EXHIBIT 10.15
ORIGINAL LEASE
SUGAR CREEK PLACE
SUGAR LAND, TEXAS
LEASE AGREEMENT
By and Between
XXXXXX ADREAC, L.C.
and
NEON SYSTEMS, INC.
LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into on this 23rd day of October,
1997, by and between Landlord and Tenant.
W I T N E S S E T H:
1. CERTAIN DEFINITIONS AND BASIC TERMS.
1.01 Parties, Rent, Term and Premises. Landlord and Tenant hereby
agree that for purposes of this Lease, the following capitalized terms shall
mean:
LANDLORD: Xxxxxx Adreac, L.C., a Texas limited liability
company.
TENANT: Neon Systems, Inc., a Delaware corporation.
BASE RENTAL: Years 1-5 - Twenty and No/100 Dollars ($20.00) per
year per square foot of Net Rentable Area within the
Leased Premises.
BASE YEAR: 1999
BROKER: Trione & Xxxxxx, Inc.
BUILDING: The Sugar Creek Place office building, which is to
be constructed on the Land.
COMMENCEMENT DATE: If Tenant elects to have Landlord contract for the
construction of the Leasehold Improvements, the later to occur of. (i) Fifteen
(15) days following the Leasehold Improvements Completion Date (as defined in
Exhibit "C" attached hereto), less the total number of days of Tenant Delay (as
defined in Exhibit "C") and (ii) August 1, 1998. If Tenant elects to have
Landlord contract for the construction of the Leasehold Improvements and the
Leasehold Improvements Completion Date less the number of days of Tenant Delay
(as defined in Exhibit "C") is a date after July 15, 1998, then two (2) days of
Base Rental shall xxxxx and not be made payable by Tenant for each day after
such date until the Commencement Date, and, in the event as a result of such
delay, Tenant is required to temporarily relocate its offices, Landlord shall
reimburse Tenant for Tenant's reasonable and actual third party moving expenses
paid and or payable for such temporary relocation provided, however, that such
temporary relocation shall be as a result of Landlord's failure to complete
construction of the Leasehold Improvements and tender possession of the Leased
Premises to Tenant by July 15, 1998 other than by reason of Tenant Delay.
If Tenant elects to contract directly for the construction of the Leasehold
Improvements, the Commencement Date shall be the later of (i) the date which is
ninety (90) days following the date that Landlord tenders possession of the
Leased Premises to Tenant in a "broom clean" condition
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with all of Landlord's Work (as described in Exhibit "C") complete, excluding
such portions of Landlord's Work which are required to be performed following
completion of work to be performed by Tenant's contractor, or (ii) August 1,
1998. In the event that Landlord does not so tender the Leased Premises to
Tenant by May 1, 1998, and further provided that Tenant has timely met Tenant's
obligations per the terms and conditions of Exhibit "C" including the Schedule
of Critical Dates, (as defined in Exhibit "C"), then two (2) days of Base Rental
shall xxxxx and not be payable by Tenant for each day until such date which the
Leased Premises are so tendered to Tenant, and in the event as a result of such
delay, Tenant is required to temporarily relocate its offices, Landlord shall
reimburse Tenant for Tenant's reasonable and actual third party moving expenses
paid and or payable for such temporary relocation provided, however, that such
temporary relocation shall be as a result of Landlord's failure to timely tender
possession of the Leased Premises other than by reason of Tenant Delay.
Notwithstanding the foregoing, if as of the Commencement Date determined in
accordance with either of the two preceding paragraphs the Garage (as defined on
Exhibit "E") or the ground-floor lobby of the Building are not substantially
complete (i.e., open and available for use by Tenant and its employees and
visitors as intended by the design thereof), the Commencement Date will be
delayed until the Garage and ground-floor Building lobby are substantially
complete, and two (2) days of Base Rental shall xxxxx and not be made payable by
Tenant for each day that the Commencement Date is so delayed.
LAND: The tract or parcel of land described by metes and bounds on
Exhibit "A" attached hereto and made a part hereof for all purposes.
LANDLORD'S ADDRESS FOR NOTICES:
Xxxxxx Adreac, L.C.
407 Xxxxx Xxxxxx Dr., Xxxxx 000
Xxxxx Xxxx, Xxxxx 00000
WITH A COPY TO:
Xxxxxx Xxxxxxxxx
00000 Xxxx & Xxxxxxx Xxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
LEASED PREMISES: All of floor 5 of the Building estimated to be a
minimum of twenty five thousand six hundred thirty-three (25,633) square feet of
Net Rentable Area as reflected on the floor plan(s) of the Leased Premises
attached hereto and made a part hereof for all purposes as Exhibit "B", together
with any additional premises hereafter added thereto by written amendment to
this Lease.
MINIMUM LEASED PREMISES NET RENTABLE AREA: All of floor 5 of the
Building estimated to be a minimum of 25,633 square feet.
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RENT: All Base Rental, Tenant's Additional Rental, Tenant's
Estimated Additional Rental (as defined below) and all other sums payable to
Landlord by Tenant pursuant to the terms of this Lease.
SECURITY DEPOSIT: forty two thousand seven hundred twenty-one and
66/100 Dollars ($42,721.66).
TENANT'S ADDITIONAL RENTAL: For each calendar year Tenant's
Proportionate Share of the Excess Operating Expense Amount (defined below).
TENANT'S PROPORTIONATE SHARE: The term "Tenant's Proportionate
-Share" shall mean the percentage determined by dividing the Net Rentable Area
contained within the Leased Premises by the aggregate Net Rentable Area of the
Building.
TENANT'S ADDRESS FOR NOTICES: Until Tenant occupies the Leased
Premises, after which time Tenant's address for notices will be the Leased
Premises, the address for notices to Tenant is:
Neon Systems, Inc.
00000 Xxxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxx Xxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxx
TERMINATION DATE: Sixty months following the Commencement Date
subject to the Commencement Agreement attached hereto as Exhibit "I".
1.02 OTHER BASIC TERMS.
NET USABLE AREA. The term 'Net Usable Area", as used herein,
shall mean (a) in the case of a floor leased to a single tenant, all floor area
measured from the inside surface of the outer glass line of the Building to the
inside surface of the opposite outer glass line, excluding only Vertical
Penetrations and General Common Areas (both defined below), and (b) in the case
of a floor leased to or held for lease to more than one tenant, all floor are-as
within the inside surface of the outer glass line of the Building enclosing the
Leased Premises and measured to the inside surface of demising walls (I.E.,
walls separating the Leased Premises from areas leased to or held for lease to
other tenants, from On-Floor Common Areas (defined below] and/or from General
Common Areas), excluding only Vertical Penetrations.
VERTICAL PENETRATIONS. The term "Vertical Penetrations' shall
mean the areas within (and measured from the mid-point of the walls enclosing)
Building's stairs, fire towers, elevator shafts, flues, vents, stacks, pipe
shafts and vertical ducts, but excluding columns or projections necessary to the
Building. Areas for the specific use of Tenant and installed at the request of
Tenant such as special stairs or elevators are not included within the
definition of Vertical Penetrations.
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GENERAL COMMON AREAS. The term "General Common Areas" shall mean
those areas within (and measured from the mid-point of the walls enclosing) the
Building's elevator machine rooms, main mechanical and electrical rooms, ground
floor public lobbies, rest rooms, mechanical rooms, janitor closets, telephone
and equipment rooms, and other similar facilities and other areas not leased or
held for lease within the Building but which are necessary or desirable for the
proper utilization of the Building or to provide customary services to the
Building.
ON-FLOOR COMMON AREAS. The term "On-Floor Common Area" shall mean
all areas located above the ground floor of the Building and within (and
measured from the mid-point of the walls enclosing) public corridors, elevator
foyers and mechanical and electrical rooms for the use of all tenants on the
floor on which the Leased Premises are located.
COMMON AREAS. The term "Common Areas" shall mean all of the
General Common Areas and the On-Floor Common Areas of the Building.
NET RENTABLE AREA. The term "Net Rentable Area' shall be measured
and mean as follows:
(i) as to any full floor leased by Tenant, the
Net Rentable Area of the space leased shall equal the sum of (A) the Net
Usable Area of that space, and (B) an allocation of the square footage of
the General Common Areas (as such term is hereinafter defined) based upon
the ration which the Net Usable Area of the space bears to the aggregate
Net Usable Area of the Building; and
(ii) as to any partial floor leased by Tenant,
the Net Rentable Area of the space leased shall equal the sum of (A) the
Net Usable Area of that space, (B) an allocation of the square footage of
the On Floor Common Areas (as such term is herein defined) based upon the
ratio which the Net Usable Area of that space bears to the aggregate Net
Usable Area of the floor on which its located, and (C) an allocation of
the area of the square footage of the General Common Areas based upon the
ratio which the sum of (A) and (B) bears to the aggregate Net Usable Area
of the office space in the Building.
NET RENTABLE AREA OF THE LEASED PREMISES AND THE BUILDING. The
foregoing definitions of Net Usable Area, Vertical Penetrations, General Common
Areas, On-floor Common Areas and Net Rentable Area shall be used by the
Landlord's architect in calculating the Building Net Rentable Area, Leased
Premises Net Rentable Area and Tenant's Proportionate Share upon substantial
completion of construction of the Building, such calculations to be reviewed and
agreed to by the Tenant's Architect. Tenant and Landlord hereby stipulate and
agree that such computations, as agreed to by Landlord's architect and Tenant's
Architect, shall be appropriate and acceptable, notwithstanding any different
measurement thereof that may be based on any industry standard established,
whether now used or hereafter established, in other similar office buildings in
the area of the Building, and that such computations by the Landlord's architect
and Tenant's architect shall be confirmed by Landlord and Tenant in the
Commencement Agreement. If the Building is ever demolished, altered, remodeled,
renovated, expanded or otherwise changed in such
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manner as to alter the amount of space contained therein, the Building Net
Rentable Area shall be adjusted and recalculated pursuant only to a physical
change in the Building by using the foregoing method of determining Net Rentable
Area.
EXCESS OPERATING EXPENSE AMOUNT. For any calendar year, the
amount by which the Operating Expense Amount for that year exceeds the Operating
Expense amount for the Base Year. If the rentable area of the Building in that
year differs from the rentable area of the Building in the Base Year pursuant
only to a physical change in the Building, the Operating Expense amount for the
Base Year shall be appropriately adjusted.
2. DEMISE AND LEASE TERM.
2.01 DEMISE OF LEASED 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, Landlord does
hereby lease, demise and let to Tenant and Tenant does hereby lease and take
from Landlord the Leased Premises.
2.02 TERM. Subject to and upon the terms and conditions set forth
herein, or in any exhibit hereto, the term of this Lease shall commence on the
Commencement Date and shall expire on the Termination Date.
2.03 DECLARATION OF COMMENCEMENT DATE. Within five (5) days after the
Commencement Date and at any time thereafter upon the request of Landlord,
Tenant shall execute and deliver to Landlord a declaration as set forth in
Exhibit I of the Lease attached hereto specifying the date upon which the same
occurred.
3. USE. The Leased Premises are to be used and occupied by Tenant
(and its permitted assignees and subtenants) solely for the purpose of general
office space and incidental or related uses and for no other purpose, provided,
however, the Leased Premises shall never be used for any one of the Specifically
Prohibited Uses set out in Section 7.05. The Premises may be used by Tenant (and
its permitted assignees and subtenants) for general office space and incidental
or related uses and no other purpose. Tenant may maintain (for the
noncommercial use of its employees and visitors) a kitchen/lunch room, coffee
bars, printing and copying facilities, storage, telecommunications equipment,
computer equipment, data and word processing equipment, showers, exercise rooms,
and any other facility or equipment utilized in the normal conduct of Tenant's
business and not inconsistent with the primary use of the Premises as a business
office.
4. RENT.
4.01 BASE RENTAL. Tenant hereby covenants and agrees to pay the Base
Rental and Tenant's Additional Rental in accordance with Section 4.04 below.
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4.02 ADDITIONAL RENTAL. (a) At or prior to March 1 of each calendar
year beginning in 2000, Landlord shall present to Tenant a good faith estimate
of Tenant's Additional Rental to be due and payable by Tenant for the balance of
such calendar year. Tenant shall not be responsible for the payment of any
Additional Rental for the years 1998 and 1999. Thereafter Tenant shall pay to
Landlord an amount equal to the estimated Tenant's Additional Rental for the
remainder of such year divided by the number of full calendar months remaining
in such year, which payments shall be made according to the terms of Section
4.04. From time to time during any calendar year and upon thirty (30) days prior
written notice to Tenant, Landlord may revise its estimate of the Tenant's
Additional Rental for such calendar year. Thereafter, the monthly installments
of estimated Tenant's Additional Rental payable by Tenant shall be appropriately
adjusted in accordance with the revised estimate so that by the end of such
calendar year, the total payments of estimated Tenant's Additional Rental paid
by Tenant shall equal the amount of such revised estimate. As used herein,
"Tenant's Estimated Additional Rental" shall mean the estimated Tenant's
Additional Rental payments to be made by Tenant pursuant to this Section 4.02.
(b) As used herein, "Operating Expense Amount" shall mean an amount
equal to (x) plus (y), where:
(x) equals the amount of the Actual Operating Expenses (defined
below) for the entire Complex (defined below) for such year, and
(y) equals a management fee contribution equal to Five percent
(5%) of Base Rental for the entire Complex (defined below) for such year
subject to Section 4.03 (d) (xxiii).
(c) Within one hundred fifty (150) days after the end of each calendar
year during the term of this Lease (except for the year 1998 ), Landlord shall
provide Tenant a statement showing the Actual Operating Expenses for said
calendar year, prepared in accordance with generally accepted accounting
principles, and a statement prepared by Landlord comparing Tenant's Estimated
Additional Rental paid by Tenant with Tenant's Additional Rental. In the event
that Tenant's Estimated Additional Rental paid by Tenant exceeds Tenant's
Additional Rental for said calendar year, Landlord shall pay Tenant an amount
equal to such excess at Landlord's option, by either giving a credit against
rentals next due, if any, or by direct payment to Tenant within thirty (30) days
of the date of such statement. In the event that the Tenant's Additional Rental
exceeds Tenant's Estimated Additional Rental for said calendar year, Tenant
shall pay Landlord, within thirty (30) days of receipt of the statement, an
amount equal to such difference. Tenant shall have the fight to audit, at
Tenant's expense and after giving twenty (20) days' prior written notice to
Landlord, Landlord's books and records relating to Actual Operating Expenses for
any period within the term of this Lease. Any such inspection and audit shall
be at Tenant's expense and shall be conducted in Landlord's office during normal
business hours by Tenant's accounting personnel or by independent public
accountants or other qualified consultants.
4.03 ACTUAL OPERATING EXPENSES. (a) "Actual Operating Expense", as
that term is used herein, shall consist of all Operating Expenses (defined
below), computed on a calendar year accrual basis, for the Building, the Land,
related pedestrian walkways, landscaping, fountains,
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roadways and parking facilities, and such additional facilities to service any
of the foregoing in subsequent years as may be necessary or desirable in
Landlord's discretion (the Building, the Land, and said additional facilities
being hereinafter sometimes collectively called the "Complex").
(b) The term "Operating Expenses" as used herein shall mean all
expenses, costs and disbursements (other than the costs and expenses
specifically described in Section 4.03(d) below) of every kind and nature
relating to or incurred or paid in connection with the ownership and operation
of the Complex, including but not limited to, the following:
(i) Reasonable wages and salaries of all persons directly
engaged in the operation, maintenance, security or access control for the
Complex, including taxes, insurance and benefits relating thereto.
(ii) Cost of supplies, tools, equipment and materials used in
the operation and maintenance of the Complex.
(iii) Cost of all utilities for the Complex which are not paid or
reimbursed by tenants, including but not limited to the cost of water and
power for heating, lighting, air conditioning and ventilating.
(iv) Cost of all maintenance and service agreements for the
Complex and the equipment therein, including but not limited to security
service, window cleaning, elevator maintenance and janitorial service.
(v) Cost of repairs and general maintenance (excluding repairs
and general maintenance paid or reimbursed by proceeds of insurance or by
Tenant or other third parties).
(vi) Amortization of the cost of installation of capital
investment items which are installed for the purpose of reducing or
avoiding increases in operating expenses or which may be required by
governmental authority; provided, however, no costs related to initial
construction of the Complex shall be included. All such costs which
relate to the installation of such capital investment items shall be
amortized over the reasonable life of the capital investment item, 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.
(vii) The cost of all insurance relating to the Complex as
Landlord may elect to obtain, which may include without limitation the
cost of fire and extended coverage insurance, rental abatement insurance
and liability insurance applicable to the Complex and Landlord's personal
property used in connection therewith.
(viii) All taxes, assessments and governmental charges (including
reasonable costs and expenses contesting the amount or validity thereof
by appropriate administrative or legal proceedings, paid or payable by
Landlord (excluding Abated Taxes for the applicable
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year as provided and defined in Section 4.05), whether federal, state,
county or municipal and whether they be by taxing districts or
authorities presently taxing the Complex or by others subsequently
created or otherwise, and any other taxes and assessments attributable to
the Complex or its operation, including, without limitation, all real
property taxes and general and special assessments; vault rentals;
charges, fees, levies or assessments for transit, housing, police, fire
or other governmental services or purported benefits to the Complex;
service payments in lieu of taxes; and any tax, fee or excise on the act
of entering into this Lease or any other lease of space in the Building,
on the use or occupancy of the Complex or any part thereof, or on the
rent payable under any lease or in connection with the business of
renting space in the Complex, 'Taxes" shall not include federal and state
taxes on income, death taxes, franchise taxes, and any taxes imposed or
measured on or by the income of Landlord from the operation of the
Complex; provided, however, that if at any time during the term of this
Lease, the present method of taxation or assessment shall be so changed
that the whole or any part of the taxes, assessments, levies, impositions
or charges now levied, assessed or imposed on real estate and the
improvements thereto shall be discontinued and as a substitute therefore,
or in lieu of an addition thereto, taxes, assessments, levies,
impositions or charges shall be levied, assessed and/or imposed wholly or
partially as a capital levy or otherwise on the rents received from the
Complex or the rents reserved herein or any part thereof, then such
substitute or additional taxes, assessments, levies, impositions or
charges, to the extent so levied, assessedor imposed, shall be deemed to
be included within Operating Expenses to the extent that such substitute
or additional tax would be payable if the Complex were the only property
of the Landlord subject to such tax. Tenant shall, in addition to and
separate from Tenant's Additional Rental as herein calculated, pay and
reimburse Landlord upon demand for any and all taxes, surcharges, levies,
assessments, fees and charges payable by Landlord, whether or not now
customary or within the contemplation of the parties hereto: (a) upon,
measured by or reasonably attributable to the cost or value of Tenant's
equipment, furniture, fixtures and other personal property located in the
Leased Premises-, (b) upon or measured by any rent payable hereunder
including, without limitation, any gross income tax, gross receipts tax
or excise tax levied by the State of Texas, the federal government of the
United States or any other governmental body with respect to the receipt
of such rent; (c) upon or with respect to the possession, leasing,
operation, management, maintenance, alteration, repair, use or occupancy
by Tenant of the Leased Premises or any portion thereof, or (d) upon this
transaction or any document to which Tenant is a party creating or
transferring an interest of an estate in the Leased Premises.
(c) In the event that the Building is less than 95% occupied, on a
monthly average basis calculated on the ratio of Net Rentable Area under lease
to the aggregate Net Rentable Area in the Building, during any calendar year or
in the event the entire Building is not provided with Building standard services
during any calendar year, an adjustment shall be made in computing each
component of the Actual Operating Expenses which varies with the rate of
occupancy of the Building (such as utility and janitorial expenses) so that the
Actual Operating Expenses shall be computed for such year as though the Building
had been 95% occupied during such year and as though the entire Building had
been provided with Building standard services during such year. In making the
adjustment of Actual Operating Expenses pursuant to this Section 4.03 (c),
however, it
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is understood and agreed that (i) no adjustment will be made to any item or
component of Actual Operating Expenses which does not actually vary with the
rate of occupancy of the Building, (ii) any adjustment that is made to any item
or component of Actual Operating Expenses shall be based on the extent to which
that particular item or component actually varies with the rate of occupancy of
the Building, and (iii) the adjustments for each year after the Base Year shall
be made in a manner consistent with the adjustments for the Base Year.
(d) Landlord hereby agrees that "Operating Expenses" shall not include
(i) depreciation and other non-cash charges, expenditures classified as capital
expenditures for federal income tax purposes and amortization thereon except as
set forth in Section 4.03(b)(vi), (ii) costs for which Landlord is entitled to
specific reimbursement by Tenant, by any other tenant of the Building or by any
other third party or Abated Taxes for the applicable year except as provided and
defined in Section 4.05, (iii) leasing commissions, (iv) costs incurred by
Landlord in connection with the negotiation of any tenant lease in the Complex,
including leasing commissions, attorneys fees, costs disbursement and other
expenses in connection with negotiations or disputes with tenants or other
occupants of the Building, and leasehold improvements expenses (and/or
allowances therefore), (v) overhead and profit increments paid to subsidiaries
or other affiliates of Landlord or an affiliate of any partner or shareholder of
Landlord, or to the property management company or an affiliate of the property
management company (excepting the management fee contribution as defined in
Section 4.02(b)(y) of this Lease) for services on or to the Complex, to the
extent the same is in excess of the reasonable cost of said item or service in
an arms length transaction with an unaffiliated party, (vi) marketing or
advertising expenses or public relations or the production and distribution of a
tenant newsletter, tenant perception surveys and the creation and implementation
of tenant retention programs; (vii) collection costs incurred by Landlord,
(viii) repairs, replacements, or other work occasioned by (a) fire, windstorm or
other casualty required to be insured hereunder by Landlord except to the extent
of deductibles on such coverages not to exceed $10,000 (b) the exercise by
governmental authorities of the right of eminent domain, (c) the act of
Landlord, or any affiliate of Landlord, or any contractor, representative,
employee or agent of same, except to the extent of deductibles not in excess of
$10,000 on insurance providing coverage for such loss or amage, or (d) any other
tenant in the Building, or any other tenant's agents, employees, licensees or
invitees; (ix) expenses for work performed in any other tenants' or prospective
tenants' space (including any cost or expense incurred as a direct result of
painting, decorating, carpet shampooing, drapery cleaning and wall washing
within the rentable areas of the Building to the extent such are not Building
standard services) which is unrelated to Actual Operating Expense as defined in
this Section 4.03 and to Landlord Services as defined in Section 6 of this
Lease, except to the extent of deductibles not in excess of $10,000 on Landlord
provided insurance providing coverage for such loss or damage; (x) costs for
correcting any defects in the original design or any subsequent construction of
the Building or the material used in the construction of the Building (including
latent defects in the original or any subsequent construction of the Building or
defects in the design of the Building) or in the Building equipment or
appurtenances thereto; (xi) any and all expenses relating to the presence in and
around the Building, including without limitation costs of any identification,
encapsulation, removal or other treatment of any hazardous materials including
asbestos-containing materials, or the replacement of any such material with
non-asbestos containing material as required by any laws or regulations, whether
currently existing or hereafter enacted; (xii) advertising and promotional
expenses,
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including, without limitation, leasing-related advertising and promotional
expenses; (xiii) all interest or penalties incurred as a result of Landlord's
failure to pay any costs of taxes or assessments as the same shall become due
because of Landlord's negligence; (xiv) excess costs for goods or services
attributable to any payments received by Landlord or the property manager, or
the employees or officers of either, from suppliers or goods or services as
kickbacks, finders fees, expediting fees or other similar dishonest fees; (xv) a
bad debt loss, rent loss or payment to a reserve for bad debts or rent loss-,
(xvi) any and all costs associated with the operation of the business of the
entity which constitutes Landlord; excluded items shall specifically include but
shall not be limited to, formation of the entity, internal accounting and legal
matters, including but not limited to preparation of tax returns and financial
statements and gathering of data therefore (except to the extent required in the
performance of Landlord's performance under the Lease, such as the preparation
of the annual operating expense statement for the Complex), costs of defending
any lawsuits, costs of selling, syndicating or financing the Complex, financing
and refinancing costs, interest on debt or amortization payments on any
mortgages and rental payments under any ground leases or lease and cost of any
disputes between Landlord and its employees; (xvii) any expense incurred as a
direct result of the negligence of Landlord, its agents, servants or employees
or arising out of Landlord's negligent failure to manage the Complex
consistently with the standard required by this Lease to the extent that such
expense would not have been incurred in the absence of such negligence; (xviii)
any costs or expense for services or amenities that are specifically provided
for the benefit of a particular tenant and that are of a nature not generally
provided to all tenants in the Building or for services or amenities generally
provided to all tenants in the Building but which are provided to any particular
tenant without additional charge or at a reduced charge (on a net effective
basis) than the charge imposed upon other tenants; (xix) Landlord's cost of
electricity, incremental air conditioning and other services sold to tenants for
which Landlord is entitled to be reimbursed by tenants (whether or not actually
collected by Landlord) as a separate additional charge or rental; (xx)
charitable donations; (xxi) allocation of Landlord's or the property manager's
home office costs or general overhead, other than central accounting costs to
the extent that the cost allocated does not materially exceed the cost that
would have been incurred for on-site personnel and accounting equipment; (xxii)
costs required by or incurred in connection with any law enacted before the date
of the Lease or the regulations promulgated thereunder, including without
limitation, the Americans with Disabilities Act of 1990, the Clean Air Act and
the Texas Architectural Barriers Act; (xxiii) an allocation to Tenant of the
management fee contribution described in Section 4.02(b)(y) which would cause
Tenant's share of the management fee contribution to exceed five percent (5%) of
Tenant's Base Rental.
4.04 RENTAL PAYMENT. (a) Tenant hereby agrees to pay the Base Rental
plus Tenant's Estimated Additional Rental and Tenants Additional Rental. The
Base Rental and Tenant's Estimated Additional Rental shall be due and payable in
twelve (12) equal installments on the first day of each calendar month during
each year of the initial term of this Lease and any extensions or renewals
hereof, and Tenant hereby agrees to so pay such rentals to Landlord at
Landlord's address as provided herein (or such other address as may be
designated by Landlord in writing from time to time) monthly in advance.
Provided Tenant's payment by Tenant shall be received by Landlord by on or
before the fifth day of each calendar month during which the same become due, no
late charge or interest shall be charged to Tenant for such payment.
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(b) If the term of this Lease as described above commences on other
than the first day of a calendar month or terminates on other than the last day
of a calendar month, then the installments of Base Rental and Tenant's Estimated
Additional Rental for such month or months shall be prorated and the installment
or installments so prorated shall be paid in advance. The payment for such
prorated month shall be calculated by multiplying the monthly installment by a
fraction, the numerator of which shall be the number of days of the lease term
occurring during said commencement or termination month, as the case may be, and
the denominator of which shall be the total number of days occurring in said
commencement or termination month. Also, if the term of this Lease commences or
terminates on other than the first day of a calendar year, the Base Rental and
Tenant's Estimated Additional Rental shall be prorated for such commencement or
termination year, as the case may be, by multiplying each by a fraction, the
numerator of which shall be the number of days of the lease term during the
commencement or termination year, as the case may be, and the denominator of
which shall be 365, and the calculation described in Section 4.02(c) below shall
be made as soon as reasonably possible after the termination of this Lease, but
in no event later than ninety (90) days following the end of the calendar year
after such termination, Landlord and Tenant hereby agreeing that the provisions
relating to said calculation shall survive the termination of this Lease.
(c) Tenant shall pay all Rent under this Lease at the times and in the
manner provided in this Lease, without demand, set-off or counterclaim except as
provided herein. Tenant hereby acknowledges and agrees that (i) Landlord and
Tenant have expressly negotiated that except as expressly provided under Section
6.01 (c) below, Tenant's covenants to pay Rent under this Lease are separate and
independent from Landlord's covenant to provide services and other amenities
hereunder, and (ii) had the parties not mutually agreed upon the independent
nature of Tenant's covenants to pay Rent hereunder, Landlord would have required
a greater amount of Base Rental in order to enter into this Lease. All Rent not
received by Landlord by the fifth (5h) day of the month shall bear interest from
the date due until paid at the greater of (1) two percent (2%) above the "prime
rate" per annum of Texas Commerce Bank National Association or its successor
("TCB") in effect on said due date (or if the "prime rate" be discontinued, the
base reference rate then being used by TCB, to define the rate of interest
charged to commercial borrowers) or (2) eighteen percent (18%) per annum;
provided, however, in no event shall the rate of interest hereunder exceed the
maximum non-usurious rate of interest (hereinafter called the "Maximum Rate")
permitted by the applicable laws of the State of Texas or the United States of
America, whichever shall permit the higher non-usurious rate, and as to which
Tenant could not successfully assert a claim or defense of usury, and to the
extent that the Maximum Rate is determined by reference to the laws of the State
of Texas, the Maximum Rate shall be the indicated rate ceiling (as defined and
described in Texas Revised Civil Statutes, Article 5069-1.04, as amended) at the
applicable time in effect. Landlord agrees that in the event Tenant fails to
pay Rent by the fifth (5d) day of the month, once, but not more than once in any
calendar year of the Lease Term and provided that Tenant pays such Rent within
five (5) days of Landlord's written notice to Tenant of Tenant's failure to pay
rent, that no late charge or interest shall accrue thereon or be payable by
Tenant with respect to such rent payment.
4.05 TAX ABATEMENT. Landlord and Tenant stipulate and agree that the
Base Rental and the Operating Expense Amount for the Base Year provided for in
this Lease contemplate and
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intend that Landlord will receive certain abatements of ad valorem property
taxes for the City of Sugar Land and Fort Bend County (the "Abated Taxes") that
would otherwise be payable by the Landlord for the Project during the Base Year
and subsequent years during the Lease Term, and, as a result, be payable by
Tenant in the calculation of Tenant's Additional Rental.
Tenant and Landlord agree that Actual Operating Expenses for the Base
Year, and Actual Operating Expenses for any subsequent calendar years from
January 1, 1999 through December 31, 2004, but not any subsequent years during
the Lease Term, shall not include the amount of such Abated Taxes for purposes
of computing Tenant's Estimated Additional Rental and Tenant's Additional
Rental.
4.06 SECURITY DEPOSIT. The Security Deposit, if any, shall be due and
payable by Tenant on the date of execution of this Lease by Tenant, to be held
for the performance by Tenant of Tenant's covenants and obligations under the
lease, it being expressly understood that the deposit shall not be considered an
advance payment of rental or a measure of Landlord's damages in case of default
by Tenant. Upon any event of default or breaches of Tenant's covenants or
obligations under this Lease other than the payment of any sum of money due
Landlord, Landlord shall advise Tenant in writing of the nature of such default
or breech of covenant and shall provide Tenant with a period of thirty (30) days
within which to remedy said default or breech of covenant prior to Landlord
exercising its rights to use the Security Deposit as herein provided. Following
any such application of the security deposit, Tenant shall pay to Landlord on
demand the amount so applied in order to restore the security deposit to the
amount thereof existing prior to such application. Any remaining balance of the
security deposit shall be returned by Landlord to Tenant within thirty (30) days
after the termination of this Lease; provided, however, Landlord shall have the
right to retain and expend such remaining balance (a) to reimburse Landlord for
any and all rentals or other sums due hereunder that have not been paid in full
by Tenant and/or (b) for cleaning and repairing the Leased Premises if Tenant
shall fail to deliver same at the termination of this Lease in a neat and clean
condition and in as good a condition as existed at the date of possession of
same by Tenant, ordinary wear and tear only excepted. Tenant shall not be
entitled to any interest on the security deposit. Notwithstanding the
foregoing, the Security Deposit shall be kept by Landlord in a separate
federally insured account bearing interest at competitive money market rates.
Landlord shall promptly deposit the security deposit in such account following
payment of same by Tenant and shall advise enant of the name and address of the
financial institution and the applicable account number(s). Provided that no
event of monetary default has occurred and remained uncured for a period beyond
the curative period provided in this Lease and that no event of non-monetary
default or breach of covenant or obligation has occurred and remained uncured
for a period beyond the curative periods provided in this Lease within the
preceding twenty-four (24) months and further provided that no event of default,
or breach of covenant or obligation then currently exists, Landlord shall return
the Security Deposit and any interest accrued thereon to Tenant within thirty
(30) days following Landlord's receipt of the twenty-fourth (24h) month's
payment of Rent from Tenant.
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5. LEASEHOLD IMPROVEMENTS
5.01 INITIAL LEASEHOLD IMPROVEMENTS. The Leased Premises shall be
delivered to Tenant at the Commencement Date in its then current condition with
only the additional leasehold improvements and tenant finish, if any, set forth
and described on Exhibit "C" attached hereto.
5.02 SUBSEQUENT LEASEHOLD IMPROVEMENTS. Tenant shall not make or allow
to be made (except as otherwise provided in this Lease) any alterations or
physical additions (fixtures) in or to the Leased Premises, or place safes,
vaults or other heavy furniture or equipment within the Leased Premises, without
first obtaining the written consent of Landlord which consent shall not be
unreasonably withheld. Tenant shall submit requests for consent to make
alterations or physical additions together with copies of the plans and
specifications for such alterations. Subsequent to obtaining Landlord's consent
and prior to commencement of construction of the alterations, Tenant shall
deliver to Landlord the building permit and a copy of the executed construction
contract covering the alterations. Tenant shall pay to Landlord upon demand a
review fee in the amount of Landlord's actual costs incurred (not to exceed five
hundred dollars ($500.00) to compensate Landlord for the cost of review and
approval of the plans. TENANT SHALL NOT BE ASSESSED A REVIEW FEE BY LANDLORD
FOR LANDLORD'S REVIEW AND APPROVAL OF TENANT'S PLANS RELATED TO EXPANSION OF THE
LEASED PREMISES BY WAY OF TENANT'S EXERCISE OF EXPANSION OPTIONS OR RIGHT OF
REFUSAL AS DESCRIBED IN EXHIBIT "H" ATTACHED HERETO. Tenant shall deliver to
Landlord a copy of the "as-built" plans and specifications for all alterations
or physical additions so made in or to the Leased Premises, and shall reimburse
Landlord for the cost incurred by Landlord, if any, to update its current
architectural plans for the Building. Landlord's approval as provided herein
shall not be required for alterations or physical additions which total in
actual costs an amount less than or equal to $5,000 in the aggregate in any
given year under the term of this Lease provided however, Tenant shall remain
responsible for all other fees, costs and requisite submittals and shall abide
by all other terms and conditions associated with the construction of said
alterations or physical additions as provided for in this Section 5.02. Tenant
agrees specifically that no food, soft drink or other vending machine will be
installed within the Leased Premises which is not for the exclusive use of
Tenant, its employees and invitees.
5.03 OWNERSHIP OF IMPROVEMENTS. All alterations, physical additions,
or improvements in or to the Leased Premises (including fixtures) but excluding
Tenant's trade 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
moveable equipment or furniture owned by Tenant. Notwithstanding the preceding
provisions of this Section, Tenant shall have the option of removing all such
alterations, physical additions and improvements and restore the Leased Premises
to building standard condition.
5.04 INDEMNITY. Except for work performed by Landlord, Tenant shall
indemnify and hold harmless Landlord from and against all costs (including
reasonable attorneys' fees and costs of suit), losses, liabilities, or causes of
action arising during the term of the Lease 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.
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5.05 LIENS. 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 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, cancel or
discharge the same and upon Landlord's demand, Tenant shall promptly reimburse
Landlord for all costs incurred in canceling such lien or liens.
5.06 COMPLIANCE WITH LAWS. Tenant shall cause all alterations,
physical additions, and improvements (including fixtures), constructed or
installed in the Leased Premises by or on behalf of Tenant to comply with all
applicable governmental codes, ordinances, rules, regulations and laws. Tenant
acknowledges and agrees that neither Landlord's review and approval of Tenant's
plans and specifications nor its observation or supervision of the construction
or installation thereof shall constitute any warranty or agreement by Landlord
that same comply with such codes, ordinances, rules, regulations and laws.
5.07 HAZARDOUS SUBSTANCES. Tenant shall use its diligent good faith
efforts to comply with all applicable federal, state or local laws, regulations,
orders, judgments and decrees regarding health; safety or the environment
("Environmental Laws") pertaining to or governing Tenant's particular use and
occupancy of the Leased Premises or the conduct of Tenants business therein,
including without limitation the application for and maintenance of all required
permits, the submittal of all notices and reports, proper labeling, training and
record keeping, and timely and appropriate response to any release or other
discharge by Tenant of a substance under Environmental Laws.
5.08 ADA COMPLIANCE. Tenant shall be wholly responsible for any
accommodations or alterations that are required by applicable governmental
codes, ordinances, rules, regulations and laws to be made to the Leased Premises
to accommodate disabled employees and customers of Tenant, including, without
limitation, compliance with the American with Disabilities Act (42 U.S.C. __
1201 et seq.) ("ADA") and the Texas Architectural Barriers Act
(Xxx.Xxx.Xxx.Xxxx.Xxx 9201) ("TABA"). As to any full floor(s) of the Building
which are leased by Tenant, Tenant's responsibility under this Section 5.08
shall not apply to elevator lobbies, mechanical, electrical and rest rooms which
are constructed by Landlord as provided for in Landlord's plans and
specifications for the Building.
5.09 BUILDING COMPLIANCE WITH LAWS AND REGULATIONS. Landlord warrants
to Tenant that Landlord's Building shall at the time at which Tenant takes
occupancy of the Leased Premises, comply with all laws, ordinances, orders,
rules and regulations (state, federal, municipal and other agencies or bodies
having any jurisdiction thereof) relating to the use, condition or occupancy of
Landlord's Building. Landlord shall cause the Landlord's Building to comply
with such laws,
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ordinances, orders and other regulations as are hereafter enacted or amended,
subject to the actual costs thereof being amortized as described in Section
4.03(b)(vi) and constituting a portion of Actual Operating Expenses for
calculation of Tenants' Additional Rental.
6. LANDLORD SERVICES.
6.01 SERVICES. (a) Provided that no Event of Default pursuant to
Section 13.01(a) has occurred and is continuing, Landlord shall furnish Tenant
while Tenant is occupying the Leased Premises;
(i) Hot and cold domestic water at those points of supply
provided for general use of other tenants in the Building, including hot
and cold domestic water service to one set of men's and ladies' restrooms
and one drinking fountain on each floor on which any portion of the
Premises is located and for distribution to other plumbing fixtures
installed by Tenant with the Leased Premises.
(ii) Subject to curtailment as required by governmental laws,
rules or regulations, air conditioning and heating to the Leased Premises
and the general Common Areas during the normal business hours of the
Building (7:00 a.m. to 6:00 p.m. Monday through Friday, and 8:00 a.m. to
1:00 p.m. on Saturday, exclusive of holidays). Tenant will be billed for
overtime air and electrical service at $35.00 per hour per floor.
Landlord (at no cost to Tenant) will install timer controls that allow
Tenant to operate the Building HVAC equipment after normal business hours
and record such usage for billing purposes. Holidays observed by the
Building will be New Year's Day, Memorial Day, Independence Day, Labor
Day, Thanksgiving Day, Friday following Thanksgiving Day and Christmas
Day.
(iii) Electric lighting service for all public areas and special
service areas of the Building and all levels of the Building parking
garage from dusk until xxxx in the manner and to the extent reasonably
deemed by Landlord to be in keeping with the standards of a first-class
office building.
(iv) Janitor service on a five (5) day week basis, in a manner
consistent with the standards of other first-class office buildings
in the Xxxxx Xxxx xxxx xx Xxxx Xxxx Xxxxxx, Xxxxx; provided, however if
Tenant's floor coverings are other than standard commercial grade vinyl
tile or carpets Landlord will only clean same upon special agreement with
Tenant.
(v) Equipment to limit access to the Building after normal
business hours (such equipment to include intelligent, programmable
central control unit, card/keyboard entry, burglar, fire and emergency
alarms and 24-hour electronic monitoring capability); provided, however,
Landlord shall have no responsibility to prevent and shall not be liable
to Tenant for, 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
16
to the Building or the Leased Premises, and Tenant hereby releases
Landlord from all liability relating thereto.
(vi) Sufficient electricity to operate as generally outlined in
Article 220 of the National Electric Code Handbook including low-voltage
electrical capacity sufficient to service a total connected (exclusive of
lighting and air handlers), plus sufficient additional electrical
capacity to operate, the lighting and base-Building air handlers load of
no less than 10 xxxxx per square foot of Net Rentable Area within the
Leased Premises, calculated separately for each floor on which portions
of the Leased Premises are located. Tenant shall pay to Landlord,
monthly as billed, such charges as may be separately metered or as
Landlord's engineer shall reasonably compute for any electrical service
usage in excess of that stated above. IF TENANT'S USE OF THE LEASED
PREMISES REQUIRES SEPARATE METERING AND/OR AIR CONDITIONING IN EXCESS OF
BUILDING STANDARD, THE SAME SHALL BE PURCHASED AND INSTALLED AT TENANT'S
EXPENSE AND TENANT SHALL PAY ALL OPERATING COSTS RELATING THERETO,
(vii) All Building standard fluorescent bulb and ballast
replacement in all areas and all incandescent bulb replacement in public
areas, toilet and rest room areas and stairwells and exterior lighting
fixtures.
(viii) Reasonably adequate, non-exclusive passenger elevator
service to the Leased Premises twenty-four (24)hours per day, which shall
include (subject to repair and maintenance service agreements) a minimum
of two passenger elevator cabs.
(ix) Maintenance of the roof, exterior walls, load-bearing
columns, foundation, floor slabs which are constructed by Landlord as
provided for in Landlord's plans and specifications for the Building, and
other structural components, the mechanical, electrical and plumbing
systems, the common areas, bathrooms, interior plants, exterior lighting
and the driveways and exterior landscaping of the Project, and such
repairs and replacements as may be required to maintain the Building and
parking garage in keeping with the standards of a first-class office
building.
(x) Management of the Building including an on-site property
manager for the Project, Monday through Friday from 8:00 a.m. to 5:00
p.m., exclusive of holidays.
(xi) Not less than two local-access fiber optic providers
servicing the Building through separate Building entrance links located
on separate sides of the Building.
(b) To the extent any of the services or amenities required to be
provided by Landlord pursuant to the terms of this Lease (the "Landlord
Services") require electricity, gas and water supplied by public utilities,
Landlord's covenants hereunder shall only impose on Landlord the obligation to
use its good faith efforts to cause the applicable public utilities to furnish
the same. Failure by Landlord to furnish any of the Landlord Services to any
extent, or any cessation thereof, resulting from causes beyond the reasonable
control of Landlord, 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
17
hereof. As used herein, the phrase "causes beyond the reasonable control of
Landlord" shall include, without limitation, acts of the public enemy,
restraining of government, unavailability of materials, strikes, civil riots,
floods, hurricanes, tornadoes, earthquakes and other severe weather conditions
or acts of God.
(c) In the event of a failure by Landlord to provide the Landlord
Services resulting from the malfunction or obsolescence of the Building
equipment or machinery, or from any other cause which is reasonably within the
control of Landlord, Landlord covenants and agrees to promptly repair or replace
such equipment or machinery, or to rectify such other cause, and to restore such
Landlord Services. Tenant hereby covenants and agrees that in the event of any
interruption or cessation of Landlord Services described in this Section
6.01(c), Tenant shall have no claim for rebate or abatement of Rent or for
damages on account thereof; provided, however, that in the event any such
interruption or cessation of Landlord Services renders all or any portion of the
Leased Premises untenantable, and such interruption or cessation continues for
five (5) consecutive business days, Rents with respect to the untenantable
portion of the Leased Premises shall be equitably abated thereafter until such
Landlord Services are restored or the affected portion(s) of the Leased Premises
are otherwise restored to a tenantable condition. Provided that Tenant notifies
Landlord in writing immediately upon such failure of building equipment or
machinery or such other cause which has caused all or any portion of the Leased
Premises to become untenantable and that such failure or cause occurred through
no fault of Tenant and further provided that Landlord, upon receipt of such
written notification from Tenant, fails to use diligent good faith efforts to
promptly repair or replace such equipment or machinery, or to rectify such other
cause, and to restore such Landlord services and such failure of Landlord shall
cause the Leased Premises or portions thereof to remain untenantable for in
excess of five (5) business days as provided herein, then the equitable
abatement of rent shall be calculated from the first day of such interruption of
Landlord Services.
(d) Tenant shall pay Landlord, at the charges established by Landlord
from time to time (which charges shall not exceed Landlord's actual costs in
performing such services), for all supplementary services provided by Landlord
or its agents to Tenant, other than Landlord Services, which charges shall be
payable by Tenant upon demand by Landlord. Such supplementary services shall
include, without limitation, maintenance, repair, janitorial, cleaning and other
services provided during hours other than ordinary business hours and/or in
amounts not reasonably considered by Landlord as standard.
(e) Tenant hereby acknowledges and agrees that Landlord is obligated
to provide only the Landlord Services under this Lease, and that Landlord, its
agents and representatives, have made no representations whatsoever of any
additional services or amenities to be provided by Landlord now or in the future
under this Lease. Notwithstanding the foregoing, Tenant recognizes that
Landlord may, at Landlord's sole option, elect to provide additional services or
amenities for the tenants of the Complex from time to time, and hereby agrees
that Landlord's discontinuance of any of same, shall not constitute a default of
Landlord under this Lease nor entitle Tenant to any abatement of or reduction in
Rent. Additional services or amenities which Landlord elects to provide for
other Tenants of the Complex shall be made available by Landlord to Tenant upon
Tenant's request therefor, at the same cost and on the same basis as for
Landlord's other tenants.
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6.02 SECURITY SYSTEM ACCESS CARDS AND LOCKS. Landlord shall furnish
Tenant with three and one-half (3.5) sets per thousand square feet of Net
Rentable Area within the Leased Premises of access cards for the Building
corridor doors entering the Leased Premises. Additional access cards will be
furnished by Landlord (at Landlord's cost therefor) upon an order signed by
Tenant and at Tenant's expense. All such access cards 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 duplicate access cards, except those furnished by Landlord. Upon
termination of this Lease, Tenant shall surrender to Landlord all access cards
to any locks on doors entering or within 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. Tenant will have the
right to connect the security system for the Leased Premises into the Building
security system at no cost to Tenant other than installation costs and customary
monitoring fees.
6.03 GRAPHICS, BUILDING DIRECTORY AND NAME. (a) Landlord shall provide
and install all initial Building Standard letters or numerals on entrance doors
to the Leased Premises at Landlord's sole cost and expense; all such letters and
numerals shall be in the Building standard graphics. No signs, numerals,
letters or other graphics shall be used or permitted on the exterior of, or
which may be visible from outside, the Leased Premises, unless approved in
advance and in writing by Landlord.
(a) Landlord shall install Building standard strips in a number which
is proportionate to Tenant's proportionate share of the net rentable area of the
Building containing a listing of Tenant's name on the Building directory board
located in the main lobby of the Building. Landlord shall provide to Tenant as
soon as is practicable following Landlord's selection of a directory board
system, information on the number of strips which will be available to Tenant
and Tenant shall provide to Landlord the information which Tenant desires to
have listed on said strips.
(b) Tenant will have the right to install signs displaying Tenant's
logo in the elevator bank in the lobby level of the Building. Tenant will also
have the right to prominently display its logo in the elevator lobby of each
full floor leased by Tenant and next to or on its door on each partial floor
Tenant occupies, plus the right to install directional signage on each partial
floor. All Tenant signage shall be of a size, constructed of materials and
affixed in locations which shall be approved by Landlord, which approval shall
not be unreasonably delayed, conditioned or withheld.
6.04 MAINTENANCE AND REPAIRS. Landlord shall maintain the Building
(excluding leasehold improvements) in a good and operable first class condition,
and shall make such repairs and replacements as may be required to maintain the
Building in such condition. This Section 6.04 shall not apply to damages
resulting from an exercise of eminent domain (as to which Section 8 shall
apply). Unless otherwise expressly stipulated herein, Landlord shall not be
required to make any improvements to or repairs of any kind or character to the
Leased Premises during the term of this Lease, except such repairs to Building
standard improvements as are necessary for normal maintenance operations;
provided, however, non-Building standard leasehold improvements will, at
Tenant's written request, be-maintained by Landlord at Tenant's expense, at a
cost or charge
19
equal to the costs incurred in such maintenance plus as additional charge of
fifteen percent (15%). Tenant's leasehold improvements for the purposes of this
Section 6.04 shall be deemed to be Building standard and thereby not subject to
additional cost for repairs associated with normal maintenance operations,
provided that the cost to construct the Tenant's Initial Leasehold Improvements
and Subsequent Leasehold Improvements, if any, shall not exceed the Improvement
Allowance described in Exhibit "C" attached hereto. Notwithstanding any
provisions of this Lease to the contrary, all repairs, alterations or additions
to the base Building or its systems (as opposed to those involving only Tenant's
leasehold improvements), and all repairs, alterations or additions to Tenant's
non-Building standard leasehold improvements which affect the Building's
structural components or major mechanical, electrical or plumbing systems, made
by or for or on behalf of Tenant and any other tenants in the Building shall be
made by Landlord or its contractor only, and, in the case of Tenant, shall be
paid for by Tenant in an amount equal to Landlord's costs plus fifteen percent
(15%).
6.05 LANDLORD ALTERATIONS OR MODIFICATIONS. Notwithstanding anything
herein to the contrary, Landlord hereby expressly reserves the right in its
reasonable discretion to (a) temporarily change the location of, close, block or
otherwise alter any entrances, corridors, doorways or walkways leading to or
providing access to the Building or any part thereof or otherwise restrict the
use of same provided such activities do not unreasonably impair Tenants access
to the Leased Premises, (b) improve, remodel, or otherwise alter the Building,
and (c) Landlord shall have the right at any time during the Term to attach to
any or all of the Complex windows a glazing or coating of film for the purpose
of improving the Complex's energy efficiency which glazing or coating shall not
cause the windows of the Complex to become opaque nor unreasonably diminish the
amount of natural light within the Leased Premises. Tenant shall not remove,
alter or disturb any such glazing, coating or film and the addition of such
glazing, coating or film, shall in no way reduce Tenant's obligations under this
Lease or impose any liability on Landlord and it is agreed that Landlord shall
not incur any liability whatsoever to Tenant as a consequence thereof and such
activities shall not be deemed to be a breach of any of Landlord's obligations
hereunder. Landlord agrees to exercise good faith in notifying Tenant within a
reasonable time in advance of any alterations, modifications or other actions of
Landlord under this Section 6.05. Any diminution or shutting off of light, air
or view by any structure which is now or may hereafter be effected on lands
adjacent to the Complex shall in no way affect this Lease or impose any
liability on Landlord. Noise, dust or vibration or other incidents to new
construction of improvements on lands adjacent to the Complex, whether or not
owned by Landlord, shall in no way affect this Lease or impose any liability on
Landlord.
7. CARE AND USE OF THE LEASED PREMISES.
7.01 REPAIRS BY TENANT. Tenant shall at its own cost and expense, (i)
maintain the Leased Premises in a first class clean, safe, operable, attractive
condition, and shall not commit or allow to remain any waste or damage to any
portion thereof or to the Complex, and (ii) subject to Landlord's supervision,
repair or replace any damage or injury to the Complex caused by Tenant, its
agents, contractors, employees. If Tenant fails to make such repairs or
replacements promptly after receipt of written notice from Landlord, Landlord
may, at its option, make such repairs or replacements, and Tenant shall to the
extent such costs of repair or replacement are not covered by Landlord's
20
insurance pursuant to the provisions of Section 11.01 of this Lease, repay the
cost thereof plus a charge of fifteen percent (15%) to the Landlord on demand.
Any damage or injury to the base Building or its systems (as opposed to those
involving only Tenant's leasehold improvements) and (notwithstanding the
foregoing) any damage or injury to Tenant's leasehold improvements which affects
the Building's structural components or major mechanical, electrical or plumbing
systems, caused by Tenant, its agents, contractors, employees shall be repaired
or replaced by Landlord, but at Tenant's expense plus a charge of fifteen
percent (15%) to the extent such costs of repair or replacement are not covered
by Landlord's insurance pursuant to the provisions of Section 11.01 of this
Lease.
7.02 ENTRY FOR REPAIRS AND INSPECTION. Tenant shall permit Landlord
and its contractors, agents or representatives to enter into and upon any part
of the Leased Premises upon forty-eight (48) hours prior notice at all
reasonable hours to inspect or clean the same, make repairs, alterations or
additions thereto, show the same to prospective tenants or purchasers, to
determine whether Tenant is performing its obligations hereunder for any other
purpose as Landlord may deem necessary or desirable, and such entry shall not
constitute a trespass or an eviction (constructive or otherwise) and Tenant
shall not be entitled to any abatement or reduction of rent or claim for damages
for any injury to or interference with Tenant's business, for loss of occupancy
or quiet enjoyment or for consequential damages by reason thereof. Except in
the case of an emergency, Landlord shall schedule all such entries into and upon
any part of the Leased Premises so as to minimize the disruption to Tenant and
its business to the extent reasonably practicable. Tenant may require one or
more representatives of Tenant to accompany Landlord and its contractors, agents
or representatives in any entry into secured or confidential areas. Any work to
be undertaken for cleaning, repairs, alterations or improvements to the Leased
Premises shall be done as promptly as reasonably possible and to the extent
practicable after 7:00 p.m. on weekdays or on weekends and so as to cause as
little interference to Tenant and its business as reasonably possible. Promptly
upon completion of any work undertaken by or on behalf of Landlord, the Leased
Premises shall be restored to the condition which existed prior to such entry.
Landlord will only have the right to show the Leased Premises to prospective
tenants during the final nine months of the Lease term.
7.03 NUISANCE. Tenant shall conduct its business and control its
agents, employees, invitees, contractors and visitors in such manner as not to
create any nuisance, or unreasonably interfere with, annoy or disturb any other
tenant or Landlord in its operation of the Building. Landlord shall be
responsible for maintaining compliance by the Building's other Tenants with
respect to this same or similar clauses contained within other Tenant's leases.
7.04 LAWS AND REGULATIONS: Rules of Building. Tenant shall comply
with, Tenant shall use diligent, good faith efforts to cause its visitors,
employees, contractors, agents and invitees to comply with, and Landlord shall
use reasonable good faith efforts to cause other Tenants to comply with, all
laws, ordinances, orders, rules and regulations (state, federal, municipal and
other agencies or bodies having any jurisdiction thereof) relating to the use,
condition or occupancy of the Leased Premises, and with the rules of the
Building reasonably adopted and altered by Landlord from time to time for the
safety, care and cleanliness of the Leased Premises and the Building and for
preservation of good order therein. all of which Building rules will be sent by
Landlord to Tenant
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in writing and shall be thereafter carried out and observed by Tenant, its
employees, contractors, agents. Tenant and its employees, contractors, and
agents shall be required to comply with additions or modifications to the
rules of the Building only if such modifications or additions: (a) are
reasonable and consistent with rules and regulations imposed in comparable
buildings in the area of one-half mile to either side of State Highway 59
bounded by the Xxx Houston Tollway (Beltway 8) to the northeast and State
Highway 6 to the southwest; (b) are not inconsistent with any other
provisions of this Lease; (c) are uniformly enforced among all office tenants
within the Building; and (d) are effective only after Tenant has received
reasonable advance written notice of such modifications or additions. 'The
current rules of the Building are attached hereto as Exhibit "13".
7.05 SPECIFICALLY PROHIBITED USES. Tenant shall not (a) occupy or use
the Leased Premises, or permit any portion of the Leased Premises to be occupied
or used, for any business or purpose which is unlawful, disreputable or deemed
to be hazardous on account of fire or other hazards, or permit anything to be
done which would in any way increase the rate of fire or liability or any other
insurance coverage on the Building and/or its contents, (b) keep, or permit to
be kept, any substance in the Leased Premises which might emit offensive odors
into other portions of the Building, or (c) install any food, soft drink or
other vending machine in the Leased Premises, other than those for the exclusive
use of Tenant and its business invitees. Tenant shall not use nor permit the
Premises to be used by any subtenant or assignee for the business of oil and gas
exploration or for the business of a title agency.
7.06 SURRENDER OF THE LEASED PREMISES. At the termination of this
Lease, by lapse of time or otherwise, Tenant shall deliver up the Leased
Premises to Landlord in as good condition as existed on the date of possession
by Tenant, ordinary wear and tear, damage by fire or casualty, taking by eminent
domain or transfers in lieu thereof, latent defects and repairs for which the
Landlord or another third party is responsible excepted. Upon such termination
of this Lease, Landlord shall have the right to re-enter and resume possession
of the Leased Premises.
7.07 HOLDING OVER. In the event of holding over by Tenant after
expiration or termination of this Lease without the prior written consent of
Landlord, Tenant shall pay as liquidated damages one hundred fifty percent
(150%) of the amount of all Base Rental and Tenant's Additional Rental which was
payable by Tenant immediately prior to such expiration or termination. In the
event of any unauthorized holding over, Tenant shall also indemnify Landlord
against all claims for damages by any other tenant to whom Landlord may have
leased all or any part of the Leased Premises effective upon the termination of
this Lease. In the event Tenant shall be precluded from timely vacating the
Leased Premises upon expiration or termination of this Lease as a result of
significant damage, destruction or similar catastrophic event involving Tenant's
future leased premises, Tenant shall be permitted to remain in occupancy of the
Leased Premises subject to all of the terms and conditions contained within this
Lease for a maximum period of sixty (60) days following the expiration or
termination of this Lease and shall only be responsible to Landlord for the
payment of the amounts provided for pursuant to this Section 7.07 as liquidated
damages. Any such holding over without the prior written consent of Landlord
shall create a tenancy at sufferance relationship with Tenant.
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8. CONDEMNATION. If all of the Complex is taken or condemned, or
acquired under threat of condemnation, by or at the direction of any
governmental authority (a "Taking" or "Taken", as the context requires), or if
so much of the Complex is Taken that, in Landlord's reasonable opinion, the
remainder cannot be restored to an economically viable, quality office building,
or if the awards payable to Landlord as a result of any Taking are, in
Landlord's reasonable opinion, inadequate to restore the remainder to an
economically viable, quality office building, Landlord may, at its election,
exercisable by the giving of written notice to Tenant within sixty (60) days
after the date of the Taking, terminate this Lease as of the date of the Taking
or the date Tenant is deprived of possession of the Leased Premises (whichever
is later), provided, however, that Landlord shall similarly terminate all other
tenant leases within the Building. If this Lease is not terminated as a result
of a Taking, Landlord shall restore the Leased Premises remaining after the
Taking to a Building standard condition, provided, however, in the event the
Landlord has not actually completed such repair work such that the Leased
Premises are tenantable and otherwise suitable for the operation of Tenant's
business, in Tenant's reasonable discretion, within two hundred and seventy
(270) days from the date of the condemnation, or if twenty (20) percent or more
of the Leased Premises is Taken, Tenant shall have the right to terminate this
Lease by delivering written notice to Landlord. In the case of Tenant's written
notice to Landlord pursuant to Tenant's rights provided herein to terminate this
Lease as a result of the Taking of twenty (20) percent or more of the Net
Rentable Area of the Leased Premises, such termination must be delivered to
Landlord within (60) days after the date of the Taking, failing which, such
right of Tenant shall be of no further force or effect. During the period of
restoration, Base Rental shall be abated to the extent the Leased Premses are
rendered untenantable and, after the period of restoration, Base Rental and
Tenant's Proportionate Share shall be reduced in the proportion that the area of
the Leased Premises Taken or otherwise rendered untenanta6le bears to the area
of the Leased Premises just prior to the Taking. If any portion of Base Rental
is abated under this Section 8, Landlord may elect to extend the expiration date
of the Term for the period of the abatement. All awards, proceeds, compensation
or other payments from or with respect to any Taking of the Complex or any
portion thereof shall belong to Landlord, Tenant hereby assigning to Landlord
all of its right, title, interest and claim to same. Tenant shall have the
right to assert a claim for and recover from the condemning authority, but not
from Landlord, such compensation as may be awarded on account of Tenant's moving
and relocation expenses, and depreciation to and loss of Tenant's movable
personal property and any leasehold improvements above building standard paid
for by Tenant.
9. DAMAGES FROM CERTAIN CAUSES. Landlord shall not be liable or
responsible to Tenant for any loss or damage to any property or person
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 cause beyond Landlord's control, or for any damage or
inconvenience which may arise through repair or alteration of any part of the
Building.
10. CASUALTY. In the event of a fire or other casualty in the Leased
Premises, Tenant shall promptly give notice thereof to Landlord. If the Leased
Premises shall be partially destroyed by fire or other casualty so as to render
the Leased Premises untenantable in whole or in part, Rent shall xxxxx
thereafter as to the portion of the Leased Premises rendered untenantable until
such time as the Leased Premises are made tenantable and Landlord agrees to
commence and prosecute such repair work promptly and with all due diligence. In
the event such destruction results in total or
23
substantial damages to or destruction of the Building and Landlord shall elect
not to rebuild, then all Rent owed up to the time of such destruction or
termination shall be paid by Tenant and thenceforth this Lease shall cease and
come to an end. Landlord shall give Tenant written notice of its decisions,
estimates or elections under this Section 10 within sixty (60) days after any
such damage or destruction. In the event that more than twenty (20) percent of
the Net Rentable Area of the Leased Premises becomes untenantable as a result of
fire or other casualty and further if a qualified contractor selected by
Landlord reasonably estimates that it will take longer than two hundred seventy
(270) days from the date of such casualty to rebuild/restore such destruction,
Tenant shall have the right to terminate this Lease by delivering written notice
to Landlord within thirty (30) days of receiving such notice with respect to the
duration of the anticipated rebuilding/restoration time requirements from
Landlord or Landlord's contractor. If Tenant does provide such notice to
Landlord and thereby elects not to terminate this Lease, Landlord shall be
obligated to commence and prosecute such repair work promptly and with all due
diligence and shall restore the Leased Premises to the condition that existed
immediately prior to such casualty subject to the limitations further provided
in this Section 10 of the Lease. If the repair and restoration is not competed
within thirty (30) days after the time period stated in the notice provided to
Tenant by Landlord or Landlord's contractor, Tenant shall have the right to
terminate this Lease. If Tenant elects to terminate the Lease pursuant to the
rights granted to Tenant under this Section 10, Tenant may nevertheless continue
its occupancy of the tenantable portion of the Leased Premises for up to six
months following the date of the casualty, provided that Tenant continues to pay
all Rent prorated as to the portion of the Leased Premises then occupied by
Tenant and Tenant otherwise abides by the terms of the Lease. Notwithstanding
anything contained in this Section 10, Landlord shall only be obligated to
restore or rebuild the Leased Premises to the condition originally constructed
by way of Landlord's Work at Tenant Space combined with the level of
improvements which were afforded by way of the Improvement Allowance as defined
in Exhibit "C" to the Lease and in no event shall Landlord be required to expend
more sums than received from the proceeds of any insurance carried by Landlord;
provided, however, Tenant shall have the right to cause Landlord to rebuild or
restore the Leased Premises to the condition they were in prior to such damage
or destruction, in which event Tenant shall bear the cost (including rentals
which are lost due to any excess construction time) of such restoration or
rebuilding to the extent the same exceeds the costs Landlord would have incurred
had only Building standard improvements been used.
11. INSURANCE.
11.01 INSURANCE BY LANDLORD. Landlord shall obtain and maintain
throughout the term of this Lease the following policies of insurance:
(a) replacement cost fire and extended coverage insurance of not less
than eighty percent (80%) of full replacement cost, excluding footings and
foundations, on the Building (excluding non-Building standard leasehold
improvements) and on all Building standard improvements; and
(b) comprehensive general and contractual liability insurance in an
amount of at least $1,000,000 against claims for personal injury, death and
property damage occurring in or about the Building.
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Said insurance shall be maintained with an insurance company authorized
to do business in Texas, subject to the foregoing requirements of Section 11.01,
in such amounts desired by Landlord and at the expense of Landlord (but with the
same to be included in the operating expenses of the Building as described in
Section 4.03) and payments for losses thereunder shall be made solely to
Landlord. If the annual premiums to be paid by Landlord for casualty insurance
shall exceed the standard rates because of Tenant's operations within or
contents of the Leased Premises or because the improvements to the Leased
Premises are above Building standard, Landlord shall notify Tenant no later than
ten (10) days prior to Landlord's purchase of said insurance policy, to the
extent to which Landlord shall have such information, the nature of Tenant's
operations, contents within the Leased Premises or the improvements to the
Leased Premises which are above building standard and which have caused the
annual premiums to be paid by Landlord for casualty insurance to exceed the
standard rate and Tenant shall promptly pay the excess amount of the premium
upon request by Landlord (and if necessary, Landlord may allocate the insurance
costs of the Building to give effect to this sentence). Tenant shall be named
as an additional insured under Landlord's general liability insurance policy.
11.02 INSURANCE BY TENANT. Tenant shall obtain and maintain throughout
the term of this Lease the following policies of insurance.
(a) replacement cost fire and extended coverage insurance, with
vandalism, malicious mischief and sprinkler leakage endorsements, on all of
Tenant's personal property and non-Building standard leasehold improvements in
the Leased Premises in an amount not less than the full replacement cost
thereof;
(b) comprehensive general and contractual liability insurance against
claims for personal injury, death and property damage occurring in or about the
Leased Premises, such insurance to afford protection to the limits of (i) not
less than $2,000,000.00 in respect of injury to or death of any number of
persons arising out of any one occurrence and (ii) $1,000,000.00 in respect of
any instance of property damage; and
Tenant shall deliver to Landlord, prior to the Commencement Date, certificates
of such insurance and shall, at all times during the term of this Lease, deliver
to Landlord upon request true and correct copies of said insurance policies.
The policy described in clause (b) shall (i) NAME LANDLORD AS AN ADDITIONAL
INSURED, (ii) provide that it will not be canceled or reduced in coverage
without thirty (30) days' prior written notice to Landlord, (iii) insure
performance of the indemnities of Tenant contained in this Lease, and (iv) be
primary coverage, so that any insurance coverage obtained by Landlord shall be
excess thereto. Tenant shall deliver to Landlord certificates of renewal at
least thirty (30) days prior to the expiration date of each such policy and
copies of new policies at least thirty (30) days prior to terminating any such
policies. All policies of insurance required to be obtained and maintained by
Tenant shall be subject to the approval of Landlord as to terms, coverage,
deductibles and issuer.
11.03 WAIVER OF RECOVERY AND SUBROGATION RIGHTS. Landlord and Tenant
each hereby waives any and all rights of recovery, claims, actions or causes of
action, against the other, its
25
agents, servants, partners, shareholders, officers, or employees, for any loss
or damage that may occur to the Leased Premises or the Building, or any
improvements thereto, or any personal property of such party therein, by reason
of fire, the elements, or any other cause which would be insured against under
the terms of the insurance policies required to be maintained pursuant to
Sections I 1.0 I and 1 1.02 hereof, or which is actually maintained by such
other party, regardless of cause or origin, including negligence of the other
party hereto, its agents, officers, partners, shareholders, servants, or
employees, and covenants that no insurer shall hold any right of subrogation
against such other party. If the respective insurer of Landlord and Tenant does
not permit such a waiver without an appropriate endorsement to such party's
insurance policy, then Landlord and Tenant each covenant and agree to notify its
insurer of the waiver set forth herein and to secure from such insurer an
appropriate endorsement to its respective policy with respect to such waiver.
12. HOLD HARMLESS. Landlord shall not be liable to Tenant, its
agents, servants, employees, contractors, customers or invitees for any damage
to person or property caused by any act, omission or neglect of Tenant, its
agents, servants or employees, and Tenant agrees to indemnify and hold Landlord
harmless from all liability and claims for any such damage in the Building or on
the Land. Tenant shall not be liable to Landlord, or to Landlord's agents,
servants, employees, contractors, customers or invitees for any damage to person
or property caused by any act, omission or neglect of Landlord, its agents,
servants or employees, and Landlord agrees to indemnify and hold Tenant harmless
from all claims for such damage.
13. ENFORCEMENT OF LEASE.
13.01 DEFAULT BY TENANT. The occurrence of any one or more of the
following shall constitute an Event of Default" under this Lease:
(a) the failure of Tenant to pay any Rent as and when due under this
Lease and the continuance of such failure for a period of ten (10) days after
receipt of written notice to Tenant;
(b) the failure of Tenant to perform, comply with or observe any of
the other covenants or conditions and the continuance of such failure for a
period of thirty (30) days after receipt of written notice to Tenant; or, if
such failure cannot reasonably be cured within said thirty (30) day period
despite Tenant's diligent good faith efforts, the failure of Tenant to promptly
commence its diligent good faith efforts to cure such failure within said thirty
(30) day period and complete curative action within a reasonable time
thereafter;
(c) the filing of a petition by or against Tenant or any guarantor of
Tenant's obligations under this Lease (i) naming Tenant as debtor in any
bankruptcy or other insolvency proceeding, (ii) for the appointment of a
liquidator or receiver for all or substantially all of Tenant's property or for
Tenant's interest in this Lease, or (iii) to reorganize or modify Tenant's
capital structure; and in the case of filing against Tenant on an involuntary
basis and any of the same is not dismissed within sixty (60) days thereafter;
26
(d) the admission by Tenant in writing of its inability to meet its
obligations as they become due or the making by Tenant of an assignment for the
benefit of its creditors;
(e) except for any sale or exchange of Tenant's stock in a public
offering and the subsequent sale of Tenant's stock on a nationally recognized
exchange or NASDAQ, the transfer of ownership interests in Tenant in one or more
transactions, the result of which is to change the majority ownership interest
and/or control of Tenant from that which existed as of the date of execution of
this Lease, unless Landlord consents to such change in ownership and/or control
in advance (which consent will not be unreasonably withheld, conditioned or
delayed); or
(f) the assignment or subletting of all or any part of the Leased
Premises by Tenant without the prior written consent of Landlord in accordance
with Section 19.
13.02 REMEDIES OF LANDLORD. Upon any Event of Default, Landlord may
exercise any one or more of the following described remedies, in addition to all
other rights and remedies provided at law or in equity;
(a) Terminate this Lease by written notice to Tenant and forthwith
repossess the Leased Premises and be entitled to recover forthwith as damages a
sum of money equal to the total of (i) the cost of recovering the Leased
Premises (including attorneys' fees and costs of suit), (ii) the cost of
removing and storing any personal property, (iii) the unpaid Rent earned at the
time of termination, plus interest thereon at the rate described in Section
4.04(c), (iv) the present value (discounted at the rate of eight percent (8%)
per annum) of the balance of the Rent for the remainder of the lease term less
the present value (discounted at the same rate) of the fair market rental value
of the Leased Premises for said period, taking into account the period of time
the Leased Premises will remain vacant until a new tenant is obtained, and the
cost to prepare the Leased Premises for occupancy and the other costs (such as
leasing commissions and attorneys' fees) to be incurred by Landlord in
connection therewith, and (v) any other sum of money and damages owed by Tenant
to Landlord under this Lease.
(b) Elect to receive liquidated damages in an amount equal to the
monthly Base Rental and monthly Tenant's Estimated Additional Rental payable
hereunder for the month during which this Lease is terminated times eighteen
(18), which amount shall be in lieu of the payment of damages Landlord may
suffer by reason of such termination, but which shall not be in lieu of or
reduce in any way any amount due from Tenant (including accrued Rent) or damages
incurred by Landlord due to breach by Tenant of any covenant or other obligation
herein (whether or not liquidated) which accrued prior to the termination of
this Lease. Nothing contained in this Lease shall limit or prejudice the right
of Landlord to prove for and obtain in any proceedings to enforce Landlord's
rights hereunder, including without limitation, any proceedings for bankruptcy
or insolvency by reason of the termination of this Lease, an amount equal to the
maximum allowed by any statute or rule of law in effect at the time when, and
governing the proceedings in which, the damages are to be proved, whether or not
the amount be greater, equal to, or less than the amount of the loss or damages
referred to above.
27
(c) Terminate Tenant's right of possession (but not this Lease) and
may repossess the Leased Premises by forcible entry and detainer suit or
otherwise, without thereby releasing Tenant from any liability hereunder and
without demand or notice of any kind to Tenant and without terminating this
Lease. Landlord shall use reasonable efforts under the circumstances to relet
the Leased Premises on such terms and conditions as Landlord in its sole
discretion may determine (including a term different than the term of this
Lease, rental concessions, alterations and repair of the Leased Premises);
provided, however, Landlord hereby reserves the fight (i) to lease any other
comparable space available in the Building or in any adjacent building owned by
Landlord prior to offering the Leased Premises for lease, and (ii) to refuse to
lease the Leased Premises to any potential tenant which does not meet Landlord's
standards and criteria for leasing other comparable space in the Building.
Landlord shall not be liable, nor shall Tenant's obligations hereunder be
diminished because of, Landlord's failure or refusal to relet the Leased
Premises or collect rent due in respect of such reletting. For the purpose of
such reletting Landlord shall have the right to decorate or to make any repairs,
changes, alterations or additions in or to Leased Premises as may be reasonably
necessary or desirable. In the event that (i) Landlord shall fail or refuse to
relet the Leased Premises, or (ii) the Leased Premises are relet and a
sufficient sum shall not be realized from such reletting (after first deducting
therefrom, for retention by Landlord, the unpaid rent due hereunder earned but
unpaid at the time of reletting plus interest thereon at the rate specified in
Section 4.04(c), the cost of recovering possession (including attorneys' fees
and costs of suit), all of the costs and expenses of such decorations, repairs,
changes, alterations and additions, the expense of such reletting and the cost
of collection of the rent accruing therefrom) to satisfy the Rent, then Tenant
shall pay to Landlord as damages a sum equal to the amount of such deficiency.
Any such payments due Landlord shall be made upon demand therefore from time to
time and Tenant agrees that Landlord may file suit to recover any sums failing
due under the terms of this Section 13.03(c) from time to time. No delivery to
or recovery by Landlord of any portion due Landlord hereunder shall be any
defense in any action to recover any amount not theretoforereduced to judgment
in favor of Landlord, nor shall such reletting be construed as an election on
the part of Landlord to terminate this Lease unless a written notice of such
intention be given to Tenant by Landlord. Notwithstanding any such termination
of Tenant's fight of possession of the Leased Premises, Landlord may at any time
thereafter elect to terminate this Lease. In any proceedings to enforce this
Lease under this Section 13.03(c), Landlord shall be presumed to have used its
reasonable efforts to relet the Leased Premises, and Tenant shall bear the
burden of proof to establish that such reasonable efforts were not used.
(d) Alter any and all locks and other security devices at the Leased
Premises, and if it does so Landlord shall not be required to provide a new key
or other access right to Tenant unless Tenant has cured all Events of Default;
provided, however, that in any such instance, during Landlord's normal business
hours and at the convenience of Landlord, and upon the written request of Tenant
accompanied by such written waivers and releases as Landlord may require,
Landlord will escort Tenant or its authorized personnel to the Leased Premises
to retrieve any personal belongings or other property of Tenant not subject to
Landlord's lien or security interest described in Section 13.01. The provisions
of this Section 13.03(d) are intended to override and control any conflicting
provisions of the Texas Property Code.
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13.03 DEFAULT BY LANDLORD. If Landlord defaults in the performance of
any of its obligations under the Lease, and such default has a material adverse
effect on Tenant's use and enjoyment of the Premises, and if such default
continues for 30 days after written notice to Landlord, and to any first lien
mortgagee or ground lessor of Landlord of which Tenant has notice (or, if such
failure cannot reasonably be cured within said 30-day period despite Landlord's
or such mortgagee's or ground lessor's diligent good faith efforts, such longer
period of time as is required provided that Landlord or such mortgagee or
ground lessor commences diligent good faith efforts to cure such failure within
said 30-day period and thereafter diligently pursue such efforts) Tenant may, at
its option, in addition to all other remedies available at law or under the
Lease: (a) cure such default and invoice Landlord for the reasonable costs
thereof, in which event Tenant shall have the right to deduct from Rents payable
hereunder the amount of any such invoice not paid by Landlord within 10 days of
its receipt thereof, or (b) institute legal proceedings against Landlord to
recover the damages incurred by Tenant on account of such default and/or to
enjoin such default.
13.04 REMEDIES OF TENANT. Upon any Event of Default by Landlord, Tenant
may exercise all rights and remedies provided at law or in equity except to the
extent otherwise specifically provided in this Lease.
13.05 NON-WAIVER. No action by the Landlord or Tenant shall be deemed
to imply or constitute a waiver by them of any of their rights under this Lease
unless such waiver is in writing and signed by Landlord or Tenant and
acknowledges that such action taken by Landlord or Tenant is an express waiver
of their rights. Furthermore, any such writing shall not be deemed to be a
continuing waiver of Landlord's or Tenant's fights and shall be expressly
limited to actions recited in any such waiver. Landlord and Tenant shall have
the right to declare any default under the Lease not waived in writing at any
time and take such action as might be lawful or authorized hereunder, either in
law or in equity.
13.06 RENT COMPUTATION. For purposes of computing unpaid rent which
would have accrued and become payable under this Lease, unpaid rent shall
consist of the sum of:
(a) the total Base Rental for the balance of the Term; plus
(b) Tenant's Additional Rental for the balance of the Term. For
purposes of computing, Additional Rental for the calendar year of the default
and each future calendar year in the Term, it shall be assumed to be equal to
the Additional Rental for the calendar year prior to the year in which default
occurs compounded at a rate equal to the mean average rate of inflation for the
three (3) calendar years preceding the calendar year of the default, as
determined by using the United States Department of Labor, Bureau of Labor
Statistics Consumer Price Index (All Urban Consumers, all items, 1982-84 equals
100) for the metropolitan area or region of which Houston, Texas is a part. If
such index is discontinued or revised during the Term, such other government
index or computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the index had not been
discontinued or revised. If no replacement index exists then Landlord shall
select as a replacement index that index which, in Landlord's opinion, is
generally recognized as the successor index.
29
13.07 LANDLORD'S RIGHT TO CURE DEFAULTS. All agreements and provisions
to be performed by Tenant under any of the terms of this Lease shall be at
Tenant's sole cost and expense and without any abatement of rent. If Tenant
shall fail to pay any sum of money, other than Base Rental, required to be paid
by it hereunder or shall fail to cure any default and such failure shall
continue for ten (10) days after notice thereof by Landlord, then Landlord may,
but shall not be obligated so to do, and without waiving or releasing Tenant
from any obligations, make any such payment or perform any such act on Tenant's
part. All sums so paid by Landlord and all costs incurred by Landlord in taking
such action shall be deemed additional rent hereunder and shall be paid to
Landlord on demand, and Landlord shall have (in addition to all other rights and
remedies of Landlord) the same rights and remedies in the event of the
non-payment thereof by Tenant as in the case of default by Tenant in the payment
of rent.
14. ATTORNEYS' FEES. In the event either party defaults in the
performance of any of the terms, agreements or conditions contained in this
Lease and the other party places the enforcement of this Lease, or any part
thereof, or the collection of any rent due or to become due hereunder, or
recovery of the possession of the Leased Premises, in the hands of an attorney
who files suit upon the same, and should such non-defaulting party prevail in
such suit, the defaulting party agrees to pay the other party's reasonable
attorneys' fees.
15. SUBORDINATION. Tenant covenants and agrees with Landlord to
subordinate Tenant's rights and interests under this Lease to any mortgage, deed
of trust and/or security agreement which may now or hereafter encumber the
Building or the Land or any interest of Landlord therein and/or the contents of
the Building, and to any advances made on the security thereof and to any and
all increases, renewals, modifications, consolidations, replacements and
extensions thereof provided the holder thereof delivers to Tenant a
non-disturbance agreement reasonably acceptable to Tenant. In confirmation of
such subordination, however, at Landlord's request Tenant shall execute promptly
any appropriate certificate or subordination agreement or instrument that
Landlord may reasonably request. In the event of the enforcement by the
trustee, the beneficiary or the secured party under any such mortgage, deed of
trust or security agreement of the remedies provided for by law or by such
mortgage, deed of trust or security agreement, subject to the terms of any
non-disturbance agreement or subordination agreements executed by Tenant,
Tenant, upon request of the any person or party succeeding to the interest of
Landlord as a result of such enforcement, will automatically become the Tenant
of such successor in interest without any change in the terms or other
provisions of this Lease; provided, however, that such successor in interest
shall not be bound by (a) any payment of Rent for more than one month in advance
except prepayments in the nature of security for the performance by Tenant of
its obligations under this Lease, or (b) any amendment or modification of this
Lease made without the written consent of such ground lessor or such successor
in interest; and further provided that such successor in interest shall assume
and perform the duties and obligations of Landlord under the Lease from and
after the date Landlord's interest is so acquired, subject to and without
increasing the limitations of Landlord's Personal Liability set forth in Section
20 of this Lease. Upon request by such successor in interest, whether before or
after the enforcement of its remedies, Tenant shall execute and deliver an
instrument or instruments reasonably acceptable to Tenant confirming and
evidencing such attornment herein set forth, and deliver such instruments or
certificates within fifteen (15) days after being requested by Landlord to do
so. Notwithstanding anything contained in this Lease to the contrary, in the
event of any
30
default by Landlord in performing its covenants or obligations hereunder which
would give Tenant the right to terminate this Lease, Tenant shall not exercise
such right unless and until (a) Tenant gives written notice of such default
(which notice shall specify the exact nature of said default and how the same
may be cured) to the lessor under any such land or ground lease and the
holder(s) of any such mortgage or deed of trust or security agreement who has
theretofore notified Tenant in writing of its interest and the address to which
notices are to be sent, and (b) said lessor and holder(s) fail to cure or cause
to be cured said default within thirty (30) days from the receipt of such notice
from Tenant. This Lease is further subject to and subordinate to all matters of
record in Xxxxxx County, Texas. The terms of any subordination and attornment
agreement executed by Tenant with any lienholder shall supercede and control
over the provisions of this Section 15 as to such matters between Tenant and
such lienholder.
Notwithstanding anything to the contrary set forth above, any beneficiary under
any deed of trust may at any time subordinate its deed of trust to this Lease in
whole or in part, without any need to obtain Tenant's consent, by execution of a
written document subordinating such deed of trust to the Lease to the extent set
forth in such document and thereupon the Lease shall be deemed prior to such
deed of trust to the extent set forth in such document without regard to their
respective dates of execution, delivery and/or recording. In that event, to the
extent set forth in such document, such deed of trust shall have the same rights
with respect to this Lease as would have existed if this Lease had been
executed, and a memorandum thereof, recorded prior to the execution, delivery
and recording of the deed of trust.
Notwithstanding the foregoing, Tenant shall not be disturbed in its rights to
use, occupy and possess the Lease Premises pursuant to the terms and conditions
of this Lease so long as Tenant is not in default hereunder.
Upon acquisition of the Land, Landlord shall provide to Tenant a commercially
reasonable Non-disturbance agreement in a form reasonably acceptable to Tenant
in favor of Tenant from any lien holder(s) or any mortgage holder(s), now in
existence against the Leased Premises, and as to all advances made or hereafter
to be made thereon. If at any time during the term of this Lease any new or
additional lien or mortgage is imposed on the Complex, then contemporaneously
with the creation of such lien or mortgage, Landlord shall provide to Tenant a
commercially reasonable non-disturbance agreement in a form reasonably
acceptable to Tenant in favor of Tenant from such lien holder(s) or mortgage
holder(s). Each non-disturbance agreement shall be in recordable form and may
be recorded at Tenant's election and expense.
16. ESTOPPEL CERTIFICATE. Tenant agrees periodically to furnish
within ten (10) days after so requested by Landlord, or the holder of any deed
of trust, mortgage or security agreement covering the Building, the Land, or any
interest of Landlord therein, a certificate signed by a Tenant to the extent the
following are true representations (a) that this Lease is in full force and
effect and unmodified (or if there have been modifications, that the same is in
full force and effect as modified and stating the modification), (b) as to the
Commencement Date and the date through which Base Rental and Tenant's Estimated
Additional Rental have been paid, (c) that, except as stated on the Certificate,
Tenant has accepted possession of the Leased Premises and that any improvements
required by the terms of this Lease to be made by Landlord have been completed
to
31
the satisfaction of Tenant, (d) that except as stated in the certificate no Rent
has been paid more than thirty (30) days in advance of its due date, (e) that
the address for notices to be sent to Tenant is as set forth in this Lease (or
has been changed by notice duly given and is as set forth in the certificate),
(f) that except as stated in the certificate, Tenant, as of the date of such
certificate, has no charge, lien, or claim of offset against Rent due or to
become due, (g) that except as stated in the certificate, Landlord is not then
in default under this Lease, (h) as to the amount of Net Rentable Area then
occupied by Tenant, (i) that there are no renewal or extension options, purchase
options, rights of first refusal or the like in favor of Tenant except as set
forth in this Lease and 6) as to such other matters as may be reasonably
requested by Landlord or the holder of any such deed of trust, mortgage or
security agreement and which accurately confirm matters of fact and provisions
of this Lease. Any such certificate may be relied upon by any, prospective
purchaser, secured party, mortgagee or any beneficiary under any mortgage, deed
of trust on the Building or the Land or ay part thereof or interest of Landlord
therein.
17. NAME OF BUILDING AND BUILDING SIGNAGE. Landlord and Tenant
mutually covenant and agree that provided no Event of Default then exists,
Tenant shall be permitted the use of the upper most position of a monument sign
to be provided by Landlord (substantially as shown on Exhibit "K" hereto) in a
location proximal to the driveway access from U.S. Highway 59. The area
provided on Landlord's monument for Tenant's identification shall be a minimum
of twenty-four square feet in size. Tenant's signage to be erected upon the
monument provided by Landlord, shall be at Tenant's expense, shall be of a
design, constructed of materials, affixed in an exact location which shall be
subject to the approval of Landlord. which approval shall not be unreasonably
withheld. Other than to the extent provided in this Section 17, Tenant shall
not be permitted to place signage on any part of the Building exterior or
complex. Should an Event of Default occur, Landlord hereby reserves and shall
have the right at any time and from time to time to remove Tenant's name from
the monument signage as Landlord may deem advisable, and Landlord shall not
incur any liability whatsoever to Tenant as a consequence thereof.
18. ASSIGNMENT OR SUBLETTING BY TENANT
18.01 GENERAL. In the event Tenant should desire to assign this Lease
or sublet the Leased Premises or any part thereof or allow same to be used or
occupied by others, Tenant shall give Landlord written notice (which shall
specify the duration of said desired sublease, assignment, use or occupancy, the
date same is to occur, the exact location of the space affected thereby and the
proposed rentals on a square foot basis chargeable thereunder) of such desire at
least fifteen (15) days in advance of the date on which Tenant desires to make
such assignment or sublease or allow such a use or occupancy. Landlord shall
then have a period of fifteen (15) days following receipt of such notice within
which to notify Tenant in writing that Landlord elects:
(a) to refuse to permit Tenant to assign or sublet this Lease which
refusal shall only be based upon Landlord's reasonable judgment that (i) the
nature and character of the proposed assignee or sublessee, its business and
activities or intended use of the Leased Premises are not consistent with the
standards of the Building (ii) the proposed occupancy would impose a material
additional burden upon the Building systems or Landlord's ability to provide
services to other tenants in the Building provided, however, that Tenant shall
have the opportunity to agree to rectify
32
or alleviates such additional burden at Tenant's expense, in which event this
condition shall not be the basis for Landlord's refusing its consent, or (iii)
the granting of such consent would constitute a default of any exclusive or
restrictive use provision of any other lease in the Building, provided, that
Landlord has given Tenant prior written notice of such exclusive or restrictive
use and in such case this Lease shall continue in full force and effect in
accordance with the terms and conditions hereof, or
(b) to terminate this Lease (in the event of a proposed assignment) or
recapture (in the event of a proposed sublease) the space so affected for the
period of the proposed sublease term as of the date so specified by Tenant in
which event Tenant shall be relieved of all obligations hereunder as to such
space arising from and after such date for the period of the proposed sublease
term, or
(c) to suspend this Lease as to the space so affected as of the date
and for the duration so specified by Tenant in its notice, in which event Tenant
will be relieved of all obligations hereunder as to such space during said
suspension, including a suspension of the Rent in proportion to the portion of
the Leased Premises affected thereby (but after said suspension, if the
suspension is not for the full term hereof, Tenant shall once again become
liable hereunder as to the applicable space), or
(d) permit Tenant to assign this Lease or sublet such space for the
duration specified in such notice, provided that the form and substance of the
proposed sublease or instrument of assignment is expressly subject to all of the
terms and provisions of this Lease and to any matters to which this Lease is
subject.
Notwithstanding the foregoing, Tenant shall have the right to sublet all or any
portion of the Leased Premises to any entity which by majority ownership
controls, is under common control with, or is controlled by Tenant and Tenant
shall have provided Landlord with proof thereof and provided that the sublease
and such subletting is expressly subject to all of the terms and provisions of
this Lease including, but not limited to, Sections 3, 18.02, 18.03 and 18.04
hereof.
18.02 AGREEMENTS WITH LANDLORD. No assignment or subletting by Tenant
shall be effective unless Tenant shall execute, have acknowledged and deliver to
Landlord, and cause each sublessee or assignee to execute, have acknowledged and
deliver to Landlord, an instrument in form and substance reasonably acceptable
to Landlord in which (i) such sublessee or assignee adopts this Lease and
assumes and agrees to perform jointly and severally with Tenant, all of the
obligations of Tenant under this Lease, as to the space transferred to it, (ii)
Tenant subordinates to Landlord's statutory lien, contract lien and security
interest any liens, security interests or other fights which Tenant may claim
with respect to any property of such sublessee or assignee, (iv) Tenant and such
sublessee or assignee agree to provide to Landlord, at their expense, direct
access from a public corridor in the Building to the transferred space, (v) such
sublessee or assignee agrees to use and occupy the transferred space solely for
the purpose specified in Section 3 or for other general office use purposes
which shall not conflict with any exclusive use rights granted by Landlord to
any of Landlord's other tenants within Landlord's Building and otherwise in
strict accordance with this Lease and (vi) Tenant acknowledges and agrees that,
notwithstanding such subletting or assignment, Tenant remains directly and
primarily liable for the performance of all the
33
obligations of Tenant hereunder (including, without limitation, the obligation
to pay Rent), and Landlord shall be permitted to enforce this Lease against
Tenant or such sublessee or assignee, or both, without prior demand upon or
proceeding in any way against any other persons. So long as any Event of
Default shall exist hereunder, Landlord, in addition to any other remedies
herein provided or available at law or in equity. may, at its option, collect
directly from such assignee or subtenant all rents due and becoming due to
Tenant under such assignment or sublease and apply such rent against the Rent
due to Landlord frm Tenant hereunder, and no such collection shall be construed
to constitute a novation or a release of Tenant from the further performance of
its obligations hereunder.
18.03 EFFECT OF TRANSFER. No consent by Landlord to an assignment or
sublease shall be deemed in any manner to be a consent to a use not permitted
under Section 3. Any consent by Landlord to a particular assignment or sublease
shall not constitute Landlord's consent to any other or subsequent assignment or
sublease, and any proposed sublease or assignment by any assignee or sublessee
shall be subject to the provisions of this Section 18 as if it were a proposed
sublease or assignment by Tenant. The prohibition against an assignment or
sublease described in this Section 18 shall be deemed to include a prohibition
against Tenant's mortgaging or otherwise encumbering its leasehold estate, as
well as against an assignment or sublease which may occur by operation of law,
each of which shall be ineffective and void and shall constitute an event of
default under this Lease unless consented to by Landlord in writing in advance.
18.04 DELIVERY TO LANDLORD. In any situation in which Landlord consents
to an assignment or sublease hereunder, Tenant shall promptly deliver to
Landlord a fully executed copy of the final sublease agreement or assignment
instrument and all ancillary agreements relating thereto.
19. PEACEFUL ENJOYMENT. Landlord covenants that Tenant shall and may
peacefully have, hold and enjoy the Leased Premises, subject to the other terms
hereof, provided that Tenant pays the rental and other sums herein recited to be
paid by Tenant and performs all of Tenant's covenants and agreements herein
contained. It is understood and agreed that this covenant and any and all other
covenants of Landlord contained in this Lease shall be binding upon Landlord and
its successors only with respect to breaches occurring during its and their
respective ownership of the Landlord's interest hereunder.
20. LIMITATION OF LANDLORD'S PERSONAL LIABILITY. Tenant specifically
agrees to look solely to Landlord's interest in the Complex (but including
rental income and proceeds of insurance, condemnation, sale and financing
accruing to Landlord after the date of any final judgment) for the recovery of
any judgment against Landlord, it being agreed that Landlord, its officers,
directors, agents and employees shall never be personally liable for any such
judgment. The provision contained in the foregoing sentence is not intended to,
and shall not, limit any right that Tenant might otherwise have to obtain
injunctive relief against Landlord or Landlord's successors in interest or any
suit or action in connection with enforcement or collection of amounts which may
become owing or payable under or payable under or on account of any insurance
policy maintained by Landlord. Landlord's obligations hereunder are subject to
Landlord acquiring the Land upon the terms and conditions of the Landlord's
contract for such acquisition and Landlord obtaining interim construction
financing of the Building upon terms and conditions satisfactory to Landlord.
34
Tenant's obligations hereunder are subject to Landlord notifying Tenant in the
affirmative of said approvals on or before, October 30, 1997.
21. NOTICES. (a) Any notice or other communications to Landlord or
Tenant required or permitted to be given under this Lease (and copies of the
same to be given to the parties as below described) must be in writing and shall
be effectively given if delivered to such party at its address for notice set
forth in Section 1.01 above, or if sent by United States mail, certified or
registered, return receipt requested, to said address. Any notice mailed shall
be deemed to have been given on the regular business day next following the date
of deposit of such item in a depository of the United States Postal Service in
Houston, Texas. Notice effected other than by mail shall be deemed to have been
given at the time of actual delivery. Either party shall have the right to
change its address to which notices shall thereafter be sent by giving the other
written notice thereof. Additionally, Tenant shall send copies of all notices
of Landlord Default required or permitted to be given to Landlord to each lessor
under any ground or land lease covering all or part of the Land and each holder
of a mortgage or deed of trust encumbering the Complex who notifies Tenant in
writing of its interest and the address to which notices are to be sent.
22. BANKRUPTCY. If a petition is filed by or against Tenant for
relief under Title 11 of the United States Code, as amended (the "Bankruptcy
Code"), and Tenant (including for purposes of this Section Tenant's successor in
bankruptcy, whether a trustee or Tenant as debtor in possession) assumes and
proposes to assign, or proposes to assume and assign, this Lease pursuant to the
provisions of the Bankruptcy Code to any person or entity who has made or
accepted a bona fide offer to accept an assignment of this Lease on terms
acceptable to Tenant, then notice of the proposed assignment setting forth (a)
the name and address of the proposed assignee, (b) all of the terms and
conditions of the offer and proposed assignment, and (c) the adequate assurance
to be furnished by the proposed assignee of its future performance under the
Lease, shall be given to Landlord by Tenant no later than twenty (20) days after
Tenant has made or received such offer, but in no event later than ten (10) days
prior to the date on which Tenant applies to a court of competent jurisdiction
for authority and approval to enter into the proposed assignment. Landlord
shall have the prior right and option, to be exercised by notice to Tenant given
at any time prior to the date on which the court order authorizing such
assignment becomes final and non-appealable, to receive an assignment of this
Lease upon the same terms and conditions, and for the same consideration, if
any, as the proposed assignee, less any brokerage commissions which may
otherwise be payable out of the consideration to be paid by the proposed
assignee for the assignment of this Lease. Any person or entity to which this
Lease is assigned pursuant to the provisions of the Bankruptcy Code shall be
deemed, without further actor documentation, to have assumed all of the Tenants
obligations arising under this Lease on and after the date of such assignment.
Any such assignee shall, upon demand, execute and deliver to Landlord an
instrument confirming such assumption. No provision of this Lease shall be
deemed a waiver of Landlord's rights or remedies under the Bankruptcy Code to
oppose any assumption and/or assignment of this Lease, to require a timely
performance of Tenant's obligations under this Lease, or to regain possession of
the Premises if this Lease has neither been assumed on or rejected within sixty
(60) days after the date of the order for relief or within such additional time
as a court of competent jurisdiction may have fixed. Notwithstanding anything
in this Lease to the contrary, all amounts payable by Tenant to or on behalf of
Landlord under this Lease, whether or not expressly
35
denominated as rent, shall constitute rent for the purposes of Section 502(b)(6)
of the Bankruptcy Code.
23. MISCELLANEOUS.
23.01 SATELLITE DISH INSTALLATION. Tenant shall be allowed to install
up to three (3) satellite dish antennas on the rooftop of the Building, and use
of the Building risers to run conduit and cabling as necessary to connect the
antennas to the Premises at no additional cost to Tenant. The size of such
antennas shall not exceed three feet (Y) in diameter, subject to Landlord's
reasonable approval of the location and manner of attachment of such antennas
and any applicable law and regulations affecting the Building.
23.02 MOVING EXPENSE. Tenant shall be responsible for all cost and
expense associated with Tenant's relocation to Landlord's Building.
23.03 WAIVER OF LIEN BY TENANT. Tenant shall have no right, and Tenant
hereby waives and relinquishes all rights which Tenant might otherwise have, to
claim any nature of lien (other than a judgment lien) against the Building or to
withhold, deduct from or offset against any Rent or other sums to be paid to
Landlord by Tenant.
23.04 SUCCESSOR AND ASSIGNS. This Lease shall be binding upon and inure
to the benefit of the successors and assigns of Landlord, and shall be binding
upon and inure to the benefit of Tenant, its successors, and, to the extent
assignment may be approved by Landlord hereunder, Tenants assigns.
23.05 NUMBER AND GENDER. The pronouns of any gender shall include the
other genders, and either the singular or the plural shall include the other.
23.06 REMEDIES CUMULATIVE; APPLICABLE LAW. All rights and remedies of
Landlord under this Lease shall be cumulative and none shall exclude any other
rights or remedies allowed by law; and this Lease is declared to be a Texas
contract, and all of the terms thereof shall be construed according to the laws
of the State of Texas.
23.07 AMENDMENT. This Lease may not be altered, changed or amended,
except by an instrument in writing executed by all parties hereto.
23.08 ENTIRE AGREEMENT. The terms and provisions of all Exhibits
described herein and attached hereto are hereby made a part hereof for all
purposes. This Lease constitutes the entire agreement of the parties with
respect to the subject matter hereof, and all prior correspondence, memoranda,
agreements or understandings (written or oral) with respect hereto are merged
into and superseded by this Lease.
23.09 AUTHORITY OF TENANT AND LANDLORD. If Tenant and Landlord is a
corporation, partnership or other entity, Tenant and Landlord warrants and
represents unto each other that (a) Tenant is a duly organized and existing
legal entity, in good standing in the State of Delaware, and
36
Landlord is a duly organized and existing legal entity, in good standing in the
State of Texas, (b) Tenant and Landlord has full right and authority to execute,
deliver and perform this Lease, (c) the person executing this Lease was
authorized to do so and (d) upon request of Tenant and Landlord, such person
will deliver to each other satisfactory evidence of his or her authority to
execute this Lease on behalf of Tenant and Landlord.
23.10 GOOD FAITH EFFORTS. Whenever in this Lease there is imposed upon
Landlord the obligation to use its good faith efforts, reasonable efforts or
diligence, Landlord shall be required to do so only to the extent the same is
economically feasible and otherwise will not impose upon Landlord extreme
financial or other business burdens.
23.11 SEVERABILITY. If any term or provision of this Lease, or the
application thereof to any person or circumstance, shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each provision of
this Lease shall be valid and shall be enforceable to the extent permitted by
law.
23.12 BROKERAGE COMMISSIONS. Landlord agrees to pay to Broker, if any,
a real estate brokerage commission as set forth in a separate commission
agreement between Landlord and Broker. Tenant hereby represents and warrants to
Landlord that Tenant has not employed any other agents, brokers or other such
parties in connection with this Lease, and agrees that Tenant shall hold
Landlord harmless from and against any and all claims of all other agents,
brokers or other such parties claiming by or through Tenant.
23.13 MEMORANDUM: At the request of either party, Landlord and Tenant
agree to execute and record a Memorandum of this Lease in the real estate
records of Fort Bend County, Texas
23.14 PARKING. Parking spaces for the Leased Premises shall be governed
by the terms and provisions of Exhibit E attached hereto and made a part hereof
for all purposes.
23.15 EXHIBITS. All Exhibits referenced in this Lease are incorporated
herein for all purposes as if fully set forth within the text of this Lease.
Exhibit A - Legal Description
Exhibit B - Preliminary Floor Plan of Leased Premises
Exhibit B- I Preliminary Floor Plan of Expansion Space
Exhibit C - Initial Tenant Improvements
Exhibit D - Building Standard Holidays
Exhibit E - Parking
Exhibit F - Building Rules and Regulations
Exhibit G - Renewal Option
Exhibit H - Expansion Option
Exhibit I - Commencement Agreement
Exhibit J - Landlord's Building Description
Exhibit K - Monument Sign
37
23.16 ACKNOWLEDGMENT OF NON-APPLICABILITY OF DTPA. It is the
understanding and intention of the parties that Tenant's rights and remedies
with respect to the transactions provided for and contemplated in this Lease
(collectively, this "Transaction") and with respect to all acts or practices of
Landlord, past, present, or future, in connection with this Transaction, are and
shall be governed by legal principles other than the Texas Deceptive Trade
Practices - Consumer Protection Act (the "DTPA"). Accordingly, Tenant hereby
(a) agrees that under Section 17.49(f) of the DTPA this Transaction is not
governed by the DTPA and (b) certifies, represents and warrants to Landlord that
(i) Tenant has been represented by legal counsel in connection with this
Transaction who has not been directly or indirectly identified, suggested or
selected by the Landlord or any agent of Landlord and Tenant has conferred with
Tenant's counsel concerning all elements of this Lease (including, without
limitation, this Section 25.15) and this Transaction and (ii) the Leased
Premises will not be occupied by Tenant as Tenant's family residence. Tenant
expressly recognizes that the total consideration as agreed to by Landlord has
been predicated upon the inapplicability of the DTPA to this Transaction and
that Landlord, in determining to proceed with the entering into of this Lease,
has expressly relied on the inapplicability of the DTPA to this Transaction.
23.17 TENANT'S SPECIAL RIGHTS TO TERMINATE LEASE
(a) Tenant shall have the right to terminate this Lease if Landlord
fails to consummate the acquisition of the Land and obtain interim construction
financing for the Building on or before October 31, 1997. If Landlord does not
notify Tenant in writing of the occurrence of each such events by October 31,
1997, Tenant will have the right to terminate this Lease by written notice to
Landlord not later than November 7, 1997.
(b) Tenant will have the right to terminate this Lease if Landlord
fails to achieve any of the following construction progress events by the
deadline date specified:
(i) substantial completion of the Building foundation to the
condition that Landlord's contractor can commence erection of the
structural steel of the Building by January 30, 1998;
(ii) substantial completion of the erection of structural steel
of the Building by March 20, 1998;
(iii) completion of the Building to "dried-in" condition so that
the Building is sufficiently sealed against the rain and other elements
to permit the commencement of construction of the Initial Leasehold
Improvements without risk of damage thereto from weather elements by May
1, 1998.
Upon occurrence of each of the construction progress events described above,
Landlord will deliver to Tenant a written certification thereof from Landlord's
architect. If Tenant does not receive such certification with respect to any
such event by the applicable deadline therefor, Tenant may exercise its
termination right by delivery to Landlord of a notice of such termination within
five (5) business days following the applicable deadline date.
38
(c) Upon receipt by Landlord of timely notice by Tenant of its
election to terminate this Lease pursuant to the provisions of this Section
23.17, Landlord and Tenant shall each be released from all further liability
under this Lease, irrespective of what costs or expenses either of the parties
have incurred prior to the date of termination. Should Tenant fail to deliver
timely notice of its election to terminate this Lease pursuant to Sections
23.17(a) or (b) above, Tenant's right to so terminate this Lease shall be of no
further force or effect.
23.18 CONSTRUCTION OF BUILDING. Landlord covenants and agrees to
construct the Building substantially in accordance with the description thereof
set forth on Exhibit "J" attached hereto and those certain plans and
specifications prepared by Xxxxxx Architecture, Inc., Job No. 9708, dated
September 30, 1997.
IN TESTIMONY WHEREOF, the parties hereto have executed this Lease as of
the date aforesaid.
LANDLORD:
XXXXXX ADREAC, L.C.
By: /s/ Xxxxxxx Van
---------------
Name: Xxxxxxx Van
Title: Executive Vice President
TENANT:
NEON SYSTEMS, INC.
By: /s/ Xxx Xxxxxx
--------------
Name: Xxx Xxxxxx
Title: CEO
39
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
METES AND BOUNDS DESCRIPTION
3.841 ACRES OUT OF RESERVE'T"
SUGAR CREEK CENTER
FORT BEND COUNTY, TEXAS
Being a tract or parcel of land containing 3.841 acres (167,321 square feet)
situated in the Xxxxx & Xxxxxxx League, Abstract 15, in Fort Bend County, Texas,
and being out of and a part of that certain Reserve "D", called 6.0596 acres,
out of Sugar Creek Center as recorded in Slide 596B of the Plat Records of Fort
Bend County, said 3.841 acre tract being more particularly described by metes
and bounds as follows (with all bearings referenced to the subdivision plat):
BEGINNING at a 5/8-inch iron rod found for the most easterly northeast xxxxx of
said Reserve "D" in Sugar Creek Center, being the southerly xxxxx of a cutback
at the intersection of the southwesterly right-of-way line of Commerce Green
Boulevard (100 feet wide) with the westerly right-of-way line of U.S. Highway 59
(Southwest Freeway - width varies) as shown in Slide 596/B of the Plat Records
of Fort Bend County, being also the most easterly corner of the herein described
3.841 acre tract;
THENCE South 26'06'17" West along the westerly line of said X.X. Xxxxxxx 00 and
the easterly line of said Reserve "D", a distance of 278.83 feet to the
southeast corner;
THENCE North 6353'43" West, a distance of 54.83 feet to an angle point;
THENCE South 88'38'36" West, a distance of 222.85 feet to an intersect with the
west line of said Reserve "D" and the east right-of-way line of Xxxxxx Drive (80
feet wide) as recorded in Volume 237, Page 159, of the Deed Records of Fort Bend
County;
THENCE in a northerly direction, a distance of 124.68 feet along the west line
of said Reserve "D" and the east right-of-way line of said Xxxxxx Drive,
following the arc of a curve to the left, having a radius of 1928.40 feet, a
central angle of 03'42'1 6" (Chord = N03'l 8'57"W, 124.66') to the end of the
said curve;
THENCE continuing in a northerly direction, a distance of 792.19 feet along the
west line of said Reserve "D" and the east right-of-way line of said Xxxxxx
Drive, following the arc of a curve to the left, having a radius of 2993.00
feet, a xxxxxxx xxxxx xx 00'00'00" (Xxxxx = N1249'06"W, 789.88') to an intersect
with the southwesterly right-of-way line of said Commerce Green Boulevard as
monument on the ground;
-1-
THENCE in a southerly direction, a distance of 872.44 feet along the east line
of said Reserve "D" and the westerly right-of-way line of said Commerce Green
Boulevard, following the arc of a curve to the left, having a radius of 1180.69
feet, a xxxxxxx xxxxx xx 00'00'00" (Xxxxx = S41046'38"E, 852.72') to a 5/8-inch
iron rod found for a cutback corner;
THENCE South 18'24'36" East along the cut-back corner at the northeast xxxxx of
said Reserve "D" a distance of 28.67 feet to the POINT OF BEGINNING and
containing 3.841 acres (167,321 square feet) of land, more or less.
XxXxxxxxx & Reno
Ph: (000) 000-0000
Job No. 48-9703A
October, 1997
EXHIBIT B
FLOOR PLAN OF LEASED PREMISES
1
EXHIBIT X-0
XXXXX XXXX XX XXXXXXXXX XXXX
0
EXHIBIT C
INITIAL TENANT IMPROVEMENTS
This Workletter (this "Agreement") is made and entered into this ___ day
of 199__, in connection with that certain Lease Agreement (the "Lease") by and
between constitutes the entire agreement between Landlord and Tenant with
respect to the construction and completion of the Leased Premises. All
capitalized terms used herein, but not otherwise defined shall have the meanings
ascribed to such terms in the Lease.
To induce Landlord and Tenant to enter into the Lease (which is hereby
incorporated by reference to the extent that the provisions of this Agreement
may apply thereto) and in consideration of the mutual covenants hereinafter
contained, Landlord and Tenant mutually agree as follows in the event Tenant
elects to have Landlord construct the Initial Tenant Improvements:
1. WORK BY LANDLORD. Landlord shall cause to be constructed and/or
installed in the Leased Premises of the leasehold improvements and tenant finish
(the "Initial Tenant Improvements") as set forth on approved plans which are to
be developed in accordance with Schedule of Critical Dates herein stated.
2. PLANNING AND CONSTRUCTION. Landlord and Tenant shall cooperate in
good faith in the planning and construction of the Initial Tenant Improvements,
and Tenant shall respond promptly to any request from Landlord for Tenant's
approval of any particular aspect thereof, it being agreed and understood that
it is the intent and desire of the parties that the Leased Premises be ready for
Tenant's occupancy on or before July 15, 1998 (the "Estimated Leased Premises
Delivery Date").
3. QUALITY OF WORK. Landlord shall supervise the construction of the
Initial Tenant Improvements and shall use its reasonable good faith efforts to
cause same to be constructed and installed in a good and workmanlike manner in
accordance with good industry practice. Landlord and Tenant shall inspect the
Leased Premises before Tenant takes occupancy and create a repair list of items
(if any) that may need correcting. The creation of such list shall not delay
the "Leasehold Improvements Completion Date". Landlord shall use reasonable
good faith to correct all items listed in a timely manner. Landlord's
contractor shall provide Tenant a one (1) year warranty on workmanship,
materials and equipment (or in the case of equipment warranties where
manufacturers' warranties exceed one (1) year, such warranties which
manufacturers provide).
4. COMPLETION OF CONSTRUCTION. The "Leasehold Improvements
Completion Date" shall mean the date upon which the Initial Tenant Improvements
are substantially complete. Landlord shall provide a temporary or final
certificate of occupancy covering the Leased Premises as required for Tenant's
temporary and final use of the Leased Premises. The phrase "substantially
complete" shall mean that all construction debris has been removed from the
Leased Premises and the Leased Premises are clean, the Leased Premises may
reasonably be used and occupied for the purposes intended by the Tenant and the
progress of the construction of the Initial Tenant Improvements to date is such
that final completion of the Initial Tenant Improvements can occur
1
within a reasonable period of time and without undue interference to the
Tenant's use of the Leased Premises. If the Leased Premises are not ready for
occupancy by the Estimated Leased Premises Delivery Date for any reason,
Landlord shall not be liable or responsible for any claims, damages or
liabilities in connection therewith or by reason thereof unless otherwise
provided for in the Lease.
5. DISCLAIMER OF WARRANTY. The foregoing constitutes Landlord's only
warranty with respect to the Leasehold Improvements. TENANT ACKNOWLEDGES THAT
THE CONSTRUCTION AND INSTALLATION OF THE INITIAL TENANT IMPROVEMENTS, IF ANY, TO
BE PROVIDED BY LANDLORD, WILL BE PERFORMED BY XXXXXX ADREAC QUEST, L.C. D.B.A.
QUEST CONSTRUCTION COMPANY AND THAT LANDLORD HAS MADE AND NVILL MAKE NO
WARRANTIES TO TENANT WITH RESPECT TO THE QUALITY OF CONSTRUCTION THEREOF OR AS
TO THE CONDITION OF THE PREMISES, EITHER EXPRESS OR IMPLIED, AND THAT LANDLORD
EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTY THAT THE LEASED PREMISES ARE OR WILL BE
SUITABLE FOR TENANT'S INTENDED COMMERCIAL PURPOSE. AS SET FORTH IN SECTION 4.04
(c) OF THIS LEASE, EXCEPT AS EXPRESSLY PROVIDED IN SECTION 6.01(c) HEREOF.
TENANT'S OBLIGATION TO PAY BASE AND ADDITIONAL RENTAL HEREUNDER IS NOT DEPENDENT
UPON THE CONDITION OF THE LEASED PREMISES OR THE BUILDING OR THE PERFORMANCE BY
LANDLORD, QUEST CONSTRUCTION COMPANY, TENANT OR ANY CONTRACTOR OF TENANT OF ANY
OBLIGATIONS HEREUNDER, AND TENANT SHALL CONTINUE TO PAY THE BASE AND ADDITIONAL
RENTAL WITHOUT ABATEMENT, SETOFF OR DEDUCTION, NOTWITHSTANDING ANY BREACH BY
LANDLORD CONTRACTOR OF THEIR DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR
IMPLIED. However, Landlord agrees that in the event that any defect in the
construction of the Initial Tenant Improvements is discovered, Tenant shall have
the right to pursue and seek to enforce any warranties of each contractors)
and/or manufacturer of any defective materials incorporated therein in Tenant's
own name.
6. COST OF INITIAL TENANT IMPROVEMENTS-LANDLORD CONSTRUCTS INITIAL
TENANT IMPROVEMENTS. Landlord shall pay all costs and expenses of the Initial
Tenant Improvements (including, labor, materials and architectural and
engineering costs) up to the aggregate amount of $15.00 per square foot of
Tenant's Net Rentable Area (the "Improvement Allowance"). Any costs and
expenses in excess of the Improvement Allowance shall be paid in cash by Tenant
to Landlord 50% upon Landlord's execution of the Construction Contract thereto
with the balance payable monthly (within ten (10) days of receipt of Landlord's
invoice to Tenant therefore) to Landlord in accordance with the terms and
conditions for monthly progress payments by Landlord to Landlord's Contractor
during the construction period. All payments not received by Landlord within
the prescribed period for payment shall bear interest from the date due until
paid at the greater of (1) two percent (2%) above the "prime rate" per annum. of
Texas Commerce Bank National Association or its successor ("TCB") in effect on
said due date (or if the "prime rate" be discontinued, the base reference rate
then being used by TCB to define the rate of interest charged to commercial
borrowers) or (2) eighteen percent (18%) per annum; provided, however, in no
event shall the rate of interest hereunder exceed the maximum non-usurious rate
of interest (hereinafter called the "Maximum Rate") permitted by the applicable
laws of the State of Texas or the United
2
States of America, whichever shall permit the higher non-usurious rate, and as
to which Tenant could not successfully assert a claim or defense of usury, and
to the extent that the Maximum Rate is determined by reference to the laws of
the State of Texas, the Maximum Rate shall be the indicated rate ceiling (as
defined and described in Texas Revised Civil Statutes, Article 5069-1.04, as
amended) at the applicable time in effect.
In the event the costs of the Initial Tenant Improvements as defined
above shall be less than the Improvement Allowance, Landlord shall rebate to
Tenant the amount of the Improvement Allowance which has not been expended.
Landlord may effect such rebate in any of the following methods and the
determination of the method of rebate shall be at the sole discretion of
Landlord;
(i) Landlord may issue direct payment to Tenant in an amount equal to
the amount of Improvement Allowance which Landlord has not expended. Such
payment shall be made within forty-five (45) days following receipt by Landlord
of all final invoices for labor, materials and architectural and engineering,
costs associated with the construction of the Tenant Improvements and lien
waivers therefor but in no event shall such payment be issued prior to Tenant's
Occupancy of the Leased Premises and execution by Tenant of the Commencement
Agreement as provided for in Exhibit "I" to the Lease.
(ii) Landlord may provide to Tenant an abatement of Base Rental due
under the Lease in an amount equal to the amount of Improvement Allowance not
expended by Landlord. Landlord shall provide to Tenant Landlord's calculation
of the amount of abatement within forty-five (45) days following receipt by
Landlord of all final invoices for labor, materials and architectural and
engineering costs associated with the construction of the Tenant Improvements
and lien waivers therefor. No abatement of Tenant's Base Rental due under the
Lease shall become effective prior to Tenant's Occupancy of the Leased Premises
and execution by Tenant of the Commencement Agreement as provided for in Exhibit
T' to the Lease.
3
PART 1. SCHEDULE OF CRITICAL DATES WHEN LANDLORD CONSTRUCTS INITIAL TENANT
IMPROVEMENTS
Set forth below is a schedule of certain critical dates relating to
Landlord's and Tenant's respective obligations with respect to construction of
the Initial Leasehold Improvements for the Leased Premises. These dates and the
respective obligations of Landlord and Tenant are more fully described in Part
II below.
RESPONSIBLE
DATE DUE PARTY
-------- -----
A. Preliminary Space Plan November 15, 1997 11/15/97
Delivery Date
B. Landlord Preliminary 5 days following Landlord's Landlord 11/20/97
Review Date receipt of Preliminary Space Plan
C. Space Plan December 19, 1997 Tenant 12/19/97
Delivery Date
D. Landlord Review Date 5 days following Landlord's Landlord 12/24
receipt of Space Plan
E. Space Plan 10 days following Tenant's Tenant 01/03/98
Revision Date receipt of Landlord's Comments
F. Space Plan 5 days following Landlord's Landlord 01/08/98
Approval receipt of revised Space Plan
G. Working Drawings 30 days following Working Tenant 02/07/98
Delivery Date Drawings delivery date
H. Working Drawings 5 days following Working Landlord 02/12/98
Revision Date Drawings delivery date
I. Working Drawings 10 days following receipt of Tenant 02/22/98
Revision Date Landlord's comments to
Working Drawings
J. Working Drawings 5 days following Landlord's Landlord 02/27/98
Review Date receipt of revised Working
Drawings
K. Bid Date 15 days following Working Landlord 03/14/98
Drawings approval
4
L. Bid Review 5 days following receipt of Bid Tenant 03/19/98
M. Bid Revision Date 5 days following receipt of Landlord 03/24/98
requested revisions from Tenant
N. Bid Date 5 days following receipt of Tenant 03/29/98
Acceptance Date Revised Bid
O. Leasehold Improvements July 15, 1998 Landlord
Completion Date
All references to days mean working or business days.
PART II. LANDLORD AND TENANT PRE-CONSTRUCTION OBLIGATIONS WHEN LANDLORD
CONSTRUCTS INITIAL TENANT IMPROVEMENTS
1. Tenant will deliver to Landlord no later than the Space Plan Delivery Date
(described in Part I above) a space plan containing the information
described in Part IV (I and 2) below, (said space plan and other
information and instructions being called the "Preliminary Tenant Space
Plan").
2. Landlord will review the Preliminary Tenant Space Plan to confirm that it
conforms to the requirements listed in Part IV (I and 2) below, and
Landlord shall report any non-conformity to Tenant, on or before the
Landlord Preliminary Review Date (described in Part I above).
3. Tenant will deliver to Landlord no later than the Space Plan Delivery Date
(described in Part I above) a space plan containing the information
described in Part IV below (said space plan and other information and
instructions being called the "Tenant Space Plan").
4. Landlord will review the Tenant Space Plan to confirm that it conforms to
the requirements listed in Part IV below, and Landlord shall report any
non-conformity to Tenant, on or before the Landlord Review Date (described
in Part I above). Additionally, on or before the Landlord Review Date,
Landlord shall meet with Tenant and advise Tenant informally of the
estimated costs based upon conformance with and utilization of Building
Standard Tenant Finishes (or better if and where indicated by Tenant on
Tenant Space Plan). Such amounts in excess of the Tenant finish cost
allowance, being called 'Tenant Extra Work' as further described in Part V
below.
5. In the event the Tenant Space Plan does not conform to the requirements of
Part IV below, or Tenant determines the approximate construction costs
associated with Tenant Extra
5
Work are not within the scope of its budget, Tenant will deliver a
corrected Tenant Space Plan to Landlord no later than the Space Plan
Revision date (described in Part I above).
6. After Landlord has approved the Tenant Space Plan, Tenant shall promptly
cause working drawings (hereafter called "Tenant Working Drawings") of the
improvements to Leased Premises shown on the Tenant Space Plan to be
prepared and shall deliver to Land lord the Tenant Working Drawings no
later than the Working Drawings Delivery Date (described in Part I above)
or such later date as may be reasonable in light of the complexity of
Tenant's leasehold improvements or the nature of Tenant's above Standard
improvements,
7. Landlord shall deliver to Tenant written comments or approval of the Tenant
Working Drawings no later than the Working Drawings Approval Date
(described in Part I above).
In the event the Tenant Working Drawings vary in design from the Tenant
Space Plan, or if Landlord shall require modification to the Working
Drawings Tenant at Tenant's expense promptly shall correct the Tenant
Working Drawings.
8. Upon receipt of the approved Tenant Working Drawings, Landlord agrees to
cause its contractor to submit for pricing by its contractors and suppliers
the work shown on the Tenant Working Drawings to include bids from three
qualified subcontractors approved by Tenant for each element of
construction which Landlord's contractor will subcontract. Landlord shall
then furnish to Tenant the Bids which shall be based upon conformance with
and utilization of Building Standard Tenant Finishes (or better if and
where indicated by Tenant on the Tenant Working Drawings) and which shall
contain the material factors used by Landlord in calculation such Bid, on
or before the Bid Date (described in Part I above) or such later date as
may be reasonable in light of the complexity of Tenant's leasehold
improvements or the nature of Tenant's Above Standard improvements.
9. Tenant agrees to promptly review the Bid and to send written notice to
Landlord of its approval or rejection, on or before the Bid Acceptance Date
(described in Part I above).
PART III CERTAIN PROVISIONS RELATING TO CONSTRUCTION WHEN LANDLORD CONSTRUCTS
INITIAL TENANT IMPROVEMENTS
1. Upon approval of the Bid, Landlord agrees to use reasonable efforts, in
good faith, in installing the improvements to the Leased Premises described
therein prior to the Commencement Date. Tenant shall, in advance and upon
request by Landlord per the terms outlined in Paragraph 6 of this Exhibit,
pay all costs incurred in connection with Tenant Extra Work, including the
costs of the materials and labor therefore.
2. Tenant may make changes in the work to be done on or for its leasehold
improvements both before and during construction of same. However, Tenant
shall be responsible for all costs relating thereto, which costs shall
include those resulting from any delays incurred by Landlord as a result
of the changes.
6
3. Unless Tenant occupies the Leased Premises prior thereto and subject to the
provisions of the paragraph entitled "Commencement Date" on page 2 of the
Lease, Tenant shall not be required to pay rent and the term of this lease
shall not commence until Tenant's leasehold improvements arc substantially
completed, unless such substantial completion is delayed as a result of
special above standard improvements requested by Tenant, or such other
delays as may be caused by Tenant. The following are examples of such
delays:
(a) If Tenant's leasehold improvements involve Tenant Extra Work which
requires more time to complete than is required for Building Standard
Improvements;
(b) Failure by Tenant or its architects, engineers, space planners or
others employed by Tenant to timely comply with the provisions of Part
II above (but only if the failure results in Tenant's leasehold
improvements being substantially completed later than they would have
been absent said failure);
(c) if Tenant makes changes either before or during construction of its
leasehold improvements as described in paragraph 2 of this Part III
(but only if the changes result in Tenants leasehold improvements
being substantially completed later than they would have been
substantially completed absent said changes).
4. Any failure of Tenant to use reasonable efforts, in good faith, to comply
with the requirements of this Exhibit shall constitute a default by Tenant,
giving Landlord all of the remedies described in Article 13, subject to the
notice and cure provisions provided for in Article 13 notwithstanding any
provisions hereof to the contrary.
5. Tenant shall pay and be responsible for the architectural and engineering
fees incurred in preparing the Tenant Working Drawings which relate to the
Leased Premises and Landlord shall reimburse Tenant for Tenant's cost
incurred in connection with the preparation of the Tenant Working Drawings
or chances thereto upon receipt of an invoice therefore and deduct same
from the Improvement Allowance.
6. Landlord and Tenant shall cooperate in good faith in the planning and
construction of the Initial Tenant Improvements, and Landlord shall respond
promptly to any request from Tenant for Landlord's approval of any
particular aspect thereof, it being agreed and understood that it is the
intent and desire of the parties that the Leased Premises be ready for
Tenant's occupancy on or before July 15, 1998 (the "Leasehold Improvements
Completion Date").
PART IV. MIMMUM INFORMATION REQUIRED OF TENANT SPACE PLAN
FLOOR PLANS INDICATING:
1. Location and type of all partitions.
7
2. Location and types of all doors.
3. Location and type of glass partitions, windows and doors - indicate framing
if not Building Standard.
4. Location of telephone equipment room.
5. Location and type of all non-Building Standard electrical items.
6. Location, weight per square foot and description of any special weight
requirements.
7. Requirements for special air conditioning or ventilation.
8. Location and type of plumbing.
9. Location and type of kitchen equipment.
10. Location and type of equipment that has any special electrical, mechanical,
plumbing, or structural requirements, indicating such requirements.
11. Bracing or support of special walls, glass partitions, etc., if desired.
PART V. BUILDING STANDARD TENANT FINISHES
- Ceiling Tile - 2'x2'x5/8" non-directional random fissured surface
acoustical ceiling, color; white. USG Omni Fissured or equal
- Ceiling Grid - 2'x2' suspended steel exposed grid system, color; white
- USGDX Suspension System or equal
- Light Fixture - 2'x4' 18 cell recessed parabolic 3 lamp fluorescent
light fixture with electronic ballast, clear alzak finish and
fluorescent lamps
- Lightolier Deepcel DPA2G I 8DP340 or equal
- Light Fixture - Same as above but 2'x2' - 9 cell equal to Lightolier
- Deepcel DPA2G9DS2UA or equal
- Light Fixture - Recessed Downlight with clear alzak finish, A lamp and
white trim ring. Lightolier B7054 or equal
- Door Frames - full height (9'-04") RACO System frames
- Doors - Full height (9'-O") plastic laminate solid core door to match
corridor door.
- Partitions - Gypsum board partitions to have RACO System head track to
match door frames. RACO or equal
- Hardware - Satin finish bronze lever style cylindrical hardware
- SWBB Hinges 4-1/2x4 FBB 179 painted to match door frame by Xxxxxxx or
equal
8
- Parallel or regular Arm door closer factory painted to match frame,
with six bolts; Yale 4400-BF-DA or equal
- Devises - Rocker type, quiet action wall switches; white clovers.
Pass and Seymour Sierraplex 2621 Series or equal
- Duplex receptacle; white cover. Pass and Seymour Sierraplex 26352
Series or equal
- Mini-blinds with extruded aluminum blinds pockets. Mini-blinds to
match aluminum sill color
SECURITY SYSTEM:
- The Building will include a high level security system with the
following features:
Intelligent, programmable central control unit
Car/keyboard entry
Burglar, fire and emergency alarms
24-hour electronic monitoring capability
LANDLORD'S WORK
AT LEASED PREMISES:
- Concrete floor
- 2' x 2' ceiling grid and one-time installation of tiles
- Metal stud framing with insulation at head and sill of exterior wall
- Glass and aluminum windows at exterior wall
- HVAC system will be provided by self-contained water cooled package
unit with 2 air-handier units per floor. Units will be complete with
leaving air temperature controls and inlet guide valve static pressure
control
- Air distribution will be through externally insulated sheet metal
ductwork, sized for low pressure, both upstream and downstream of the
VAV boxes
- Temperature control will be by ten fan-powered VAV boxes with electric
heat per floor serving the exterior zones and by eight cooling only
VAV boxes serving the interior zones
- The temperature control system will consist of a multi-channel
microprocessor based time clock for load scheduling.
- Installing supply and return air grilles and thermostats.
- TENANT FINISH WORK WILL CONSIST OF RELOCATING ANY SUPPLY AND RETURN
AIR GRILLES, LOWERING AND ADDRESSING OF THERMOSTATS THAT MAY BE
REQUIRED AS A RESULT OF MODIFICATIONS OR CHANGES IN TENANT'S SPACE
PLANS FOLLOWING LANDLORD'S INITIAL INSTALLATIONS.
- Untreated outside air will be supplied by a roof-mounted supply fan,
distributed by a vertical riser with taps on each floor
- Toilets will be exhausted by a roof-mounted exhaust fan, serving a
vertical riser
- Electrical system shall deliver 3500 amp 3 phase 4 conductor 277/480
volt power to the building (10 xxxxx per square foot available power
for low voltage consumption). The
9
electrical room on each floor shall have a 400 amp high voltage
distribution panel for each tenant to tap into, and a 225 amp low
voltage panel
- Landlord's Building will include a wet pipe automatic fire sprinkler
system in accordance with the City of Sugar Land and State of Texas'
requirements
- Landlord's work will include installation of all piping, equipment and
sprinkler heads of the fire sprinkler system within Tenant's space.
- TENANT FINISH WORK WILL INCLUDE ANY ADJUSTMENTS OR ADDITIONS OF FIRE
SPRINKLER HEADS THAT MAY BE REQUIRED AS A RESULT O MODIFICATIONS OR
CHANGES TO THE TENANT'S SPACE PLAN FOLLOWING LANDLORD'S INITIAL
INSTALLATIONS.
PART VI. LANDLORD'S WORK WHEN TENANT CONTRUCTS INITIAL TINANT
I.MPROVEMENTS
To induce Landlord and Tenant to enter into the Lease (which is hereby
incorporated by reference to the extent that the provisions of this Agreement
may apply thereto) and in consideration of the mutual covenants hereinafter
contained, Landlord and Tenant mutually agree as follows in the event Tenant
elects not to have Landlord construct the Initial Tenant Improvements.
1. WORK BY LANDLORD. Landlord shall cause to be constructed and/or installed
in the Leased Premises the Landlord's Work at Tenant Space as set forth in
this Exhibit "C" in accordance with Schedule of Critical Dates herein
stated.
2. PLANNING AND CONSTRUCTION. Landlord and Tenant shall cooperate in good
faith in the planning and construction of the Initial Tenant Improvements,
and Tenant shall respond promptly to any request from Landlord for Tenant's
approval of any particular aspect thereof, it being agreed and understood
that it is the intent and desire of the parties that the Leased Premises be
ready for tender of possession to Tenant on or before May 1, 1998 (the
"Estimated Tender of Possession Date").
3. QUALITY OF WORK. Landlord shall supervise the construction of the
Landlord's Work at Leased Premises and shall use its reasonable good faith
efforts to cause same to be constructed and installed in a good and
workmanlike manner in accordance with good industry practice. Landlord and
Tenant shall inspect the Leased Premises before Tenant takes possession and
create a repair list of items (if any) that may need correcting. The
creation of such list shall not delay the "Tender of Possession Date".
Landlord shall use reasonable good faith to correct all items listed in a
timely manner.
4. COMPLETION OF LANDLORD'S WORK AT LEASED PREMISES. The "Tender of
Possession Date" shall mean the date upon which the Landlord's Work at the
Leased Premises are substantially complete. The phrase "substantially
complete" shall mean that all construction debris has been removed from the
Leased Premises and the Leased Premises are tendered to Tenant in a "broom
clean" condition, and may reasonably be used by Tenant for the purpose of
construction of the Initial Tenant Improvements by Tenant's contractors and
the progress of the construction of the Landlord's Work at the Leased
Premises to date is such that final completion of the Landlord's Work at
the Leased Premises can occur within a reasonable period of time and
without undue
10
interference to the Tenant's use of the Leased Premises for the purpose of
construction of the Initial Tenant Improvements. If the Leased Premises
are not ready for tender by the Estimated Tender of Possession Date for any
reason, Landlord shall not be liable or responsible for any claims, damages
or liabilities in connection therewith or by reason thereof unless
otherwise provided for in the Lease
PART VII. SCHEDULE OF CRITICAL DATES WHEN TENANT CONSTRUCTS INITIAL TENANT
IMPROVEMENTS
A. Set forth below is a schedule of certain critical dates relating to
Landlord's and Tenant's respective obligations with respect to construction
by Landlord of the Landlord's Work at Leased Premises and construction by
Tenant of the Initial Leasehold Improvements f/or the Leased Premises.
These dates and the respective obligations of Landlord and Tenant are more
fully described in Part VII below.
RESPONSIBLE
DATE DUE PARTY
-------- -----
A. Preliminary Space November 15, 1997 Tenant 11/14/97
Plan Delivery Date
B. Landlord Review 5 days following Landlord's Landlord 11/19/97
Date receipt of Space Plan
C. Space Plan December 15, 1997 Tenant
Delivery Date
D. Landlord Review 5 days following Landlord's Landlord 12/20
Date receipt of Space Plan
E. Space Plan 10 days following Tenant's Tenant 12/20
Revision Date receipt of Landlord's
Comments to Tenant's Space
Plan
F. Space Plan 5 days following Landlord's Landlord 01/04/98
Approval receipt of Landlord's
Comments to Tenant's Space
Plan
G. Working Drawings 20 days following Space Tenant 01/29/98
Revision Date Plan approval
H. Working Drawings 5 days following Working Landlord 02/08/98
Review Date Drawings delivery date
I. Working Drawings 10 days following receipt Tenant 02/08/98
Revision Date of Landlord's comments to
Working Drawings
11
J. Working Drawings 5 days following receipt of Tenant 02/13/98
Approval Landlord's comments to
Working Drawings
K. Estimated Tender May 1, 1998 Landlord 05/01/98
of Possession Date
L. Leasehold 75 days following Tender of Tenant
Improvements Possession Date
Completion Date
All references to days other than with respect to Leasehold Improvements
Completion Date mean working or business days.
PART VIII. LANDLORD AND TENANT PRE-CONSTRUCTION OBLIGATIONS WHEN TENANT
CONSTRUCTS INITIAL TENANT IMPROVEMENTS
1. Tenant will deliver to Landlord no later than the Preliminary Space Plan
Delivery Date (described in Part I above) a space plan containing the
information described in Part IV (I and 2) above, (said space plan and
other information and instructions being called the "Preliminary Tenant
Space Plan").
2. Landlord will review the Preliminary Tenant Space Plan to confirm that it
conforms to the requirements listed in Part IV below, and Landlord shall
report any non-conformity to Tenant, on or before the Landlord Review Date
(described in Part VII above).
3. Tenant will deliver to Landlord no later than the Space Plan Delivery Date
(described in Part I above) a space plan containing, the information
described in Part IV above, (said space plan and other information and
instructions beiric, called the "Tenant Space Plan").
4. Landlord will review the Tenant Space Plan to confirm that it conforms to
the requirements listed in Part IV above, and Landlord shall report any
non-conformity to Tenant, on or before the Landlord Review Date (described
in Part VII above). Additionally, on or before the Landlord Review Date,
Landlord shall meet with Tenant and advise Tenant informally of the
estimated costs based upon conformance with and utilization of Building
Standard Tenant Finishes (or better if and where indicated by Tenant on
Tenant Space Plan). Such amounts in excess of the Tenant finish cost
allowance, being called "Tenant Extra Work" as further described in Part V
below.
5. In the event the Tenant Space Plan does not conform to the requirements of
Part IV above, or Tenant determines the approximate construction costs
associated with Tenant Extra Work are not within the scope of its budget,
Tenant will deliver a corrected Tenant Space Plan to Landlord no later than
the Space Plan Revision date (described in Part VII above).
6. After Landlord has approved Tenant Space Plan, Tenant shall promptly cause
working drawings (hereafter called "Tenant Working Drawings") of the
improvements to Leased Premises shown on the Tenant Space Plan to be
prepared and shall deliver to Landlord the
12
Tenant Working Drawings no later than the Working Drawings Delivery Date
(described in Part VII above) or such later date as may be reasonable in
light of the complexity of Tenant's leasehold improvements or the nature of
Tenant's above Standard improvements.
7. Landlord shall deliver to Tenant written comments or approval of the Tenant
Working Drawings no later than the Working Drawings Approval Date
(described in Part VII above),
In the event the Tenant Working Drawings vary in design from the Tenant
Space Plan, or if Landlord shall require modification to the Working
Drawings Tenant at Tenant's expense promptly shall correct the Tenant
Working Drawings.
8. If such final plans and specifications (working drawings) are mutually
approved by Landlord and Tenant in writing, such plans and specifications
(working drawings) shall be initialed or signed by Landlord and Tenant and
dated but need not be attached to the Lease Agreement.
PART IX. CERTAIN PROVISIONS RELATING TO CONSTRUCTION-TENANT CONSTRUCTS INITIAL
TENANT IMPROVEMENTS
1. Landlord hereby consents to Tenant's construction of the Initial Tenant
Improvements at the Leased Premises upon the following four (4) conditions
precedent: (i) that Landlord and Tenant shall have mutually agreed in
writing upon plans and specifications for such construction utilizing the
procedure herein set forth; (ii) that Landlord and Tenant shall have
mutually agreed in writing upon one or more general contractors (herein
sometimes referred to in the singular as "contractor" and the plural as
"contractors") to be utilized by Tenant in erecting such improvements;
(iii) that Tenant has tendered to Landlord: a true copy of a "Building
Permit" (meaning all required governmental, quasi-governmental, regulatory
authority and other permits, consents, letters of utility availability and
permissions) for the work of Tenant and its contractors to be performed
under the Lease Agreement, certificates of all insurance required to be
obtained by Tenant pursuant to the Lease Agreement, certificates of
insurance from Tenants' contractor as Landlord may reasonably require; and
(iv) that the Lease Agreement has not been terminated for any reason
permitted under the Lease Agreement.
2. In connection with Tenant's erection of improvements at the Leased
Premises, if Landlord and Tenant have not prior to (or contemporaneous
with) the execution of the Lease by Landlord and Tenant agreed in writing
upon one or more general contractors to be utilized by Tenant in erecting
such improvements, then by the Working Drawings Delivery Date, Tenant shall
submit to Landlord a list of one (1) or more contractors, any of which
Tenant would be willing to enter into a contract with for the construction
of such improvements, provided that the bid of such contractor or price
negotiated with such contractor was satisfactory to Tenant. Landlord shall
notify Tenant whether Landlord objects to any contractor named on such list
of contractors and if so, the reason therefore within ten (10)
13
days thereafter, failing which Landlord will be deemed to have approved
each contractor named on Tenant's list.
3. Upon tender of possession of the Leased Premises by Landlord to Tenant,
Tenant shall enter the Leased Premises and Tenant will perform such
construction work and provide and install such materials as are provided in
the Working Drawings and this Lease Agreement (inclusive of any other
Exhibits to the Lease Agreement) to be constructed or performed and
installed by Tenant. Tenant will also provide and install all other
interior work, trade equipment, furniture, fixtures, and effects of every
description necessary or appropriate for Tenant's business (other than
those specifically stated in this Exhibit similarly stated in the Working
Drawings to be provided by Landlord) and all such items to be provided and
installed by Tenant shall be new and modem and of first-class quality.
Tenant may make chances in its construction work (other than substantial
changes) without- Landlord's approval; Landlord will not unreasonably
withhold approval of substantial changes proposed by Tenant. Landlord
shall have the right to approve and to monitor any construction related to
the Building's MEP systems and structural members and to monitor any
construction related to the Leased Premises. Landlord will not impose any
fee in connection with the monitoring of Tenant's construction of the
Initial Tenant Improvements and installation of Tenant's equipment and
improvements in other areas of the Building.
4. At all times while Tenant is constructing the improvements at the Leased
Premises and installing its trade equipment, furniture and fixtures, Tenant
shall not unreasonably interfere with the conducting of business at the
Building. Tenant shall comply with said reasonable requests of Landlord as
Landlord might make for the purpose of avoiding such interference.
5. With respect to any labor performed or materials furnished by Tenant at the
Leased Premises, the following shall apply: All such labor shall be
performed and materials furnished at Tenant's own cost, expense and risk.
Labor and materials used in the installation of Tenant's furniture and
fixtures, and in any other work on the Leased Premises performed by Tenant,
will be subject to Landlord's prior written approval. Any such approval of
Tenant's labor shall constitute a license authorizing, Tenant to pen-nit
such labor to enter upon the Complex and Leased Premises prior to the
commencement of the lease term; however, the continued effectiveness of
such license is conditioned upon Tenant's aforesaid labor working in
harmony with and not interfering with labor utilized by Landlord or
Landlord's mechanics or contractors and not interfering with labor utilized
by any other tenant or such tenant's mechanics or contractors.
Accordingly, if at any time such entry of Tenant's labor shall cause
disharmony or interference therewith, this license may be withdrawn by
Landlord upon forty-eight (48) hours written notice to Tenant, upon
expiration of which Tenant shall have caused all of Tenant's labor (as to
whom Landlord shall have given such notice) to have been removed from the
Leased Premises and from the Complex. With respect to any contract for any
such labor or materials, Tenant acts as a principal and not as the agent of
Landlord. Subject to Section 11.3 of the Lease, Tenant agrees to indemnify
and hold Landlord harmless from all claims (including costs and expenses of
defending against such claims) arising or alleged to arise from any act or
omission of Tenant or Tenant's agents, employees, contractors,
subcontractors, laborers,
14
materialmen or invitees or arising from any bodily injury or property
damage occurring or alleged to have occurred incident to Tenant's work at
the Leased Premises. Tenant shall have no authority to place any lien upon
the Leased Premises or any interest therein nor in any way to bind
Landlord; and any attempt to do so shall be void and of no effect.
Landlord expressly disclaims liability for the cost of labor performed or
materials furnished by Tenant. If, because of any actual or alleged act or
omission of Tenant, any lien, affidavit, charge or order for the payment of
money shall be filed against Landlord, the Leased Premises or any portion
thereof or interest therein, whether or not such lien, affidavit, charge or
order is valid or enforceable, Tenant shall, at its own cost and expense,
cause same to be discharged of record by payment, bonding or otherwise no
later than fifteen (15) days after notice to Tenant of the filing thereof,
but in all events, prior to the foreclosure thereof. All of Tenant's
construction at the Leased Premises shall be performed in substantial
compliance with the plans and specifications therefor mutually approved by
Landlord and Tenant in a good and workmanlike manner. All such work shall
be performed by Tenant in compliance with all applicable building codes,
regulations and all other legal requirements and shall be performedin such
manner as to not cause Landlord's fire and extended coverage insurance to
be canceled or the rate therefor increased (or at Landlord's option, will
upon demand pay any such increase). In the performance of such work,
Tenant shall not interfere with or delay any work being done by Landlord's
contractors.
6. Landlord will make reasonable utilities available to Tenant's contractors
at no additional cost or expense. Tenant's contractors shall have
non-exclusive use of the loading dock, freight elevators and other service
areas of the Building, all at no additional cost or expense (subject to the
reasonable scheduling procedures of Landlord's contractor).
7. Upon full completion of construction of the improvements by Tenant in
accordance with the Working Drawings, Landlord shall pay to Tenant (or, at
Landlord's option, Landlord may pay Tenant and the general contractor
and/or one or more subcontractors) as an "Allowance", the lesser of (i)
Tenant's actual "Tenant Improvement Costs" (as hereinafter defined) or (ii)
the Improvement Allowance as defined in Section 6 of this Exhibit "C"
toward Initial Tenant Improvement Costs with respect to the Leased Premises
provided that Tenant has furnished to Landlord the following (on forms to
be furnished by Landlord where applicable):
a.) A certificate of occupancy (or other certificates evidencing
inspection and acceptance of all of Tenant's construction by
appropriate government authorities);
b.) A copy of Tenant's contract with the general contractor performing
such work, which contract shall contain a schedule of values totaling
the full amount of the contract. In the event that Tenant has acted
as its own general contractor, Tenant must have entered into written
subcontracts with all parties who furnished labor and/or materials
totaling more than Five Hundred and No/100 Dollars ($500.00) and
copies of such subcontracts must be furnished to Landlord;
15
c.) Tenant's affidavit, in the form attached hereto as Exhibit "C-1", that
such construction has been completed to its satisfaction and in strict
accordance with the Working Drawings which affidavit shall also state
the total Initial Tenant Improvement Costs itemized in reasonable
detail;
d.) General Contractor's Affidavit and Lien Waiver with respect to the
Leased Premises and Complex, in the form attached hereto as Exhibit
"C-2", executed by the general contractor(s) performing such work
stating that construction has been fully completed in accordance with
the Working Drawings and that all subcontractors, laborers and
material suppliers engaged in or supplying materials for such work
have been paid in full (in the event, however, that Tenant has acted
as its own general contractor, Tenant, itself, will execute Exhibit
"C-2");
e.) Subcontractor's Lien Waiver with respect tot he Leased Premises and
Complex, in the form attached hereto as Exhibit "C-3", executed by all
subcontractors and materialmen who shall have furnished labor and/or
materials for the work;
f.) Certificate of substantial completion from Tenant's architect or
engineer certifying that such construction work has been fully
completed in accordance with the Working Drawings;
g.) Notice from Tenant to Landlord that Tenant has opened for business at
the Leased Premises and execution by Tenant and delivery to Landlord
of the Commencement Agreement attached hereto as Exhibit "I"
indicating the commencement and termination dates of the lease term;
h.) Delivery to Landlord of certificates or duplicate originals of all
insurance which Tenant is required to carry under the terms of the
Lease;
i.) Execution by Tenant and delivery to Landlord of any Uniform Commercial
Code (UCC) Financing Statements required under the Lease;
1. Any work at the Leased Premises involving the sprinkler system (if any)
serving the Leased Premises shall be performed by Landlord or its
contractors at Tenant's cost. Tenant shall pay the cost of any such work
(or reimburse Landlord therefore) within ten (10) days after delivery to
Tenant of a statement therefore.
2. Notwithstanding anything to the contrary contained in this Exhibit "C" to
the Lease, if Tenant elects to construct the Initial Tenant Improvements,
Landlord shall upon the request of Tenant fund construction progress
payments on a monthly basis within twenty days after Landlord's receipt of
Tenant's contractor's standard AIA form draw request and supporting
documentation, provided, however that such draw request is delivered to
Landlord no earlier than two (2) days prior to the last day of the month to
which the draw request pertains and no later than five (5) days later than
the last day of the month to which the draw request pertains.
16
EXHIBIT "C-1"
TENANT'S AFFIDAVIT
STATE OF Section
---------------
Section
COUNTY OF Section
---------------
BEFORE ME, the undersigned authority, personally appeared ;
who, being by me duly sworn, states as follows:
I.
I am the duly constituted representative of NEON SYSTEMS, INC., the Tenant
under and by virtue of a Lease Agreement with XXXXXX ADREAC, L.C. for certain
leased premises in THE FAIRFIELD BUILDING located in Sugar Land, Texas.
II.
As an inducement to Landlord to pay Tenant the sum of (AMOUNT DUE) as a
construction "Allowance" (as defined in the Lease), I do hereby certify as
follows:
(a) The construction of the Leased Premises has been completed to Tenant's
satisfaction and in strict accordance with the plans and
specifications mutually agreed upon as provided in the Lease.
(b) The total amount paid by Tenant for all construction work to the lease
premises is the sum of $ .
(c) Tenant has occupied and opened for business at the Leased Premises as
of , 19_____.
SIGNED this _________ day of ___________________, 1998.
NEON SYSTEMS, INC.
By: _______________________________
Authorized Agent
1
STATE OF Section
---------------
COUNTY OF Section
---------------
BEFORE ME, the undersigned authority, on this day personally appeared
______________, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he/she executed the same for
the purposes therein expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this ______ day of _____________,
1998.
-----------------------------------------
Notary Public, State of Texas
Print Name:
-----------------------------
My Commission Expires:
-------------------
STATE OF Section
---------------
COUNTY OF Section
---------------
SWORN TO AND SUBSCRIBED before me this _____ day of _______________, 1998.
-----------------------------------------
Print Name:
-----------------------------
My Commission Expires:
-------------------
2
EXHIBIT "C-2"
GENERAL CONTRACTOR'S AFFEDAVIT AND LIEN WAIVER
STATE OF Section
COUNTY OF Section
BEFORE ME, the undersigned authority, personally appeared
(NAME), who, being by me duly sworn, states as follows:
I.
I am _______________(TITLE) FOR __________________________("CONTRACTOR")..
Contractor has completed construction of improvements to the Leased Premises for
NEON SYSTEMS, INC. in THE FAIRFIELD BUILDING located in Sugar Land, Texas, the
legal description of which is attached hereto as Exhibit "B"
II.
In consideration of the sum of $______________ which constitutes full
payment to Contractor for all work done at the Leased Premises, receipt of which
is hereby acknowledged, Contractor does hereby waive and release any and all
liens (and all rights to hereafter perfect any lien) on the property described
on Exhibit "B" and the improvements presently or hereafter erected thereon.
Further, as an inducement to Landlord to pay to Tenant the "Allowance" (as such
term is defined in the Construction Rider to the Lease), I, duly authorized
agent for Contractor, do hereby wan-ant and represent, for and on behalf of
Contractor, that construction of the Leased Premises has been fully completed in
strict accordance with the Working Drawings and Specifications and that
Contractor and all subcontractors, laborers and material suppliers engaged in
working, or supplying materials for such work, have been paid in full.
I further warrant and represent: (1) that all subcontractors, laborers and
material suppliers engaged in or supplying materials for such construction are
shown on Exhibit "A" attached hereto, (2) that the total amount due each is
shown thereon, (3) that the amount due each has been fully paid, (4) that each
has submitted a full and complete waiver of all rights to file any lien on the
project, and (5) that Contractor will fully indemnify and hold harmless both
Tenant and Landlord from and against any loss arising out of any lien filed by
any subcontractor, laborer or supplier of materials in any way relating to the
work done by or at the request of Contractor.
SIGNED this ___________day of __________________1998.
----------------------------------
Company Name
By:
-----------------------------
Authorized Agent
0
XXXXX XX Xxxxxxx
XXXXXXXX Xxxxxxx
XXXXXX XX, the undersigned authority, on this day personally appeared known
to me to be the person whose name is subscribed to the foregoing instrument and
acknowledged to me that he/she executed the same for the purposes therein
expressed.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this _____ day of
__________1998.
-----------------------------------------
Notary Public, State of Texas
Print Name:
------------------------------
My Commission Expires:
-------------------
STATE OF Section
COUNTY OF Section
SWORN TO AND SUBSCRIBED before me this _______day of ______________., 1998.
-----------------------------------------
Print Name:
-----------------------------
My Commission Expires:
-------------------
2
EXHIBIT "A TO GENERAL CONTRACTOR'S AFFIDAVIT AND LIEN WAIVER"
LIST OF ALL SUBCONTRACTORS, LABORERS & MATERIAL SUPPLIERS
All subcontractors, laborers and suppliers paid in excess of $500.00 must
initial beside paid amount to acknowledge their receipt of payment in full.
NAME OF SUBCONTRACTOR,
LABORER OR SUPPLIER TYPE OF WORK AMOUNT PAID INITIAL
------------------- ------------ ----------- -------
1. Plumbing
--------------------------------------------------------------------------------
2. HVAC
--------------------------------------------------------------------------------
3. Electrical
--------------------------------------------------------------------------------
4. Millwork & Carpentry
--------------------------------------------------------------------------------
5. Storefront
--------------------------------------------------------------------------------
6. Floor Covering
--------------------------------------------------------------------------------
7. Lumber
--------------------------------------------------------------------------------
8. Sheet Rock
--------------------------------------------------------------------------------
9. Electrical Supplies
--------------------------------------------------------------------------------
10. Plate Glass
--------------------------------------------------------------------------------
11. Acoustical Ceiling
--------------------------------------------------------------------------------
12. Architect
--------------------------------------------------------------------------------
13. Insulation
--------------------------------------------------------------------------------
14. Engineer
--------------------------------------------------------------------------------
15. Painting
--------------------------------------------------------------------------------
**NOTE: Each subcontractor listed above shall execute an Exhibit "C-3".
1
EXHIBIT "C-3"
SUBCONTRACTORS LIEN WAIVER
The undersigned has heretofore provided (or contemplates hereafter
providing) labor and/or materials for improvements at the real property
described in Exhibit "B" attached hereto and incorporated by reference herein
for all purposes.
By this instrument, the undersigned (being a subcontractor or supplier of
material for the construction of improvements on a portion of the above
described real property) agrees to look for payment solely to (GENERAL
CONTRACTOR) and does hereby waive and release any and all liens on such above
described real property and all improvements presently or hereafter erected
thereon and further waives and releases all rights to hereafter perfect any lien
on such real property and/or improvements.
The undersigned also certifies that all work, labor, materials, machinery,
and equipment furnished by the undersigned to date have been fully paid for and
that there are no amounts unpaid in favor of any sub-contractor or materialman
or any other person finishing labor and/or materials utilized on the basis of
which any lien (commonly called a mechanic's or materialman's lien) has been or
can be filed for work done or materials, machinery, or equipment furnished to
said structures, property, or facilities or any part thereof Further, the
undersigned does hereby agree to indemnify and hold harmless the Owner of the
real property against any loss or damage which may be sustained by reason of the
placing or filing of liens against said real estate and the structures thereon
by sub-subcontractors, laborers, or materialmen, whether his own or those of
sub-subcontractors of materialmen or employees of sub-subcontractors. the
undersigned will pay all attorney's fees, court costs, and other expenses
arising from the placing or filing of any such liens.
SIGNED this _____________day of ___________________1998.
-------------------------------------------
Company Name
By:
--------------------------------------
Authorized Agent
STATE OF Section
COUNTY OF Section
BEFORE ME, the undersigned authority, on this day personally appeared
_______________ known to me to be the person whose name is subscribed to the
foregoing instrument and acknowledged to me that he/she executed the same for
the purposes therein expressed.
1
GIVEN UNDER MY HAND AND SEAL OF OFFICE this _________day of _____________1998.
-------------------------------------------
Notary Public, State of Texas
Print Name:
-------------------------------
My Commission Expires:
---------------------
STATE OF Section
COUNTY OF Section
SWORN TO AND SUBSCRIBED before me this __________day of ______________1998.
-------------------------------------------
Print Name:
-------------------------------
My Commission Expires:
---------------------
2
EXHIBIT D
BUILDING STANDARD HOLIDAYS
Subject to the provisions of Section 6, Landlord will furnish Building
standard heating, ventilating and air conditioning without special charge to
Tenant during Tenant's business hours, but only to the extent the same occur
between the normal business hours of the Building in effect from time to time.
The current normal business hours of the Building are 7:00 a.m. and 6:00 p.m. on
weekdays (from Monday through Friday, inclusive) and Saturdays between 8:00 a.m.
and 1:00 p.m., all exclusive of Holidays (defined below). Landlord will furnish
air conditioning and heating at other times (that is, at times other than the
times specified above), upon request of Tenant made in accordance with the rules
and regulations for the Building, in which event Tenant shall reimburse Landlord
for furnishing such services at the rate of $35.00 per floor per hour.
The following dates shall constitute "Holidays" as said term is used in
this Lease:
(1) New Year's Day
(2) Memorial Day
(3) Independence Day
(4) Labor Day
(5) Thanksgiving Day
(6) Friday following Thanksgiving Day
(7) Christmas Day
If in the event that any Holiday shall be observed on a day other than the
actual day on which such Holiday occurs, then the day which such Holiday is
observed shall constitute the Holiday under this Lease.
1
EXHIBIT E
PARKING
Landlord hereby agrees to make available to Tenant, during the full ten-n
of this Lease, three and one-half (3.5) covered parking permit(s) for every one
thousand square feet of Net Rentable Area leased by Tenant within the Building
from time to time, fifteen percent (15%) of which shall be reserved/assigned
(hereinafter called the "Initial Parking Permits") in the Building parking
garage (hereinafter called the "Garage"), at no additional cost. Additional
parking permits may be made available upon the following terms and conditions:
(1) In the event Tenant shall desire to obtain additional covered
unassigned parking permits (hereinafter called "Additional Parking Permits") in
the Garage, Tenant shall notify Landlord in writing of Tenant's desire to do so.
Tenant shall pay as rental for the additional Parking Permits twenty five
dollars ($25.00) per month. Said rentals shall be due and payable to Landlord
as additional Rent on the first day of each calendar month during the term of
this Lease. Following Landlord's receipt of such written notice Landlord shall
make available to Tenant such number of Additional Parking Permits as Landlord
deems reasonable, if same are available. Landlord hereby agrees that Tenant may
at any time and from time to time during the term of this Lease elect to
discontinue leasing or taking any or all of the Additional Parking Permits by
giving written notice thereof to Landlord. Tenant hereby agrees that Landlord
may at any time and from time to time during the term of this Lease elect to
cancel any or all of the Additional Parking Permits (but not the Initial Parking
Permits) by giving written notice thereof to Tenant. Any such election by
Tenant or Landlord, as the case may be, shall be effective as of the first day
of the first full calendar month following the expiration of thirty (30) days
after the date such notice is given (the Initial Parking Permits and the
Additional Parking Permits being hereinafter collectively called the "Parking
Permits").
(2) Landlord will issue to Tenant parking tags, stickers or access cards
for the Parking Permits, or will provide a reasonable alternative means of
identifying and controlling vehicles authorized to park in the covered parking
areas of the Garage. Tenant shall surrender each such tag, sticker or other
identifying device to Landlord upon termination of the Parking Permit related
thereto.
(3) Landlord, at its discretion, shall have the right from time to time
and upon written notice to Tenant to designate the parking spaces pertaining to
any of Tenant's Parking Permits for assigned parking, and to designate the
areas(s) within which unassigned vehicles may be parked provided, however, the
Initial Parking Permits shall at all times be for covered spaces not on the roof
of the Garage.
(4) If, for any reason, Landlord fails or is unable to provide, or Tenant
is not permitted to use, all or any portion of the parking spaces to which it is
entitled hereunder, then Tenant's obligation to pay for such spaces shall be
abated for so long as Tenant does not have the use thereof. If the Garage is
taken under power of eminent domain or damaged or destroyed by a
1
Casualty, Landlord shall use reasonable efforts to reconstruct or repair such
damage or destruction as promptly as practicable. If Tenant is not permitted to
use all or any portion of the parking spaces to which it is entitled hereunder,
and as a result Tenant is required to obtain alternate parking (which may
include shuttle service for Tenant's employees to and from the alternate parking
area), then Tenant may offset from its obligation to pay rentals under this
Lease the amount of the costs incurred by Tenant in obtaining such alternate
parking (including such shuttle service).
(5) If the term of this lease 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.
(6) Tenant shall defend, indemnify and hold harmless Landlord and
Landlord's officers, directors, shareholders, partners, agents and employees
from and against all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, costs, expenses and disbursements (including court costs
and reasonable attorneys' fees) resulting directly or indirectly from the use of
the Parking Permits.
(7) Landlord may provide parking in the Garage for visitors to the
Building in an area designated by Landlord and in a capacity determined by
Landlord to be appropriate for the Building.
(8) Upon the occurrence of an Event of Default, as defined in Section
13.01(a) of the Lease, Landlord shall have the right (in addition to all other
rights, remedies and recourse hereunder and at law) to suspend until such Event
of Default has been cured the Parking Permits without prior notice or warning to
Tenant.
(9) In addition to the Parking Permits, Tenant and its visitors will have
the non-exclusive right (in common with the other tenants of the Building and
their visitors) to use the surface parking areas around the Building.
2
EXHIBIT F
BUILDING RULES AND REGULATIONS
1. Sidewalks, doorways, vestibules, halls, stairways, and other similar areas
shall not be used for the disposal of trash, be obstructed by tenants, or
be used by tenants for any purpose other than entrance to and exit from the
Leased Premises and for going from one part of the Building to another part
of the Building.
2. Plumbing fixtures shall be used only for the purposes for which they are
designated, and no sweepings, rubbish, rags or other unsuitable materials
shall be disposed into them. Damage resulting to any such fixtures from
misuse by a tenant shall be the liability of said tenant.
3. Signs, advertisements, or notices visible in or from public corridors or
from outside the Building shall be subject to Landlord's prior written
approval.
4. Movement in or out of the Building of furniture, office equipment, or any
other bulky or heavy materials shall be restricted to such hours as
Landlord designates. Landlord will determine the method and routing of said
items so as to ensure the safety of all persons and property concerned.
Advance written notice of intent to move such items must be made to the
Building management office.
5. All deliveries of furniture, office equipment or bulk freight shall be
coordinated in advance with Landlord, and shall be performed subject to
Landlord's supervision and direction by use only of an elevator designated
by Landlord.
6. Building management shall have the authority to prescribe the weight and
manner that heavy furniture and equipment are positioned.
7. Corridor doors, when not in use, shall be kept closed.
8. Tenant space that is visible from public areas must be kept neat and clean.
9. The disposal of trash or storage of materials in the hallways, elevator
lobbies, stairways and other common are-as of the Building is prohibited.
10. No animals shall be brought into or kept in, on or about the Building.
11. Tenant shall not tamper with or attempt to adjust temperature control
thermostats in the Leased Premises. Landlord shall adjust thermostats as
required to maintain the Building standard temperature.
12. Tenant will comply with any and all security procedures established by
Landlord from time to time.
1
13. Tenants shall lock all office doors leading to corridors and turn out all
lights at the close of their working day.
14. All requests for overtime air conditioning or heating must be submitted in
writing to the Building management office by 2:00 p.m. on the day desired
for weekday requests, by 2:00 p.m. Friday for weekend requests and by 2:00
p.m. on the preceding business day for holiday requests. Tenant shall not
be required to make requests for the areas contained within the Leased
Premises which Tenant intends to operate on a 24-hour basis as contemplated
under Section 5.01 of this Lease.
15. No flammable or explosive fluids or materials shall be kept or used within
the Building except in areas approved by Landlord, and Tenant shall comply
with all applicable building and fire codes relating thereto.
16. Smoking is prohibited in the Building except in designated areas.
17. The Building is designated a non-smoking building except for areas, if any,
that may be designated by Landlord from time to time as smoking areas.
Notwithstanding the foregoing, any tenant may designate a smoking lounge or
confined area in its leased premises provided that such lounge or confined
area is equipped with an adequate filtration system in Landlord's judgment
to avoid discharge of smoke vapors or odors into the common areas of the
Building, the return-air plenum or into space leased or held for lease to
others.
Landlord reserves the right to rescind any of these rules and regulations and to
make such other and rules and regulations as in its reasonable judgment shall,
from time to time, be required for the safety, protection, care and cleanliness
of the Building, and the operation thereof, the preservation of good order
therein and the protection and comfort of the tenants and their agents,
employees and invitees. Such rules and regulations, when made and written
notice thereof is given to a tenant, shall be binding upon it in like manner as
if originally herein prescribed.
2
EXHIBIT G
RENEWAL OPTION
Provided, no Event of Default by Tenant has occurred and remains uncured,
Tenant, shall have the right to renew and extend this lease for two (2) separate
but consecutive five (5) year renewal periods or one additional ten (10) year
period at a Base Rental equal to ninety-five percent (95%) of the then
prevailing Market Rental Rate, and the other terms and conditions as set forth
below, along with any Additional Rental by providing written notice to Landlord
no later than two hundred seventy (270) days prior to the termination date of
this lease or extension thereof. In the event of such renewal, the "Term" shall
include such renewal term and such renewal shall be upon the same provisions as
for the initial Term except that:
(1) Landlord shall not be obligated to make any alterations or
improvements to the Leased Premises;
(2) After the second Renewal Term, Tenant shall have no further right to
renew this Lease.
(3) In the event Landlord has not received written notice of Tenant's
intention and desire to exercise the Option to lease the Premises for
the Extended Term two hundred seventy (270) days prior to the
termination Date, such Option shall expire and the Lease shall
terminate at the end of the Initial Term;
(4) Any such extension shall apply to all space included in the Premises
as of the expiration of the prior term and shall be upon all the same
terms and conditions of this Lease except for (i) the then executed,
discharged, or waived provisions of the Lease such as any tenant
interior construction obligations of Landlord, (ii) the renewal
option, and (iii) the Base Rental; and
(5) The Base Rental for the option period shall be ninety-five percent
(95%) of the "Prevailing Market Rate", as defined below, for each year
of the specific option period.. The term "Prevailing Market Rate"
shall mean the rental rate as would be accepted in an arm's length,
bona fide negotiations for a new lease of the space for which the
Market Rental Rate is being determined to be executed at the time of
determination and to commence at the time that the rental rate based
upon such determination will be effective under the Lease upon all of
the terms and conditions of the Lease by a willing prospective lessee
and accepted by a willing lessor for office space in the area one-half
mile to either side of State Highway 59 bounded by the Xxx Houston
Tollway (Beltway 8) to the northeast and State Highway 6 to the
southwest.
"Prevailing Market Rate" shall mean the rental rate charged for space of
comparable, office buildings in the First Colony area of Sugar Land, Texas
taking into consideration, but not limited to
1
such factors as: location, quality and age of the building; use and size of the
space in question; location and/or floor level within the building; extent of
leasehold improvements allowance (considering existing improvements); abatements
(including with respect to base rental, operating expenses and ad valorem/real
estate taxes, and parking charges); parking charges or inclusion of same in
rental; lease takeovers/assumptions; relocation allowances; refurbishment and
repainting allowances; any and all other concessions or inducements, extent of
services provided or to be provided; distinction between "gross" and "net"
lease; base year or dollar amount for escalation purposes (both operating costs
and ad valorem/real estate taxes); any other adjustments (including by way of
indexes) to base rental; term or length of lease; and any other relevant term or
condition in making such "Prevailing Market Rate" rental rate determination.
Within thirty (30) days after receipt of Tenant's notice of exercise of a
Renewal Option, Landlord will notify Tenant in writing of its determination or
the Prevailing Market Rate for the Leased Premises for the renewal term. If
Tenant disagrees with the Prevailing Market Rate determined by Landlord,
Landlord and Tenant will negotiate in good faith to reach an agreement as to a
mutually acceptable Base Rental rate for the renewal term. If Landlord and
Tenant are unable to reach an agreement within thirty (30) days after Tenant
receives Landlord's notice of determination, Tenant shall have the option to
either withdraw the exercise of the renewal option or to give written notice
(the "BINDING NOTICE") to Landlord of its election to exercise the renewal
option and have the Prevailing Market Rate determined by Qualified Brokers (as
hereinafter defined) in accordance with the following provisions. If Tenant
does not so notify Landlord within such time, Tenant shall be deemed to have
elected not to renew this Lease and all rights of Tenant to renew and extend
this Lease shall automatically terminate.
If Tenant elects to exercise a Renewal Option and have the prevailing market
Rate determined by qualified Brokers, Landlord and Tenant shall each within five
(5) days after Landlord's receipt of the Binding Notice nominate and appoint a
Qualified Broker to determine the Prevailing Market Rate. Upon the appointment
of the two qualified Brokers, they shall be instructed to fairly and impartially
determine the Prevailing market Rate. The two (2) Qualified Brokers shall
afford to landlord and Tenant the right to submit evidence with respect to such
value and shall, with all possible speed, make their respective determinations
and deliver a written report thereof to Landlord and Tenant within thirty (30)
days after their appointment. If the higher of the two Prevailing Market Rate
determinations is not more than one hundred ten percent (110%) of the lower
determination, the average of the values so determined shall be binding upon
Landlord and Tenant and shall be the basis upon which the Base Rental equal to
ninety-five percent (95%) of the then Prevailing Market Rate shall be determined
for purposes of the applicable renewal term. if the higher determination is
more than one hundred ten (110%) of the lower determination, the two Qualified
Brokers shall within five (5) days after both of such qualified Brokers have
submitted their written reports to landlord and Tenant select by mutual
agreement a third (3rd) qualified Broker and give written notice of such
appointment to Landlord and Tenant. If the two (2) Qualified Brokers fail to
agree upon the third Qualified Broker within said five 95) day period, a third
Qualified Broker shall be selected by mutual agreement of Landlord and Tenant
within a further period of five (5) days. If Landlord and Tenant cannot so
agree on the third qualified Broker, then either Landlord or Tenant may elect to
have such Qualified Broker appointed by the president of the Texas Chapter of
the Society of Industrial and Office Realtors or its successor
2
organization. The third Qualified Broker shall be instructed to fairly and
impartially determine which of the two original Qualified Brokers' determination
of the Prevailing Market Rate most closely approximates his determination of the
Prevailing Market Rate, and the determination so selected shall be binding upon
Landlord and Tenant and shall be the basis upon which the Base Rental equal to
ninety-five percent (95%) of the then Prevailing Market Rate shall be determined
for purposes of the applicable renewal term. Landlord and Tenant shall pay the
fees and expenses of the Qualified Broker it appoints, and the fees and expenses
of the third Qualified Broker shall be divided equally between Landlord and
Tenant. If any Qualified Broker appointed as aforesaid shall thereafter become
unable or unwilling to act, such Qualified Broker's successor shall be appointed
in the same manner as provided in this paragraph for the appointment of the
Qualified Broker so becoming unable or unwilling to act.
As used herein, the term "QUALIFIED BROKER" means a real estate broker who (a)
is licensed in the State of Texas, (b) has been actively and continuously
engaged in leasing office space in multi-story office buildings in the greater
Houston area for not less than the previous five (5) year period, and (c) during
the preceding three (3) year period has individually represented a party to an
office space lease of at least 25,000 square feet.
3
EXHIBIT H
EXPANSION OPTIONS
Provided no Event of Default has occurred and remains uncured by Tenant,
Tenant shall have the options to lease additional areas on the fourth floor of
the Building (the "Expansion Areas"), as follows:
The Expansion Areas shall be provided by Landlord, and must be taken by
Tenant, in increments and in the sequences as follows:
The first Expansion Area ("Option Space I") as shown on Exhibit B- I of the
Lease shall equal 8,542 square feet of Net Rentable Arm
The second Expansion Area ("Option Space 2") as shown on Exhibit B-1 of the
Lease shall equal 8,000 square feet of Net Rentable Area.
The third Expansion Area ("Option Space 3") as shown on Exhibit B-I of the
Lease shall equal 9,000 square feet of Net Rentable Area.
Tenant must exercise its options to lease the Expansion Areas by written
notice received by Landlord no later than the Exercise Dates, Landlord shall
deliver the applicable Expansion Area by the Delivery Dates, and Rental shall
become due and payable for such Expansion Areas on the Expansion Commencement
Dates, as follows:
EXPANSION EXERCISE DELIVERY RENT
OPTION DATE DATE COMMENCEMENT
DATE
First Option August 1, 1998 November 1, 1998 January 1, 1999
Second Option March 1, 1999 June 1, 1999 August 1, 1999
Third Option November 1, 1999 February 1, 2000 April 1, 2000
If the Commencement Date of the Lease occurs after August 1, 1998, each of
the dates set forth above shall be extended one day for each day beyond
August 1, 1998, that the Commencement Date of this Lease so occurs.
FIRST OPTION:
By on or before the First Option Exercise Date as set forth above,
Tenant shall be entitled to exercise: (i) its option as to Option Space 1;
(ii) its option as to Option Space 2, if Tenant simultaneously exercises
its option to Option Space 1; and (iii) its option as to Option Space 3, if
Tenant simultaneously exercises its option to Option Space I and Option
Space 2. If by on or before the First Option Exercise Date, Tenant does not
elect to exercise its option to lease Option Space 1, then Tenant's option
rights (but not its right of first
1
refusal provided below) as to Option Space 3 shall cease, terminate and
expire automatically on the First Option Exercise Date, I.E., August 1,
1998.
SECOND OPTION:
By on or before the Second Option Exercise Date as set forth above,
Tenant shall be entitled to exercise: (i) its option as to Option Space 1,
if not previously exercised by the First Option Exercise Date; (ii) its
option as to Option Space 2, if not previously exercised by the First
Option Exercise Date, and if Tenant has previously exercised its option as
to Option Space 1, or simultaneously exercises its option to Option Space
1, and (iii) its option as to Option Space 3, if Tenant has previously
exercised its option to Option Space I by the First Option Exercise Date,
and if Tenant has previously exercised its option to Option Space 2 by the
First Option Exercise Date or simultaneously exercises its option to Option
Space 2. If Tenant has not elected to exercise its option to lease Option
Space I by the Second Option Exercise Date, then Tenant's option rights
(but not its right of first refusal provided below) as to Option Space 2
shall cease, terminate and expire automatically on the Second Option
Exercise Date. If Tenant exercises its option to lease Option Space I by
the First Option Exercise Date, but does not exercise its option to lease
Option Space 2 by the Second Option Exercise Date, then Tenant's option
rights (but not its right of first refusal provided below) as to Option
Space 3 shall cease, terminate and expire automatically on the Second
Option Exercise Date, i.e., March 1, 1999.
THIRD OPTION:
By on or before the Third Option Exercise Date as set forth above,
Tenant shall be entitled to exercise: (i) its option as to Option Space 1,
if not previously exercised by Tenant; (ii) its option as to Option Space 2
if Tenant has previously exercised its option as to Option Space I by the
Second Option Exercise Date, and (iii) its option as to Option Space 3, if
Tenant has previously exercised both its option to Option Space I by the
First Option Exercise Date and its option to Option Space 2 by on or before
the Second Option Exercise Date. All rights and options of Tenant as to
any and all Expansion Areas shall cease, terminate and expire automatically
on the Third Option Exercise Date, I.E., November 1, 1999.
OTHER MATTERS:
Upon the exercise by Tenant of any of the foregoing Options, Tenant
shall also have the right and option to extend the Termination Date of this
Lease as to both the initial Leased Premises and all Expansion Areas
previously and then being optioned, until five (5) years after the
Expansion Commencement Date of the Option then being exercised. In the
event of Tenant's exercise of such option to so extend the Termination Date
of this Lease, and only in such event, Landlord shall provide to Tenant an
allowance equal to Fifteen Dollars ($15.00) per square foot of Net Rentable
Area of the Expansion Area then being. optioned, for the payment of
architectural and engineering fees, permanent leasehold improvements,
cabling and communication equipment expenses and any other related
2
expenses for construction of the Expansion Area(s) then being optioned. If
Tenant does not so elect to extend the Termination Date of this Lease,
Landlord shall provide to Tenant an allowance equal to the sum of
Twenty-Five Cents ($0.25) per square foot of Net Rentable Area of the
Expansion Area(s) then being optioned times the number of months from the
Expansion Commencement Date until the Termination Date of this Lease, for
the payment of architectural and engineering fees, permanent leasehold
improvements, cabling and communication equipment expenses and any other
related expenses for construction of the Expansion Area(s) then being
optioned. All other terms and conditions of this Lease shall be applicable
to the Expansion Area(s) being optioned. The actual Net Rentable Area
contained within the Expansion Area(s) referenced in this Exhibit "H" shall
be determined in accordance with the terms and conditions for determining
Net Rentable Area as provided for in the Commencement Agreement (Exhibit
"I") to the Lease.
Tenant shall have the right and option to either contract directly and on
and for its own account for the design and construction of the leasehold
improvements to the Expansion Area(s), or to have Landlord contract for the
construction of the leasehold improvements to the Expansion Area(s), on the same
terms and conditions set out in this Lease for the construction of the initial
Leased Premises. Landlord shall install and construct the same building shell
components and improvements for the Expansion Area(s) described in Exhibits "C"
and "J" of the initial Leased Premises. Any Expansion Area(s) leased by Tenant
pursuant to this Exhibit "H" will be delivered to Tenant with all of Landlord's
Work complete, excluding such portion of Landlord's Work which are required to
be performed following completion of work to be performed by Tenant's
contractor. If Tenant elects to have Landlord contract for the construction of
the leasehold improvements to any of the Expansion Area(s), then the Delivery
Date(s) and Expansion Commencement Date(s) as to such Expansion Area(s) stated
above shall not be applicable, and instead the Delivery Date and Expansion
Commencement Date of the Expansion Area(s) for which Landlord contracts for
construction of the leasehold improvements thereto shall be calculated and
subject to the terms and conditions of Exhibit "C" to this Lease.
In addition to the foregoing Options as to Expansion Areas, Tenant is
hereby granted a first right of refusal to lease additional space on the fourth
and fifth floors of the Building, when and if such space shall become available.
Within a reasonable period of time from the date upon which Landlord shall
become aware of a bona fide offer that is acceptable to Landlord to lease any
portion of the refusal space (other than an offer by Tenant), Landlord shall
advise Tenant of said offer and of the identity of the third-party prospect and
the material business terms of the offer. Within fifteen (15) days after Tenant
has received such information form Landlord, Tenant may, at its option, give
Landlord written notice of the exercise of its first right of refusal. If
Tenant exercises its first right of refusal under this provision, Tenant shall
be entitled to take possession of said expansion space, which shall become part
of the Leased Premises and subject to the terms of this Lease, effective upon
the same terms and conditions as to that of the offer which Landlord had
provided notice of the terms and conditions of to Tenant; provided, however,
that (a) if the proposed third-party lease term is less than the remaining term
of the Lease, Tenant will have the 6ption to lease the refusal space for the
remainder of the term hereof, and (b) if the proposed third-party lease term
would extend beyond the remaining term of this Lease, then:
3
(i) if there is then less than three (3) years remaining in the term of
this Lease, Tenant will have the option to lease the refusal space for
a term of five (5) years, in which event the term of this Lease as to
the existing Leased Premises will be extended to be coterminous with
Tenant's lease of the refusal space, in which event the Base Rental
for the existing Leased Premises during the extended term of this
Lease will be the Prevailing Market Rate (determined at the time of
Tenant's exercise of such option in accordance with the procedures
established in Exhibit "G"); and
(ii) if there is then three (3) years or more remaining in the term of this
Lease, Tenant will have the option to lease the refusal space for such
remaining term, in which event the Base Rental set forth in the notice
to Tenant shall be adjusted as required to fully amortize all of the
allowances and inducements to be provided to Tenant in connection with
its lease of the refusal space over the term of Tenant's lease of such
space.
Failure of Tenant to give such notice within such fifteen (15) day period shall
cause Landlord to have a period of one hundred twenty (120) days to consummate a
lease of the subject space to Landlord's prospect based upon the material
business terms outlined to Tenant in Landlord's prior written notice to Tenant.
In the event Landlord shall fail to consummate a lease of the subject space to
Landlord's prospect based upon the material business terms outlined to Tenant in
Landlord's prior written notice to Tenant within such period of one hundred
twenty (120) days, Landlord shall again be obligated to advise Tenant of future
offers to lease that portion of the refusal space in the manner described above
and Tenant's first right of refusal shall apply to any such subsequent lease
offer.
4
EXHIBIT I
COMMENCEMENT AGREEMENT
THIS COMMENCEMENT AGREEMENT is executed by and between XXXXXX ADREAC, L.C.,
a Texas limited liability company ("Landlord"), and NEON SYSTEMS INCORPORATED, a
Delaware corporation ("Tenant").
WHEREAS, Landlord and Tenant have entered into that certain Lease agreement
dated ______________, 1997 (the "Lease"), for the lease by Landlord to Tenant of
the Leased Premises described in the Lease within the Building situated on the
real property in Fort Bend County, Texas, as more particularly described on
Exhibit "A" attached hereto; and
WHEREAS, Landlord and Tenant desire to evidence the completion of the
Leased Premises, the commencement of the term of the Lease and the other matters
set forth herein.
NOW, THEREFORE, the parties agree as follows:
1. Landlord has fully completed all construction work and leasehold
improvements required of Landlord under the terms of the Lease and/or any other
agreements between Landlord and Tenant concerning the Leased Premises.
2. Me Leased Premises are tenantable. Landlord has no further
obligations for construction of the Leased Premises and Tenant acknowledges
that, to Tenant's knowledge the Land, the Building and the Leased Premises are
satisfactory in all respects. Further, the Leased Premises are suitable for the
Use of Tenant permitted under the Lease.
3. Tenant has taken possession of and has accepted the Leased Premises,
and the Base Rental and Additional Rental are presently accruing in accordance
with the terms of the Lease.
4. The Commencement Date of the Lease is and the
Termination Date of the Lease is unless sooner terminated or
extended pursuant to any provision of the Lease.
5. Pursuant to S 1.02 of the Lease, Landlord's and Tenant's architects
have calculated, and the Landlord and Tenant hereby confirm and agree, that:
Net Usable Area is used in the Lease equals _____________square feet.
Vertical Penetrations as used in the Lease equals _____________square feet.
General Common Areas as used in the Lease equals _____________square feet.
On-Floor Common Areas as used in the Lease equals _____________square feet.
Net Rentable Area as used in the Lease equals _____________square feet.
Building Net Rentable Area as used in the Lease equals
_______________percent (____%).
Leased Premises Net Rentable Area as used in the Lease
equals _______________percent (_____%).
1
Tenant's Proportionate Share as used in the Lease
equals ________________percent (____%).
6. All capitalized terms not defined herein shall have the meaning
assigned to them in the Lease.
AGREED TO THIS _____________day of_____________________199____.
NEON SYSTEMS, INC. XXXXXX ADREAC, L.C.
a Delaware corporation a Texas limited liability company
By: By:
-------------------------- -----------------------------
Name: Name: Xxxxxxx Van
Title: Executive Vice President
Title:
-------------------------
0
XXXXX XX XXXXX Xxxxxxx
XXXXXX XX XXXX XXXX 21
This instrument was acknowledged before me on ________________199____. by
____________, the __________________of Neon Systems, Inc., a Delaware
corporation, on behalf of said corporation.
-------------------------------------------
Notary Public, State of Texas
STATE OF TEXAS Section
COUNTY OF FORT BEND Section
This instrument was acknowledged before me on _______________, 199_____, by
___________________, the of Xxxxxx Adreac, L.C., a Texas limited liability
company, on behalf of said company.
-------------------------------------------
Notary Public, State of Texas
3
EXHIBIT J
LANDLORD'S BUILDING DESCRIPTION
SITEWORK:
- Lime-stabilized sub-grade
- Reinforced concrete pavement (5" & 6")
- Landscape/irrigation consistent with Sugar Creek Center and City of
Sugar Land standards
- Vertical lamp High Pressure Sodium lighting
SITE UTILITIES:
- Water, sanitary sewer, storm sewer, gas and underground electrical
service
TELE-COMMUNICATIONS:
- Two Fiber Optic lines available to the building
- Standard Telephone Service
BUILDING STRUCTURE:
- Drilled pier with underreamed. footings
- Select-fill sub-grade
- Reinforced concrete slab-on-grade
- Composite System Steel frame with metal deck and concrete slab at
elevated levels
BUILDING EXTERIOR:
- Masonry (brick) veneer with metal stud/sheathing back-up Pre-cast
Stone trim & moldings
- Pre-cast stone wainscoat
- Glass and aluminum strip window with reflective/tinted glass
- 3-ply built-up roof (a mechanically fastened EPDM or modified Bitumen
alternative)
1
HVAC SYSTEM:
- Water cooled, self-contained system with 2 air handlers on each floor
serving 10 fan-powered VAV boxes with electric heat per floor serving
the exterior zones, and 8 cooling only VAV boxes serving the interior
zone
- Temperature control system will consist of a multi-channel
microprocessor based time clock for load scheduling
- Air distribution will be through externally insulated sheet metal
ductwork sized for low pressure, both upstream and downstream of the
VAV boxes
ELECTRICAL SYSTEM:
- Landlord's Building will be equipped with 3500 amp 3 phase 4 conductor
277/480 volt power
- The electrical room on each floor shall have a 400 amp high voltage
distribution panel, a 75 KVA
- transformer and a 225 amp low voltage panel for each tenant to tap
into
- 10 xxxxx per square foot planned for tenant's use
FIRE PROTECTION SYSTEM:
- Landlord's Building will include a wet pipe automatic fire protection
sprinkler system in accordance with City of Sugar Land and State of
Texas requirements
ELEVATORS:
- Three 3500 lb., 350 fpm, six stop electric geared, with high grade cab
finishes.
- One 2500 lb., 150 frm, hydraulic elevator serving the parking garage
BUILDING FINISHES:
SIDEWALK:
- Salt finish concrete
ROOF:
- 3-ply Built-up roofing system with rock ballast or modified Bitumen
roofing system with cap sheet
2
WINDOWS:
- Off-set flush glaze, solar cool xxxx glass with bronze finished
aluminum frames and mullions.
FRONT ENTRY DOORS:
- Standard 9 foot tall medium style solar cool xxxx tempered glass with
satin bronze or chrome finished frame with matching hardware
ENTRANCE LOBBY &
GROUND FLOOR LOBBY:
- Walls-Vinyl/cloth wall covering
- Floors - 16"x 1 6" limestone or approved equal
- Base - Limestone or approved equal
- Ceiling - Gypsum board with contemporary brass pendant lighting and
gypsum board coffers
- Elevator doors and frames - satin bronze
- Building directory mounted opposite elevator doors
TYPICAL FLOOR
ELEVATOR LOBBY:
- Walls - High finish wall at elevator doors; wall covering on opposite
wall with directory
- Floors - Limestone or approved equal
- Base - Limestone
- Ceiling - 2'x2' recessed acoustical tile or gypsum board with
incandescent downlighting
- 9 foot elevator doors and frames - Automotive lacquer limestone color
paint
COMMON CORRIDORS:
- Walls - Vinyl wall covering
- Floors - 36 oz carpet
- Base - 2-1/2" resilient base
- Doors - full height (9'-O") plastic laminate solid core door to match
corridor door. Hardware is lever style satin bronze with satin bronze
closers and hinges
- Door Frames - Full height (9'-O") limestone color painted hollow metal
frames
- Ceiling - 2'x2' acoustical grid, white; non-directional acoustical
tile
- Lighting - 2'x2' parabolic 3 lamp fluorescent fixtures
- Column covers - Painted gypsum board
- Fire extinguisher and painted cabinet at all stair doors
3
TOILET ROOMS:
- Floor - 16'X 1 6' Limestone tile or approved equal
- Wall - 2"x2" glazed ceramic tile with vinyl wall covering above to
ceiling
- Base - Limestone or equal
- Countertop - Hard surface counter mounted lavatories
- Ceiling - Painted gypsum board or 12"xl2" concealed spline
- Lighting - Compact fluorescent downlights with recessed light covers
over lavatories
- Toilet partitions - Floor-mounted steel; factory standard paint in
light beige to match floor tile
- State of the art - automatic sensor operated fixtures
ELEVATOR CARS:
- Walls - High finish with satin bronze control panels
- 9 Foot Doors - Center opening satin bronze
- Floors - Limestone, or approved equal
- Ceiling - Satin bronze with incandescent downlights
STAIRS:
:
- Pre-engineered painted stair system or concrete filled metal pan with
concrete sealer and painted steel pipe rails
- Fluorescent lighting
- Walls - Painted gypsum board
PARKING:
- Building will include a minimum of four (4) parking spaces per 1,000
square feet of Net Rentable Area
- Not less than 30% of the Building parking spaces will be contained
within a 3-story structured parking garage
4
EXHIBIT K
MONUMENT SIGN
1
FIRST AMENDMENT OF OFFICE BUILDING LEASE AGREEMENT
WHEREAS, XXXXXX ADREAC L.C.("Landlord"), and NEON SYSTEMS, INC. ("Tenant")
entered into a certain Lease Agreement dated October 23, 1997 ("the Lease
Agreement"); and
NOW, THEREFORE, the parties undersigned do hereby agree that the Lease
Agreement shall be amended as follows:
1. The Leased Premises as defined in Section 1.01 of the Lease Agreement is
hereby amended to mean and read:
(a) All of floor 5 of the Building estimated by Landlord to be twenty
five thousand nine hundred eighteen (25,918) square feet of Net
Rentable Area, and (b) a portion of floor 4 of the building estimated
by Landlord to be eight thousand three hundred sixty-three (8,363)
square feet of Net Rentable Area (same being Option Space 1 as
referenced on Revised Exhibit H attached hereto), as reflected on the
floor plan(s) of the Leased Premises attached hereto and made a part
hereof for all purposes as Amended Exhibit "B", together with any
additional premises hereafter added thereto by written amendment to
this Lease. Tenant shall have the right to verify the net Rentable
Area of the Leased Premises, and Landlord agrees to cooperate with
Tenant and Tenant's architect with respect thereto.
2. The Minimum Leased Premises Net Rentable Area as defined in Section 1.01 of
the Lease Agreement is hereby amended to mean and read:
All of floor 5 of the Building estimated to be 25,918 square feet.
3. Landlord's shall construct the Initial Tenant Improvements for the portion
of the Leased Premises located on floor 5 in accordance with the Tenant
Working Drawings dated March 3, 1998, revised March 12, 1998, May 6, 1998
and May 11, 1998, without additional cost for the construction, provided
however Tenant shall be responsible for the payment of all costs and
expenses associated with Tenant's architectural and engineering services
related to the construction of the Initial Tenant Improvements in such
space. The leasehold improvements in Option Space 1 will be designed and
constructed in accordance with Amended Exhibit H. Landlord acknowledges
that Tenant is entitled to the full allowance of $16.50 per square foot of
Net Rentable Area in Option Space 1.
4. Landlord acknowledges that in connection with Tenant's exercise of the
First Expansion Option, Tenant also elected to extend the Termination Date
of the Lease as to the initial Leased Premises and Option Space 1 until the
fifth anniversary of the Expansion Commencement Date of Option Space 1;
accordingly, the Termination Date of the Lease is now December 31, 2003
(subject to any adjustment of the Option Space 1 Expansion Commencement
Date in accordance with Amended Exhibit H).
2
5. Exhibit "B-1" of the Lease Agreement is hereby amended to read as set out
in Amended Exhibit "B-1" attached hereto:
6. Exhibit "E" of the Lease Agreement is hereby amended to read as set out in
Amended Exhibit "E" attached hereto:
7. Exhibit "H" of the Lease Agreement is hereby amended to read as set out in
Amended Exhibit "H" and Exhibit "H- I" attached hereto:
8. Section 6.01 (xi) of the Lease Agreement is hereby amended to mean and
read:
Management of the Building including an on-site property manager for
the Project, Monday through Friday from 8:00 a.m. to 5:00 p.m.,
exclusive of holidays. On-site shall mean within the Building or
Landlord's building to be constructed adjacent to the Building.
Except as changed and modified herein the terms and provisions of Lease
Agreement continue in full force and effect.
All capitalized terms used herein (and not otherwise defined herein) shall have
the meanings attributed to them in the Lease Agreement.
IN WITNESS WHEREOF this instrument has been executed this 30th day of July,
1998.
"LANDLORD" "TENANT"
XXXXXX ADREAC, L.C. NEON SYSTEMS, INC.
By: /S/ XXXXXXX VAN By: /S/ XXXX X. XXXXXXX
-------------------------- -----------------------------
Name: Xxxxxxx Van Name: Xxxx X. Xxxxxxx
Title: Exec. Vice President Title: CFO
3
AMENDED EXHIBIT E
PARKING
Landlord hereby agrees to make available to Tenant, during the full term of
this Lease, THREE AND ONE-HALF (3.5) covered parking permit(s) for every one
thousand square feet of Net Rentable Area leased by Tenant within the Building
from time to time, fifteen percent (15%) of which shall be reserved/assigned
(hereinafter called the "Initial Parking Permits") in the Building parking
garage (hereinafter called the "Garage"), at no additional cost. Additional
parking permits may be made available upon the following terms and conditions:
(1) In the event Tenant shall desire to obtain additional covered
unassigned parking permits (hereinafter called "Additional Parking Permits") in
the Garage, Tenant shall notify Landlord in writing of Tenant's desire to do so.
Tenant shall pay as rental for the additional Parking Permits twenty five
dollars ($25.00) per month. Said rentals shall be due and payable to Landlord
as additional Rent on the first day of each calendar month during the term of
this Lease. Following Landlords receipt of such written notice Landlord shall
make available to Tenant such number of Additional Parking Permits as Landlord
deems reasonable, if same are available. Landlord hereby agrees that Tenant may
at any time and from time to time during the term of this Lease elect to
discontinue leasing or taking any or all of the Additional Parking Permits by
giving written notice thereof to Landlord. Tenant hereby agrees that Landlord
may at any time and from time to time during the term of this Lease elect to
cancel any or all of the Additional Parking Permits (but not the Initial Parking
Permits) by giving written notice thereof to Tenant. Any such election by
Tenant or Landlord, as the case may be, shall be effective as of the first day
of the first fall calendar month following the expiration of thirty (30) days
after the date such notice is given (the Initial Parking Permits and the
Additional Parking Permits being hereinafter collectively called the "Parking
Permits").
(2) Landlord will issue to Tenant parking tags, stickers or access cards
for the Parking Permits, or will provide a reasonable alternative means of
identifying and controlling vehicles authorized to park in the covered parking
areas of the Garage. Tenant shall surrender each such tag, sticker or other
identifying device to Landlord upon termination of the Parking Permit related
thereto.
(3) Landlord, at its discretion, shall have the right from time to time
and upon written notice to Tenant to designate the parking spaces pertaining to
any of Tenant's Parking Permits for assigned parking, and to designate the
areas(s) within which unassigned vehicles may be parked provided, however, the
Initial Parking Permits shall at all times be for covered spaces not on the roof
of the Garage.
(4) If, for any reason, Landlord fails or is unable to provide, or Tenant
is not permitted to use, all or any portion of the parking spaces to which it is
entitled hereunder, then Tenant's obligation to pay for such spaces shall be
abated for so long as Tenant does not have the use thereof. If the Garage is
taken under power of eminent domain or damaged or destroyed by a Casualty,
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Landlord shall use reasonable efforts to reconstruct or repair such damage or
destruction as promptly as practicable. If Tenant is not permitted to use all
or any portion of the parking spaces to which it is entitled hereunder, and as a
result Tenant is required to obtain alternate parking (which may include shuttle
service for Tenant's employees to and from the alternate parking area), then
Tenant may offset from its obligation to pay rentals under this Lease the amount
of the costs incurred by Tenant in obtaining such alternate parking (including
such shuttle service).
(5) If the term of this lease 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.
(6) Tenant shall defend, indemnify and hold harmless Landlord and
Landlord's officers, directors, shareholders, partners, agents and employees
from and against all liabilities, obligations, losses, damages, penalties,
claims, actions, suits, costs, expenses and disbursements (including court costs
and reasonable attorneys' fees) resulting directly or indirectly from the use of
the Parking Permits.
(7) Landlord may provide parking in the Garage for visitors to the
Building in an area designated by Landlord and in a capacity determined by
Landlord to be appropriate for the Building.
(8) Upon the occurrence of an Event of Default, as defined in Section
13.01(a) of the Lease, Landlord shall have the right (in addition to all other
rights, remedies and recourse hereunder and at law) to suspend until such Event
of Default has been cured the Parking Permits without prior notice or warning to
Tenant.
(9) In addition to the Parking Permits, Tenant and its visitors will have
the non-exclusive right (in common with the other tenants of the Building and
their visitors) to use the surface parking areas around the Building.
(10) Landlord shall have the right to have an independent company operate
the parking garage and Tenant agrees to contract with such company upon the same
terms as set forth herein. Landlord agrees, however, that notwithstanding any
such operating or management agreement with an independent third party, Landlord
shall remain fully liable to Tenant for the performance by such third party of
Landlord's obligations under this Exhibit E; any default by such third party in
performing such obligations shall constitute a default by Landlord entitling
Tenant to exercise any and all remedies against Landlord as if such operating or
management agreement did not exist and Tenant had contacted for the Parking
Permits directly from Landlord.
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AMENDED EXHIBIT H
EXPANSION OPTIONS
Provided no Event of Default has occurred and remains uncured by Tenant,
Tenant shall have the options to lease additional areas on the fourth floor of
the Building (the "Expansion Areas"), as follows:
The Expansion Areas shall be provided by Landlord, and must be taken by
Tenant, in increments and in the sequences as follows:
The first Expansion Area ("Option Space 1") as shown on Amended Exhibit B-1
of the Lease shall equal approximately 8,363 square feet of Net Rentable
Area.
The second Expansion Area ("Option Space 2") as shown on Amended Exhibit
B-1 of the Lease shall equal approximately 8,344 square feet of Net
Rentable Area.
The third Expansion Area ("Option Space 3") as shown on Amended Exhibit B-1
of the Lease shall equal approximately 9,107 square feet of Net Rentable
Area.
Tenant must exercise its options to lease the Expansion Areas by written notice
received by Landlord no later than the Exercise Dates, Landlord shall deliver
the applicable Expansion Area by the Delivery Dates, and Rental shall become due
and payable for such Expansion Areas on the Expansion Commencement Dates, as
follows:
EXPANSION EXERCISE DELIVERY RENT COMMENCEMENT
OPTION DATE DATE DATE
First Option August 1, 1998 November 1, 1998 January 1, 1999
Second Option March 1, 1999 June 1, 1999 August 1, 1999
Third Option November 1, 1999 February 1, 2000 April 1, 2000
If the Commencement Date of the Lease occurs after August 1, 1998, each of
the dates set forth above shall be extended one day for each day beyond
August 1, 1998, that the Commencement Date of this Lease so occurs.
FIRST OPTION:
By on or before the First Option Exercise Date as set forth above,
Tenant shall be entitled to exercise:(i) its option as to Option Space 1;
(ii) its option as to Option Space 2, if Tenant simultaneously exercises
its option to Option Space 1; and (iii) its option as to Option Space 3, if
Tenant simultaneously exercises its option to Option Space 1 and Option
Space 2. If by on or before the First Option Exercise Date, Tenant does not
elect to exercise its option to lease Option Space 1, then Tenant's option
rights (but not its fight of first refusal provided below) as to Option
Space 3 shall cease, terminate and expire automatically on the First Option
Exercise Date, I.E., August 1, 1998.
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SECOND OPTION:
By on or before the Second Option Exercise Date as set forth above, Tenant
shall be entitled to exercise:(i) its option as to Option Space 1, if not
previously exercised by the First Option Exercise Date; (ii)its option as
to Option Space 2, if not previously exercised by the First Option Exercise
Date, and if Tenant has previously exercised its option as to Option Space
1, or simultaneously exercises its option to Option Space 1, and (iii) its
option as to Option Space 3, if Tenant has previously exercised its option
to Option Space 1 by the First Option Exercise Date, and if Tenant has
previously exercised its option to Option Space 2 by the First Option
Exercise Date or simultaneously exercises its option to Option Space 2. If
Tenant has not elected to exercise its option to lease Option Space 1 by
the Second Option Exercise Date, then Tenant's option rights (but not its
right of first refusal provided below) as to Option Space 2 shall cease,
terminate and expire automatically on the Second Option Exercise Date. If
Tenant exercises its option to lease Option Space 1 by the First Option
Exercise Date, but does not exercise its option to lease Option Space 2 by
the Second Option Exercise Date, then Tenant's option rights (but not its
right of first refusal provided below) as to Option Space 3 shall cease,
terminate and expire automatically on the Second Option Exercise Date,
I.E., March 1, 1999.
THIRD OPTION:
By on or before the Third Option Exercise Date as set forth above,
Tenant shall be entitled to exercise:(i) its option as to Option Space 1,
if not previously exercised by Tenant; (ii) its option as to Option Space 2
if Tenant has previously exercised its option as to Option Space 1 by the
Second Option Exercise Date, and (iii) its option as to Option Space 3, if
Tenant has previously exercised both its option to Option Space 1 by the
First Option Exercise Date and its option to Option Space 2 by on or before
the Second Option Exercise Date. All rights and options of Tenant as to
any and all Expansion Areas shall cease, terminate and expire automatically
on the Third Option Exercise Date, I.E., November 1, 1999.
OTHER MATTERS:
Upon the exercise by Tenant of any of the foregoing Options, Tenant
shall also have the right and option to extend the Termination Date of this
Lease as to both the initial Leased Premises and all Expansion Areas
previously and then being optioned, until five (5) years after the
Expansion Commencement Date of the Option then being exercised. In the
event of Tenant's exercise of such option to so extend the Termination Date
of this Lease, and only in such event, Landlord shall provide to Tenant an
allowance equal to Sixteen Dollars and Fifty Cents ($16.50) per square foot
of Net Rentable Area of the Expansion Area then being optioned, for the
payment of architectural and engineering fees, permanent leasehold
improvements, cabling and communication equipment expenses and any other
related expenses for construction of the Expansion Area(s) then being
optioned. If Tenant does not so elect to extend the Termination Date of
this Lease, Landlord shall provide to
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Tenant an allowance equal to the sum of Twenty-Five Cents ($0.275) per
square foot of Net Rentable Area of the Expansion Area(s) then being
optioned times the number of months from the Expansion Commencement Date
until the Termination Date of this Lease, for the payment of architectural
and engineering fees, permanent leasehold improvements, cabling and
communication equipment expenses and any other related expenses for
construction of the Expansion Area(s) then being optioned. All other terms
and conditions of this Lease shall be applicable to the Expansion Area(s)
being optioned. The actual Net Rentable Area contained within the
Expansion Area(s) referenced in this Amended Exhibit "H" shall be
determined in accordance with the terms and conditions for determining Net
Rentable Area as provided for in the Commencement Agreement (Exhibit "I")
to the Lease.
Tenant shall have the right and option to either contract directly and on
and for its own account for the .design and construction of the leasehold
improvements to the Expansion Area(s), or to have Landlord contract for the
construction of the leasehold improvements to the Expansion Area(s), on the same
terms and conditions set out in this Lease for the construction of the initial
Leased Premises. Landlord shall install and construct the same building shell
components and improvements for the Expansion Area(s) described in Exhibits "C"
and "J" of the initial Leased Premises. Any Expansion Area(s) leased by Tenant
pursuant to this Exhibit "H" will be delivered to Tenant with all of Landlord's
Work complete, excluding such portion of Landlord's Work which are required to
be performed following completion of work to be performed by Tenant's
contractor. If Tenant elects to have Landlord contract for the construction of
the leasehold improvements to any of the Expansion Area(s), then the Delivery
Date(s) and Expansion Commencement Date(s) as to such Expansion Area(s) stated
above shall not be applicable, and instead the Delivery Date and Expansion
Commencement Date of the Expansion Area(s) for which Landlord contracts for
construction of the leasehold improvements thereto shall be calculated and
subject to the terms and conditions of Exhibit "C" to this Lease.
Notwithstanding anything to the contrary contained within this Other Matters
Section in this Amended Exhibit "H", Landlord and Tenant agree and acknowledge
that Landlord intends to construct at its sole cost and expense an area
consisting of approximately 5,326 square feet of Net Rentable Area within Option
Space 3 for its own use. Landlord shall prepare for Tenant's review and
approval, Working Drawings for that portion of the Option Space 3 which Landlord
shall occupy, which Working Drawings shall be in accordance with the
specifications contained within the Tenant Working Drawings for the initial
Leased Premises dated March 3, 1998, revised March 12, 198, May 6, 1998 and May
II, 1998, provided by Tenant to Landlord and in general accordance with the
Space Plan attached hereto as Exhibit "H-I" covering that portion of Option
Space 3. Landlord shall be permitted to occupy this portion of Option Space 3
until such time as Tenant elects to exercise it option to lease Option Space 3
but in no event for a period of less than twelve (12) months from the date of
Landlord's occupancy thereof, provided, however, that the term of Landlord's
occupancy shall not extend beyond January 31, 2000, in the event of Tenant's
timely election to exercise its option to lease such space. In the event that
Tenant elects to exercise its option to lease the Expansion Area ("Option Space
3"), Tenant shall not receive the allowance herein provided on that portion of
the Expansion Area ("Option Space 3") which Landlord shall have constructed for
its own use, provided, however, Landlord shall, (a) as required, replace or
repair any damage to the improvements resulting from Landlord's use thereof, (b)
to the extent to which the improvements constructed by Landlord for its own use
shall deviate from the
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Space Plan referenced herein, Landlord shall restore the improvements to comply
therewith, and (c) shampoo the carpets and repaint the walls therein to the
extent required to restore same to a "like new" condition.
In addition to the foregoing Options as to Expansion Areas, Tenant is
hereby granted a first right of refusal to lease additional space on the fourth
and fifth floors of the Building, when and if such space shall become available.
Within a reasonable period of time from the date upon which Landlord shall
become aware of a bona fide offer that is acceptable to Landlord to lease any
portion of the refusal space (other than an offer by Tenant), Landlord shall
advise Tenant of said offer and of the identity of the third-party prospect and
the material business terms of the offer. Within fifteen (15) days after Tenant
has received such information from Landlord, Tenant may, at its option, give
Landlord written notice of the exercise of its first right of refusal. If
Tenant exercises its first right of refusal under this provision, Tenant shall
be entitled to take possession of said expansion space, which shall become part
of the Leased Premises and subject to the terms of this Lease, effective upon
the same terms and conditions as to that of the offer which Landlord had
provided notice of the terms and conditions of to Tenant; provided, however,
that (a) if the proposed third-party lease term is less than the remaining term
of the Lease, Tenant will have the option to lease the refusal space for the
remainder of the term hereof, and (b) if the proposed third-party lease term
would extend beyond the remaining term of this Lease, then:
(i) if there is then less than three (3) years remaining in the term of
this Lease, Tenant will have the option to lease the refusal space for
a term of five (5) years, in which event the term of this Lease as to
the existing Leased Premises will be extended to be coterminous with
Tenant's lease of the refusal space, in which event the Base Rental
for the existing Leased Premises during the extended term of this
Lease will be the Prevailing Market Rate (determined at the time of
Tenant's exercise of such option in accordance with the procedures
established in Exhibit "G"); and
(ii) if there is then three (3) years or more remaining in the term of this
Lease, Tenant will have the option to lease the refusal space for such
remaining term, in which event the Base Rental set forth in the notice
to Tenant shall be adjusted as required to fully amortize all of the
allowances and inducements to be provided to Tenant in connection with
its lease of the refusal space over the term of Tenant's lease of such
space.
Failure of Tenant to give such notice within such fifteen (15) day period shall
cause Landlord to have a period of one hundred twenty (120) days to consummate a
lease of the subject space to Landlord's prospect based upon the material
business terms outlined to Tenant in Landlord's prior written notice to Tenant.
In the event Landlord shall fail to consummate a lease of the subject space to
Landlord's prospect based upon the material business terms outlined to Tenant in
Landlord's prior written notice to Tenant within such period of one hundred
twenty (120) days, Landlord shall again be obligated to advise Tenant of future
offers to lease that portion of the refusal space in the manner described above
and Tenant's first right of refusal shall apply to any such subsequent lease
offer.
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AMENDED EXHIBIT B
FLOOR PLAN OF LEASED PREMISES
[DRAWING]
5TH FLOOR
25,918 N.R.A.
Subject to verification by
Landlord's & Tenant's Architect
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AMENDED EXHIBIT B-1
FLOOR PLAN OF LEASED PREMISES
[DRAWING]
4TH FLOOR
25,814 N.R.A.
Subject to verification by
Landlord's & Tenant's Architect
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AMENDED EXHIBIT H-1
SPACE PLAN OF EXPANSION AREA
[DRAWING]
4TH FLOOR
25,814 N.R.A.
Subject to verification by
Landlord's & Tenant's Architect
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