qualified Broker (or
Qualified Appraiser, as applicable) shall determine which of the two (2)
Qualified Brokers’ (or two (2) Qualified Appraisers’, as applicable)
determinations of the Market Base Rental Rate most closely approximates the
Market Base Rental Rate, and the determination so selected shall be used as
the
Market Base Rental Rate for the subject space during the applicable term and
shall be binding on both Landlord and Tenant.
-8-
(d) Landlord
and Tenant shall, separately and collectively and in good faith, use all
reasonable diligence to ensure that all three (3) determinations are completed
in good faith within sixty (60) days after the appointment of the first
Qualified Broker (or Qualified Appraiser, as applicable) to be appointed. Each
party shall be responsible for the compensation, if any, of the Qualified Broker
(or Qualified Appraiser, as applicable) appointed by it and for one-half (½) of
the compensation, if any, of the third (3rd) Qualified Broker (or Qualified
Appraiser, as applicable). If Tenant does not timely withdraw its exercise
of
the Renewal Option (or Expansion Option) as provided in subsection (b)(i),
or
contest Landlord’s finding of the Market Base Rental Rate as provided in
subsection (b)(ii) above, Tenant shall be conclusively deemed to have accepted
the Market Base Rental Rate determined by Landlord as the Base Rental rate
for
the applicable Renewal Term (or expansion term).
(e) As
used
herein the term “Qualified
Broker”
means
a
real estate broker who (i) is licensed in the State of Texas, (ii) is a member
of the Houston Office Leasing Brokers Association or the Society of Industrial
and Office Realtors, (iii) has been actively involved in leasing office space
in
multi-story office buildings in the Xxxxxxx Xxxxxxxx Xxxxxxxx xx Xxxxxxx, Xxxxx
for not less than the previous ten (10) year period, and (iv) has not
represented Landlord or Tenant during the preceding five (5) year period. As
used herein, the term “Qualified
Appraiser”
means
an appraiser who (i) is licensed in the State of Texas, (ii) is a MAI Appraiser,
(iii) has been actively involved in appraising multi-story office buildings
in
the Xxxxxxx Xxxxxxxx Xxxxxxxx xx Xxxxxxx, Xxxxx for not less than the previous
ten (10) year period, and (iv) has not represented Landlord or Tenant during
the
preceding five (5) year period.
-9-
13. Expansion
Options.
(a) All
expansion rights, preferential lease rights and refusal rights previously
granted Tenant pursuant to the Lease are hereby deleted in their entirety.
Subject to and upon the terms, provisions and conditions set forth in this
Section 13, Tenant shall have, and is hereby granted, two (2) options (each
an
“Expansion
Option”)
to
lease approximately one-half (1/2) of any single floor located in the elevator
bank serving Floors 49-59 of the Building designated by Landlord as Tenant’s
expansion floor (the “Expansion
Premises”),
in
response to Tenant’s exercise of an Expansion Option (i.e., if Tenant leases
one-half (1/2) of a floor pursuant to the first Expansion Option, the other
one-half (1/2) of such floor shall be the Expansion Premises subject to the
second Expansion Option, otherwise, if Tenant does not exercise the first
Expansion Option, the second Expansion Premises shall be one-half (1/2) of
a
floor located in the elevator bank serving Floors 49-59 of the Building
designated by Landlord, as applicable) by written notice to Landlord on or
prior
to the expiration of the forty-eighth (48th) full calendar month of the Term
with respect to the first Expansion Option, and/or on or prior to the expiration
of the eighty-fourth (84th) full calendar month of the Term with respect to
the
second Expansion Option, respectively. If Tenant does not timely exercise an
Expansion Option, such Expansion Option shall be waived.
(b) An
Expansion Option may be exercised only if, at the time of such exercise and
at
the time of Landlord’s delivery of the applicable Expansion Premises to Tenant
(i) no event of default then exists under the Lease and (ii) Tenant is in
possession of at least the Occupancy Threshold (unless Landlord, in its sole
discretion, elects to waive such condition(s)). If such condition(s) are not
satisfied or waived by Landlord, any purported exercise of an Expansion Option
shall be null and void. No assignee of Tenant, or sublessee of the Leased
Premises may exercise an Expansion Option.
(c) If
Tenant
elects to exercise an Expansion Option, Tenant’s lease of the applicable
Expansion Premises shall be subject to all of the terms, covenants and
conditions of this Lease except that the Base Rental rate shall be the Market
Base Rental Rate (as defined in Section 12 hereof). The term of the Lease with
respect to the applicable Expansion Premises shall commence on the date of
Landlord’s delivery of possession of the applicable Expansion Premises to Tenant
(which shall occur at any time after the expiration of the fifty-fourth (54th)
full calendar month of the Term, but prior to the expiration of the sixty-sixth
(66th) full calendar month of the Term with respect to the first Expansion
Premises, and at any time after the expiration of the ninetieth (90th) full
calendar month of the Term, but prior to the expiration of the one hundred
second (102nd) full calendar month of the Term with respect to the second
Expansion Premises, respectively), and shall be coterminous with the Term with
respect to the remainder of the Leased Premises. Tenant’s obligation to pay the
rent for the applicable Expansion Premises shall commence on the date (the
“Expansion
Rental Commencement Date”)
that
is the earlier to occur of (i) ninety (90) days following Landlord’s delivery of
possession of the applicable Expansion Premises to Tenant, or (ii) the date
that
Tenant fully occupies the applicable Expansion Premises.
(d) If
Landlord fails to deliver possession of the applicable Expansion Premises to
Tenant within sixty (60) days following the applicable outside delivery date
referenced above, the applicable Expansion Rental Commencement Date shall be
extended one additional day for each day of delay beyond such sixty (60) day
period that Landlord fails to deliver possession of the applicable Expansion
Premises to Tenant.
-10-
(e) If
Tenant
elects to lease Expansion Premises, Landlord will deliver possession of the
applicable Expansion Premises to Tenant, and Tenant will accept such Expansion
Premises, in its then current condition (i.e. “AS
IS”
and
“WITH
ALL FAULTS”).
Landlord’s provision of (or failure to provide, as applicable) an improvements
allowance with respect to the applicable Expansion Premises shall be reflected
in the determination of the Market Base Rental Rate for such Expansion
Premises.
(f) Upon
request of Landlord at any time after Tenant’s exercise of an Expansion Option,
Tenant shall execute and deliver to Landlord an amendment to the Lease (in
a
form provided by Landlord) specifying (i) the applicable Expansion Rental
Commencement Date, (ii) the Base Rental schedule for the applicable Expansion
Premises, (iii) the net rentable area of the applicable Expansion Premises,
and
(iv) any other terms applicable to Tenant’s lease of the applicable Expansion
Premises.
14. Right
of First Refusal.
(a) Subject
to and upon the terms, provisions and conditions set forth in this Section
14,
Tenant shall have, and is hereby granted, a continuing right of first refusal
(the “Right
of First Refusal”)
during
the Term of this Lease to lease any space (the “ROFR
Premises”)
located on Floors 52 and/or 53 of the Building that becomes available for lease
and for which Landlord receives a bona fide written third-party offer to lease
that Landlord desires to accept.
(b) Tenant
may exercise a Right of First Refusal only if, at the time of such exercise
and
at the time of Landlord’s delivery of the ROFR Premises to Tenant, (i) no event
of default exists and (ii) Tenant is in possession of at least the Occupancy
Threshold (unless Landlord, in its sole discretion, elects to waive such
condition(s)). If such condition(s) are not satisfied or waived by Landlord,
any
purported exercise of the Right of First Refusal shall be null and void. No
assignee of Tenant, or sublessee of the Leased Premises may exercise a Right
of
First Refusal.
(c) If
Landlord receives a bona fide written third-party offer to lease any of the
ROFR
Premises that Landlord desires to accept, Landlord will contemporaneously submit
a proposal to Tenant upon the same terms except that the term shall be
coterminous with the Term with respect to the remainder of the Leased Premises
and any allowances shall be prorated (a “Refusal
Lease Proposal”).
Tenant shall have a period of five (5) business days after receipt of a Refusal
Lease Proposal to irrevocably and unconditionally exercise its Right of First
Refusal to lease the applicable ROFR Premises upon the terms of the Refusal
Lease Proposal by written notice to Landlord. If Tenant does not exercise a
Right of First Refusal within such five (5) business day period, the Right
of
First Refusal shall be waived with respect to such space. Any purported
conditional or qualified exercise of a Right of First Refusal shall be null
and
void. Upon Tenant’s exercise of a Right of First Refusal, Landlord and Tenant
shall execute an amendment to the Lease evidencing same, but an otherwise valid
exercise of a Right of First Refusal shall be fully effective, whether or not
such amendment is executed.
-11-
(d) If
Landlord does not receive written notice from Tenant of its exercise of the
Right of First Refusal within said five (5) business day period, Landlord shall
have a period of one hundred eighty (180) days thereafter to lease the
applicable ROFR Premises for a net effective rental rate not less than ninety
percent (90%) of the net effective rental rate reflected by the Refusal Lease
Proposal. If Landlord does not lease such ROFR Premises within said one hundred
eighty (180) day period, Tenant shall have a Right of First Refusal on any
subsequent leasing thereof on the terms set forth above.
(e) Tenant
acknowledges and agrees that the Right of First Refusal is subject and
subordinate to any and all expansion options, refusal rights, preferential
rights and renewal options hereafter granted to future tenant(s) of the ROFR
Premises (and their respective successors and assigns) for which Tenant did
not
exercise a Right of First Refusal.
(f) Landlord
acknowledges and agrees that Tenant’s failure to exercise any Right of First
Refusal shall not affect the Expansion Options granted Tenant
herein.
15. Riser
Space.
(a) Landlord
grants Tenant a non-exclusive license co-terminus with the Term for limited
access to one or more Building risers (in Landlord’s sole, reasonable
discretion) to install, operate and maintain up to four inches (4") of conduit
in the aggregate for fiber optic telecommunications/data cabling (the
“Riser
Penetrations”)
to be
used in connection with Tenant’s use of the New Premises. The locations of and
specifications for the Riser Penetrations installed pursuant to this Section
15
shall be subject to the prior written approval of Landlord, which approval
shall
not be unreasonably withheld or delayed. The installation of the Riser
Penetrations shall be performed at Tenant’s sole cost and expense. Tenant’s
installation and use of the Riser Penetrations shall not interfere with the
activities being carried on by other tenants or services of the Building. Any
drilling, chipping, or other disruptive construction work shall be performed
during non-business hours and, in any event, Tenant shall use its best efforts
to minimize and contain all noise, dust and any other disturbance to tenants
in
the Building.
(b) Tenant
shall not be required to pay to Landlord any license fee with respect to the
Riser Penetrations.
(c) Prior
to
the installation or operation of the Riser Penetrations, Tenant shall obtain
and
at all times thereafter maintain all required governmental licenses, permits
and/or consents. Tenant shall give Landlord reasonable advance notice of its
intent to access the applicable Building riser(s) in order to install, maintain,
repair or replace the Riser Penetrations. Tenant’s installation, maintenance,
repair and/or replacement of the Riser Penetrations shall also be governed
by
the cable and conduit installation procedures set forth on EXHIBIT
B
attached
hereto and made a part hereof for all purposes, which procedures are subject
to
change from time to time in Landlord’s sole discretion.
(d) Tenant,
at its sole cost and expense, shall maintain, repair and/or replace the Riser
Penetrations and shall at all times maintain the Riser Penetrations in a safe,
clean and first class condition. Tenant shall not permit any liens, claims,
charges or encumbrances to attach to the Riser Penetrations or the Building
resulting from the furnishing of labor or materials in connection with the
installation, maintenance, repair or replacement of the Riser
Penetrations.
-12-
(e) Tenant,
at its sole cost and expense, shall repair any and all damage to the Building,
including, without limitation, the Building riser(s), which results from or
arises out of the use, repair, installations, maintenance, operation and/or
removal of Riser Penetrations by Tenant, its employees, agents and contractors
of the Building, including, without limitation, any and all loss, cost, damage
or expense suffered by Landlord or the Building as a result of (i) the
installation, operation, repair, maintenance, replacement or removal of any
Riser Penetrations; (ii) access work in the Building riser(s) or (iii)
unreasonable interference with Landlord or the Building’s tenants, occupants or
invitees. Tenant shall indemnify and hold Landlord, its successors and assigns,
harmless from and against any and all liens, costs, losses, liabilities, causes
of action or claims by contractors, subcontractors, materialmen or laborers
providing any materials to or performing any work on or in the Building for
or
on behalf of Tenant with respect to the use, repair, installation, maintenance,
operation and/or removal of Riser Penetrations, including, without limitation,
any reasonable attorneys’ fees and costs of suit incurred by Landlord in
discharging or attempting to discharge any such liens or claims (if Tenant
fails
to discharge same within thirty (30) days following Tenant’s receipt of written
notice thereof). Additionally, Tenant shall indemnify and hold Landlord, its
successors and assigns, harmless from and against any and all liabilities,
losses, damages, costs, expenses (including, without limitation, reasonable
attorneys’ fees), causes of action, suits, claims or demands arising out of or
in connection with the installation, use, repair, maintenance, operation and/or
removal of the Riser Penetrations by Tenant, its employees, agents and
contractors, or otherwise arising out of or in connection with the exercise
by
Tenant, its employees, agents and contractors of the license herein granted
or
under claim of the rights and privileges herein granted, including, without
limitation, any future damages due to removal operations by Tenant pursuant
to
Section 15(g) below.
(f) If
Tenant
is not required to pay for the removal of the existing cabling in the Building
riser(s) now serving the New Premises, upon Tenant’s relocation to the New
Premises, Tenant will, at Tenant’s sole cost and expense within thirty (30) days
thereafter, remove any cabling in the Building riser(s) now serving the Existing
Premises and repair any damage to the Building resulting therefrom. In addition,
upon the termination or expiration of the Lease (following any renewal periods,
if exercised by Tenant), if Tenant is not required to pay for the removal of
the
existing cabling in the Building riser(s) now serving the New Premises, Tenant
will, at Tenant’s sole cost and expense and within thirty (30) days thereafter,
remove any cabling installed by or on behalf of Tenant in the Building riser(s)
to serve the New Premises, and repair any damage to the Building resulting
therefrom.
16. Sky
Lobby Signage.
In the
event Landlord, at its sole election (and with no obligation to do so), grants
name signage rights on the wall on Floor 60 adjacent to the elevator bank
serving Floors 49-59 of the Building, to tenant(s) leasing space equal to or
in
excess of the net rentable area of the Leased Premises, Landlord shall also
grant a similar name signage right to Tenant.
17. Lender
Approval.
The
Lease is subject and subordinate to the mortgage lien of Landlord’s existing
mortgagee, the New York State Teachers’ Retirement System (“Lender”),
encumbering the Building, as set forth in that certain Subordination,
Non-Disturbance and Attornment Agreement dated June 24, 2003 by and among
Lender, Landlord and Tenant (the “SNDA”).
Landlord shall use good faith efforts to obtain, as soon as reasonably
practicable following the date hereof, Lender’s written approval of this
Eleventh Amendment and/or a written acknowledgment from Lender that the SNDA
applies to the Lease as amended by this Eleventh Amendment.
-13-
18. Miscellaneous.
(a) Amendment
to Lease.
Tenant
and Landlord acknowledge and agree that the Lease has not been amended or
modified in any respect, other than by this Eleventh Amendment, and there are
no
other agreements of any kind currently in force and effect between Landlord
and
Tenant with respect to the Leased Premises or the Building. The term “Lease”
shall mean the Lease as amended by this Eleventh Amendment unless the context
requires otherwise.
(b) Counterparts.
This
Eleventh Amendment may be executed in multiple counterparts, and each
counterpart when fully executed and delivered shall constitute an original
instrument, and all such multiple counterparts shall constitute but one and
the
same instrument.
(c) Entire
Agreement.
This
Eleventh Amendment sets forth all covenants, agreements and understandings
between Landlord and Tenant with respect to the subject matter hereof and there
are no other covenants, conditions or understandings, either written or oral,
between the parties hereto except as set forth in this Eleventh
Amendment.
(d) Full
Force and Effect.
Except
as expressly amended hereby, all other items and provisions of the Lease, as
amended, remain unchanged and continue to be in full force and
effect.
(e) Conflicts.
The
terms of this Eleventh Amendment shall control over any conflicts between the
terms of the Lease and the terms of this Eleventh Amendment.
(f) Authority
of Tenant.
Tenant
warrants and represents unto Landlord that (i) Tenant is a duly organized and
existing legal entity, in good standing in the State of Texas; (ii) Tenant
has
full right and authority to execute, deliver and perform this Eleventh
Amendment; (iii) the person executing this Eleventh Amendment on behalf of
Tenant was authorized to do so; and (iv) upon request of Landlord, such person
will deliver to Landlord satisfactory evidence of his or her authority to
execute this Eleventh Amendment on behalf of Tenant.
(g) Capitalized
Terms.
Capitalized terms not defined herein shall have the same meanings attached
to
such terms under the Lease.
(h) Successors
and Assigns.
This
Eleventh Amendment shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
(i) No
Guaranties.
Landlord acknowledges and agrees that all guaranties previously executed by
Tenant’s principals from time to time during the Lease term, including but not
limited to the Original Guaranty, the Fourth Amendment Guaranty, the Sixth
Amendment Guaranty and the joinder of Guarantors to the Seventh Amendment,
have
been terminated in all respects, and there are no guaranties now in effect
with
respect to the Lease.
-14-
(j) Governing
Law.
This
Eleventh Amendment shall be governed by and construed in accordance with the
laws of the State of Texas.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
-15-
Executed
as of the date first written
above.
LANDLORD:
|
||
TEXAS
TOWER LIMITED,
a
Texas limited partnership
|
||
|
|
|
By: | Prime Asset Management LLC, | |
a
Delaware limited liability company,
its
general partner
|
||
By: Raha
One (U.S.) Limited, Inc.,
a
Delaware corporation,
its
managing member
|
By: | /s/ Xxxxx X. Xxxxx | |
Xxxxx
X. Xxxxx
President
|
TENANT: | ||
XXXXXXX
XXXXXX XXXXXX INC.,
a
Texas corporation
|
||
|
|
|
By: | /s/ Xxx X. Xxxxxx | |
Name: Xxx X. Xxxxxx |
||
Title: Chief Executive Officer |
-16-
EXHIBIT
A
Floor
Plans of New Premises
[TO
COME]
A-1
EXHIBIT
B
Building
Cabling and Conduit Installation Procedures
1.
|
All
floor-to-floor vertical cable/conduit installations must be approved
in
advance, in writing by Xxxxx Property
Management.
|
2.
|
Xxxxx
Property Management will approve the installation
location.
|
3.
|
Only
plenum rated conduit shall be installed, and only plenum rated cable
shall
be installed if the proposed cable will not be installed in and enclosed
by conduit.
|
4.
|
All
cable/conduit runs will be vertical. No “zigzag” installations are
allowed.
|
5.
|
Upon
installation, all cable/conduit will be labeled by tenant on each
floor to
clearly indicate the tenant name.
|
6.
|
Tenant
or tenants’ cable/conduit contractor is responsible for repairing or
replacing, as necessary, firestop in each
penetration.
|
7.
|
At
such time that cable/conduit is no longer in use, but in any case,
not
later than the lease expiration, tenant is responsible for removing
its
cable.
|
8.
|
Tenant
is responsible for all costs associated with the cable/conduit
installation, and cable removal. This may include labor to coordinate
the
installation, repair of damage to other cable/conduit or the surrounding
area, removal and/or replacement of floor penetration sealant,
etc.
|
9.
|
The
cable/conduit installed will be for the sole use of the tenant. Tenant
shall not assign, sell, lease or in any other manner, share cable/conduit
without Landlord’s prior written
consent.
|
TENANT
NAME:
_____________________________________________________________________
CABLE/CONDUIT
LOCATION:
_______________________________________________________________________
FLOORS:
_______________________________________________________________________
TYPE
OF CABLE/CONDUIT:
______________________________________________________________________
I
agree
to install and remove this cable/conduit pursuant to the provisions and
procedures as stated above:
_____________________________ | _________________________________ | ______________ |
Name
& Firm Name (print)
|
Signature
|
Date
|
B-1
(Tenant)
EXHIBIT
C
Construction
of Initial Leasehold Improvements
Tenant
will have the right to construct and install the leasehold improvements and
tenant finish desired by Tenant in the Leased Premises (collectively, the
“Initial
Leasehold Improvements”)
in
accordance with, and subject to the limitations and conditions set forth in,
this EXHIBIT
B.
1.
|
Tenant
shall have prepared and submitted to Landlord for approval no later
than
thirty (30) days prior to commencement of construction of the Initial
Leasehold Improvements a set of preliminary plans (the “Proposed
Space Plans”)
in the form of a schematic design providing a conceptual layout and
description of the Initial Leasehold
Improvements.
|
2.
|
Within
ten (10) business days after delivery of the Proposed Space Plans
to
Landlord, Landlord shall either approve the Proposed Space Plans
or notify
Tenant of the item(s) of the Proposed Space Plans that Landlord
disapproves and the reason(s) therefor. If Landlord disapproves the
Proposed Space Plans, Tenant shall revise and resubmit same to Landlord
for approval (the “Revised
Space Plans”)
within ten (10) business days following receipt of Landlord’s disapproval.
Within five (5) business days after delivery of the Revised Space
Plans to
Landlord, Landlord shall either approve the Revised Space Plans or
notify
Tenant of the item(s) of the Revised Space Plans which Landlord
disapproves and the reason(s) therefor. If Landlord disapproves the
Revised Space Plans, Tenant shall further revise and resubmit same
to
Landlord for approval, which process shall continue until the plans
are
approved. Landlord shall have five (5) business days after delivery
of the
each set of Revised Space Plans to either approve the Revised Space
Plans
or notify Tenant of the item(s) of the Revised Space Plans which
Landlord
disapproves and the reason(s) therefor. The Proposed Space Plans
or
Revised Space Plans, as approved by Landlord, are hereinafter referred
to
as the “Space
Plans”.
|
3.
|
Upon
Landlord’s approval of the Space Plans, Tenant shall have prepared, by a
licensed architect and engineer reasonably acceptable to Landlord,
construction drawings (in accordance with the Space Plans) and
specifications including complete sets of detailed architectural,
structural, mechanical, electrical and plumbing working drawings
(the
“Proposed
Construction Drawings”)
for the Initial Leasehold Improvements and shall deliver the Proposed
Construction Drawings to Landlord for approval within one hundred
twenty
(120) days following Landlord’s approval of the Space
Plans.
|
4.
|
Within
ten (10) business days after delivery of the Proposed Construction
Drawings to Landlord, Landlord shall either approve the Proposed
Construction Drawings or notify Tenant in writing of the item(s)
of the
Proposed Construction Drawings that Landlord disapproves and the
reason(s)
therefor. If Landlord disapproves the Proposed Construction Drawings,
Tenant shall revise and resubmit same to Landlord for approval (the
“Revised
Construction Drawings”)
within ten (10) business days following receipt of Landlord’s disapproval.
Within five (5) business days after delivery of the Revised Construction
Drawings to Landlord, Landlord shall either approve the Revised
Construction Drawings or notify Tenant in writing of the item(s)
of the
Revised Construction Drawings which Landlord disapproves and the
specific
reason(s) therefor. If Landlord disapproves the Revised Construction
Drawings, Tenant shall further revise and resubmit same to Landlord
for
approval, which process shall continue until the plans are approved.
Landlord shall have five (5) business days after delivery of each
set of
Revised Construction Drawings to either approve the Revised Construction
Drawings or notify Tenant of the item(s) of the Revised Construction
Drawings which Landlord disapproves and the reason(s) therefor. The
Proposed Construction Drawings or Revised Construction Drawings,
as
approved by Landlord, are hereinafter referred to as the “Construction
Drawings”.
|
C-1
5.
|
Landlord’s
approval of the Construction Drawings shall in no manner indicate
that
Landlord believes the Construction Drawings are in compliance with
all
applicable codes, law and regulations and it shall be Tenant’s obligation
to obtain all such requisite
approvals.
|
6.
|
Tenant
shall submit to Landlord in writing the following information at
least ten
(10) days prior to the commencement of construction of the Initial
Leasehold Improvements:
|
A.
|
The
name and address of Tenant’s proposed general contractor (the
“General
Contractor”),
and the names of each of the subcontractors that the General Contractor
intends to engage in the construction of the mechanical, electrical
and
plumbing system portions of the Initial Leasehold Improvements. The
General Contractor and all such subcontractors (collectively,
“Tenant’s
Contractors”)
shall be subject to Landlord’s prior written approval, which approval
shall not be unreasonably withheld, delayed or
conditioned.
|
B.
|
The
anticipated commencement date of construction and estimated date
of
completion.
|
C.
|
Evidence
of property, liability and worker’s compensation insurance reasonably
acceptable to Landlord as to insurer, policy terms and coverage (which,
as
to property and liability insurance policies, may include, without
limitation, naming Landlord as additional
insured).
|
7.
|
Tenant,
at its sole cost and expense, shall cause Tenant’s Contractors to perform
all work required to complete the Initial Leasehold Improvements
substantially in accordance with the approved Construction Drawings
(“Tenant’s
Work”).
Landlord, at Landlord’s expense, shall have the right to observe the
Tenant’s Work, but any such observation shall be strictly for Landlord’s
own purposes and shall not impose upon Landlord any express or implied
duty to Tenant or any third party with respect to the Tenant’s Work or the
Leased Premises, including, without limitation, verification that
the
Initial Leasehold Improvements are constructed in a good and workmanlike
manner, substantially in accordance with (a) the Construction Drawings,
(b) all applicable laws, codes and ordinances and (c) Landlord’s insurance
requirements.
|
C-2
8.
|
Tenant
shall not be deemed to be the agent or representative of Landlord
in
making the Initial Leasehold Improvements, and shall have no right,
power
or authority to encumber the fee interest in the Building or the
land on
which it is located. Accordingly, any claims against Tenant with
respect
to the Tenant’s Work or the Initial Leasehold Improvements shall be
limited to Tenant’s leasehold estate under this Lease. Should any
mechanic’s or other liens be filed against the Leased Premises, the
Building or any other property of Landlord or any interest therein
by
reason of Tenant’s acts or omissions or because of a claim against Tenant
or Tenant’s Contractors, Tenant shall cause same to be canceled or
discharged of record by bond or otherwise within thirty (30) days
after
notice by Landlord. If Tenant shall fail to cancel or discharge said
lien
or liens, within said thirty (30) 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 or at law, cancel
or
discharge same and Tenant shall promptly reimburse Landlord upon
demand,
for all reasonable costs incurred in canceling or discharging such
lien or
liens (including, without limitation, reasonable legal
fees).
|
9.
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All
Tenant’s Work shall be performed in a good and workmanlike manner in
accordance with good industry practice, shall comply in all material
respects with applicable federal, state, city and county statutes,
ordinances, regulations, laws and codes, including, without limitation,
the ADA and TABA and shall be performed so as not to alter the exterior
appearance of the Building and so as not to adversely affect the
structure
or safety or systems or services of the Building, the Project or
those of
the other tenants therein. All required building and other permits
in
connection with the construction and completion of the Tenant’s Work shall
be obtained and paid for by Tenant.
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10.
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All
material used in the performance of Tenant’s Work and in the fixturing of
the Leased Premises shall be new and of good quality (other than
materials
already located in the Leased Premises on the date of this
Lease).
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11.
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Tenant’s
Contractors (at no cost to Tenant prior to the Commencement Date)
shall be
allowed to utilize power, water and other existing utility facilities
as
necessary and required in connection with the Tenant’s Work in the Leased
Premises.
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12.
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Tenant
shall maintain the Leased Premises and the surrounding areas in a
clean
and orderly condition during construction. Tenant shall promptly
remove
all unused construction materials, equipment, shipping containers,
packaging, debris and flammable waste from the Building. Neither
Tenant
nor Tenant’s Contractors shall be permitted to deposit rubbish, dirt or
debris in Landlord’s trash containers or elsewhere in the Building.
Storage of construction materials, tools, equipment and debris shall
be
confined within the Leased
Premises.
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13.
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Landlord
shall have the right at all times to inspect the Initial Leasehold
Improvements. Tenant shall do structural work, coring, drilling and
chipping, after normal business hours but shall have the right to
construct all other Initial Leasehold Improvements at any hour. If
at any
time the entry by or presence of one or more persons furnishing labor
or
materials for the Initial Leasehold Improvements shall cause disharmony
or
interference with the other tenants in the Building or the operation
of
the Project, any consent granted by Landlord with respect to the
disruptive contractor or subcontractor may be withdrawn following
twenty-four (24) hours’ written notice to Tenant if such disharmony or
interference is not cured within such twenty-four (24) hour period;
provided however, Landlord shall have the right at all times to
immediately terminate any particular activity or activities of Tenant
or
its employees, agents, or contractors which, in Landlord’s reasonable
judgment, (i) causes unreasonable interference with other Building
tenants’ usage of the Project, or (ii) poses an immediate threat of damage
or injury to persons or property in or around the
Project.
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C-3
14.
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Upon
completion of Tenant’s Work, Tenant shall deliver to Landlord one set of
the “records drawings” and specifications for the Leased Premises on a
diskette in AutoCad or compatible
format.
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15.
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Landlord
agrees to provide Tenant an allowance (the “Improvements
Allowance”)
of up to $38.55 per square foot of net rentable area of the Leased
Premises in connection with the design, construction and installation
of
the Initial Leasehold Improvements. The Improvements Allowance shall
be
funded in installments (less ten percent (10%) retainage) (no more
frequently than once per month) promptly following Landlord’s receipt of
Tenant’s written draw request, accompanied by a partial lien waiver from
the General Contractor and supporting detail for the costs incurred
by
Tenant reasonably acceptable to Landlord. The final installment of
the
Improvements Allowance shall be funded upon the later to occur of
(i) the
date that Tenant fully occupies the Leased Premises, and (ii) Landlord’s
receipt of Tenant’s written request therefor, accompanied by a final lien
waiver from the General Contractor and each of the other Tenant’s
Contractors designated by Landlord, the AutoCad diskette of the “record
drawings” and specifications for the Leased Premises and supporting detail
for the costs incurred by Tenant reasonably acceptable to Landlord.
If the
total costs of the Initial Leasehold Improvements exceed the Improvements
Allowance, the excess shall be at Tenant’s sole cost and expense. If the
total costs of the Initial Leasehold Improvements do not exceed the
Improvements Allowance, any savings may be utilized for future leasehold
improvements in the Leased Premises if completed prior to December
31,
2011, failing of which Tenant shall forfeit any remaining balance
of the
Improvements Allowance as of such
date.
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16.
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In
the event Tenant requests Landlord to contract for the construction
and
installation of any portion of the Tenant’s Work on behalf of Tenant,
Landlord shall supervise the construction of that portion of Tenant’s Work
and Tenant agrees to pay Landlord a reasonable construction management
fee
in an amount not to exceed five percent (5%) of the total construction
costs of that portion of the Tenant’s Work performed by Landlord’s
contractor.
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17.
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From
time to time as such schedules are revised, Tenant or Tenant’s Contractors
shall provide Landlord with schedules showing the timing of construction
of the Initial Leasehold Improvements. All Initial Leasehold Improvements
shall comply in all material respects with the Construction
Drawings.
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C-4