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EXHIBIT 10.18
TABLE OF CONTENTS
1. DEFINITIONS AND BASIC LEASE TERMS . . . . . . . . . . . . . . . . . 1
2. GRANTING CLAUSE AND RENT PROVISIONS . . . . . . . . . . . . . . . . 3
2.1 Grant of Premises . . . . . . . . . . . . . . . . . . . . . 3
2.2 Base Rent . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Operating Expenses . . . . . . . . . . . . . . . . . . . . . 3
2.4 Definition of Operating Expenses . . . . . . . . . . . . . . 4
2.5 Late Payment Charge . . . . . . . . . . . . . . . . . . . . 5
2.6 Increase in Insurance Premiums . . . . . . . . . . . . . . . 5
2.7 Deleted . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.8 Holding Over . . . . . . . . . . . . . . . . . . . . . . . . 5
2.9 Parking . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. OCCUPANCY, USE AND OPERATIONS . . . . . . . . . . . . . . . . . . . 6
3.1 Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Signs . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Compliance with Laws, Rules and Regulations . . . . . . . . 6
3.4 Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6 Security . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Personal Property Taxes . . . . . . . . . . . . . . . . . . 7
4. UTILITIES AND SERVICE . . . . . . . . . . . . . . . . . . . . . . . 7
4.1 Building Services . . . . . . . . . . . . . . . . . . . . . 8
4.2 Deleted . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.3 Janitorial Service . . . . . . . . . . . . . . . . . . . . . 8
4.4 Excessive Utility Consumption . . . . . . . . . . . . . . . 8
4.5 Window Coverings . . . . . . . . . . . . . . . . . . . . . . 8
4.6 Restoration of Services; Abatement . . . . . . . . . . . . . 8
4.7 Deleted . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5. REPAIRS AND MAINTENANCE . . . . . . . . . . . . . . . . . . . . . . 8
5.1 Lessor Repairs . . . . . . . . . . . . . . . . . . . . . . . 9
5.2 Lessee Repairs . . . . . . . . . . . . . . . . . . . . . . . 9
5.3 Request for Repairs . . . . . . . . . . . . . . . . . . . . 9
5.4 Lessee Damages . . . . . . . . . . . . . . . . . . . . . . . 9
6. ALTERATIONS AND IMPROVEMENTS . . . . . . . . . . . . . . . . . . . 9
6.1 Construction . . . . . . . . . . . . . . . . . . . . . . . . 9
6.2 Lessee Improvements . . . . . . . . . . . . . . . . . . . . 9
6.3 Common and Service Area Alterations . . . . . . . . . . . . 10
7. CASUALTY; WAIVERS; SUBROGATION AND INDEMNITY . . . . . . . . . . . 10
7.1 Repair Estimate . . . . . . . . . . . . . . . . . . . . . . 10
7.2 Lessor's and ▇▇▇▇▇▇'s Rights . . . . . . . . . . . . . . . . 10
7.3 Lessor's Rights . . . . . . . . . . . . . . . . . . . . . . 11
7.4 Repair Obligation . . . . . . . . . . . . . . . . . . . . . 11
7.5 Property Insurance . . . . . . . . . . . . . . . . . . . . . 11
7.6 Waiver; No Subrogation . . . . . . . . . . . . . . . . . . . 11
7.7 Deleted . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.8 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 12
8. CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8.1 Taking - Lessor's and ▇▇▇▇▇▇'s Rights . . . . . . . . . . . 12
8.2 Taking - Lessor's Right . . . . . . . . . . . . . . . . . . 12
8.3 Award . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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9. ASSIGNMENT OR SUBLEASE; SUBORDINATION AND NOTICE . . . . . . . . . 13
9.1 Sublease; Consent . . . . . . . . . . . . . . . . . . . . . 13
9.2 Deleted . . . . . . . . . . . . . . . . . . . . . . . . . . 13
9.3 Additional Compensation . . . . . . . . . . . . . . . . . . 13
9.4 Lessor Assignment . . . . . . . . . . . . . . . . . . . . . 13
9.5 Rights of Mortgagee . . . . . . . . . . . . . . . . . . . . 13
9.6 Estoppel Certificates . . . . . . . . . . . . . . . . . . . 14
9.7 Notice to Lessor's Mortgagee . . . . . . . . . . . . . . . . 14
10. DELETED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
11. DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . 15
11.1 Events of Default . . . . . . . . . . . . . . . . . . . . . 15
11.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 15
11.3 Payment by Lessee . . . . . . . . . . . . . . . . . . . . . 16
12. RELOCATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
12.1 Deleted . . . . . . . . . . . . . . . . . . . . . . . . . . 16
12.2 Deleted . . . . . . . . . . . . . . . . . . . . . . . . . . 16
13. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
13.1 Deleted . . . . . . . . . . . . . . . . . . . . . . . . . . 16
13.2 Act of God or Force Majeure . . . . . . . . . . . . . . . . 16
13.3 Deleted . . . . . . . . . . . . . . . . . . . . . . . . . . 16
14. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
14.1 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
14.2 Act of God . . . . . . . . . . . . . . . . . . . . . . . . . 17
14.3 Attorney's Fees . . . . . . . . . . . . . . . . . . . . . . 17
14.4 Successors . . . . . . . . . . . . . . . . . . . . . . . . . 17
14.5 Rent Tax . . . . . . . . . . . . . . . . . . . . . . . . . . 17
14.6 Interpretation . . . . . . . . . . . . . . . . . . . . . . . 17
14.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 17
14.8 Submission of Lease . . . . . . . . . . . . . . . . . . . . 18
14.9 Corporation Authority . . . . . . . . . . . . . . . . . . . 18
14.10 Deleted . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.11 Deleted . . . . . . . . . . . . . . . . . . . . . . . . . . 18
14.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . 18
14.13 Lessor's Liability . . . . . . . . . . . . . . . . . . . . . 18
14.14 Sale of Property . . . . . . . . . . . . . . . . . . . . . . 18
14.15 Time is of the Essence . . . . . . . . . . . . . . . . . . . 18
14.16 Subtenancies . . . . . . . . . . . . . . . . . . . . . . . . 18
15. SPECIAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . 18
15.01 Renewal Option . . . . . . . . . . . . . . . . . . . . . . . 18
16. AMENDMENT AND LIMITATION OF WARRANTIES . . . . . . . . . . . . . . 19
16.1 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 19
16.2 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 19
16.3 Limitation of Warranties . . . . . . . . . . . . . . . . . . 19
16.4 ▇▇▇▇▇▇ and Releases . . . . . . . . . . . . . . . . . . . . 19
Exhibit "A"
Exhibit "B"
Exhibit "C"
Exhibit "D"
Building Rules and Agreed Regulations
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OFFICE LEASE
One Fasken Center, Suite ▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
This Lease, made as of the 8th day of January, 1996 by and between the
Lessor and the Lessee named below.
ARTICLE 1 - BASIC LEASE TERMS
For the purposes of this Lease, the following terms shall have the
meanings set forth below:
1.1 Lessor. Fasken Center, Ltd.
1.2 Lessee. Titan Resources, L.P.
1.3 Building. The Building (including the Leased Premises) known as
One Fasken Center, ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
located on the tract of land (the "Land") described on Exhibit "A" hereto,
together with all other buildings, structures, fixtures and other improvements
located thereon from time to time. The Building and the Land are collectively
referred to herein as the "Property".
1.4 (a). Leased Premises. Approximately 12,905 square feet of
Useable Area in the Building as more fully diagrammed on the floor plan of such
premises attached hereto and made a part hereof as Exhibit "B", on the floor(s)
indicated thereon.
(b). Net Rentable Area. The Net Rentable Area includes the
Useable Area together with a common area percentage factor of 14.3%. The Net
Rentable Area for the purposes of this Lease Agreement shall be deemed to be
14,750 square feet. Said Net Rentable Area represents approximately 3.499025%
of the Total Net Rentable Area of the Building. The Building contains a total
of approximately 421,546 square feet of Net Rentable Area.
1.5 Lease Term. Three (3) years and Zero (0) months, beginning on the
Commencement Date.
1.6 Commencement Date. Improvements are to be erected upon the
Leased Premises pursuant to a separate Leasehold Improvements Agreement between
Lessor and Lessee, as described in Section 6.1, and the "Commencement Date"
shall be the earlier of the date Lessee begins operating its business in the
Leased Premises or the scheduled "Commencement Date" as stated herein; and if
no improvements are to be erected upon the Leased Premises pursuant to a
Leasehold Improvements Agreement, the Commencement Date shall be January 1,
1996 (the "Commencement Date"). The Commencement Date shall constitute the
commencement of the term of this Lease for all purposes, whether or not Lessee
has actually taken possession. If this Lease is executed before the Leased
Premises become vacant or otherwise available and ready for occupancy by
▇▇▇▇▇▇, or if any present occupant of the Leased Premises holds over and Lessor
cannot acquire possession of the Leased Premises before the Commencement Date,
then (a) Lessee's obligation to pay rent hereunder shall be waived until Lessor
tenders possession of the Leased Premises to Lessee, (b) the term shall be
extended by the time between the scheduled Commencement Date and the date on
which Lessor tenders possession of the Leased Premises to Lessee (which date
will then be defined as the Commencement Date), (c) Lessor shall not be in
default hereunder or be liable for damages therefore, and (d) Lessee shall
accept possession of the Leased Premises when Lessor tenders possession thereof
to Lessee. By occupying the Leased Premises, Lessee shall be deemed to have
accepted the Leased Premises in their condition as of the date of such
occupancy. Lessee shall execute and deliver to Lessor, within
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ten (10) days after ▇▇▇▇▇▇ has requested same, a letter confirming (i) the
Commencement Date, (ii) that Lessee has accepted the Leased Premises, and (iii)
that Lessor has performed all of its obligations with respect to the Leased
Premises (except for punch-list items specified in such letter) if applicable.
1.7 Base Rent. During the term of this Lease, ▇▇▇▇▇▇ hereby agrees
to pay a Base Rental (herein called "Base Rental") in the amount set out in
Exhibit "C", which Exhibit is executed by ▇▇▇▇▇▇ and ▇▇▇▇▇▇ contemporaneously
herewith and incorporated herein by reference for all purposes.
1.8 Security Deposit. Security deposit is $ 0.00.
1.9 Addresses.
Lessor's Address: Fasken Center, Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone # ▇▇▇-▇▇▇▇ - Fax # ▇▇▇-▇▇▇▇
Lessee's Address: Titan Resources, L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone # ▇▇▇-▇▇▇▇ - Fax # ▇▇▇-▇▇▇▇
Manager's Address: ▇▇▇▇▇ Properties, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone # ▇▇▇-▇▇▇▇ - Fax # ▇▇▇-▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ and Manager, by written notice to the others may change from
time to time the foregoing addresses, and Lessor, by written notice to ▇▇▇▇▇▇,
may notify Lessee from time to time of the appointment of a new Manager and
such new Manager's address.
1.10 Permitted Use. The Leased Premises are to be used and occupied
by Lessee solely for the purposes of office space and for no other purpose
without ▇▇▇▇▇▇'s expressed written consent.
1.11 Common Areas. Such parking areas, streets, driveways, aisles,
sidewalks, curbs, delivery passages, loading areas, lighting facilities,
designated elevators, public corridors, stairwells, lobbies, restrooms, and all
other areas situated on or in the Property which are designated by Lessor from
time to time, for use by all tenants of the Property in common.
1.12 Guarantor. The guarantor of ▇▇▇▇▇▇'s obligations under this
Lease pursuant to a Guaranty of Lease, if any, executed for the benefit of
Lessor. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ is, as of the date of execution hereof: N/A
1.13 Operating Expense Base. 1995 Base Year.
1.14 Parking. ▇▇▇▇▇▇ agrees to provide parking for at least Twenty-Nine
(29) spaces located in the attached parking garage at no additional cost per
space.
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ARTICLE 2. - GRANTING CLAUSE AND RENT PROVISIONS
2.1 Grant of Premises. In consideration of the obligation of Lessee
to pay the rent and other charges as provided in this Lease, and in
consideration of the other terms and provisions of this Lease, Lessor hereby
leases the Leased Premises to Lessee during the Lease Term, subject to the
terms and provisions of this Lease.
2.2 Base Rent. ▇▇▇▇▇▇ agrees to pay monthly as base rent during the
term of this Lease the sum of money set forth in Section 1.7 of this Lease,
which amount shall be payable to Lessor at the address shown in Section 1.9
above or at such address that Lessor in writing shall notify Lessee. One (1)
monthly installment of rent shall be due and payable on the date of execution
of this Lease by ▇▇▇▇▇▇ for the first month's rent and a like monthly
installment shall be due and payable on or before the first day of each
calendar month succeeding the Commencement Date during the term of this Lease,
without demand offset or reduction; provided, if the Commencement Date should
be a date other than the first day of a calendar month, the monthly rental set
forth above shall be prorated to the end of that calendar month, and all
succeeding installments of rent shall be payable on or before the first day of
each succeeding calendar month during the term of this Lease. Unless otherwise
specified, Lessee shall pay, as additional rent, all other sums due under this
Lease at the same time and in the same manner as the base rent due hereunder
including Operating Expenses referred to in Section 2.3. No payment by Lessee
or receipt by Lessor of a lesser amount than the monthly installment of rents
herein stipulated shall be deemed to be other than a payment on account of the
earliest stipulated rent and/or additional rent; nor shall any endorsement of
payment on any check or any letter accompanying any check or payment as rent be
deemed an accord or satisfaction and Lessor may accept such check for payment
without prejudice to Lessor's right to recover the balance of such rent and/or
additional rent or to pursue any other remedy provided in this Lease and/or
under applicable law.
2.3 Operating Expenses. If ▇▇▇▇▇▇'s operating Expenses per net
rentable square foot for the Property, in any calendar year during the term of
this Lease exceeds the Operating Expense Base, ▇▇▇▇▇▇ agrees to pay as
additional rent ▇▇▇▇▇▇'s share of such excess operating expenses. As used
herein, the term "Lessee's share of such excess Operating Expenses" means the
amount by which ▇▇▇▇▇▇'s Operating Expenses per net rentable square foot exceed
the Operating Expense Base, multiplied by the net rentable square feet
comprising the Leased Premises. Lessor may invoice Lessee monthly for ▇▇▇▇▇▇'s
share of the estimated excess operating expenses for each calendar year, which
amount shall be adjusted each year based upon anticipated operating expenses.
Within one-hundred twenty (120) days following the close of each calendar year,
Lessor shall provide Lessee an accounting showing in reasonable detail all
computations of additional rent due under this section. Failure of Lessor to
give ▇▇▇▇▇▇ said notice within said time period shall not be a waiver of
▇▇▇▇▇▇'s right to collect said additional rent. If the accounting shows that
the total of the monthly payments made by Lessee exceeds the amount of the
additional rent due by Lessee under this section, the accounting shall be
accompanied by a refund. If the accounting shows that the total of the monthly
payments made by Lessee is less than the amount of additional rent due by
Lessee under this section, the accounting shall be accompanied by an invoice
for the additional rent. Notwithstanding any other provisions in this Lease,
during the year in which the Lease terminates, Lessor, by March 31 of the
following year after the termination date, shall have the option to invoice
Lessee for ▇▇▇▇▇▇'s share of the excess operating expenses based upon the
previous year's operating expenses. If this Lease shall terminate on a day
other than the last day of a calendar year, the amount of any additional rent
payable by Lessee applicable to the year in which such termination shall occur
shall be prorated on the ratio that the number of days from the commencement of
the calendar year to and including the
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termination date bears to 365. Lessee shall have the right at its own expense
and within a reasonable time, to audit during ▇▇▇▇▇▇'s regular business hours
Lessor's books relevant to the additional rent payable under this Section.
Notwithstanding anything to the contrary contained in this Lease, if the
Building is not occupied to the extent of ninety-five percent (95%) of the
rentable area thereof, during any calendar year, ▇▇▇▇▇▇'s additional rent under
this Section and the operating expenses shall be determined as if the Building
had been occupied to the extent of ninety-five (95%) of the rentable area
during such year. ▇▇▇▇▇▇ agrees to pay any additional rent due under this
Section within thirty (30) days following receipt of the invoice or accounting
showing additional rent due.
2.4 Definition of Operating Expenses. The term "operating expenses"
includes all expenses incurred by Lessor with respect to the maintenance,
servicing, repairing and operation of the Property, including, but not limited
to the following: maintenance, repair and replacement costs (other than major
or substantive repair, replacement and general maintenance of the roof,
foundation and exterior walls of the Building or replacement costs of major
HVAC equipment, i.e. chiller); electricity, fuel, water, sewer, gas and other
utility charges; security, window washing and janitorial services; trash and
snow and ice removal; landscaping and pest control; management fees payable to
Lessor or third parties, but not both, in an amount not to exceed three percent
(3%) of Gross Revenues from the property; plus wages and salaries of all
employees employed by Manager or Lessor, engaged in the operation, repair,
replacement, maintenance, and security of the Building, including taxes,
insurance, and benefits relating thereto; all services, supplies, repairs,
replacement or other expenses for maintaining and operating the Property
including parking and common areas; the cost including interest, amortized over
a reasonable period, of any capital improvement made to the Property by Lessor
after the date of this Lease which is required under any governmental law or
regulation that was not applicable to the Property at the time it was
constructed (Lessor shall be responsible for any compliance improvements to the
common areas of the property and Lessee shall be responsible for any compliance
improvements required within the Leased Premises); the cost, including
interest, amortized over a reasonable period, of installation of any device or
other equipment which improves the operating efficiency of any system
applicable to the Leased Premises or the Property and thereby reduces operating
expenses such that the cost will be recovered in reduced operating expenses
over a period not to exceed five (5) years; all real property taxes and
installments of special assessments, which accrue against the Property during
the term of this Lease; governmental levies or charges of any kind or nature
assessed or imposed on the Property except for fines caused by ▇▇▇▇▇▇'s
negligent activities or any third parties' activities, whether by state,
county, city or any political subdivision thereof; and all insurance premiums
Lessor is required to pay or deems necessary to pay including public liability
insurance, with respect to the Property. The term operating expenses does not
include the following: expenses for repairs, restoration or other work
occasioned by fire, wind, the elements or other casualty to the extent they are
covered by insurance proceeds; income and franchise taxes of Lessor; expenses
incurred in leasing to or procuring of tenants, leasing commissions,
advertising expenses and expenses for the renovating of space for new tenants;
interest or principal payments on any mortgage or other indebtedness of Lessor;
compensation paid to any employee of Lessor above the grade of property
manager; any depreciation allowance or expense; or operating expenses which are
the responsibility of Lessee.
For the term of this Lease, Operating Expenses may not be increased by
Lessor by more than the proportion of increase in the Consumer Price Index for
Urban Wage Earners ("CPI-U") maintained by the United States Department of
Labor, with a base month of December, 1995 for Operating Expenses within
Lessor's control. That portion of the Excess Operating Expenses made up of
Operating Expenses that are not within Lessor's control, i.e., Noncontrollable
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Expenses (increases in real property and ad valorem taxes, insurance, utilities
[including water, sewer, electricity, natural gas fuel and trash hauling],
third party contractors such as janitorial and mechanical, and government
levies or charges of any kind or nature assessed or imposed on the property and
directly paid by Lessor, whether by state, county, city or any political
subdivision thereof, shall not be limited to the increase in the CPI as set
forth above, and Lessee shall pay its full share of any Excess Operating
Expenses for Noncontrollable Expenses.
2.5 Late Payment Charge. Other remedies for nonpayment of rent
notwithstanding, if any monthly rental payment is not received by Lessor on or
before the fifteenth (15th) day of the month for which the rent is due, or if
any other payment hereunder due Lessor by ▇▇▇▇▇▇ is not received by Lessor on
or before the tenth (10th) day of the month next following the month in which
Lessee was invoiced, a late payment charge of ten percent (10%) of such past
due amount shall become due and payable in addition to such amounts owed under
this Lease. Alternatively, at Lessor's election, all payments required of
Lessee hereunder shall bear interest from the date due until paid at the
maximum lawful rate. In no event, however, shall the charges permitted under
this Section 2.5 or elsewhere in this Lease, to the extent the same are
considered to be interest under applicable law, exceed the maximum lawful rate
of interest.
2.6 Increase In Insurance Premiums. In addition to the insurance
provided under the Operating Expense provision above, if an increase in any
insurance premiums paid by Lessor for the Property is caused by ▇▇▇▇▇▇'s use of
the Leased Premises or if Lessee vacates the Leased Premises and causes an
increase in such premiums, then Lessee shall pay as additional rent the amount
of such increase to Lessor. ▇▇▇▇▇▇ agrees to pay any amount due under this
Section within ten (10) days following receipt of the invoice showing the
additional rent due as documented by the carrier that the increase is due to
the conduct of ▇▇▇▇▇▇.
2.7 Deleted.
2.8 Holding over. If Lessee does not vacate the Leased Premises upon
the expiration or earlier termination of this Lease, Lessee shall be a tenant
at will for the holdover period and all of the terms and provisions of this
Lease shall be applicable during that period, except that Lessee shall pay
Lessor (in addition to additional rent payable under Section 2.3 and any other
sums payable under this Lease) as base rental for the period of such holdover
an amount equal to two times the base rent which would have been payable by
▇▇▇▇▇▇ had the holdover period been a part of the original term of this Lease
(without waiver of Lessor's right to recover damages as permitted by law). Upon
the expiration or earlier termination of this Lease, ▇▇▇▇▇▇ agrees to vacate
and deliver the Leased Premises, and all keys thereto, to Lessor upon delivery
to Lessee of notice from Lessor to vacate. The rental payable during the
holdover period shall be payable to Lessor on demand. No holding over by
▇▇▇▇▇▇, whether with or without the consent of Lessor, shall operate to extend
the term of this Lease.
2.9 Parking. The parking spaces set forth in Section 1.14 shall be
for Lessee and/or Lessee's employees and Lessor shall have the right to assign
parking space as conditions permit. However, Lessor shall not be required to
police the use of these spaces. Lessor may make, modify and enforce rules and
regulations relating to the parking of automobiles in the parking area(s), and
▇▇▇▇▇▇ shall abide thereby. Lessor shall not be liable to Lessee or Lessee's
agents, servants, employees, customers, or invitees for damage to person or
property caused by any act omission or neglect of Lessee.
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ARTICLE 3. - OCCUPANCY, USE AND OPERATIONS
3.1 Use. Lessee warrants and represents to Lessor that the Leased
Premises shall be used and occupied only for the purpose as set forth in
Section 1.10. Lessee shall occupy the Leased Premises, conduct its business
and control its agents, employees, invitees and visitors in such a manner as is
lawful, reputable and will not create a nuisance to other tenants in the
Property. Lessee shall not solicit business, distribute handbills or display
merchandise within the Common Areas, or take any action which would interfere
with the rights of other persons to use the Common Areas. Lessee shall not
permit any operation which emits any odor or matter which intrudes into other
portions of the Property, use any apparatus or machine which makes undue noise
or causes vibration in any portion of the Property or otherwise interfere with,
annoy or disturb any other tenant in its normal business operations or Lessor
in its management of the Property. Lessee shall neither permit any waste on
the Leased Premises nor allow the Leased Premises to be used in any way which
would, in the opinion of Lessor, be extra hazardous on account of fire or which
would in any way increase or render void the fire insurance on the Property, or
permit the storage of any hazardous materials or substances.
3.2 Signs. No signs of any type or description shall be erected,
placed or painted in or about the Leased Premises except those signs submitted
to Lessor in writing and approved by Lessor in writing, and which signs are in
conformity with Lessor's sign criteria established for the Property. Lessor
reserves the right to remove, at ▇▇▇▇▇▇'s expense, all signs other than signs
approved in writing by Lessor under this Section 3.2 without notice to Lessee
and without liability to Lessee for any damages sustained by ▇▇▇▇▇▇ as a result
thereof.
3.3 Compliance with Laws, Rules and Regulations. Lessee, at Lessee's
sole cost and expense, shall comply with all laws, ordinances, orders rules and
regulations of state, federal, municipal or other agencies or bodies having
jurisdiction over the use, condition or occupancy of the Leased Premises.
Lessee shall procure at its own expense all permits and licenses required for
the transaction of its business in the Leased Premises. Lessee will comply
with the rules and regulations of the Property adopted by Lessor which are set
forth on a schedule attached to this Lease. If Lessee is not complying with
such rules and regulations, or if Lessee is in any way not complying with this
Article 3, then notwithstanding anything to the contrary contained herein,
Lessor, may upon three (3) business days written notice, at its election, enter
the Leased Premises without liability therefor and fulfill Lessee's
obligations. Lessee shall reimburse Lessor on demand for any reasonable
expenses which Lessor may incur in effecting compliance with ▇▇▇▇▇▇'s
obligations and agrees that Lessor shall not be liable for any damages
resulting to Lessee from such action. Lessor shall have the right at all times
to change and amend the rules and regulations in any reasonable manner as it
may deem advisable for the safety, care, cleanliness, preservation of good
order and operation or use of the Property or the Leased Premises.
3.4 Quiet Enjoyment. Lessor and Lessee each respectfully warrant
that it has the right and authority to execute this Lease, Lessee shall
peaceably and quietly hold and enjoy the Leased Premises for the term, without
hindrance from Lessor or any party claiming by, through, or under Lessor,
subject to the terms and conditions of this Lease and subject to all mortgages,
deeds of trust, leases and agreements of record as of the date of this Lease
and to all laws, ordinances, orders, rules and regulations of any governmental
authority.
3.5 Inspection. Lessor or its authorized agents shall at any and all
reasonable times have the right to enter the Leased Premises to inspect the
same, to supply janitorial service or any other service to be provided by
Lessor, to show the Leased Premises to prospective mortgagees, purchasers or
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prospective tenants, and to alter, improve or repair the Leased Premises or any
other portion of the Property. Subject to section 4.6 and in connection with
the rights granted in this paragraph only, ▇▇▇▇▇▇ hereby waives any claim for
abatement or reduction of rent or for any damages for injury or inconvenience
to or interference with ▇▇▇▇▇▇'s business, for any loss of occupancy or use of
the Leased Premises, and for any other loss occasioned thereby. Lessor shall
at all times have and retain a key with which to unlock all of the doors in,
upon and about the Leased Premises. Lessee shall not change Lessor's lock
system or in any other manner prohibit Lessor from entering the Leased
Premises. Lessor shall have the right at all times to enter the Leased
Premises by any means in the event of an emergency without liability therefor.
3.6 Security. Lessor shall provide a security service or electronic
security devices to supervise access to the Building during the weekends and
after normal working hours during the week; provided, however, Lessor shall
have no responsibility to prevent losses due to theft or burglary, or damages
done by persons gaining access to the Leased Premises or the Building and the
parking areas and Lessee accepts the present security system provided in the
building as a satisfactory security system.
3.7 Personal Property Taxes. Lessee shall be liable for all taxes
levied against leasehold improvements, merchandise, personal property, trade
fixtures and all other taxable property located in the Leased Premises. If any
such uncontested or contested taxes for which Lessee is liable are levied
against Lessor or Lessor's property and if Lessor elects to pay the same or if
the assessed value of Lessor's property is increased by inclusion of personal
property and trade fixtures placed by Lessee in the Leased Premises and Lessor
elects to pay the taxes based on such increase with five (5) business days
prior written notice, Lessee shall pay to Lessor, upon demand, that part of
such taxes for which the Lessee is primarily liable pursuant to the terms of
this Section. Lessee shall pay when due any and all taxes related to ▇▇▇▇▇▇'s
use and operation of its business in the Leased Premises.
ARTICLE 4. - UTILITIES AND SERVICE
4.1 Building Services. Lessor shall provide water and electricity
for Lessee during the term of this Lease. Lessee shall pay all telephone
charges. Lessor shall furnish Lessee water at those points of supply provided
for general use by other tenants in the Building, and central heating and air
conditioning in season on business days during regular hours as are considered
normal in Midland, Texas (7:00 a.m. to 6:00 p.m., Monday through Friday, 7:00
a.m. to 1:00 p.m. Saturday except for legal holidays will be furnished only
upon request of Lessee, who shall bear the additional costs thereof) and at
temperatures and in amounts as are considered by Lessor to be standard or in
compliance with any governmental regulations, such service at times other than
regular hours to be furnished upon request with not less than twenty-four (24)
hours advance notice from Lessee, who shall bear the entire cost thereof (which
cost shall include but not be limited to an amount that will fairly compensate
Lessor for additional services, depreciation and replacement of capital items
and any other costs attributable thereto) at the rate of $25.00 per hour.
Lessor shall credit the base operating expense account for that portion of
after hours charges specifically attributable to increased utility costs as
calculated by Lessor. Lessor shall also provide routine maintenance, painting
and electric lighting service for all public areas and special service areas of
the Property in the manner and to the extent deemed by Lessor to be standard.
Lessor may, in its sole discretion, provide additional services not enumerated
herein. Subject to Section 4.6 herein, failure by Lessor to any extent to
provide these defined services or any other services not enumerated, or any
cessation thereof, shall not render Lessor liable in any respect for damages to
either person or property, be construed as an
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eviction of ▇▇▇▇▇▇, work an abatement of rent or relieve ▇▇▇▇▇▇ from
fulfillment of any covenant in this Lease. If any of the equipment or machinery
useful or necessary for provision of utility services, and for which Lessor is
responsible, breaks down, or for any cause ceases to function properly, Lessor
shall use reasonable diligence to repair the same promptly, but Lessee shall
have no claim for rebate of rent or damages on account of any interruption in
service occasioned from the repairs. Lessor reserves the right from time to
time to make changes in the utilities and services provided by Lessor to the
Property.
4.2 Deleted.
4.3 Janitorial Service. Lessor shall furnish janitorial services to
the Leased Premises and public areas of the Building five (5) times per week
during the term of this Lease, excluding holidays. Lessor shall not provide
janitorial service to storage areas included in the Leased Premises.
4.4 Excessive Utility Consumption. Lessee shall pay all utility
costs occasioned by electronic data processing equipment telephone equipment,
special lighting and other equipment of high electrical consumption as
determined by Lessor, whose electrical consumption exceeds normal office usage
including (without limitation) the cast of installing, servicing and
maintaining any special or additional inside or outside wiring or lines, meters
or submeters, transformers, poles, air conditioning costs, or the cost of any
other equipment necessary to increase the amount or type of electricity or
power available to the Leased Premises and such Excess Utility Costs shall be
subject to the additional rent provisions of Section 2.2.
4.5 Window Coverings. Lessor may (but shall not be obligated to)
furnish and install window coverings on all exterior windows to maintain a
uniform exterior appearance. Lessee shall not remove or replace these window
coverings or install any other window covering which would affect the exterior
appearance of the Building. Lessee may install lined or unlined over draperies
on the interior sides of the Lessor furnished window coverings for interior
appearance or to reduce light transmission, provided such over draperies do not
(in Lessor's determination) affect the exterior appearance of the Building or
affect the operation of the Building's heating, ventilating and air
conditioning systems.
4.6 Restoration of Services; Abatement. Lessor shall use reasonable
efforts to restore any service that becomes unavailable; however, such
unavailability shall not render Lessor liable for any damages caused thereby,
be a constructive eviction of Lessee, constitute a breach of any implied
warranty, or, except as provided in the next sentence, entitle Lessee to any
abatement of ▇▇▇▇▇▇'s obligations hereunder. However, if ▇▇▇▇▇▇ is prevented
from making reasonable use of the Leased Premises for more than five (5)
consecutive business days because of the unavailability of any such service,
Lessee shall, as its exclusive remedy therefor, be entitled to a reasonable
abatement of rent for each consecutive day (after such five (5) day period)
that Lessee is so prevented from making reasonable use of the Leased Premises.
4.7 Deleted.
ARTICLE 5. - REPAIRS AND MAINTENANCE
5.1 Lessor Repairs. Unless otherwise expressly stipulated herein,
Lessor shall not be required to make any improvements to or repairs of any kind
or character on the Leased Premises during the term of this Lease, except such
repairs as may be for normal maintenance of the Common Areas which shall
include the painting of and repairs to walls, floors, corridors, windows, and
other structures and equipment within the Common Areas only, and such
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11
additional maintenance of the Common Areas as may be necessary because of
damages by persons other than Lessee, its agents, employees, invitees, or
visitors. Lessor shall have no obligation to maintain or repair the Leased
Premises except for plumbing and electrical fixtures (unless such damage is
caused by Lessee) except as set forth herein. Lessee will promptly give Lessor
notice of any damage in the Leased Premises requiring repairs by Lessor. If
the Building or the equipment used to provide the services referred to in
Section 4.1 are damaged by acts or omissions of Lessee, its agents, customers,
employees or invitees, then Lessee will bear the cost of such repairs. Lessor
shall not be liable to Lessee, except as expressly provided in this Lease, for
any damage or inconvenience, and Lessee shall not be entitled to any damages
nor to any abatement or reduction of rent by reason of any repairs, alterations
or additions made by Lessor under this Lease. Lessor's cost of maintaining and
repairing the items set forth in this section are subject to the operating
expense provisions in Section 2.3.
5.2 Lessee Repairs. Lessee, at its own cost and expense, shall
maintain the Leased Premises in a good working condition (except for those
items that are the responsibility of Lessor under Section 5.1) and shall repair
or replace any damage or injury to all or any part of the Leased Premises
and/or the Property, caused by any act or omission of Lessee or Lessee's agents
or employees.
5.3 Request for Repairs. All requests for repairs or maintenance
that are the responsibility of Lessor pursuant to any provision of this Lease
may be made by telephone and followed in writing to Lessor and Manager at the
addresses in Section 1.9.
5.4 Lessee Damages. Lessee shall not cause any damage to be
committed on any portion of the Leased Premises or Property, and at the
termination of this Lease, by lapse of time or otherwise, ▇▇▇▇▇▇ shall deliver
the Leased Premises to Lessor in as good a condition as existed at the
Commencement Date of this Lease, ordinary wear and tear excepted. Except for
ordinary wear and tear, the cost and expense of any repairs necessary to
restore the condition of the Leased Premises shall be borne by ▇▇▇▇▇▇.
ARTICLE 6. - ALTERATIONS AND IMPROVEMENTS
6.1 Construction. If any construction of tenant improvements is
necessary for the initial occupancy of the Leased Premises, such construction
shall be accomplished and the cost of such construction shall be borne by
Lessor and/or Lessee in accordance with a separate "Leasehold Improvements
Agreement" (herein so called and made a part hereof as Exhibit "D") between
Lessor and Lessee. Except as expressly provided in this Lease or in the
Leasehold Improvements Agreement (if any) and except for new demising
partitions shown on Exhibit "B", Lessee acknowledges and agrees that Lessor has
not undertaken to perform any modification, alteration or improvements to the
Leased Premises, and Lessee further waives any defects in the Leased Premises
(except in accordance with Section 6.2 below) and acknowledges and accepts (l)
the Leased Premises as suitable for the purpose for which they are leased and
(2) the Property and every part and appurtenance thereof as being in good and
satisfactory condition. Upon the request of Lessor, Lessee shall deliver to
Lessor a completed acceptance of premises memorandum in Lessor's standard form.
6.2 Lessee Improvements. Lessee shall not make or allow to be made
any alterations, physical additions or improvements in or to the Leased
Premises without first obtaining the written consent of Lessor, which consent
may in the sole and absolute discretion of Lessor be denied. Any alterations,
physical additions or improvements to the Leased Premises made by or installed
by either party hereto shall remain upon and be surrendered with the Leased
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Premises and become the property of Lessor upon the expiration or earlier
termination of this Lease without credit to Lessee; provided, however, Lessor,
at its option, may require Lessee to remove any physical improvements or
additions and/or repair any alterations in order to restore the Leased Premises
to the condition existing at the time Lessee took possession, normal wear and
tear excepted, all costs of removal and/or alterations to be borne by Lessee.
This clause shall not apply to moveable equipment, furniture or moveable trade
fixtures owned by ▇▇▇▇▇▇ including the grid filing systems and built-ins, which
may be removed by Lessee at the end of the term of this Lease if Lessee is not
then in default and if such equipment and furniture are not then subject to any
other rights, liens and interests of Lessor. Lessee shall have no authority or
power, express or implied, to create or cause any mechanic's or materialmen's
lien, charge or encumbrance of any kind against the Leased Premises, the
Property or any portion thereof. Lessee shall promptly cause any such liens
that have arisen by reason of any work claimed to have been undertaken by or
through Lessee to be released by payment, bonding or otherwise within thirty
(30) days after request by Lessor or provide written notice to Lessor that such
claim is contested. Lessee shall indemnify Lessor against losses arising out
of any such claim (including, without limitation, legal fees and court costs).
If ▇▇▇▇▇▇ fails to timely take either such action, then Lessor may pay any
uncontested lien claim without inquiry as to the validity thereof, and any
amounts so paid, including expenses and interest, shall be paid by Lessee to
Lessor within ten (10) days after Lessor has delivered to Lessee an invoice
therefor.
6.3 Common and Service Area Alterations. Lessor shall have the right
to decorate and to make repairs, alterations, additions, changes or
improvements, whether structural or otherwise, in, about or on the Property or
any part thereof, and to change, alter, relocate, remove or replace service
areas and/or Common Areas, to place, inspect, repair and replace in the Leased
Premises (below floors, above ceilings or next to columns) utility lines, pipes
and the like to serve other areas of the Property outside the Leased Premises
and to otherwise alter or modify the Property, and for such purposes to enter
upon the Leased Premises and, during the continuance of any such work, to take
such measures for safety or for the expediting of such work as may be required,
in ▇▇▇▇▇▇'s judgment, all without affecting any of ▇▇▇▇▇▇'s obligations
hereunder.
ARTICLE 7. - CASUALTY; WAIVERS; SUBROGATION AND INDEMNITY
7.1 Repair Estimate. If the Leased Premises or the Building are
damaged by fire or other casualty (a "Casualty"), Lessor shall, within twenty
(20) days after such Casualty, deliver to Lessee a good faith estimate (the
"Damage Notice") of the time needed to repair the damage caused by such
Casualty.
7.2 Lessor's and ▇▇▇▇▇▇'s Rights. If a material portion of the
Leased Premises or the Building is damaged by Casualty such that Lessee is
prevented from conducting its business in the Leased Premises in a manner
reasonably comparable to that conducted immediately before such Casualty and
Lessor estimates that the damage caused thereby cannot be repaired within
ninety (90) days after the commencement of repair, then Lessor may with
Lessee's approval, at Lessor's expense, relocate Lessee to office space
reasonably comparably to the Leased Premises, provided that Lessor notifies
Lessee of its intention to do so in the Damage Notice. Such relocation may be
for a portion of the remaining term or the entire term. Lessor shall complete
any such relocation within ninety (90) days after Lessor has delivered the
Damage Notice to Lessee. If Lessor and Lessee do not elect to relocate Lessee
following such Casualty, then Lessee may terminate this Lease by delivering
written notice to Lessor of its election to terminate within thirty (30) days
after the Damage Notice has been delivered to Lessee. If Lessor does not
relocate Lessee and
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Lessee does not terminate this Lease, then (subject to Lessor's rights under
Section 7.3) Lessor shall repair the Building or the Leased Premises, as the
case may be, as provided below, and Basic Rental for the portion of the Leased
Premises rendered untenantable by the damage shall be abated on a reasonable
basis from the date of damage until the completion of the repair, unless Lessee
caused such damage, in which case, Lessee shall continue to pay rent without
abatement.
7.3 Lessor's Rights. Notwithstanding anything herein to the
contrary, if a Casualty damages a material portion of the Building, and Lessor
makes (in its sole discretion) a determination that restoring the Leased
Premises would not be in Lessor's best interests, or if Lessor is required to
pay any insurance proceeds arising out of the Casualty to Lessor's Mortgagee,
then Lessor may terminate this Lease by giving written notice of its election
to terminate within thirty (30) days after the Damage Notice has been delivered
to ▇▇▇▇▇▇, and all Rental hereunder shall be abated as of the date of the
Casualty.
7.4 Repair Obligation. If neither party elects to terminate this
Lease following a Casualty, then Lessor shall, within a reasonable time after
such Casualty, commence to repair the Building and the Leased Premises and
shall proceed with reasonable diligence to restore the Building and Leased
Premises to substantially the same condition as they existed immediately before
such Casualty; however, Lessor shall not be required to repair or replace any
part of the furniture, equipment, fixtures, and other improvements which may
have been placed by, or at the request of, Lessee or other occupants in the
Building or the Leased Premises, and the Lessor's obligation to repair or
restore the Building or Leased Premises shall be limited to the extent of the
insurance proceeds actually received by Lessor for the Casualty in question.
7.5 Property Insurance. Lessor shall at all times during the term of
this Lease insure the Property against all risk of direct physical loss with
such deductibles as Lessor considers appropriate; provided, Lessor shall not be
obligated in any way or manner to insure any personal property (including, but
not limited to, any furniture, machinery, goods or supplies) of Lessee upon or
within the Leased Premises, any fixtures installed or paid for by Lessee upon
or within the Leased Premises, or any improvements which Lessee may construct
on the Leased Premises. Lessee shall have no right in or claim to the proceeds
of any policy of insurance maintained by Lessor even if the cost of such
insurance is borne by ▇▇▇▇▇▇ as set forth in Article 2. Lessee at all times
during the term of the Lease shall, at its own expense, keep in full force and
effect insurance against fire and such other risks as are from time to time
included in standard all-risk insurance (including coverage against vandalism
and malicious mischief) for the full insurable value of Lessee's trade
fixtures, furniture, supplies and all items of personal property of Lessee
located on or within the Leased Premises.
7.6 Waiver: No Subrogation. Neither Lessor nor Lessee shall be
liable to the other party or those claiming by, through, or under each party
for any injury to or death of any person or persons or the damage to or theft,
destruction, loss, or loss of use of any property (a "Loss") caused by
casualty, theft, fire, third parties, or any other matter beyond the control of
Lessor or Lessee, or for any injury or damage or inconvenience which may arise
through repair or alteration of any part of the Building, or failure to make
repairs, or from any other cause, except if such Loss is caused by Lessor's or
▇▇▇▇▇▇'s gross negligence or willful misconduct. Lessor and ▇▇▇▇▇▇ each waives
any claim it might have against the other for any damage to or theft,
destruction, loss, or loss of use of any property, to the extent the same is
insured against under any insurance policy that covers the Building, the Leased
Premises, Lessor's or ▇▇▇▇▇▇'s fixtures, personal property, leasehold
improvements, or business, or is required to be insured against
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under the terms hereof, regardless of whether the negligence or fault of the
other party caused such loss. Each party shall cause its insurance carrier to
endorse all applicable policies waiving the carrier's rights of recovery under
subrogation or otherwise against the other party.
7.7 Deleted.
7.8 Insurance. Lessee shall at its expense procure and maintain
throughout the term the following insurance policies: (i) comprehensive general
liability insurance in amounts of not less than $ 500,000, insuring Lessee,
Lessor and Lessor's agents against all liability for injury to or death of a
person or persons or damage to property arising from the use and occupancy of
the Leased Premises, (ii) insurance covering the full value of Lessee's
property and improvements, and other property (including property of others),
in the Leased Premises, and (iii) business interruption insurance. Lessee's
insurance shall provide primary coverage to Lessor when any policy issued to
Lessor provides duplicate or similar coverage, and in such circumstance
Lessor's policy will be excess over ▇▇▇▇▇▇'s policy. Lessee shall furnish
certificates of such insurance and such ether evidence satisfactory to Lessor
of the maintenance of all insurance coverage required hereunder, and ▇▇▇▇▇▇
shall obtain a written obligation on the part of each insurance company to
notify Lessor at least thirty (30) days before cancellation or a material
change of any such insurance. All such insurance policies shall be in form,
and issued by companies, reasonably satisfactory to Lessor.
ARTICLE 8. - CONDEMNATION
8.1 Taking - Lessor's and ▇▇▇▇▇▇'s Rights. If any part of the
Building is taken by right of eminent domain or conveyed in lieu thereof (a
"Taking"), and such Taking prevents Lessee from conducting its business in the
Leased Premises in a manner reasonably comparable to that conducted immediately
before such Taking, then Lessor may, with ▇▇▇▇▇▇'s consent and at Lessor's
expense, relocate Lessee to office space reasonably comparable to the Leased
Premises, provided that Lessor notifies Lessee of its intention to do so within
thirty (30) days after the Taking. Such relocation may be for a portion of the
remaining term or the entire term. Lessor shall complete any such relocation
within 180 day after Lessor has notified Lessee of its intention to relocate
Lessee. If Lessor does not elect to relocate Lessee following such Taking,
then Lessee may terminate this Lease as of the date of such Taking by giving
written notice to Lessor within sixty (60) days after the Taking, and rent
shall be apportioned as of the date of such Taking. If Lessor does not
relocate Lessee and ▇▇▇▇▇▇ does not terminate this Lease, then all Base Rental
shall be abated on a reasonable basis as to that portion of the Leased Premises
rendered untenantable by the Taking.
8.2 Taking - Lessor's Rights. If any material portion, but less than
all, of the Building becomes subject to a Taking, or if Lessor is required to
pay any of the proceeds received for a Taking to Lessor's Mortgagee, then this
Lease, at the option of Lessor, exercised by written notice to Lessee within
thirty (30) days after such Taking, shall terminate and rent shall be
apportioned as of the date of such Taking. If Lessor does not so terminate
this Lease and does not elect to relocate Lessee, then this Lease will
continue, but if any portion of the Leased Premises has been taken, Base Rental
shall ▇▇▇▇▇ as provided in the last sentence of Section 8.1.
8.3 Award. If any Taking occurs, then Lessor shall receive the
entire award or other compensation for the Land, the Building, and other
improvements taken, and ▇▇▇▇▇▇ may separately pursue a claim against the
condemnor for the value of ▇▇▇▇▇▇'s personal property which ▇▇▇▇▇▇ is entitled
to remove under this Lease, moving costs, loss of business, and other claims it
may have.
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ARTICLE 9. - ASSIGNMENT OR SUBLEASE: SUBORDINATION AND NOTICE
9.1 Sublease: Consent. Lessee shall not, without the prior written
consent of Lessor, (which shall not be unreasonably withheld), (i) advertise
that any portion of the Leased Premises is available for lease, (ii) assign,
sublease, or encumber this Lease or any estate or interest herein, whether
directly or by operation of law. (iii) permit any other entity to become
Lessee hereunder by merger, consolidation, or other reorganization, (iv) if
Lessee is an entity other than a corporation whose stock is publicly traded,
permit the transfer of an ownership interest in Lessee so as to result in a
change in the current control of Lessee, (v) sublet any portion of the Leased
Premises, (vi) grant any license, concession, or other right of occupancy of
any portion of the Leased Premises, or (vii) permit the use of the Leased
Premises by any parties other than Lessee (any of the events listed in clauses
(ii) through (vii) being a "Sublease"). If ▇▇▇▇▇▇ requests ▇▇▇▇▇▇'s consent to
a Sublease, then Lessee shall provide Lessor with a written description of all
terms and conditions of the proposed Sublease, copies of the proposed
documentation, and the following information about the proposed sublease: name
and address; reasonably satisfactory information about its business and
business history; its proposed use of the Leased Premises; banking, financial,
and other credit information; and general references sufficient to enable
Lessor to determine the proposed sublessee's credit worthiness and character.
If Lessor consents to a proposed Sublease, then the proposed sublessee shall
deliver to Lessor a written agreement whereby it expressly assumes the Lessee's
obligations hereunder; however, any sublessee of less than all of the space in
the Leased Premises shall be liable only for obligations under this Lease that
are properly allocable to the space subject to the Sublease, and only to the
extent of the rent it has agreed to pay Lessee therefor. Lessor's consent to a
Sublease shall not release Lessee from performing its obligations under this
Lease, but rather Lessee and its sublessee shall be jointly and severally
liable therefor. Lessor's consent to any Sublease shall not waive Lessor's
rights as to any subsequent Subleases. If an Event of Default occurs while the
Leased Premises or any part thereof are subject to a Sublease, then Lessor, in
addition to its other remedies, may collect directly from such sublessee all
rents becoming due to Lessee and apply such rents against rent. Lessee
authorizes its sublessees to make payments of rent directly to Lessor upon
receipt of notice from Lessor to do so.
9.2 Deleted.
9.3 Additional Compensation. Lessee shall pay to Lessor, immediately
upon receipt thereof, seventy-five percent (75%) of all compensation received
by Lessee for a Sublease that exceeds the rent allocable to the portion of the
Leased Premises covered thereby.
9.4 Lessor Assignment. Lessor shall have the right to sell, transfer
or assign, in whole or in part, its rights and obligations under this Lease and
in the Property. Any such sale, sublease or assignment shall operate to
release Lessor from any and all liabilities under this Lease for any actions or
operations arising after the date of such sale, assignment or transfer.
9.5 Rights of Mortgagee. ▇▇▇▇▇▇ accepts this Lease subject and
subordinate to any recorded lease, mortgage or deed of trust lien presently
existing, if any, or hereafter encumbering the Property, except to companies
affiliated with Lessor, and to all existing ordinances and recorded
restrictions, covenants, easements, and agreements with respect to the
Property, Lessor hereby is irrevocably vested with full power and authority to
subordinate ▇▇▇▇▇▇'s interest under this Lease to any mortgage or deed of trust
lien hereafter placed on the Property. Upon any foreclosure, judicially or
non-judicially, of any such mortgage, or the sale of the Property in lieu of
foreclosure, or any other transfer of ▇▇▇▇▇▇'s interest in the Property,
whether or not in connection with a mortgage, ▇▇▇▇▇▇ hereby does, and
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hereafter agrees to attorn to the purchaser at such foreclosure sale or to the
grantee under any deed in lieu of foreclosure or to any other transferee of
Lessor's interest, and shall recognize such purchaser, grantee, or other
transferee as Lessor under this Lease, and no further attornment or other
agreement shall be required to effect or evidence ▇▇▇▇▇▇'s attornment to and
recognition of such purchaser or grantee as Lessor hereunder. Such agreement
of Lessee to attorn shall survive any such foreclosure sale, trustee's sale,
conveyance in lieu thereof, or any other transfer of Lessor's interest in the
Property. Lessee, upon demand, at any time, before or after any such
foreclosure sale, trustee's sale, conveyance in lieu thereof, or other transfer
shall execute, acknowledge, and deliver to the prospective transferee and/or
mortgagee the Lease Subordination, Non-disturbance and Attornment Agreement and
any such instruments or certificates evidencing such attornment as the
mortgagee or other prospective transferee may reasonably require.
Notwithstanding anything to the contrary implied in this Section, any mortgagee
under any mortgage shall have the right at any time to subordinate any such
mortgage to this Lease on such terms and subject to such conditions as the
mortgagee in its discretion may consider appropriate.
9.6 Estoppel Certificates. ▇▇▇▇▇▇ agrees to furnish, from time to
time, within ten (10) business days after receipt of a request from Lessor's or
Lessor's Mortgagee, a statement certifying, if applicable and within Lessee's
knowledge, all or some of the following with exceptions noted that: Lessee is
in possession of the Leased Premises; the Lease is in full force and effect;
the Lease is unmodified (except as disclosed in such statement); ▇▇▇▇▇▇ claims
no present charge, lien, or claim of offset against rent; the rent is paid for
the current month, but is not prepaid for more than one (1) month and will not
be prepaid for more than one (1) month in advance; there is no existing default
by reason of some act or omission by Lessor; that Lessor has performed all
inducements required of Lessor, in connection with this Lease, including
construction obligations, and Lessee accepts the Leased Premises as
constructed; an acknowledgment of the assignment of rentals and other sums due
hereunder to the mortgage and agreement to be bound thereby; an agreement
requiring Lessee to advise the mortgagee of damage to or destruction of the
Leased Premises by fire or other casualty requiring reconstruction; an
agreement by Lessee to give the mortgagee written notice of ▇▇▇▇▇▇'s default
hereunder and to permit mortgagee to cure such default within a reasonable time
after such notice before exercising any remedy Lessee might possess as a result
of such default; and such other matters as may be reasonably required by Lessor
or Lessor's Mortgagee. ▇▇▇▇▇▇'s failure to deliver such statement, in addition
to being a default under this Lease, shall be deemed to establish conclusively
that this Lease is in full force and effect except as declared by Lessor, that
Lessor is not in default of any of its obligations under this Lease, and that
Lessor has not received more than one (1) month's rent in advance. Lessee
shall not be required to provide more than two (2) Estoppel Certificates per
year.
9.7 Notice to Lessor's Mortgagee. Lessee shall not seek to enforce
any remedy it may have for any default on the part of the Lessor without first
giving written notice by certified mail, return receipt requested, specifying
the default in reasonable detail, to any Lessor's Mortgagee whose address has
been given to Lessee and affording such ▇▇▇▇▇▇'s Mortgagee a reasonable
opportunity to perform Lessor's obligations hereunder. Any such request shall
be deemed not to be an interference with contractual relations between ▇▇▇▇▇▇
and any mortgagee.
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ARTICLE 10. - LIENS
10.1 Deleted.
ARTICLE 11. - DEFAULT AND REMEDIES
11.1 Events of Default. Each of the following occurrences shall
constitute an "Event of Default":
a. ▇▇▇▇▇▇'s failure to pay rent after five (5) days written notice
to ▇▇▇▇▇▇, or any other sums due from Lessee to Lessor under the Lease (or any
other lease executed by Lessee for space in the Building), when due;
b. ▇▇▇▇▇▇'s failure to perform, comply with, or observe any other
agreement or material obligation of Lessee under this Lease (or any other Lease
executed by ▇▇▇▇▇▇ for space in the Building) after thirty (30) days written
notice;
c. Deleted.
d. Deleted.
e. Deleted.
f. ▇▇▇▇▇▇'s failure to deliver such statement described under
Section 9.6 Estoppel Certificates after thirty (30) days written notice.
11.2 Remedies. Upon any Event of Default, Lessor may, in addition to
all other rights and remedies afforded Lessor hereunder or by law or equity,
take any of the following actions:
a. Terminate this Lease by giving Lessee written notice thereof, in
which event, Lessee shall pay to Lessor the sum of (i) all rent accrued
hereunder through the date of termination, (ii) all amounts due under Section
11.3., and (iii) an amount equal to (A) the total rent that Lessee would have
been required to pay for the remainder of the term discounted to present value
at a per annum rate equal to the "Prime Rate" as published (on the date this
Lease is terminated) by The Wall Street Journal, Southwest Edition, in its
listing of "Money Rates", minus (B) the then present fair rental value of the
Leased Premises for such period, similarly discounted; or
b. Terminate ▇▇▇▇▇▇'s right to possession of the Leased Premises
without terminating this Lease by giving written notice thereof to Lessee, in
which event Lessee shall pay to Lessor (i) all rent and other amounts accrued
hereunder to the date of termination of possession, (ii) all amounts due from
time to time under Section 11.3., and (iii) all rent and other sums required
hereunder to be paid by ▇▇▇▇▇▇ during the remainder of the term, diminished by
any net sums thereafter received by ▇▇▇▇▇▇ through reletting the Leased
Premises during such period. Lessor shall use reasonable efforts to relet the
Leased Premises on such terms and conditions as Lessor in its sole discretion
may determine (including a term different from the term, rental concessions,
and alterations to, and improvement of, the Leased Premises); however, Lessor
shall not be obligated to relet the Leased Premises before leasing other
portions of the Building. Lessor shall not be liable for, nor shall ▇▇▇▇▇▇'s
obligations hereunder be diminished because of, ▇▇▇▇▇▇'s failure to relet the
Leased Premises or to collect rent due for such reletting. Lessee shall not be
entitled to the excess of any consideration obtained by reletting over the rent
due hereunder. Re-entry by Lessor in the Leased Premises shall not affect
▇▇▇▇▇▇'s obligations hereunder for the unexpired term; rather, Lessor may, from
time to time, bring action against Lessee to collect amounts due by ▇▇▇▇▇▇,
without the necessity of Lessor's waiting until the expiration of the
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term. Unless Lessor delivers written notice to Lessee expressly stating that
it has elected to terminate this Lease, all actions taken by Lessor to exclude
or dispossess Lessee of the Leased Premises shall be deemed to be taken under
this Section 11.2b. If Lessor elects to proceed under this Section 11.2b., it
may at any time elect to terminate this Lease under Section 11.2a.
c. In addition to its rights under 11.2(a) and (b) above, Lessor,
(subject to the notice provision of Section 11.1), may alter locks or other
security devices at the Leased Premises to deprive Lessee of access thereto,
and Lessor shall not be required to provide a new key or right of access to
Lessee.
11.3 Payment by ▇▇▇▇▇▇. Upon any Event of Default, Lessee shall pay
to Lessor all costs incurred by Lessor (including court costs and reasonable
attorneys' fees and expenses) in (i) obtaining possession of the Leased
Premises, (ii) removing and storing Lessee's or any other occupant's property,
(including the cost of altering any locks or security devices), (iii) the
reasonable cost of repairing or restoring the Leased Premises to its original
condition, normal wear and tear excepted, (iv) if ▇▇▇▇▇▇ is dispossessed of the
Leased Premises and this Lease is not terminated, reletting all or any part of
the Leased Premises (including brokerage commissions, cost of tenant finish
work, and other costs incidental to such reletting), (v) performing Lessee's
obligations which ▇▇▇▇▇▇ failed to perform, and (vi) enforcing, or advising
Lessor of, its rights, remedies, and recourses arising out of the Event of
Default.
ARTICLE 12. - RELOCATION
12.1 Deleted.
12.2 Deleted.
ARTICLE 13. - DEFINITIONS
13.1 Deleted.
13.2 Act of God or Force Majeure. An "act of God" or "force majeure"
is defined for purposes of this Lease as strikes, lockouts, sitdowns, material
or labor restrictions by any governmental authority, unusual transportation
delays, riots, floods, washouts, explosions, earthquakes, fire storms, weather
(including wet grounds or inclement weather which prevents construction), acts
of the public enemy, wars, insurrections, and/or any other cause not reasonably
within the control of Lessor or Lessee or which by the exercise of due
diligence either party is unable wholly or in part, to prevent or overcome.
13.3 Deleted.
ARTICLE 14. - MISCELLANEOUS
14.1 Waiver. Failure of either Lessor or Lessee to declare an event
of default immediately upon its occurrence, or delay in taking any action in
connection with an event of default, shall not constitute a waiver of the
default, but Lessor shall have the right to declare the default at any time and
take such action as is lawful or authorized under this Lease. Pursuit of any
remedy hereunder or at law shall not constitute forfeiture or waiver of any
rent or damages accruing to Lessor by reason of the violation of any of the
terms, provisions or covenants of this Lease. Failure by Lessor or Lessee to
enforce one or more of the remedies provided hereunder or at law upon any
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event of default shall not be deemed or construed to constitute a waiver of the
default or of any other violation or breach of any of the terms provisions and
covenants contained in this Lease. Lessor may collect and receive rent due
from Lessee without waiving or affecting any rights or remedies that Lessor may
have at law or in equity or by virtue of this Lease at the time of such
payment. Subject to the provisions of Section 11.2, institution of a forcible
detainer action to re-enter the Leased Premises shall not be construed to be an
election by Lessor to terminate this Lease.
14.2 Act of God. Neither Lessor nor Lessee shall be required to
perform any covenant or obligation in this Lease, or be liable in damages to
Lessee, so long as the performance or non-performance of the covenant or
obligation is delayed, caused or prevented by an act of God or force majeure.
14.3 Attorney's Fees. If either Lessor or Lessee defaults in the
performance of any of the terms, covenants, agreements or conditions contained
in this Lease and either party places in the hands of any attorney the
enforcement of all or any part of this Lease, the collection of any rent or
other sums due or to become due or recovery of the possession of the Leased
Premises, the defaulting party agrees to pay reasonable attorney's fees.
14.4 Successors. This Lease shall be binding upon and inure to the
benefit of ▇▇▇▇▇▇ and ▇▇▇▇▇▇ and their respective heirs, personal
representatives, successors and assigns.
14.5 Rent Tax. If applicable in the jurisdiction where the Leased
Premises are situated, Lessee shall pay and be liable for all rental, sales and
use taxes or other similar taxes, if any, levied or imposed by any city, state,
county or other governmental body having authority, such payments to be in
addition to all other payments required to be paid to Lessor by Lessee under
the terms of this Lease. Any such payment shall be paid concurrently with the
payment of the rent, additional rent, operating expenses or other charge upon
which the tax is based as set forth above and which shall be paid in the same
time and manner as operating expenses set forth herein.
14.6 Interpretation. The captions appearing in this Lease are for
convenience only and in no way define, limit, construe or describe the scope or
intent of any Section. Grammatical changes required to make the provisions of
this Lease apply (1) in the plural sense where there is more than one tenant
and (2) to either corporations, associations, partnerships or individuals,
males or females, shall in all instances be assumed as though in each case
fully expressed. The laws of the State of Texas shall govern the validity,
performance and enforcement of this Lease. This Lease shall not be construed
more or less favorably with respect to either party as a consequence of the
Lease or various provisions hereof having been drafted by one of the parties
hereto.
14.7 Notices. All rent and other payments required to be made by
Lessee shall be payable to Lessor, in care of Manager, at Manager's address set
forth on page 2 (or if no address be set forth for Manager to Lessor at
Lessor's address set forth on page 2). All payments required to be made by
Lessor to Lessee shall be payable to Lessee at ▇▇▇▇▇▇'s address set forth on
page 2. Any notice or document (other than rent) required or permitted to be
delivered by the terms of this Lease shall be deemed to be delivered (whether
or not actually received) when deposited in the United States Mail, postage
prepaid, certified mail, return receipt requested, addressed to the parties at
the respective addresses set forth on page 2 (or, in the case of Lessee, at the
Leased Premises), or to such other addresses as the parties may have designated
by written notice to each other, with copies of notices to Lessor being sent to
▇▇▇▇▇▇'s address as shown on page 2. Manager shall be a co-addressee with
Lessor on all notices sent to Lessor by ▇▇▇▇▇▇ hereunder,
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and any notice sent to Lessor and not to Manager, also, in accordance with this
section shall be deemed ineffective.
14.8 Submission of Lease. Submission of this Lease to Lessee for
signature does not constitute a reservation of space or an option to Lease.
This Lease is not effective until execution by and delivery to both Lessor and
▇▇▇▇▇▇.
14.9 Corporate Authority. If Lessee executes this Lease as a
corporation or a partnership (general or limited), each person executing this
Lease on behalf of Lessee hereby personally represents and warrants that:
Lessee is a duly authorized and existing corporation or partnership (general or
limited), Lessee is qualified to do business in the state in which the Leased
Premises are located, the corporation or partnership (general or limited) has
full right and authority to enter into this Lease, each person signing on
behalf of the corporation or partnership (general or limited) is authorized to
do so, and the execution and delivery of the Lease by ▇▇▇▇▇▇ will not result in
any breach of, or constitute a default under any mortgage, deed of trust,
lease, loan, credit agreement, partnership agreement, or other contract or
instrument to which Lessee is a party or by which Lessee may be bound.
14.10 Deleted.
14.11 Deleted.
14.12 Severability. If any provision of this Lease or the application
thereof to any person or circumstances shall be invalid or unenforceable to any
extent, the remainder of this Lease and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
14.13 Lessor's Liability. If Lessor shall be in default under this
Lease and, if as a consequence of such default, ▇▇▇▇▇▇ shall recover a money
judgment against Lessor, such judgment shall be first satisfied out of the
right, title and interest of ▇▇▇▇▇▇ in the property. Should ▇▇▇▇▇▇'s
unencumbered right, title and interest in the property not be sufficient to
satisfy ▇▇▇▇▇▇'s money judgment, then such deficiency may be satisfied from
other property of the Lessor to the maximum extent of $500,000.
14.14 Sale of Property. Upon any conveyance, sale or exchange of the
Leased Premises or assignment of this Lease, Lessor shall be and is hereby
entirely free and relieved of all liability under any and all of its covenants
and obligations contained in or derived from this Lease arising out of any act,
occurrence, or omission relating to the Leased Premises or this Lease occurring
after the consummation of such sale or exchange and assignment.
14.15 Time is of the Essence. The time of the performance of all of
the covenants, conditions and agreements of this Lease is of the essence of
this Lease.
14.16 Subtenancies. At Lessor's option, the voluntary or other
surrender of this Lease by ▇▇▇▇▇▇, or a mutual cancellation thereof, shall not
work a merger of estates and shall operate as an assignment of any or all
permitted subleases or subtenancies.
ARTICLE 15. - SPECIAL PROVISIONS
15.1 Renewal Option. Provided no Event of Default exists and Lessee
is occupying the entire Premises at the time of such election, ▇▇▇▇▇▇ may renew
this Lease for Two (2) additional periods of Three (3) years on the same terms
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21
provided in this Lease (except as set forth below), by delivering written
notice of the exercise thereof to Lessor not later than 180 days before the
expiration of the Term. On or before the commencement date of the extended
Term in question, Lessor and Lessee shall execute an amendment to this Lease
extending the Term on the same terms provided in this Lease, except as follows:
(a) The Basic Rental Rate payable for each month during the extended
Term shall be at the then prevailing market rate.
(b) Lessee shall have no further renewal options unless expressly
granted by ▇▇▇▇▇▇ in writing: and
(c) Lessor shall lease to Lessee the Leased Premises in their then
current condition, and Lessor shall not provide to Lessee any allowances (e.g.,
moving allowance, construction allowance, and the like) or other tenant
inducements.
Lessee's rights under this clause shall terminate if (i) this Lease or
▇▇▇▇▇▇'s right to possession of the Premises is terminated, (ii) Lessee assigns
any of its interest in this Lease or sublets any portion of the Premises, or
(iii) Lessee fails to timely exercise its option under this Exhibit, time being
of the essence with respect to ▇▇▇▇▇▇'s exercise thereof.
ARTICLE 16. - AMENDMENT AND LIMITATION OF WARRANTIES
16.1 Entire Agreement. IT IS EXPRESSLY AGREED BY THE PARTIES, AS A
MATERIAL CONSIDERATION FOR THE EXECUTION OF THIS LEASE, THAT THIS LEASE, WITH
THE SPECIFIC REFERENCES TO EXTRINSIC DOCUMENTS, IS THE ENTIRE AGREEMENT OF THE
PARTIES: THAT THERE ARE, AND WERE, NO VERBAL REPRESENTATIONS, WARRANTIES,
UNDERSTANDINGS, STIPULATIONS, AGREEMENT OR PROMISES PERTAINING TO THE SUBJECT
MATTER OF THIS LEASE OR OF ANY EXPRESSLY MENTIONED EXTRINSIC DOCUMENTS THAT ARE
NOT INCORPORATED IN WRITING IN THIS LEASE.
16.2 Amendment. THIS LEASE MAY NOT BE ALTERED, WAIVED, AMENDED OR
EXTENDED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY ▇▇▇▇▇▇ AND ▇▇▇▇▇▇.
16.3 Limitation of Warranties. ▇▇▇▇▇▇ AND ▇▇▇▇▇▇ EXPRESSLY AGREE THAT
THERE ARE AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY,
FITNESS OF A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE,
AND THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY SET FORTH IN
THIS LEASE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, LESSEE EXPRESSLY
ACKNOWLEDGES THAT ▇▇▇▇▇▇ HAS MADE NO WARRANTIES OR REPRESENTATIONS CONCERNING
ANY HAZARDOUS SUBSTANCES OR OTHER ENVIRONMENTAL MATTERS AFFECTING ANY PART OF
THE PROPERTY, AND LESSOR HEREBY EXPRESSLY DISCLAIMS AND LESSOR WAIVES ANY
EXPRESS OR IMPLIED WARRANTIES WITH RESPECT TO ANY SUCH MATTER.
16.4 Waiver and Releases. LESSEE SHALL NOT HAVE THE RIGHT TO WITHHOLD
OR TO OFFSET RENT OR TO TERMINATE THIS LEASE EXCEPT AS EXPRESSLY PROVIDED
HEREIN. ▇▇▇▇▇▇ ▇▇▇▇▇▇ AND RELEASES ANY AND ALL STATUTORY LIENS.
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22
EXECUTED by ▇▇▇▇▇▇ on the _____ day of ________________________, 19___ and by
Lessor on the _____ day of ________________________, 19___, to be effective as
of the first day written herein.
LESSOR
Fasken Center, LTD.
-----------------------------------
a Texas Limited Partnership
---------------------------------
By: 550 Texas, Inc., General Partner, a Texas Corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------
Title: VICE PRESIDENT
-----------------------------
LESSEE
Titan Resources, L.P.
-------------------------------------------
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
Title: PRESIDENT
-----------------------------
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