EXHIBIT 10.8
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ BUILDING
LEASE AGREEMENT
BETWEEN
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ VENTURE
(LANDLORD)
AND
TEXOIL, INC.
(TENANT)
DATED /S/ JUNE 1, 1995
1
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ BUILDING
LEASE AGREEMENT
INDEX
BASIC LEASE PROVISIONS.......................................................1
ARTICLE 1 PREMISES.........................................................3
1.01 Premises. ......................................................3
1.02 Refusal Rights. ................................................3
1.03 Expansion Rights. ..............................................4
1.04 Parking..........................................................4
ARTICLE 2 TERM.............................................................5
2.01 Term and Commencement Date. ....................................5
2.02 Expiration. ....................................................5
2.03 Acceptance. ....................................................5
2.04 Renewal Term. ..................................................5
2.05 Early Occupancy. ...............................................6
2.06 Early Cancellation Option. .....................................6
ARTICLE 3 BASE RENT........................................................6
3.01 Base Rent. .....................................................6
3.02 Renewal Term. ..................................................6
3.03 Prevailing Market Rate - Defined. ..............................6
ARTICLE 4 ADDITIONAL RENT..................................................7
4.01 Additional Rent. ...............................................7
4.02 Additional Rent - Defined. .....................................7
4.03 Building Operating Expenses......................................7
(a) Defined. .................................................7
(b) Labor/Energy-Saving Devices. .............................9
(c) Tenant's Pro Rata Building Operating Expenses. ...........9
4.04 Estimated Additional Rent. ....................................10
4.05 Revision of Estimated Additional Rent. ........................10
4.06 Actual Additional Rent. .......................................11
ARTICLE 5 RENT............................................................11
5.01 Rent. .........................................................11
5.02 Late Charge. ..................................................11
5.03 Payments for Other Services. ..................................11
5.04 Partial Month's Rent. .........................................11
i
ARTICLE 6 LEASEHOLD IMPROVEMENTS/PREMISES.................................12
6.01 Leasehold Improvements/Premises. ..............................12
6.02 Environmental Disclosure........................................12
(a) Studies. ................................................12
(b) Landlord Environmental Tests. ...........................13
(c) Prohibition on Placement or Disposal. ....................13
(d) Tenant's Covenants to Remove. ...........................13
6.03 Refurbishment Allowance. ......................................14
ARTICLE 7 PERMITTED USE...................................................14
7.01 Use. ..........................................................14
7.02 Signs. ........................................................14
ARTICLE 8 RENTABLE AREA...................................................15
8.01 Full Floor. ...................................................15
8.02 Partial Floor. ................................................15
8.03 Building Common Areas. ........................................15
8.04 Agreed Area. ..................................................15
ARTICLE 9 ASSIGNMENT AND SUBLETTING.......................................15
9.01 By Landlord. ..................................................15
9.02 By Tenant. ....................................................16
9.03 Continuing Liability. .........................................16
9.04 Consent. ......................................................17
9.05 Subsequent Transactions. ......................................17
ARTICLE 10 BUILDING SERVICES...............................................17
10.01 Building Standard Services. ...................................17
10.02 Additional Services. ..........................................18
10.03 Common Area Services. .........................................18
10.04 Interruption of Services. .....................................18
10.05 Modifications of Services. ....................................19
ARTICLE 11 ALTERATION, REPAIRS AND LIENS...................................19
11.01 Changes in Building. ..........................................19
11.02 Alteration by Tenant. .........................................19
11.03 Removal. ......................................................20
11.04 Maintenance and Repair by Tenant. .............................20
11.05 Repairs by Landlord/Limitation of Liability. ..................20
11.06 Tenant Liens. .................................................21
ii
ARTICLE 12 LATE PAYMENTS....................................................21
12.01 Late Payments. ................................................21
ARTICLE 13 INSURANCE.......................................................21
13.01 Tenant's Insurance. ...........................................21
13.02 Landlord's Insurance. .........................................22
13.03 Increased Premiums. ...........................................22
13.04 Waiver of Subrogation. ........................................22
13.05 Indemnity. ....................................................23
ARTICLE 14 CASUALTY........................................................24
14.01 Fire or Other Casualty. .......................................24
14.02 Casualty Caused by Tenant. ....................................24
ARTICLE 15 CONDEMNATION....................................................25
15.01 Condemnation. .................................................25
ARTICLE 16 ENTRY...........................................................25
16.01 Entry. ........................................................25
ARTICLE 17 SUBORDINATION, ATTORNMENT AND QUIET ENJOYMENT...................26
17.01 Subordination. ................................................26
17.02 Attornment. ...................................................26
17.03 Rights/Security Documents. ....................................26
17.04 Modifications to Lease. .......................................26
17.05 Landlord as Attorney-in-Fact. .................................27
17.06 Quiet Enjoyment. ..............................................27
ARTICLE 18 DEFAULT.........................................................27
18.01 Event of Default. .............................................27
18.02 Rights Upon Default. ..........................................28
18.03 Costs. ........................................................30
18.04 Defaults by Landlord. .........................................30
18.05 Non-Waiver. ...................................................30
ARTICLE 19 MISCELLANEOUS PROVISIONS........................................30
19.01 Amendment. ....................................................30
19.02 Severability. .................................................30
19.03 Estoppel Letters. .............................................31
19.04 Landlord's Liability. .........................................31
19.05 Holdover. .....................................................31
19.06 Taxes on Tenant's Property. ...................................31
19.07 Surrender. ....................................................31
iii
19.08 Successors and Parties. .......................................32
19.09 Notice. .......................................................32
19.10 Rules and Regulations. ........................................32
19.11 Captions. .....................................................32
19.12 Number and Gender. ............................................32
19.13 Governing Law. ................................................32
19.14 Discriminatory School. ........................................32
19.15 Force Majeure. ................................................33
19.16 Use of Name. ..................................................33
19.17 Broker. .......................................................33
19.18 Attorneys' Fees. ..............................................33
19.19 Common Facilities. ............................................33
19.20 Examination of Lease. .........................................34
19.21 Time. .........................................................34
19.22 Authority. ....................................................34
19.23 Recording. ....................................................34
19.24 Financial Statements. .........................................34
19.25 Lender Approval. ..............................................34
19.26 Entire Agreement. .............................................34
19.27 Waiver of Texas Deceptive Trade Practices Act. ................34
EXHIBITS
A - Floor Plan
B - Property Description
C - Acceptance of Premises Memorandum D - Cleaning and Janitorial Services
E - Rules and Regulations of the Building F - Tenant Parking Agreement
iv
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ BUILDING
LEASE AGREEMENT
TEXOIL, INC.
THIS LEASE AGREEMENT ("Lease") is made and executed by and between ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ VENTURE, a Texas Joint venture, with its principal office in
Houston, ▇▇▇▇▇▇ County, Texas ("Landlord"), and TEXOIL, INC., a Texas
corporation ("Tenant"), this /S/ 1ST day of /S JUNE, 1995 ("Effective Date").
BASIC LEASE PROVISIONS
The following provisions set forth various basic terms of this Lease and
are sometimes called the "Basic Lease Provisions."
1. BUILDING: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Building
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
2. PREMISES:
(a) Suite No. 4000/4025 on Floor 40
(b) Agreed Rentable Area of Premises: 9,077 square feet
(c) Agreed Rentable Area of Building: 1,108,479 square feet
3. RENT:
(a) INITIAL TERM:
Annual Base Rent: $122,539.50
($13.50 per square foot of Agreed Rentable Area)
Monthly Installment: $10,211.63
(includes a component applicable to Building Operating Expenses
equal to the initial estimated Operating Expense Factor in the
amount set forth in ITEM 3(B) OF THE BASIC LEASE PROVISIONS)
(b) $64,537.47 Initial Estimated Operating Expense Factor:
1
($7.11 per square foot of Agreed Rentable Area (such per square foot
amount is herein called the "Operating Expense Factor")
Initial Monthly Installment: $5,378.12
(c) Renewal Term: Prevailing Market Rate
4. TERM:
(a) INITIAL TERM: Five (5) years
(b) RENEWAL TERM: One (1) option of five (5) years
5. LEASE DATES:
(a) TARGET COMMENCEMENT DATE: October 1, 1995
(b) EXPIRATION DATE: September 31, 2000
(c) EXPANSION DATE: October 1, 1998
6. LEASEHOLD INDUCEMENTS:
(a) Refusal Space: Balance of square feet of Agreed Rentable Area
located on Floor 40 of the Building as per article 1.02 of the Lease
(Refusal Space)
(b) Refurbishment Allowance: $4.25 per square foot
(c) Expansion Option: Approximately 1,500 square feet of Agreed Rentable
Area located on Floor 40 of the Building as shown on attached
Exhibit "-1" (Expansion Space") on the third (3rd) anniversary of
this Commencement Date ("Expansion Date").
7. BROKERS: ▇▇▇▇▇▇▇ Realty Corp.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
2
8. ADDRESSES FOR NOTICES:
Landlord: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Venture
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: President, Cullen Center, Inc.
Tenant: Texoil, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Building
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
ARTICLE 1
PREMISES
1.01 PREMISES. Landlord does hereby lease, let and demise unto Tenant, and
Tenant does hereby lease and rent from Landlord, upon and subject to the
provisions of this Lease, the space ("Premises") reflected on the floor plan
attached as Exhibit "A", located within the building identified in Item 1 of the
Basic Lease Provisions, and situated on Block 509 S.S..B.B., Houston, ▇▇▇▇▇▇
County, Texas. The land on which the office building is situated, which is more
particularly described on attached Exhibit "B", together with the office
building and all present or future additional improvements, appurtenances or
facilities, including, but not limited to, the underground tunnel and elevated
pedestrian walkways, but excluding the parking garage, are collectively called
"Building."
The Premises consist of the Agreed Rentable Area specified in Item 2 of
the Basic Lease Provisions, together with the vertical space within the demising
walls from the floor slab up to and including the finished ceiling system, and
all improvements and fixtures, and all alterations, additions, accessions and
installations attached to or located within that space ("Leasehold
Improvements").
1.02 REFUSAL RIGHTS. If Tenant performs all of the terms and conditions of
this Lease, Tenant shall have during the initial Term a preferential right to
lease the Refusal Space, more particularly described in ITEM 6(A) OF THE BASIC
LEASE PROVISIONS, prior to the same being leased to any third party. Prior to
leasing any portion of the Refusal Space to a third party, Landlord shall give
to Tenant a written bona fide offer for the lease of all or a portion of the
Refusal Space that contains the basic lease terms upon which Landlord intends to
lease such space ("PROSPECT OFFER"). Tenant shall be deemed to have waived its
rights under this ARTICLE 1.02, unless Tenant accepts the Prospect Offer in
writing within five (5) days following receipt of the Prospect Offer, and Tenant
executes and delivers Landlord's then standard form amendment adding the Refusal
Space to the Premises on the terms and conditions of the Prospect Offer within
ten (10) days following receipt of such amendment. The rights set forth in this
Paragraph shall not be a one-time right to lease the Refusal Space and shall
recur with respect to any subsequent offer. Nonetheless, anything to the
contrary in this Lease,
3
Tenant acknowledges and agrees that its rights in connection with the Refusal
Space to the rights of any other Tenants under their respective leases in effect
on the effective date of this Lease.
Unless the cost thereof is reflected in the Prospect Offer, all Refusal
Space shall be delivered and accepted in an "AS-IS" condition, no lease
inducements (such as rent abatement or refurbishment allowances) shall be
provided with respect to the Refusal Space, all of the terms and conditions of
Landlord's then standard form lease shall apply to the Refusal Space, and the
term of the Refusal Space shall be coterminous with the Term of this Lease (as
the same may have been extended). The Refusal Space shall constitute a portion
of the Premises for all purposes. Rent for the Refusal Space shall be the rental
rate set forth in the Prospect Offer, unless the term set forth in the Prospect
Offer is not conterminous with the Term of this Lease, in which case the Rent
for the Refusal Space shall be the rental rate set forth in the Prospect Offer
modified to reflect Landlord's net effective rental rate of return over the
different term.
1.03 EXPANSION RIGHTS. If Tenant performs all of the terms and conditions
of this Lease, Tenant shall have the right to lease the Expansion Space, more
particularly described in ITEM 6(C) OF THE BASIC LEASE PROVISIONS, on or about
the Delivery Date (defined below) at the Prevailing Market Rate (as defined
below). At least six (6) months prior to the Expansion Date, set forth in ITEM
6(C) OF THE BASIC LEASE PROVISIONS, Landlord shall notify Tenant (i) the date
such Expansion Space will be delivered to Tenant, which may be six (6) months
before or after the Expansion Date ("DELIVERY DATE"), (ii) the size of the
Expansion Space, which may be plus or minus twenty percent (20%), and (iii) the
location and configuration of the Expansion Space, all of which shall be
determined in Landlord's sole discretion. Tenant shall be deemed to have waived
its rights under this ARTICLE 1.03, unless Tenant notifies Landlord in writing
of Tenant's election to exercise this expansion option and executes Landlord's
standard form amendment adding the Expansion Space to the Premises at the
Prevailing Market Rate, which notice and amendment shall be executed and
delivered to Landlord not more than nine (9) months and not less than six (6)
months prior to the Expansion Option Date. Unless the cost thereof is reflected
in the Prevailing Market Rate, all Expansion Space shall be delivered and
accepted in an "AS-IS" condition, no lease inducements (such as rent abatement
or refurbishment allowances) shall be provided with respect to the Expansion
Space, and the terms and conditions of Landlord's then standard form lease shall
apply to the Expansion Space. The Expansion Space shall constitute a portion of
the Premises for all purposes and the Rent for the Expansion Space shall be
equal to the then Prevailing Market Rate determined as of the Delivery Date.
1.04 PARKING. During the initial Term of this Lease, Tenant shall lease
ten (10) unreserved parking spaces in the parking garage connected to the
Building, under terms and conditions as set forth in the Tenant Parking
Agreement, attached as EXHIBIT F. Tenant agrees to abide by and comply with all
rules and regulations applicable to such parking or parking garage, whether
promulgated by Landlord or the operator of the parking garage. Tenant shall be
charged $75.00 per parking space for the use of such parking space for the
initial term of this Lease. Thereafter, and for any additional parking spaces
used by Tenant, Tenant shall pay the rates generally charged for such spaces in
the parking garage, which rates may be changed from time to time upon written
notice from Landlord. In addition to the Parking Charges, Tenant shall pay all
state taxes with respect to the Parking
4
Charges; it being the intent of the parties that such state taxes be passed
through to the Tenant. Notwithstanding any provision to the contrary, Tenant
shall not be charged for the use of ten (10) parking spaces for the first four
(4) months of the Term of the Tenant Parking Agreement.
ARTICLE 2
TERM
2.01 TERM AND COMMENCEMENT DATE. The Term of this Lease shall be the
period of time specified in ITEM 4(A) OF THE BASIC LEASE PROVISIONS and shall
commence on the Target Commencement Date.
If Tenant takes possession of the Premises for any purpose, other than
construction, Tenant shall be deemed to have accepted the Premises even though
the Acceptance of Premises Memorandum described in ARTICLE 2.03 may not have
been executed and the date of such possession shall be the Commencement Date.
Neither the validity of this Lease nor the obligations of Tenant hereunder
shall be affected by Landlord's failure to tender to Tenant possession of the
Premises on or before Landlord's Target Commencement Date nor shall Landlord be
subject to any liability for failure to timely tender possession of the Premises
to Tenant, but the Rent reserved and covenanted herein to be paid shall not
commence until the Commencement Date.
2.02 EXPIRATION. The Term of this Lease shall be for the period of time
set forth in ITEM 4(A) OF THE BASIC LEASE PROVISIONS and shall commence on the
Target Commencement Date.
2.03 ACCEPTANCE. Prior to Tenant's occupancy of the Premises, Landlord and
Tenant shall confirm the actual Commencement Date and Term by execution of an
Acceptance of Premises Memorandum (the form of which is attached as EXHIBIT
"C").
2.04 RENEWAL TERM. If Tenant performs all of the terms and conditions of
this Lease, Tenant shall have the right to extend the term of the Lease for the
number of years set forth in ITEM 4(B) OF THE BASIC LEASE PROVISIONS ("RENEWAL
TERM" and, as extending the Term, the "TERM"), which shall commence on the day
following the then current Expiration Date ("RENEWAL TERM COMMENCEMENT DATE").
Tenant shall be deemed to have waived its rights under this ARTICLE 2.04, unless
Tenant notifies Landlord in writing of Tenant's election to exercise this
renewal right and executes Landlord's standard form amendment subject to
negotiations extending the Term at the rental rate set forth in ITEM 3(C) OF THE
BASIC LEASE PROVISIONS, which notice and amendment shall be executed and
delivered to Landlord not more than nine (9) months and not less than six (6)
months prior to the then Expiration Date. Tenant shall accept the Premises in an
"AS-IS" condition, Tenant shall not be entitled to any lease inducements (such
as rent abatement or refurbishment allowances), and Tenant shall not be entitled
to extend the Term beyond the Renewal Term. The terms and conditions of
Landlord's then standard form lease shall apply to the Premises and the Rent
shall be
5
equal to ninety percent (90%) the Prevailing Market Rate determined as of the
Renewal Term Commencing Date. If requested in writing by Tenant, Landlord shall
provide Tenant with Landlord's good faith determination of the Prevailing Market
Rate for the Premises.
2.05 EARLY OCCUPANCY. Notwithstanding any provision in this Lease to the
contrary, Tenant shall be allowed to take possession of the Premises on June 1,
1995, to make modifications and improvements to the Premises with the Consent of
Landlord as provided for under the provisions of this Lease ("EARLY OCCUPANCY").
Such Early Occupancy by Tenant will be without obligation to pay Base Rent or
Additional Rent until October 1, 1995, at which time all Rent shall commence as
provided for in the Lease without exception including completion of Leasehold
Improvements.
2.06 EARLY CANCELLATION OPTION. If Tenant performs all of the terms and
conditions of this Lease, Tenant shall have the right, but not the obligation,
to terminate this Lease with respect to all of the Premises on any date
specified from October 1, 1998, until January 1, 1999. ("CANCELLATION DATE");
PROVIDED, HOWEVER, (i) Tenant gives Landlord written notice of its election to
terminate the Lease, which notices shall be given not less than four (4) months
prior to the Cancellation Date, (ii) Tenant surrenders the Premises in
accordance with the terms and conditions of this Lease no later than the
Cancellation Date, and (iii) at the time Tenant gives such notice of early
cancellation, Tenant pays to Landlord an Early Cancellation Fee equal to $3.68
per square feet of Agreed Rentable Area if canceled on November 1, 1998 and
reduced thereafter to the unamortized lease costs per square foot of Agreed
Rentable Area upon the Cancellation Date.
ARTICLE 3
BASE RENT
3.01 BASE RENT. Tenant, in consideration for this Lease and the leasing of
the Premises, covenants and agrees to pay Landlord, as Base Rent, the annual sum
shown in ITEM 3(A) OF THE BASIC LEASE PROVISIONS, in equal monthly installments
in advance without notice, offset, abatement, deduction or demand, commencing on
the Commencement Date (subject to the provisions of ARTICLE 5.04) and continuing
on the first day of each calendar month during the Term.
3.02 RENEWAL TERM. In the event Tenant elects to extend the Term pursuant
to ARTICLE 2.04, the Base Rent shall be the amount set forth in ITEM 3(C) OF THE
BASIC LEASE PROVISIONS.
3.03 PREVAILING MARKET RATE - DEFINED. For the purposes of this Lease, the
term "PREVAILING MARKET RATE" shall mean the rate at which a willing landlord
and a willing tenant would agree to lease comparable space in the first class
office buildings in downtown Houston, Texas, which rate shall take into account
all economic and non-economic factors, including, but not limited to: the
credit-worthiness of such tenant, the quality and reputation of the management
of the building, the amount of space the tenant then occupies, the amount of
space being offered for lease, the location within the building of such offered
space, the quality and finish of the offered space as it then exists, the age
and quality of the building, lease term, scheduled or actual commencement date,
add-on factor, and lease
6
inducements, such as name identification, rental abatement, moving expenses, and
architectural, construction and lease assumption allowances. Landlord shall have
the right to configure the rental rate in the manner it reasonably determines
(E.G., Base Rent with lease inducements), provided such rate is equivalent to
the Prevailing Market Rate.
ARTICLE 4
ADDITIONAL RENT
4.01 ADDITIONAL RENT. Tenant, in consideration for this Lease and the
leasing of the Premises and in addition to Base Rent, covenants and agrees to
pay Landlord Additional Rent as defined in ARTICLE 4.02 and calculated on an
annual basis (subject to the partial month provisions of ARTICLE 5.04), monthly,
in advance without notice, offset, abatement, deduction or demand commencing on
the Commencement Date and continuing on the first day of each calendar month
during the Term.
4.02 ADDITIONAL RENT - DEFINED. Additional Rent shall be composed of (i)
Tenant's pro rata share of Building Operating Expenses (as defined in ARTICLE
4.03 that exceeds $64,537.00 per annum for each calendar year during the Term,
(ii) payments for other services (as defined in ARTICLE 5.03), if any, and (iii)
Parking Charges (as set forth in the Tenant Parking Agreement, attached as
EXHIBIT "F").
4.03 BUILDING OPERATING EXPENSES.
(a) DEFINED. Building Operating Expenses shall mean and include all
amounts, expenses, and costs of whatsoever nature that are paid and
incurred because of or in connection with the ownership, management,
operation, repair, and maintenance of the Building and of Landlord's
personal property used in connection with the Building, and shall include,
but not be limited to: all general real estate taxes, special assessments,
governmental charges and fees, plus any and all costs and expenses of
evaluating and contesting the validity or amount of any of the foregoing;
insurance premiums; water, sewer, electrical and other utility charges;
service and other charges incurred in the operation and maintenance of the
elevators and the heating, ventilation and air-conditioning system;
cleaning and other janitorial services; tools and supplies; repair costs;
landscape maintenance costs; security services; license, permit and
inspection fees; property management fees; wages, salaries, related taxes,
insurance, reimbursable expenses and related benefits payable to employees
engaged in the maintenance and operation of the Building; and, in general,
all other costs and expenses that are incurred for the operation and
maintenance of first-class office buildings in the central business
district of Houston, including those which would normally be amortized
over a period not to exceed five (5) years. There shall also be included
in Building Operating Expenses the cost of any capital improvements made
to the Building by Landlord after the date of this Lease which is required
under any governmental law or regulation that was not applicable to the
Building at the time it was constructed, amortized over such period as
7
Landlord shall reasonably determine, together with interest at the rate of
twelve percent (12%) per annum on the unamortized balance.
Building Operating Expenses shall not include:
(i) costs and expenses associated with owning, operating,
maintaining, or repairing the parking garage, except the portion of the
management fee and security costs allocated to the parking garage shall be
included in Building Operating Expenses;
(ii) costs, expenses and fees relating to soliciting, advertising
for and entering into leases or other tenant arrangements for space in the
Building, including leasing commissions, architectural and engineering
services, and attorney's fees;
(iii) expenses incurred in furnishing to individual tenants services
in excess of Building Standard Services (as defined in ARTICLE 10.01);
(iv) costs of renovating or otherwise improving or decorating or
redecorating space for other tenants or other occupants in the Building or
vacant space in the Building (other than Common Areas);
(v) costs, expenses and fees relating to disputes with tenants and
other occupants in the Building, including attorney's fees and punitive
damages, if any;
(vi) costs of sculpture, paintings or works of art installed in and
on the Building or the real property described in attached EXHIBIT "B";
(vii) costs of correcting defects in the Building (including latent
defects in the Building) or the building equipment or replacing defective
equipment, which is covered by warranty contract;
(viii)costs of restoring or repairing the Building as a result of
total or partial destruction or condemnation;
(ix) except as provided in this ARTICLE 4, costs of replacement of
any major Building system (or major component thereof) or other similar
capital addition made subsequent to the original construction;
(x) any interest on debt or other finance charges or amortization
payments on any mortgage or underlying leases or lease;
(xi) non-cash items, such as deductions for depreciation or
obsolescence of the Building and Building equipment, or interest on
capital invested;
8
(xii) penalties or fines incurred due to the violation of building
codes by Landlord or by any other tenant of the terms and conditions of
any lease pertaining to the Building;
(xiii)any compensation paid to clerks, attendants or other persons
in commercial concessions operated by Landlord;
(xiv) rentals and other related expenses, if any, incurred in
leasing air conditioning systems, elevators or other equipment ordinarily
considered to be of a capital nature, except equipment which is used in
providing janitorial services or in operating an office and which is not
affixed to the Building; or
(xv) costs incurred in connection with the sale or financing of the
Building, including brokerage commissions, attorneys and accountants fees,
closing costs and interest charges.
In the event any of the foregoing labor materials are used in
connection with buildings other than the Building, only the pro rata
portion of those expenses that are applicable to the Building based upon
usage or consumption, shall be included in the Building Operating
Expenses.
(b) LABOR/ENERGY-SAVING DEVICES. If Landlord shall install a
labor/energy-saving device or other similar equipment, which is designed
to improve the operating efficiency of any system within the Building and
thereby reduce Building Operating Expenses, then Landlord may add to
Building Operating Expenses in each year during the useful life of such
installed device or equipment an amount equal to the annual amortization
allowance of the cost of such installed device or equipment, as determined
in accordance with applicable regulations of the Internal Revenue Service
or generally accepted accounting principles, together with interest at the
rate of twelve percent (12%) per annum on the unamortized balance thereof.
(c) TENANT'S PRO RATA BUILDING OPERATING EXPENSES. Tenant's pro rata
share of Building Operating Expenses shall be the product of (i) the
amount, if any, by which the amount obtained by dividing Building
Operating Expenses by the Agreed Rentable Area of the Building, specified
as being the amount in ITEM 2(C) OF THE BASIC LEASE PROVISIONS, exceeds
the initial estimated Operating Expense Factor, multiplied by (ii) the
Agreed Rentable Area of the "Premises", specified as being the amount in
ITEM 2(B) OF THE BASIC LEASE PROVISIONS.
If less than one hundred percent (100%) of the Agreed Rentable Area
of the Building is occupied during any calendar year or partial calendar
year or if less than one hundred percent (100%) of the Agreed Rentable
Area of the Building is supplied with Building Standard Services during
any such period, Building Operating Expenses shall include all
9
additional costs and expenses Landlord determines it would have incurred
if the Building had been one hundred percent (100%) occupied and supplied
with Building Standard Services.
4.04 ESTIMATED ADDITIONAL RENT. During the calendar year in which the Term
of this Lease commences, Tenant agrees to pay Landlord, on account of Additional
Rent due for that period, the monthly sum calculated pursuant to this ARTICLE 4.
Notwithstanding the foregoing, Landlord and Tenant acknowledge and agree that
the Annual Base Rent set forth in ITEM 3(A) OF THE BASIC LEASE PROVISIONS
includes a component applicable to Building Operation Expenses equal to the
initial estimated Operating Expense Factor in the amount set forth in ITEM 3(B)
OF THE BASIC LEASE PROVISIONS.
Prior to the end of each calendar year during the term, Landlord shall
furnish Tenant a written estimate of Building Operating Expenses for the next
ensuing calendar year and shall notify Tenant of Tenant's estimated Additional
Rent for such year. Tenant agrees to pay Landlord such estimated Additional Rent
in twelve (12) equal monthly installments during such year. Notwithstanding the
foregoing, in no event shall the Base Rent due from Tenant to Landlord be
reduced to an amount less than the amount set forth in ITEM 3(A) OF THE BASIC
LEASE PROVISIONS.
If Landlord fails to deliver a written estimate of Building Operating
Expenses and a notice of Tenant's estimated Additional Rent, Tenant shall
continue to make payments of estimated Additional Rent in accordance with the
most recent such estimate and notice provided, until a new written estimate and
notice is delivered, whereupon the newly estimated Additional Rent shall be
paid, and adjustments shall be made between Landlord and Tenant to bring Tenant
current on its payment of estimated Additional Rent for the calendar year in
question.
If this Lease is not terminated or does not expire on the last day of a
calendar year, Landlord shall make a good faith estimate of Tenant's actual
Additional Rent for the partial calendar year in which the Lease expires or is
terminated and shall notify Tenant thereof at least thirty (30) days prior to
such date and Landlord and Tenant agree to make payments as required to
compensate for Tenant's overpayment or underpayment of Additional Rent during
such partial calendar year on or prior to the Expiration Date or the day this
Lease is terminated, as the case may be, and both agree that such payment shall
be in final settlement of Tenant's obligation to pay Additional Rent for that
period.
4.05 REVISION OF ESTIMATED ADDITIONAL RENT. If Building Operating Expenses
should increase during any calendar year above the level anticipated in
Landlord's estimate of Building Operating Expenses for such year, Landlord may
revise its estimate of Tenant's Additional Rent for such year and Tenant agrees
upon thirty (30) days written notice to begin payment of the revised estimated
Additional Rent in such amounts so that the revised estimated Additional Rent
shall be fully paid by the end of the calendar year in question.
4.06 ACTUAL ADDITIONAL RENT. After the end of each calendar year during
the Term, Landlord shall prepare and deliver to Tenant a statement showing the
actual Building Operating
10
Expenses for the preceding calendar year, Tenant's actual Additional Rent due
for that year or portion thereof, and the amount either owing to Tenant by
reason of Tenant's overpayment of Additional Rent during such period or due from
Tenant by reason of its underpayment of Additional Rent during such period.
Tenant acknowledges and agrees that Tenant shall not be entitled to receive any
credit for the amount by which Tenant's actual Additional Rent is less than the
initial estimate of Additional Rent set forth in ITEM 3(B) OF THE BASIC LEASE
PROVISIONS; it being the intent of the parties that in no event shall the Base
Rent be reduced to an amount less than the amount set forth in ITEM 3(A) OF THE
BASIC LEASE PROVISIONS. Tenant agrees to pay Landlord the amount of any
underpayment of Additional Rent within thirty (30) days of the transmission of
the aforementioned statement. Landlord agrees to credit any overpayment of
Additional Rent against the next Additional Rent payments due from Tenant.
ARTICLE 5
RENT
5.01 RENT. As used in this Lease, the term "RENT" shall mean and include
the Base Rent, Additional Rent and all other amounts to be paid by Tenant, as
provided in this Lease or documents executed in connection with this Lease, all
of which shall constitute Rent in consideration for this Lease and the leasing
of the Premises. The Rent shall be paid at the times and in the amounts provided
in this Lease in legal tender of the United States of America to Landlord at the
address specified in the Basic Lease Provisions in Houston, ▇▇▇▇▇▇ County, Texas
or to such other person or at such other address as Landlord may from time to
time designate in writing. The Rent shall be paid without notice, demand,
abatement, deduction, or offset.
5.02 LATE CHARGE. In the event any installment of Base Rent or Additional
Rent, or any other amount due from Tenant to Landlord under this Lease, has not
been paid within ten (10) days after the date the amount was due, a late charge
of five cents ($.05) per each dollar so overdue shall be charged by Landlord, as
Additional Rent, for the purpose of defraying Landlord's administrative expenses
incident to the handling of such overdue payments, and Tenant agrees to pay such
Rent to Landlord upon demand.
5.03 PAYMENTS FOR OTHER SERVICES. Unless otherwise specified herein,
Tenant agrees to pay to Landlord as Rent all charges for any services, goods, or
materials furnished by Landlord at Tenant's request which are not required to be
furnished by Landlord under this Lease, no later than ten (10) days after
Landlord renders a statement therefor to Tenant.
5.04 PARTIAL MONTH'S RENT. If the Commencement Date is not the first day
of a calendar month or the Expiration Date is not the last day of a calendar
month, Tenant shall pay Landlord on the Commencement Date or the first day of
the month in which the Expiration Date occurs, as the case may be, the Base Rent
and Estimated Additional Rent due for that partial month, calculated in the
proportion that the number of days in that month following the Commencement Date
or preceding the Expiration Date divided by the total number of days in that
month.
11
ARTICLE 6
LEASEHOLD IMPROVEMENTS/PREMISES
6.01 LEASEHOLD IMPROVEMENTS/PREMISES. Tenant has examined the Premises and
the Leasehold Improvements located in the Premises and has made such inspections
of the Building, Premises and Leasehold Improvements that Tenant deems necessary
to determine their suitability for Tenant's needs. Based upon this examination
and inspection, Tenant accepts the Building, Premises and Leasehold Improvements
in an "AS-IS" condition WITH ALL FAULTS and with no warranties, express or
implied, and Landlord shall have no further obligations with respect thereto.
TENANT HEREBY WAIVES ANY AND ALL WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF
HABITABILITY, SUITABILITY, OR FITNESS FOR ANY PARTICULAR PURPOSE. Except as
specifically set forth in this Lease, Landlord shall have no further obligation
with respect to the construction or maintenance of any Leasehold Improvements.
6.02 ENVIRONMENTAL DISCLOSURE.
(a) STUDIES. A review of the plans and projects manual for the
Building, as updated, revealed that there should not by any asbestos
within the base building when built in accordance with such plans and
project manual (hereinafter called the "HAZARDOUS SUBSTANCE SURVEYS").
Landlord makes no representations or warranties whatsoever to Tenant
regarding: (i) the Hazardous Substance Surveys, including, without
limitation, the contents, accuracy and/or scope thereof [Landlord having
informed Tenant that said Hazardous Substance Surveys are not
comprehensive surveys for all forms of hazardous or toxic materials,
including, but not limited to, asbestos containing materials, or actual
field inspections of the Building therefor, and cannot be relied upon as a
representation that there are no hazardous or toxic materials at the
Premises or Building, whether addressed therein or not], or (ii) the
presence or absence of toxic or hazardous materials in, at, or under the
Premises or the Building. Tenant: (x) shall not rely on and Tenant hereby
represents to Landlord that it has not relied on the Hazardous Substance
Surveys, the same having been provided for informational purposes only;
and (y) acknowledges that Tenant will make or has made such studies and
investigations, will conduct or has conducted such tests and surveys, and
will engage or has engaged such specialists as Tenant deems appropriate to
fairly evaluate the Premises and any risks from hazardous or toxic
materials ("ENVIRONMENTAL TESTS"), which shall be permitted only following
prior written notice to and coordination with Landlord. Further, Tenant
shall furnish Landlord with a complete and legible copy of any such
resulting study, report, test, survey or investigation and shall fully
restore all areas and improvements where samples were taken or work
performed and repair all damage resulting from any of the same and shall
indemnify and hold harmless from and against all claims, actions,
liabilities, damages, losses, injuries or deaths in connection with or
arising out of or from any Environmental Tests or similar or dissimilar
activity conducted by Tenant, Tenant's agents or contractors at the
Premises or the Building, whether under this provision or otherwise under
or in connection with this Lease.
12
(b) LANDLORD ENVIRONMENTAL TESTS. Landlord shall have the right to
conduct Environment Tests in the Premises from time to time; PROVIDED,
HOWEVER, Landlord does not unreasonably interfere with Tenant's business
operations at the Premises, repairs any damage to Tenant's property,
inventory or fixtures damaged as a result of such Environmental Tests, and
furnishes Tenant on request with a true and complete copy of any resulting
report, survey or study.
(c) PROHIBITION ON PLACEMENT OR DISPOSAL. Tenant shall not knowingly
incorporate into, use, or otherwise place or dispose of at the Premises or
in the Building any toxic or hazardous materials in concentrations or
levels sufficient that by the then-applicable EPA, OSHA, or other
applicable governmental standards cause the specific materials so
identified to be classified or identified as toxic or hazardous materials
except for the limited purposes of use and storage only where (i) such
materials are in small quantities, properly labeled and contained, (ii)
such materials are handled and disposed of in accordance with the highest
accepted industry standards for safety, storage, use and disposal, (iii)
such materials are for use in the ordinary course of business (i.e., as
with office or cleaning supplies), (iv) notice of and a copy of the
current material safety data sheet is provided to Landlord for each such
hazardous or toxic material, and (v) such materials are used, transported,
stored, handled and disposed of in accordance with all applicable
governmental laws, rules and regulations. If Tenant ever has knowledge of
the presence in the Premises or the Building of such toxic or hazardous
materials which affect the Premises, Tenant shall notify Landlord thereof
in writing promptly after obtaining such knowledge. For purposes of this
Lease, "HAZARDOUS OR TOXIC MATERIALS" shall mean hazardous or toxic
chemicals or any materials or wastes containing hazardous or toxic
chemicals at levels or content which cause such materials or wastes to be
classified as hazardous or toxic as then prescribed by the prevalent
industry practice and standards or by the then-current levels or content
as set from time to time by EPA or OSHA or as defined under 29 C.F.R. 1910
or 29 C.F.R. 1925 or other applicable governmental laws, rules and
regulations (such practices, standards, governmental laws, rules and
regulations, are herein collectively called the "ENVIRONMENTAL LAWS").
(d) TENANT'S COVENANTS TO REMOVE. If Tenant or its employees,
agents, or contractors shall ever violate the provisions of this Article,
or if Tenant's acts, negligence, breach of this provision of business
operations directly and materially expand the scope of or materially
worsen any contamination from toxic or hazardous materials, then Tenant
shall clean-up, remove and dispose of the material causing violation, in
compliance, with all applicable governmental standards, laws, rules and
regulations and repair any damage to the Premises or Building within such
period of time as may be reasonable under the circumstances after written
notice by Landlord; PROVIDED, HOWEVER, such work shall commence not later
than thirty (30) days from such notice and be diligently and continuously
carried to completion by Tenant or Tenant's designated contractors, which
contractors shall be approve in writing by Landlord. Tenant shall notify
Landlord of its method, time and procedure for any clean-up or removal of
toxic or hazardous materials under this provision and Landlord shall have
the right to require reasonable changes in such method, time or procedure
or to require the same
13
to be done after normal business hours or when the Building is otherwise
closed (i.e., weekends or holidays).
6.03 REFURBISHMENT ALLOWANCE. If Tenant performs all of the terms and
conditions of this Lease, Landlord agrees to give Tenant a credit in the amount
of $4.25 per square foot of Agreed Rentable Area ("REFURBISHMENT ALLOWANCE") to
be applied toward the payment of direct invoices for refurbishing the Premises.
Landlord agrees to construct and install the improvements set forth on plans and
specifications which are mutually approved by Landlord and Tenant, at Tenant's
cost and expense, which cost shall include a five percent (5%) fee for
Landlord's overhead and supervision if Tenant uses Landlord's contractors and a
five percent (5%) fee if an outside contractor is utilized. In the event a
credit remains following the full and final payment of all such invoices,
Landlord agrees to apply such credit toward the next sums due and owing by
Tenant to Landlord.
ARTICLE 7
PERMITTED USE
7.01 USE. Tenant shall use and occupy the Premises only for general
business office purposes. Tenant shall not use or permit the Premises to be used
for any unlawful purpose or in any unlawful manner or in any manner prohibited
hereunder. Tenant, to the best of Tenant's knowledge, shall comply with all
federal, state and local governmental laws, ordinances, orders, rules, and
regulations applicable to the Premises, the Building, and the occupancy thereof
and Tenant shall give prompt written notice to Landlord of any notification to
Tenant of any claimed violation thereof. Tenant shall not permit the maintenance
of any public or private nuisance, or do or permit any other thing which may
disturb the quiet enjoyment of any other tenant of the Building; or create
unreasonable or excessive elevator or floor loads; or interfere with any of the
operations of the Building or any part thereof or the proper and economic
heating, air conditioning, cleaning or other servicing of the Building or any
part thereof; or unreasonably interfere with the use of the other areas of the
Building by any other tenants; or keep any substance or carry on or permit any
operation which might emit offensive odors or conditions into other portions of
the Building; or use any apparatus which might make undue noise or set up
vibrations in the Building; or do or permit any other thing which would
adversely affect Landlord's leasing of the Building.
7.02 SIGNS. Tenant shall not inscribe, paint, affix or display any signs,
advertisements or notices on or in the Building, except for such Tenant
identification information other than existing as Landlord permits in writing to
be included or shown on the main building directory and adjacent to the
principal access to the Premises.
14
ARTICLE 8
RENTABLE AREA
8.01 FULL FLOOR. The Rentable Area of a full floor of the Building shall
be: the area encompassed by the exterior walls of the Building (measured to the
center line of the glass assembly); less, the areas used for stairs, elevator
shafts, fire towers, flues, vents, stacks, pipe shafts, vertical ducts and other
such floor penetrations; measured to the edge of the slab opening, plus, a pro
rata allocation (based upon Rentable Area) of the Building Common Areas, as
defined below.
8.02 PARTIAL FLOOR. The Rentable Area of a portion of a floor of the
Building shall be: the area encompassed by any exterior walls of the Building
(measured to the center line of the glass assembly), the center line of any
partitions separating the area being measured from other areas leased or
leasable to others, and the center line of any partitions separating the area
being measured from common or service areas; plus, a pro rata share of all of
the areas on that floor which are used by or are for the use or benefit of all
tenants of that floor, including but not limited to, elevator lobbies,
corridors, restrooms, janitor closets, telephone closets and mechanical rooms
measured to the center line of partitions defining such areas; plus, a pro rata
allocation (based upon Rentable Area) of Building Common Areas, as defined
below.
8.03 BUILDING COMMON AREAS. Building Common Areas shall include but not be
limited to the following areas of the Building: the ground floor and concourse
level public lobbies; the mechanical and machine rooms serving the entire
building; the shipping and receiving area; the engineers' offices and
maintenance rooms; the fire control, security and mail rooms; code required exit
enclosures; the building penthouse; elevator equipment rooms; the tunnel and the
elevated walkways; and all other such areas which are used by or for the use or
benefit of all of the tenants of the Building in common, measured to the center
line of partitions defining such areas.
8.04 AGREED AREA. The Rentable Area of the Premises shall be deemed to be
the area set forth in ITEM 2(B) OF THE BASIC LEASE PROVISIONS. The Agreed
Rentable Area of the Premises and the Agreed Rentable Area of the Building as
shown in the Basic Lease Provisions have been calculated in accordance with the
foregoing definitions and are hereby agreed to be the stated areas regardless of
minor variations resulting from actual construction and completion of the
Premises for occupancy.
ARTICLE 9
ASSIGNMENT AND SUBLETTING
9.01 BY LANDLORD. Landlord may sell, transfer, assign, and convey all or
any part of the Building and any and all of its rights under this Lease at any
time, and in the event Landlord assigns its rights under this Lease, Landlord
shall be released from any further obligations hereunder, and Tenant agrees to
look solely to Landlord's successor in interest or assignee for performance of
such obligations, and shall attorn to any such successor in interest or
assignee.
15
9.02 BY TENANT. Tenant shall not assign this Lease, or allow it to be
assigned, in whole or in part, by operation of law or otherwise (including
without limitation the sale or transfer of a majority interest in ownership of
Tenant), or mortgage or pledge the same, or sublet the Premises, or any part
thereof, without the express prior written consent of Landlord, which shall not
be unreasonably withheld, and any attempt to do so shall be void and of no
effect.
If Tenant desires to assign or sublet all or any part of the Premises, it
shall inform Landlord in writing at least thirty (30) days in advance of the
date on which Tenant desires to make such assignment or sublease that it intends
to seek a sublessee or an assignee. Tenant shall give Landlord a notice
("TENANT'S NOTICE") stating the name, address and business of the proposed
assignee or sublessee, detailed financial references for the proposed assignee
or sublessee (including its most recent audited balance sheet and income
statement), the number of rentable square feet proposed to be sublet, the
proposed effective date of the assignment or sublease, the fixed rent and/or
other consideration, written consent from such proposed assignee or sublessee to
a credit check and any other information Landlord may reasonably require. Tenant
shall reimburse Landlord for Landlord's reasonable out-of-pocket expenses
incurred in connection with Tenant's request for such consent.
When Tenant has obtained an assignee or sublessee, Tenant shall provide
Landlord with a copy of the proposed assignment or sublease. Within fifteen (15)
days after Landlord's receipt of Tenant's proposed assignment or sublease
together with all information required to be included in the Tenant's Notice,
Landlord shall have the option to:
Cancel the Lease with respect to the portion of the Premises
proposed to be assigned or sublet; or
(a) Consent to the proposed assignment or sublease, in which event,
however, if the rent due and payable by any assignee or sublessee under
any such permitted assignment or sublease (or a combination of the rent
payable under such assignment or sublease plus any bonus or any other
consideration therefor or any payment incident thereto) for the space
assigned or sublet exceeds the Rent payable under this Lease for such
space, Tenant shall be bound and obligated to pay to Landlord within ten
(10) days following receipt all net process of such subletting or
assignment, which shall be calculated as fifty percent (50%) of the
difference of the amounts received including any bonuses and other
considerations less the amount of the Rent payable under this Lease and
the reasonable expenses of leasing have been previously agreed upon by
Landlord and Tenant; or
(b) Refuse its consent to the proposed assignment or sublease but
allow Tenant to continue in the search for an assignee or sublessee that
may be acceptable to Landlord. This option (b) shall be deemed to be
elected unless Landlord gives Tenant written notice providing otherwise.
9.03 CONTINUING LIABILITY. In no event shall any assignment or sublease
ever release Tenant from any obligation or liability hereunder. Any collection
by Landlord from any assignee or sublessee
16
or any other party on behalf of Tenant's account shall not be construed to
constitute a novation or a release of Tenant from further performance of its
obligations under this Lease.
9.04 CONSENT. Any consent by Landlord to any transaction contemplated by
this ARTICLE 9 must be in writing signed by the Landlord and shall contain such
provisions as Landlord may specify.
9.05 SUBSEQUENT TRANSACTIONS. Consent by Landlord to a particular
assignment or sublease or other transaction shall not be deemed a consent to any
other or subsequent transaction. If this Lease is assigned or if the Premises
are subleased (whether in whole or in part) or in the event of the mortgage,
pledge or hypothecation of the leasehold interest or grant of any concession or
license within the Premises to anyone other than Tenant without the prior
written permission of Landlord, Landlord may nevertheless collect rent from the
assignee, sublessee, mortgagee, pledgee, party to whom the leasehold interest
was hypothecated, concessione or licensee or other occupant and apply the net
amount collected to the Rent payable hereunder, but no such transaction or
collection of rent or applicable thereof by Landlord shall be deemed a waiver of
the rights of Landlord under this ARTICLE 9 or a release of Tenant from the
further performance by Tenant of its covenants, duties and obligations
hereunder.
ARTICLE 10
BUILDING SERVICES
10.01 BUILDING STANDARD SERVICES. Provided Tenant is not in default under
this Lease, Landlord shall cause to be provided to the Premises, subject to the
conditions set forth in this ARTICLE, the following "BUILDING STANDARD
SERVICES":
(a) Hot and cold water for drinking and lavatory purposes at those
points of supply provided for the general use of tenants of the Building.
(b) Heating and air-conditioning, in season and at such temperatures
and in such amounts as Landlord deems necessary during Standard Building
Hours, subject to any governmental requirements or standards which are or
may become applicable.
(c) Janitorial services as outlined on attached EXHIBIT "D", Monday
through Friday, holidays excepted.
(d) Automatic, nonexclusive, passenger elevator service twenty-four
(24) hours per day, and nonexclusive freight elevator service during
Building Standard Hours.
(e) Electrical facilities to furnish sufficient power for Building
Standard lighting, as described in the Work Letter, and typewriters, voice
writers, personal computers calculating machines, photocopying machines
and other machines of similar low electrical consumption; but not
including electricity required for electronic equipment (whether listed
17
above or not) which (singly) consumes more than 0.5 kilowatts per hour at
rated capacity or requires a voltage other than 110 volts single phase. If
Tenant installs any electrical equipment which requires additional
electrical or air-conditioning capacity, then Tenant shall bear the entire
cost of installing and operating such additional electrical or
air-conditioning service.
(f) Replacement of all bulbs and ballasts in all Building Standard
light fixtures.
(g) Security for the Building, the extent and nature of which shall
be determined by Landlord and may be modified from time to time but never
less than currently provided by the Building. Tenant hereby waives any and
all claims that may arise against Landlord for damages or injuries
occasioned or alleged to be occasioned by a failure of the security
system.
10.02 ADDITIONAL SERVICES. On Tenant's written request and at Tenant's
expense, Landlord shall make available to Tenant, after-hours heat or
air-conditioning and shall inform Tenant of those standards and charges as
determined from time to time. The Building Standard Hours are set forth in the
Building Rules and Regulations, which are attached as EXHIBIT "E" and may change
from time to time upon written notice by Landlord; PROVIDED, HOWEVER, that such
changes are generally consistent with the standards in other first-class office
buildings in the central business district of Houston, Texas.
If Tenant should require services not specified herein or services
specified herein in quantities or at times not specified herein, and Landlord
elects to provide such services, Tenant shall pay Landlord upon demand, as
Additional Rent, the cost of such service, including a ten percent (10%)
administrative fee.
10.03 COMMON AREA SERVICES. Landlord shall cause the Building Common
Areas, including its public lobbies and special service areas, to be cleaned,
lighted and heated or air-conditioned as Landlord in its judgment deems
necessary.
10.04 INTERRUPTION OF SERVICES. Landlord shall use reasonable diligence to
restore any failure or defect in the supply or character of Building Standard
Services and Common Area Services but Landlord shall not otherwise be liable to
Tenant for any such failure or defect and no such failure or defect shall be
construed as an eviction of Tenant nor shall such entitle Tenant to any
reduction, abatement, offset, or refund of Rent or to any damages from Landlord,
nor shall Landlord be in breach or default under this Lease if Landlord uses
reasonable diligence to restore any such failure or defect after Landlord
receives written notice thereof.
Notwithstanding the foregoing, but subject to the casualty and
condemnation provisions of ARTICLES 14 AND 15, which shall supersede the
provisions of this ARTICLE 10.04, in the event any of the essential Building
Services (which shall mean the services set forth in ARTICLES 10.01(B), (D) AND
(E) are interrupted (unless due in whole or in part to a general curtailment of
services in downtown Houston, Texas caused by any governmental body, public
utility, or utility franchise) and such
18
cessation continues uninterrupted for ten (10) business days, then unless the
cessation was caused by reason of the gross negligence or willful misconduct of
Tenant or Tenant's employees or agents, Tenant shall be entitled to an equitable
abatement of rent and additional rent based upon the extent to which Tenant is
unable to use the Premises to substantially the same extent and for
substantially the same purposes that Tenant used the Premises prior to the
cessation, until (i) the date the cessation is corrected or (ii) the date Tenant
reoccupies the Premises, whichever occurs earlier. In any event, the 10-day
period shall be extended on a day-by-day basis for any days in which delay are
attributable to Tenant, Tenant's employees or agents, or force majeure.
10.05 MODIFICATIONS OF SERVICES. Landlord reserves the nondiscriminatory
modifications to the Building Standard Services; PROVIDED, HOWEVER, that the
modified services shall be generally consistent with standard building services
provided in other first-class office buildings in the central business district
of Houston, Texas.
ARTICLE 11
ALTERATION, REPAIRS AND LIENS
11.01 CHANGES IN BUILDING. Landlord shall have the right at any time to
change the arrangement, location and/or size of entrances or passageways, doors
and doorways, and corridors, elevators, stairs, toilets or other public parts of
the Building, and upon giving Tenant notice thereof, to change the name, number
or designation by which the Building is known.
11.02 ALTERATION BY TENANT. Tenant shall make no alterations,
installations, additions, or improvements in or to the Premises without
Landlord's prior written consent which shall not be unreasonably withheld and to
the extent permitted the same shall be made at Tenant's sole cost and expense.
Tenant shall indemnify and forever hold harmless the Landlord against any and
all claims, liabilities, damages or causes of action arising out of the
performance of any such work. All alterations, installations, additions, or
improvements made to the Premises shall remain upon and be surrendered with the
Premises and become the property of Landlord at the expiration or termination of
this Lease or the termination of Tenant's right to possession of the Premises.
Any such work performed by Tenant shall be performed so as not to alter
the exterior appearance of the Building, or adversely affect the structure or
safety of systems or services of the Building, and shall comply with all
building, safety, fire, and other codes and governmental and insurance
requirements, and shall be performed so as not to result in any excess usage of
Building Standard Services (either during or after such work) without prior
written permission of Landlord.
From and after the Commencement Date, Tenant shall cause the Premises to
be in compliance with all existing requirements of and regulations issued under
the Disability Acts (as herein defined) for each of the following: (i)
alterations or improvements to any portion of the Premises performed after the
Commencement Date; (ii) obligations arising under the Disability Acts or
Tenant's employer-employee obligations; (iii) obligations arising under or out
of the conduct or operations of Tenant's
19
business, including any obligations or requirements for barrier removal to
customers or invitees as a commercial facility or as a public accommodation (as
defined in the Disability Acts); and (iv) any change in the nature of Tenant's
business, or its employees, or Tenant's business operations that triggers an
obligation under the Disability Act of 1990, 42 U.S.C. ▇▇.▇▇. 12101-12213, and
the Architectural Barriers Act, Tex. Rev. Civ. Stat. ▇▇▇. art. 9102, as amended
from time to time, and interpretations or regulations related thereto.
11.03 REMOVAL. Subject to lien rights in favor of Landlord, Tenant agrees
to remove all of its trade fixtures and personal property ("TENANT'S PROPERTY")
on or before the date of expiration or termination of the Term, and shall
promptly reimburse Landlord for the estimated cost of repairing all damage done
to the Premises or the Building by such removal and by restoring the Premises
affected by such removal to an architectural whole. Unless Tenant has made prior
arrangements with Landlord and Landlord has agreed in writing to permit Tenant
to leave any of Tenant's Property in the Premises for an agreed period, if
Tenant does not remove such property prior to such termination, then, in
addition to its other remedies at law or in equity, Landlord shall have the
right to remove and store all remaining items of Tenant's Property and all
damage to the Premises or Building resulting therefrom repaired at the cost of
Tenant or treat such items of Tenant's Property as being abandoned thereby
vesting ownership in Landlord upon termination of this Lease, and Tenant shall
not have any further right with respect thereto or reimbursement therefor.
11.04 MAINTENANCE AND REPAIR BY TENANT. Tenant shall maintain the Premises
and all fixtures and appurtenances therein, including all Leasehold Improvements
in good order and repair. Any waste, damage or destruction to or on any portion
of the Premises shall be repaired or replaced by Tenant excepting normal wear
and tear. In addition, any waste, damage or destruction to the Building, the
appurtenances or fixtures therein, or any other property located in or about the
Building, including that of any other tenant, and caused by or resulting from
the act, omission, or neglect of Tenant or Tenant's employees, servants, agents,
invitees, assignees or subtenants, shall be repaired or replaced by Tenant. The
liability of the Tenant under this Article shall not be restricted to limits of
insurance required to be carried under the terms of this Lease. Any injury or
damage described in this Article 11.04 shall be repaired by Tenant within twenty
(20) days after written notice from Landlord. In the event Tenant has failed to
complete the repair or restoration within the twenty day period, Landlord, at
Landlord's option, may repair or replace any or all of such damage pursuant to
ARTICLE 11.05. All insurance proceeds from the policies required under ARTICLE
13.01 shall be used for the repair or restoration required by this ARTICLE
11.04.
11.05 REPAIRS BY LANDLORD/LIMITATION OF LIABILITY. Landlord shall provide
for the maintenance of the public portions of the Building. Except to the extent
required by ARTICLE 14, Landlord shall not be required to make any improvements
or repairs of any kind or character upon or in the Premises, except repairs to
the exterior walls, windows, roof and other structural elements and the
equipment of the Building. Landlord shall not be liable to Tenant for losses due
to theft or burglary or for damages done by other tenants or unauthorized
persons on the Premises. In the event Tenant has failed to fulfill its duty to
repair pursuant to ARTICLE 11.04, after written notice, Landlord may, at its
option and at the cost and expense of Tenant, repair or replace any damage or
injury done
20
to the Building or any part thereof caused by Tenant, Tenant's agents,
employees, licensees, invitees or visitors and Tenant shall pay the cost
thereof, which shall include Landlord's administrative fee of fifteen percent
(15%), upon demand by Landlord.
11.06 TENANT LIENS. Tenant shall keep the Premises free from any liens
arising out of any work performed, materials furnished, or obligations incurred
by or for Tenant. In the event that Tenant shall not within ten (10) days
following the imposition of any such lien cause the same to be released of
record by payment or posting of a proper bond, Landlord shall have, in addition
to all the remedies provided herein, and by law, the right but not the
obligation, to cause the same to be released by such means as it shall deem
proper, including payment of or defense against the claim giving rise to such
lien. All sums paid by Landlord and all expenses incurred by it in connection
therewith shall create automatically an obligation of Tenant to pay, on demand,
an equivalent amount as Rent. No work which Landlord permits Tenant to perform
in the Premises shall be deemed to be for the immediate use and benefit of
Landlord so that no mechanic's, materialmen's or other liens shall be allowed
against the estate of Landlord by reason of its consent to such work.
ARTICLE 12
LATE PAYMENTS
12.01 LATE PAYMENTS. All late payments of Rent or other amounts or any
portion there of by Tenant shall bear interest from the date due until paid at
the rate of (i) twelve percent (12%) per annum or (ii) the maximum contract rate
of interest that Landlord may collect from Tenant under applicable law from time
to time, whichever is less.
ARTICLE 13
INSURANCE
13.01 TENANT'S INSURANCE. Tenant covenants and agrees that at all times
during the Term, Tenant shall carry and maintain, at its sole cost and expense,
insurance as follows:
(a) General Public Liability Insurance that covers the Premises and
Tenant's use thereof against claims for personal injury or death and
property damage occurring upon, in or about the Premises, containing a
broad form contractual liability endorsement insurance Tenant's
obligations under the indemnities made by Tenant under this Lease with a
combined single limit of at least One Million Dollars ($1,000,000) per
occurrence, or such greater amounts as Landlord may reasonably require.
(b) All-Risk fire and extended coverage property insurance covering
all Leasehold Improvements and non-standard heating, ventilating and
air-conditioning equipment, installed by reason of Leasehold Improvements;
fixtures installed by or at the expense of Tenant; and all personal
property (including any fixtures and equipment) in, on or upon the
Premises, in
21
an amount not less than 80% of the full replacement cost thereof and
containing the waiver of subrogation required in ARTICLE 13.04.
The foregoing policies (with the exception of worker's compensation
insurance to the extent not available under statutory law) shall name Landlord
as an additional insured as its respective interest may appear, and, except for
worker's compensation coverage, shall provide that any loss shall be payable to
Landlord and Tenant as their respective interests may appear. All insurance
shall be placed with companies which are reasonably acceptable to Landlord and
licensed to do business in the state in which the Building is located and
written as primary policies with annual deductibles not to exceed Ten Thousand
Dollars ($10,000), with any other policies serving as excess coverage. Tenant
shall (i) provide to Landlord prior to the Commitment Date and (ii) maintain
with Landlord throughout the Term of this Lease, certificates of insurance
showing the foregoing coverages, naming Landlord as a loss payee as its interest
may appear, and containing a provision that such policies will not be canceled
or modified without the endeavor to provide Landlord with thirty (30) days prior
written notice. One time per year, Tenant agrees to permit Landlord, at a
reasonable time to inspect the policies of insurance required herein.
13.02 LANDLORD'S INSURANCE. Landlord shall, at all times during the Term,
maintain in effect a policy or policies of insurance covering the Building
(excluding property required to be insured by Tenant) in such amounts as
Landlord may from time to time determine, providing protection against perils
included within the All Risk Property Policy together with such other risks as
Landlord may from time to time determine and with any such deductibles as
Landlord may from time to time determine.
Any insurance provided for in this ARTICLE 13.02 may be effected by a
policy or policies of blanket insurance, covering additional items or locations
or assureds, provided that the requirements of this Article are otherwise
satisfied. Tenant shall have no rights in any policy or policies maintained by
Landlord nor shall Tenant by reason of payment of its pro rata share of
Landlord's premium for such insurance, as part of Additional Rent, be entitled
to be a named insured under any policy maintained by Landlord.
13.03 INCREASED PREMIUMS. Tenant shall not knowingly do nor permit to be
done any act or thing which increases the rate of insurance for the Building,
any part thereof, or any property or equipment located therein or thereon. In
addition to Landlord's rights and remedies, in the event of a breach of Tenant
under this ARTICLE 13.03, Tenant shall reimburse Landlord after receiving
written proof upon demand for any increased premiums.
13.04 WAIVER OF SUBROGATION. Notwithstanding any provision in this Lease
to the contrary, each party hereto ("FIRST PARTY") hereby waives any and every
claim which arises or may arise in favor and against the other party hereto
("SECOND PARTY") during the Term, for any and all loss of, or damage to, any of
the First Party's property, which loss or damage is or could have been covered
by an All-Risk Property Policy. Each party hereto agrees to maintain coverage of
all risks that can be covered by an All-Risk Property Policy. The foregoing
shall not modify the parties' obligations under
22
ARTICLES 11.04, 13.01(A), 13.05 AND 19.07 to repair damage or destruction to the
Premises caused by any party other than Landlord, nor the First Party's
liability to any third party, including other tenants in the Building. Said
waiver shall be in addition to, and not in limitation or derogation of, any
other waiver or release contained in this Lease with respect to any losses or
damage to property of the parties hereto. Inasmuch as the above mutual waivers
will preclude the assignment of any aforesaid claim by way of subrogation (or
otherwise) to an insurance company (or any other person), each party hereto
hereby agrees immediately to give such insurance company which has issued to it
policies of property insurance written notice of the terms of said mutual
waivers, and have said insurance policies properly endorsed, if necessary, to
prevent the invalidation of said insurance coverages by reason of said waivers.
13.05 INDEMNITY. Notwithstanding any provision in this Lease to the
contrary, Landlord and Tenant (respectively called the "FIRST PARTY") each
assumes responsibility and liability for their respective employees, agents,
servants, invitees, guests, contractors, officers, directors, partners,
venturers, and other related persons ("WORKERS") and the respective property and
the property of their respective Workers ("PROPERTY"). The First Party waives
any and every claim against the other party and its Workers ("OTHER PARTY") for
any and all actual, incidental, and consequential damages, loss of profits, and
business interruption, to the First Party or its Workers, and for any and all
damages to the Property of the First Party or its Workers, and for any death or
injury to the First Party or its Workers. Further, the First Party shall
indemnify and hold harmless the Other Party from and against any and all
liabilities, claims, costs (including, but not limited to court costs ,
attorneys' fees, and costs of investigation), and actions of any kind arising or
alleged to arise by reason of injury to or death of the First Party or any of
its Workers or damage to or loss of Property of the First Party or its Workers,
occurring on, in, or about the Building, caused by any nature whatsoever or any
person or party (including other tenants in the Building), or occasioned or
alleged to be occasioned in whole or part by any acct or omission on the part of
the Other Party, including the negligence of the Other Party, or by breach,
violation, or nonperformance of any covenant of the Other Party under this
Lease. If any action or proceeding shall be brought by or against the Other
Party in connection with any such liability or claim, the First Party, on notice
from the Other Party, shall defend such action or proceeding, at the First
Party's sole cost and expense, by or through attorneys, reasonably satisfactory
to the Other Party. The provisions of this ARTICLE 13.05 shall apply to all
activities of both parties with respect to the Building, whether occurring
before, during, or after the Term of this Lease. The First Party's obligations
under this ARTICLE 13.05 shall not be limited to the limits of coverage of
insurance maintained or required to be maintained by that party under this
Lease. Inasmuch as the above mutual waivers will preclude the assignment of any
aforesaid claim by way of subrogation (or otherwise) to an insurance company (or
any other person), each party hereto hereby agrees immediately to give such
insurance company which has issued to it policies of insurance written notice of
the terms of said mutual waivers, and have said insurance policies properly
endorsed, if necessary, to prevent the invalidation of said insurance coverages
by reason of said waivers.
ARTICLE 14
CASUALTY
23
14.01 FIRE OR OTHER CASUALTY. If the Premises or the Building is damaged
or destroyed in whole or in part by fire or other casualty at any time during
the term of this Lease and if after the damage or destruction Tenant is not able
to use the portion of the Premises not damaged or destroyed to substantially the
same extent and for substantially the same purposes as Tenant used the Premises
prior thereto, then within thirty (30) days after delivery to Landlord by Tenant
of written notice describing in reasonable detail such damage or destruction,
Landlord shall give Tenant a written notice setting forth Landlord's election
either (i) to terminate this Lease, or (ii) to restore or replace the damaged or
destroyed portion to substantially the same condition that existed immediately
prior to such damage or destruction. If Landlord does not elect in writing to
proceed under the foregoing subsection (ii), it shall be deemed that it has
elected to terminate this Lease pursuant to the foregoing subsection (i). If
such damage or destruction occurs, then, unless such damage or destruction is
the result of the gross negligence or willful misconduct of Tenant, after such
damage or destruction the Rent shall be abated proportionately to the extent
that Tenant is unable to use the portion of the Premises damaged or destroyed to
substantially the same extent and for substantially the same purposes as Tenant
used the Premises prior thereto. Landlord shall not be liable to Tenant for any
injury or inconvenience to Tenant or its business resulting from the above
damage or repair thereof except for the above rent abatement (if any). If
Landlord elects to restore or replace the damaged or destroyed portions of the
Premises or Building, this Lease shall continue in full force and effect in
accordance with the terms hereof except for the rent abatement referred to above
(if applicable) and such restoration or replacement shall be made within one
hundred eighty (180) days, subject to delays attributable to force majeure, as
set forth in ARTICLE 19.15. If Landlord elects to terminate this Lease, this
Lease shall terminate on the last day of the month next following the end of the
thirty (30) day period referred to above.
In the event of a major casualty, Tenant, unless such major casualty is
the result of the gross negligence or willful misconduct of Tenant, shall have
the right, but not the obligation, to terminate this Lease if the repair and
restoration of the damaged or destroyed portion of the Premises reasonably
cannot be completed within one hundred eighty (180) days following Landlord's
notice of intent to repair and restore, which right shall be deemed waived
unless exercised in writing by Tenant within ten (10) days following Tenant's
receipt of such notice.
14.02 CASUALTY CAUSED BY TENANT. If the Building or the Premises shall be
damaged by fire or other casualty resulting from the gross negligence or willful
misconduct of Tenant, or the agents, employees, licensees or invitees of Tenant
(except that which is the subject of a waiver of subrogation rights under
ARTICLE 13.04), such damage shall be repaired or replaced at Tenant's sole cost
and expense. if such casualty is the result of the gross negligence or willful
misconduct of Tenant, Rent shall in any case continue without abatement.
24
ARTICLE 15
CONDEMNATION
15.01 CONDEMNATION. If all or any part of or interest in the Premises
shall be taken as a result of the exercise of the power of eminent domain, this
Lease shall terminate as to the part so taken as of the date Tenant is deprived
of possession thereby. If only a part of or interest in the Premises or a
substantial portion of the Building is so taken, either Landlord or Tenant shall
have the right to terminate this Lease as to the balance of the Premises by
written notice to the other within thirty (30) days after the date of taking;
provided, however, that a condition to the exercise by Tenant of such right to
terminate shall be that the portion of the Premises or Building taken shall be
of such extent and nature as to substantially handicap, impede or impair
Tenant's use of the Premises or the balance of the Premises remaining. In the
event of any taking, Landlord shall be entitled to any and all compensation,
damages, income, rent and awards with respect thereto, including any award for
the value of any unexpired Term of the Lease, but excepting any award specified
by the condemning authority for any property that Tenant has the right to remove
upon expiration of this Lease. Tenant shall have no claim against Landlord for
the value of any unexpired Term. In the event of a partial taking of the
Premises which does not result in a termination of this Lease, the Rent
thereafter to be paid shall be equitably reduced.
ARTICLE 16
ENTRY
16.01 ENTRY. Landlord, its agents, employees, and representatives shall
have the right to enter the Premises at any time upon reasonable notice to
Tenant under the circumstances (such notice may be oral and not in compliance
with ARTICLE 19.09, and no notice shall be required in the case of routine
maintenance or any emergency) for any purpose which Landlord may reasonably deem
necessary for the operation and maintenance of the Building, or the alteration,
improvement or repair of the Premises, or any adjoining space, or to exhibit the
Premises to prospective purchasers, mortgagees, or tenants, or to determine if
Tenant is performing its obligations hereunder, or to cure any defaults by
Tenant, or to remove from the Premises any improvements placed thereon or
property placed therein in violation of this Lease. Landlord may do any of the
foregoing without being deemed guilty of an eviction of Tenant and without
abatement of Rent, and may for that purpose erect scaffolding and other
necessary structures where reasonably required by the character of the work to
be performed , provided the business of Tenant shall be interfered with as
little as is reasonably practicable. Tenant hereby waives any claim for damages
for any injury or inconvenience to or interference with Tenant's business, any
loss of occupancy or quiet enjoyment of the Premises, and any other loss
occasioned thereby. For each of the aforesaid purposes, Landlord shall at all
times have and retain a key with which to unlock all of the doors, in, upon and
about the Premises, except Tenant's vaults and safes. Landlord shall have the
right to use any and all means which Landlord may deem proper to open any doors
in an emergency without liability therefor.
25
ARTICLE 17
SUBORDINATION, ATTORNMENT AND QUIET ENJOYMENT
17.01 SUBORDINATION. The rights and interests of Tenant under this Lease
and in and to the Premises shall be subject and subordinate to any lease wherein
Landlord is the tenant or lessee (whether by sale/leaseback or otherwise), and
to the lien of all deeds of trust, mortgages, and other security instruments and
to all renewals, modifications, consolidations, replacements and extensions
thereof (said leases, deeds of trust and other documents being collectively
called "SECURITY DOCUMENTS") heretofore or hereafter executed by Landlord
covering the Premises, the Building, or any parts thereof or interest therein to
the same extent as if the Security Documents had been executed, delivered and
recorded prior to the execution of this Lease. Tenant agrees, however, that the
holder of or lessor under any of the Security Documents may at its option,
unilaterally elect to subordinate, in whole or in part, by an instrument in form
and substance satisfactory to such party, such Security Documents to this Lease.
In such case, Tenant agrees to execute promptly and deliver to Landlord or such
party any such subordination instrument or instruments reasonably requested by
such party.
17.02 ATTORNMENT. If a lease constituting a Security Document is
terminated or mortgage constituting a Security Document is foreclosed, as the
case may be, this Lease (at the option of the Landlord under such lease or the
purchaser at such foreclosure sale, as the case may be) shall not terminate or
be terminable by Tenant by reason of such termination or foreclosure and Tenant
shall (if requested to do so) attorn to the landlord under such lease or the
purchaser at such foreclosure sale, as the case may be.
17.03 RIGHTS/SECURITY DOCUMENTS. After delivery to Tenant of a notice from
Landlord that it has entered into one or more Security Documents, then during
the term of such Security Documents, Tenant shall deliver to the holder or
holders (which term shall include "LESSORS") of all Security Documents a copy of
all notices to Landlord and shall grant to such holder or holders the right to
cure all defaults, if any, of Landlord hereunder within the same time period
provided in this Lease for curing such defaults by Landlord and for an
additional twenty (20) day period after the expiration of the time period
provided in this Lease for Landlord to cure such default and, except with prior
written consent of the holder of the Security Documents, shall not (i) amend
this Lease, (ii) surrender or terminate this Lease except pursuant to a right to
terminate expressly set forth in this Lease, or (iii) pay any Rent more than one
month in advance or pay a Rent or other amounts payable hereunder other than in
strict accordance with the terms hereof.
17.04 MODIFICATIONS TO LEASE. If, in connection with financing or
refinancing for the Building or with any ground or underlying lease, the lender,
Landlord, or financier shall request reasonable modifications in this Lease,
Tenant will not unreasonably withhold, delay, or defer its consent thereto,
provided that such modifications do not increase the obligations of Tenant
hereunder or materially adversely affect the leasehold interest hereby created
or Tenant's use and enjoyment of the Premises or Building.
26
17.05 LANDLORD AS ATTORNEY-IN-FACT. The provisions of this ARTICLE 17
shall be self-operative and shall not require further agreement by Tenant.
Tenant agrees, however, that, upon the request of Landlord, or any such lessor,
mortgagee or trustee, Tenant shall execute and deliver whatever instruments may
be required for such purposes and to carry out the intent of this ARTICLE 17,
and in the event Tenant fails to do so within ten (10) days after demand in
writing, Tenant does hereby make, constitute and irrevocably appoint Landlord as
its attorney-in-fact, complete with an interest, in its name, place and stead so
to sign and deliver such instruments as if the same had been signed and
delivered by Tenant.
17.06 QUIET ENJOYMENT. Tenant, on paying the Rent and keeping and
performing the conditions and covenants herein contained, shall and may
peaceably and quietly enjoy the Premises for the Term, subject to the aforesaid
underlying leases and mortgages, all applicable laws and other governmental and
legal requirements, applicable insurance requirements and regulations, and the
provisions of this Lease.
ARTICLE 18
DEFAULT
18.01 EVENT OF DEFAULT. If any of the following events occurs, each shall
constitute a material "DEFAULT" by Tenant (as used in this ARTICLE 18.01 only,
Tenant shall mean "TENANT" as defined above, and/or any general partner of
Tenant, and/or any stockholder owning more than 50% of Tenant, or any guarantor
of Tenant's obligations hereunder):
(a) The failure of Tenant to pay the Rent or any part thereof or any
other sums due hereunder or under documents executed in connection
herewith when due; PROVIDED, HOWEVER, in the event Tenant makes such
payment within five (5) days following the due date and Tenant has not
been late in the payment of any sums due to Landlord more than one (1)
time in the preceding twelve (12) month period, Landlord agrees to waive
such late payment as a Default;
(b) The entry of a decree or order by a court having jurisdiction
adjudging Tenant to be bankrupt or insolvent or approving as properly
filed a petition seeking reorganization of Tenant under the Bankruptcy
Code, or any other similar applicable Federal or State law, or a decree or
order of a court having jurisdiction for the appointment of a receiver or
liquidator or a trustee or assignee in bankruptcy or insolvency of Tenant
or its property or for the winding up or liquidation of its affairs; or
Tenant shall institute proceedings to be adjudicated a voluntary
bankruptcy or shall file or consent to the filing of any bankruptcy,
reorganization, receivership or other proceeding for or against Tenant, or
any such proceedings shall be instituted against Tenant and the same shall
not be vacated within thirty (30) days after the same are commenced; or
Tenant shall make an assignment for the benefit of Tenant's creditors or
Tenant shall fail to pay Tenant's debts as they become due; or Tenant
27
shall admit in writing Tenant's liability to pay the debts of Tenant
generally as they may become due; or Tenant shall become insolvent; or
(c) Tenant shall fail to fulfill or perform, in whole or in part,
any of its obligations under this Lease (other than the payment of Rent or
other sums due hereunder or under documents executed in connection
therewith); or
(d) Tenant shall vacate or abandon the Premises or any significant
portion thereof which shall mean that Tenant is absent from the Premises
or any significant portion thereof for ten (10) consecutive days; or
(e) Tenant shall fail to take possession of the Premises within
twenty (20) days following the Commencement Date, provided, Landlord had
notified Tenant that the same are ready for occupancy; or
(f) The sale or attempted sale under execution or other legal
process of the Tenant's interest in the Lease; or
(g) The failure by Tenant to discharge or stay execution on any
judgment against Tenant within thirty (30) days after such judgment
becomes final.
18.02 RIGHTS UPON DEFAULT. If a Default occurs, then Landlord at any time
thereafter, without waiving any other rights available to Landlord herein, at
law or in equity, may either terminate this Lease or terminate Tenant's rights
to possession without terminating this Lease, whichever Landlord elects. In
either event, Landlord may, without additional notice and with or without court
proceedings, reenter and repossess the Premises, and remove all persons and
property therefrom using such force as is necessary, and Tenant hereby waives
any claim arising by reason thereof or by reason of issuance of any distress
warrant or writ of sequestration and agrees to indemnify and hold harmless
Landlord from any such claims. Unless Landlord specifically in writing
terminates this Lease, the same shall be deemed to be a termination of Tenant's
right to possession without a termination of this Lease.
If Landlord elects to terminate this Lease, it may treat the Default as an
entire breach of this Lease and Tenant shall immediately become liable to
Landlord for damages equal to the total of (i) the cost of recovering,
relenting, and remodeling the Premises to Building Standard condition, (ii) all
unpaid Rent and other amounts earned or due through such termination, plus (iii)
any other remedies at law or in equity available to Landlord.
If Landlord elects to terminate Tenant's rights to possession of the
Premises without terminating the Lease, Landlord may do any one or more of the
following:
(a) recover from Tenant the costs of recovering, remodeling and (if
applicable) rerenting the Premises;
28
(b) recover from Tenant all unpaid Rent and other amounts earned or
due through such termination;
(c) recover from Tenant all Rent and other amounts as the same
becomes due and owing pursuant to the terms hereof;
(d) accelerate and cause to become immediately due and payable all
Rent and other amounts due and/or likely to be due hereunder and recover
from Tenant the present value thereof; such present value to be based upon
a six percent (6%) per year discount rate;
(e) rent the Premises or any part thereof for the account of Tenant
to any person or persons for such rent and for such terms and other
conditions as Landlord deems appropriate, and Tenant shall be liable to
Landlord for the amount, if any, by which the Rent for the unexpired
balance of the Term exceeds the net amount, if any, received by Landlord
from such rerenting, being the gross amount so received by Landlord less
the costs of repossession, rerenting, remodeling, and other expenses
incurred by Landlord. Such sum or sums shall be paid by Tenant in monthly
installments on the first days of each month of the Term. Tenant agrees
that Landlord may file suit to recover any sums due under the terms hereof
and that no recovery of any portion due Landlord shall be defense to any
subsequent action brought for any amount not theretofore reduced to
judgment in favor of Landlord. In no case shall Landlord be required to
relent the Premises or to collect the rental due under such rerenting and
in event shall Tenant be entitled to any excess rents received by
landlord; and
(f) pursue any other remedies at law or in equity available to
Landlord.
If Landlord elects to terminate Tenant's rights to possession without
terminating this Lease, Landlord shall have the right at any time thereafter to
terminate this Lease, whereupon the foregoing provisions with respect to
termination of this Lease will thereafter apply. All rights and remedies of
Landlord shall be cumulative and not exclusive of any remedies provided by law,
and Landlord shall be entitled simultaneously to pursue multiple or alternative
remedies, at any time to abandon pursuit of any remedy, and at any time to
pursue additional remedies. All of the foregoing remedies may be exercised
without grace, notice or demand of any kind, which Tenant hereby waives. Tenant
agrees that all of the foregoing remedies provide just and reasonable
compensation to the Landlord for a Default, and are a reasonable method of
determining damages to Landlord which are unascertainable as of the date hereof.
Tenant acknowledges and agrees that in connection with this Lease, Landlord has
expended and will continue to expend sums of money for Tenant's lease
inducements, (E.G., expenses, such as construction costs, allowances, and fees),
for which Landlord has agreed to accept payments over all or a portion of the
initial Term of the Lease. Notwithstanding its designation as Rent, Tenant
acknowledges and agrees that the cost of such sums, plus interest at the rate of
twelve percent (12%) per annum amortized over the initial Term of the Lease,
constitute an obligation of Tenant separate and apart from the consideration for
the Premises, and that upon a Default, the unamortized portion thereof shall
become immediately due and owing; it being the intent of the
29
parties that the foregoing constitutes a proper characterization of the
components of Rent and do not constitute additional rent.
18.03 COSTS. If a Default occurs, or if either party brings any action to
enforce any provision of this Lease, then the nonprevailing party shall
reimburse the prevailing party on demand for all costs reasonably incurred by
the prevailing party in connection with such enforcement, including, but not
limited to, reasonable attorney's fees, court costs, and related costs.
18.04 DEFAULTS BY LANDLORD. Except as otherwise provided in this Lease,
Landlord shall be in default under this Lease if Landlord fails to perform any
of its obligations hereunder and said failure continues for a period of thirty
(30) days after written notice thereof from Tenant to Landlord (unless such
failure cannot reasonably be cured within thirty (30) days and Landlord shall
have commenced to cure said failure within said thirty (30) days and continues
diligently to pursue the curing of the same).
18.05 NON-WAIVER. The failure of Landlord to seek redress for violation
of, or to insist upon the strict performance of, any covenant or condition of
this Lease shall not prevent a subsequent act or omission that would have
originally constituted a violation. The receipt by Landlord of Rent with or
without knowledge of the breach of any provision of this Lease shall not be
deemed a waiver of such breach (except a breach of Tenant's obligation to pay
such Rent as Landlord shall have actually received), shall not reinstate this
Lease or Tenant's right of possession if either or both have been terminated,
and shall not otherwise affect any notice, election, action, or suit by
Landlord; and any such waiver shall not be construed as a waiver of any other or
future default by Tenant. No act or thing done by Landlord during the Term shall
be deemed an acceptance of a surrender of the Premises and no agreement to
accept such surrender shall be valid, unless expressed and in writing signed by
Landlord.
ARTICLE 19
MISCELLANEOUS PROVISIONS
19.01 AMENDMENT. Any agreement hereafter made between Landlord and Tenant
shall be ineffective to modify, release, or otherwise affect this Lease, in
whole or in part, unless such agreement is in writing and signed by the parties
to be bound thereby.
19.02 SEVERABILITY. If any term or provision of this Lease shall, to any
extent be held invalid or unenforceable by a final judgment of a court of
competent jurisdiction, the remainder of this Lease shall not be affected
thereby. In addition, to the extent possible any such term or provision shall be
deemed modified so that the intention of the parties is maintained to the extent
permitted by applicable law. Each obligation of Landlord hereunder shall be
construed as a separate and independent covenant, and not as a condition to the
performance by Tenant of its obligations hereunder.
30
19.03 ESTOPPEL LETTERS. Tenant shall at any time and from time to time
upon not less than ten (10) days prior written notice from Landlord execute,
acknowledge and deliver to Landlord a statement in writing certifying that this
Lease is unmodified and in full force and effect (or if modified, stating the
nature of such modification and certifying that this Lease, as so modified, is
in full force and effect) and the dates to which the rental and other charges
are paid, and acknowledging that there are not, to Tenant's knowledge, any
uncured defaults on the part of the Landlord hereunder (or specifying such
defaults if any are claimed), and such other matters as Landlord may reasonably
request. It is expressly understood and agreed that any such statement may be
relied upon by any prospective purchaser or existing or future lienholder of all
or any portion of the real property of which the Premises is a part or by any
other person to whom it is delivered. Tenant's failure to deliver such statement
within such time shall be conclusive upon Tenant that this Lease is in full
force and effect, without modification except as may be represented by Landlord,
that there are no uncured defaults in Landlord's performance and that the dates
through which rental and other charges have been paid, as represented by the
Landlord, are true and accurate.
19.04 LANDLORD'S LIABILITY. Tenant specifically agrees to look solely to
the then current Landlord's interest in the Building for the recovery of any
judgment against Landlord relating to this Lease, it being agreed that Landlord
shall never be personally liable for any such judgment beyond such matters. In
no event shall Tenant have the right to levy execution against any property of
Landlord other than its interest in the Building as hereinabove expressly
provided; however, that such shall not limit Tenant's right to injunctive or
other relief that does not involve Landlord's payment of money to Tenant out of
assets other than the then current Landlord's interest in the Building.
19.05 HOLDOVER. If Tenant or any party claiming under Tenant shall remain
in possession of the Premises after the expiration or earlier termination of
this Lease, then Tenant shall be deemed a tenant-at-sufferance, terminable at
any time, and shall pay Rent at double the rental rate of the most recent Rent
due prior to such termination or expiration, but otherwise shall be subject to
all of the obligations of Tenant under this Lease. Additionally, Tenant shall
pay to Landlord all damages sustained by Landlord on account of such holding
over by Tenant. No holding over by Tenant, whether with or without consent of
landlord, shall operate to extend this Lease.
19.06 TAXES ON TENANT'S PROPERTY. Tenant upon written notice shall be
liable for and shall pay, prior to their becoming delinquent, any and all taxes
and assessments levied against any personal property or trade or other fixtures
placed by tenant in or about the Premises.
19.07 SURRENDER. Upon the expiration or earlier termination of the Term,
or upon the exercise by Landlord of its rights to enter the Premises without
terminating this Lease, Tenant shall peaceably quit and surrender the Premises,
including all Leasehold Improvements and other fixtures and appurtenances made
part of the Premises, all in good order and condition, except ordinary wear and
tear resulting from normal use, and further subject to ARTICLE 11.02. All
obligations of Tenant for the period of time prior to the expiration or earlier
termination of the Term shall survive such expiration or termination. All
indemnity agreements and hold harmless agreements contained herein shall survive
the expiration or earlier termination of the Term. Upon the expiration or
earlier
31
termination of the Term of this Lease, Tenant shall, at the option of Landlord,
execute a Release of Lease and Waiver of Claim, in recordable form, containing
Tenant's release of all of his interests in the Premises.
19.08 SUCCESSORS AND PARTIES. Subject to the limitations and conditions
set forth elsewhere herein, this Lease shall bind and inure to the benefit of
the respective heirs, legal representatives, successors, and assigns of the
parties hereto. The term "LANDLORD", as used in this Lease, so far as the
performance of any covenants or obligations on the part of Landlord under this
lease are concerned, shall mean only the owner of the Building or the entity
with the right of possession of the Building, as a master lessee or otherwise,
at the time in question. If Tenant is composed of more than one party, then all
such parties shall be jointly and severally liable.
19.09 NOTICE. Except as otherwise herein provided, any statement, notice,
or other communication which Landlord or Tenant may desire or be required to
give to the other shall be in writing and shall be deemed sufficiently given or
rendered if (a) received by the other or (b) sent by registered or certified
mail with postage prepaid and addressed to the appropriate address given in ITEM
B OF THE BASIC LEASE PROVISION or at such other address as the other shall
designate by prior written notice, and such notice shall be effective upon the
earlier of four (4) days after the same is mailed as herein provided or on the
date when the same is received or (c) delivered to the Premises.
19.10 RULES AND REGULATIONS. Tenant, its servants, employees, agents,
visitors, invitees, and licensees, shall observe faithfully and comply strictly
with the Rules and Regulations set forth in attached EXHIBIT "E" and shall abide
by and conform to such further rules, regulations and modifications as Landlord
may from time to time reasonably make or adopt after Tenant receives a copy
thereof. All changes shall be sent by Landlord to Tenant in writing and shall
thereafter be carried out and observed by Tenant.
19.11 CAPTIONS. The captions in this Lease are inserted only as a matter
of convenience and for reference only and they in no way define, limit, or
describe the scope of this Lease or the intent of any provisions hereof.
19.12 NUMBER AND GENDER. All genders used in this Lease shall include the
other genders, the singular shall include the plural, and plural shall include
the singular, whenever and as often as may be appropriate.
19.13 GOVERNING LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of Texas, including applicable federal
law.
19.14 DISCRIMINATORY SCHOOL. Under no circumstances shall Tenant operate,
on the Premises, as school which discriminates on the basis of race, color,
creed or national origin.
19.15 FORCE MAJEURE. If, by reason of inability reasonably to obtain and
utilize labor, materials, equipment, or supplies; or by reason of circumstances
directly or indirectly the result of any
32
state of war or national or local emergency or acts of public enemies or
terrorists; any laws, rules, orders, regulations, action, inaction, or
requirements of any kind of government of the United States or of the State or
of any of their departments, agencies, officials or civil, military or
governmental authority, or subdivisions thereof now or hereafter in force;
epidemics; weather; strikes, lockouts, or other industrial disturbances;
insurrections; civil disturbances; arrests, restraints of government and people;
explosions; breakage or accident to machinery and transmission lines or pipes;
or partial or entire failure of utility services; accidents in, damage to, or
the making of repairs, replacements, or improvements to the Building or the
Premises, or any of the equipment of either; or any other cause beyond the
reasonable control of either party and such party shall be unable to perform or
shall be delayed in the performance of any obligation hereunder (except for
Tenant's obligation to pay Rent or any other sums due to Landlord), then this
Lease and the obligation of Tenant to pay the Base Rent or additional items of
Rent and the obligations of the other party to perform and comply with all of
the other covenants and agreements hereunder shall in no way be affected or
impaired, and such nonperformance or delay in performance (except for Tenant's
failure to pay Rent and other sums due under this Lease in a timely manner)
shall not constitute a breach or default by Landlord under this Lease nor give
rise to any claim against Landlord for damages or constitute a total or partial
eviction, constructive or otherwise. Each party shall exercise due diligence in
undertaking to remedy such inability to perform or delay in performance with all
reasonable dispatch, but shall not be required to adjust a labor dispute against
its will.
19.16 USE OF NAME. The name of the Building throughout the Term shall be
"1600 ▇▇▇▇▇ STREET BUILDING". Tenant shall not, except to designate Tenant's
business address, use the name or ▇▇▇▇ "1600 ▇▇▇▇▇ STREET BUILDING" for any
purpose whatsoever. Landlord shall have the right to change the name of the
Building.
19.17 BROKER. Landlord and Tenant each represent and warrant that it has
dealt with, and only with, the Brokers identified in ITEM 7 OF THE BASIC LEASE
PROVISIONS in connection with this Lease and that no other broker negotiated
this Lease or is entitled to any commission in connection with this Lease, by
through or under it. Each party shall indemnify and hold harmless the other
party from and against all claims (and costs of defending against and
investigating such claims including reasonable attorney's fees) of any other
broker (or similar parties) claiming by, through or under it in connection with
this Lease.
19.18 ATTORNEYS' FEES. In the event of any legal action or proceeding
brought by either party against the other arising out of this Lease, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
costs incurred in such action and such amount shall be included in any judgment
rendered in such proceeding.
19.19 COMMON FACILITIES. Tenant shall have the nonexclusive right, in
common with others, to the use of common entrances, lobbies, elevators, ramps,
drives, stairs and similar access and serviceways and other common facilities in
and adjacent to the Building, subject to such rules and regulations as may be
adopted by the Landlord.
33
19.20 EXAMINATION OF LEASE. Submission of this instrument for examination
or signature by Tenant does not constitute a reservation of or option for lease,
and it is not effective as a lease or otherwise until execution by and delivery
to both Landlord and Tenant.
19.21 TIME. TIME IS OF THE ESSENCE IN THIS LEASE AND IN EACH AND ALL OF
THE PROVISIONS HEREOF.
19.22 AUTHORITY. If Tenant executes this Lease as a corporation,
partnership or other artificial entity, each of the persons executing this Lease
on behalf of Tenant does hereby personally covenant and warrant that Tenant is a
duly authorized and existing entity, that Tenant has and is qualified to do
business in Texas, that said entity has full right and authority to enter into
this Lease, and that each person signing on behalf of said entity was authorized
to do so.
19.23 RECORDING. This Lease shall not be recorded, however, Landlord shall
have the right to record a short form or memorandum thereof, at Landlord's
expense, at any time during the term hereof.
19.24 FINANCIAL STATEMENTS. Tenant shall deliver to landlord within ninety
(90) days following the Effective Date and following the end of each calendar
year during the Term of this Lease, financial statements of Tenant, each of
which are certified that such financial statement correctly and accurately sets
forth the financial position of Tenant as of the Effective Date or the end of
the calendar year in question, as the case may be.
19.25 LENDER APPROVAL. Tenant acknowledges and agrees that this Lease is
subject to the approval of Citicorp Real Estate, Inc. and Landlord agrees to
notify Tenant of such approval within five (5) days following Landlord's receipt
thereof.
19.26 ENTIRE AGREEMENT. This Lease, including attached EXHIBITS "A"
THROUGH "F" (which Exhibits are incorporated in and shall constitute a portion
of this Lease for all purposes), contains the entire agreement between Landlord
and Tenant with regard to the subject matter hereof. Tenant hereby acknowledges
and agrees that neither Landlord nor Landlord's agents or representatives have
made any representations, warranties or promises with respect to the Building,
the Premises, Landlord services, or any other matters pertaining to the
agreement between Landlord and Tenant which are not contained herein.
19.27 WAIVER OF TEXAS DECEPTIVE TRADE PRACTICES ACT. It is the intent of
Landlord and Tenant to waive all of the provisions (other than Section 17.555)
of the Texas Deceptive Trade Practices Consumer Protection Act, Subchapter E of
Chapter 17 of the Texas Business and Commerce Code (the "DTPA") as such
provisions are or may be applicable to this Lease and the transaction evidenced
hereby. Accordingly, Landlord and Tenant hereby represent and agree as follows:
34
(a) Tenant represents to Landlord that with respect to this Lease,
Tenant is a business consumer as that term is used in the DTPA (i.e.
Tenant is an individual, partnership or corporation who seeks or acquires
by purchase or lease, any goods or services for commercial or business
use).
(b) Landlord and Tenant agree that the total consideration paid or
to be paid by Tenant over the term of this Lease exceeds $500,000.00,
failing which this part (b) shall be deemed deleted.
(c) Tenant represents to Landlord that Tenant has assets of $5
million or more according to the most recent financial statement of Tenant
prepared in accordance with generally accepted accounting principles,
failing which Tenant shall have its legal counsel sign this Lease in the
space provided on the signature page hereof. Tenant further represents
that it has knowledge and experience in financial and business matters
that enable it to evaluate the merits and risks of this transaction.
(d) Landlord and Tenant hereby agree, for themselves, their agents,
property managers, brokers and contractors and their respective heirs,
personal representatives, successors and assigns, that all of the
provisions of the DTPA (except for Section 17.555 thereof) which are or
may be applicable to this Lease and the transaction evidenced hereby are
hereby WAIVED, including specifically without limitation, all rights and
remedies resulting from or arising out of any and all acts or practices of
the other party or their agents, property managers or brokers or their
respective heirs, personal representatives or assigns in connection with
this Lease and/or the transaction evidenced hereby, regardless of whether
such acts or practices occurred before or after the execution of this
Lease. The provisions of this Section 19.28 shall survive the execution
and any termination of this Lease. IF PART (b) ABOVE IS DEEMED DELETED,
THIS SECTION 19.28 SHALL NOT BE APPLICABLE AND SHALL BE WITHOUT FORCE OR
EFFECT.
35
IN WITNESS WHEREOF, this Lease is hereby executed as of the Effective
Date.
"LANDLORD" "TENANT"
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ VENTURE TEXOIL, INC., a Texas corporation
By: Cullen Center, Inc.,
A Venturer
BY /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ BY /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇, President Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President
By: Cullen Property Management
Corporation, a Venturer
Attorney for Tenant if Required
Pursuant to Section 19.28
BY /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
EXHIBITS
A - Floor Plan
B - Property Description
C - Acceptance of Premises Memorandum D - Cleaning and Janitorial Services E -
Rules and Regulations of the Building F - Tenant Parking Agreement
36
EXHIBIT "A"
37
EXHIBIT "B"
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ BUILDING
PROPERTY DESCRIPTION
Being a tract or parcel of land containing 140,935 square feet situated in
the Obedience Smith Survey, Abstract 696, City of Houston, ▇▇▇▇▇▇ County, Texas,
being out of the ▇▇▇▇▇▇▇▇ Addition as described on the map recorded in Volume M,
page 475 of the ▇▇▇▇▇▇ County Deed Records (H.C.D.R.) and the ▇. ▇. ▇▇▇▇▇▇▇▇▇▇
Addition as shown on the map recorded in Volume 11, page 832 H.C.D.R. Said tract
being more particularly described as follows with all Coordinates and bearings
referenced to the Texas Coordinate System, South Central Zone.
COMMENCING at a Copperweld Monument stamped "A.C.-5" (x=3,150,906.78,
Y=716,037.50) found for the intersection of the centerline of ▇▇▇▇▇ Street (80
feet wide) with the centerline of ▇▇▇▇▇ Avenue (80 feet wide) from which City
Survey marker 5357-1606-C (City Rod No. 52) bears South 57 Degrees 08'01" East:
THENCE, North 32 Degrees 51'57" East, 40.00 feet along the centerline of
said ▇▇▇▇▇ Street to a point;
THENCE, departing said centerline at a right angle, North 57 Degrees
08'03" West, 40.00 feet to a 5/8-inch iron rod set for the intersection of the
northeasterly right-of-way line of said ▇▇▇▇▇ Avenue with the northwesterly
right-of-way line of said ▇▇▇▇▇ Street, same being the most southerly corner of
a 108,360 square foot tract described in the deed recorded in File No. D570782,
Film Code ▇▇▇-▇▇-▇▇▇▇ of the ▇▇▇▇▇▇ County Official Public Records of Real
Property (H.C.O.P.R.R.P.), and the POINT OF BEGINNING (X=3,150,894.89,
y=716,092.80) of the herein described Cullen Center Phase 1;
THENCE, along the northeasterly right-of-way line of said ▇▇▇▇▇ Avenue,
North 57 Degrees 08'03" West, 160.07 feet to a 5/8-inch iron rod set for an
angle point;
THENCE, continuing along the right-of-way line of said Peace Avenue (width
varies at this point), North 56 Degrees 11'52" West, 104.10 feet to a 5/8-inch
iron rod set for the intersection with the easterly right-of-way line of ▇▇▇▇
Street (width varies) and a non-tangent curve to the left;
THENCE, 54.17 feet northerly along the arc of said curve and the easterly
right-of-way line of ▇▇▇▇ Street, (Delta = 18 Degrees 49'51", Radius = 164.81
feet, Chord = North 07 Degrees 17'29" East, 53.92 feet) to a 5/8-inch iron rod
set for a point of tangency;
THENCE, North 02 Degrees 07'27" West along the easterly right-of-way line
of said ▇▇▇▇ Street, at 133.93 feet pass the south line of a 10,826 square foot
tract described in the deed recorded in Volume 7769, Page 568 of the ▇▇▇▇▇▇
County Deed Records, at 232.37 feet pass the north line of a proposed 0.123 acre
Houston Light and Power Company easement, at 263.66 feet pass the
38
proposed north line of said easement, at 265.66 feet pass the south line of a
54,130 square foot tract described in the deed recorded in File No. E143452,
Filme Code ###-##-#### of the H.C.O.P.R.R.P., and in all a total distance of
429.17 feet to a 5/8-inch iron rod set for the most southerly cut-back corner of
the intersection with the southerly right-of-way line of ▇▇▇▇▇▇▇ Street (60 feet
wide);
THENCE, North 42 Degrees 45'03" East, 14.17 feet along said cut-back line
to a 5/8-inch iron rod set in the southerly right-of-way line of said ▇▇▇▇▇▇▇
Street;
THENCE, along the southerly right-of-way line of said ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇ Degrees 37'33" East, 217.07 feet to a 5/8-inch iron rod set for the
most northerly cut-back corner of the intersection with the westerly
right-of-way line of ▇▇▇▇ Street (60 feet wide);
THENCE, South 47 Degrees 14'57" East, 14.17 feet along said cut-back line
to a 5/8-inch iron rod set in the proposed westerly right-of-way line of said
▇▇▇▇ Street;
THENCE, South 02 Degrees 07'27" East, 109.42 feet along the westerly
right-of-way line of said ▇▇▇▇ Street, (60 feet wide) to a 5/8-inch iron rod set
for the beginning of a tangent curve to the left;
THENCE, along the westerly and southwesterly right-of-way line of said
▇▇▇▇ Street, and along the arc of said curve, at 60.84 feet pass the proposed
northeast corner of said Houston Lighting and Power Company easement, in all a
total arc length of 73.08 feet (Delta = 48 Degrees 07'33", Radius = 87.00 feet,
Chord = South 26 Degrees 11'13" East, 70.95 feet) to the intersection with the
line dividing said 140,935 square foot tract (Cullen Center Phase I) and a
52,048 square foot tract (Cullen Center Phase 2);
THENCE, along said dividing line the following four courses;
South 02 Degrees 07'27" East, 120.90 feet;
South 32 Degrees 51'57" West, 107.78 feet;
South 12 Degrees 08'03" East, 106.60 feet;
South 57 Degrees 08'03" East, 71.61 feet to the existing northwesterly
right-of-way line of said ▇▇▇▇▇ Street;
THENCE, along said right-of-way line, South 32 Degrees 51'57" West, 130.39
feet to the POINT OF BEGINNING, containing 140,935 square feet of land.
39
EXHIBIT "C"
ACCEPTANCE OF PREMISES MEMORANDUM
THIS ACCEPTANCE OF PREMISES MEMORANDUM is an amendment to the Lease for
space in ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Building, executed on the ___ day of _______, 1995,
between ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ VENTURE, a Texas joint venture, as Landlord, and
TEXOIL, INC., a Texas corporation, as Tenant.
Landlord and Tenant hereby agree that:
1. The Premises are tenantable, Landlord has no obligation for
construction (except as specified in the Lease for repairs and maintenance), and
Tenant acknowledges that the Premises and the Leasehold Improvements located in
the Premises are satisfactory in all respects.
2. The Commencement Date of the Lease is agreed to be the 1st day of
September, 1995.
3. The Expiration Date of the Lease is hereby agreed to be the 31st day of
August, 2000.
All other terms and conditions of the Lease are hereby ratified and
acknowledges to be unchanged.
IN WITNESS WHEREOF, this Acceptance of Premises Memorandum is executed
this _____ day of ________, 1995.
"LANDLORD" "TENANT"
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ VENTURE TEXOIL, INC., a Texas corporation
By: Cullen Center, Inc.,
A Venturer
BY BY
▇▇▇▇ ▇. ▇▇▇▇▇▇, President Name:
Its:
By: Cullen Property Management
Corporation, a Venturer
Attorney for Tenant if Required
Pursuant to Section 19.29
BY
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
40
EXHIBIT "D"
CLEANING AND JANITORIAL SERVICE
NIGHTLY CLEANING 1. Empty, clean and damp dust all waste receptacles,
wash as necessary.
2. Empty and clean all ash trays.
3. Vacuum all rugs and carpeted area.
4. Dust furniture, file, fixtures, etc.
5. Damp wipe and polish all glass furniture tops.
6. Remove finger marks and smudges from vertical
surfaces.
7. Damp dust all water coolers.
8. Sweep all private stairways nightly and vacuum if
carpeted.
9. Damp mot spillage in office and public areas as
required.
10. Damp dust all telephones as necessary.
FLOORS 1. Ceramic tile, marble and terrazzo floors to be
swept and buffed nightly and washed or scrubbed as
necessary.
2. Vinyl particle floors and bases to be swept nightly.
3. Tile floors to be waxed and buffed monthly.
4. All carpeted areas and rugs to be vacuum cleaned
nightly.
5. Carpet shampooing to be performed at Tenant's request
and billed to Tenant.
WASH ROOMS 1. Damp mop, rinse and dry floors nightly.
2. Scrub floors as necessary.
3. Clean all mirrors, bright work and enameled surfaces
nightly.
41
4. Wash and disinfect all fixtures.
5. Damp wipe and disinfect, all partitions, tile, walls,
etc.
6. Empty and sanitize all receptacles.
7. Fill toilet tissue, soap, towel and sanitary napkin
dispensers.
8. Clean flushometers and other metal work.
9. Wash and polish all wall partitions, tile walls and
enamel surfaces from trim to floor monthly.
10. Vacuum all louvers, ventilating grills and dust light
fixtures monthly.
GLASS 1. Clean all perimeter windows at least twice per year
on the outside, and once per year on the inside.
2. Clean glass entrance doors and adjacent glass panels
nightly.
3. Clean partition glass and interior glass doors
quarterly.
HIGH DUSTING
(QUARTERLY 1. Dust and wipe clean all closet shelving when empty.
2. Dust all picture frames, charts, graphs, etc.
3. Dust clean all vertical surfaces
4. Damp dust all ceiling air conditioning diffusers.
5. Dust the exterior surfaces of light fixtures
DAY 1. Check men's washrooms for toilet tissue replacement.
2. Check ladies' washrooms for toilet tissue and
sanitary napkin replacements.
3. Supply toilet tissue, soap and towels in men's and
ladies' washroom.
42
Anything hereinabove to the contrary notwithstanding it is understood that
no services of the character provided for in this EXHIBIT shall be performed on
Saturdays, Sundays or on Holidays defined in this Lease.
The cleaning services outlined may be changed or altered from time to time
to facilitate the inclusion of the latest methods of maintenance and cleaning
technology generally recognized as acceptable for first-class office buildings
in Houston, Texas.
43
EXHIBIT "E"
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ BUILDING
RULES AND REGULATIONS OF THE BUILDING
1. Landlord will provide and maintain a directory for all tenants on the
concourse level of the Building. No signs, advertisements or notices
visible to the general public shall be permitted within the Building
unless first approved in writing by Landlord.
2. Sidewalks, doorways, vestibules, halls, stairways and other similar areas
shall not be obstructed by tenants or used by any tenant for any purpose
other than ingress and egress to and from the leased premises and for
going from one to another part of the Building.
3. Corridor doors, when not in use, shall be kept closed.
4. Plumbing, fixtures and appliances shall be used only for the purposes for
which designed, and no sweepings, rubbish, rags or other unsuitable
material shall be thrown or placed therein. Damage resulting to any such
fixtures or appliances from misuse by a tenant shall be paid by Tenant.
5. Landlord shall provide all locks for doors into each tenant's leased area,
and no tenant shall place any additional lock or locks on any door in its
leased area without Landlord's prior written consent. Two keys fro each
lock on the doors in each tenant's leased area shall be furnished by
Landlord. Additional keys shall be made available to tenants at tenant's
cost. Tenant shall not have any duplicate keys made except by Landlord.
6. Electric current shall not be used for cooking or heating without
Landlord's prior written permission.
7. All tenants will refer all contractors, contractors' representatives and
installation technicians who are to perform any work within the Building
to Landlord for Landlord' supervision, approval and control before the
performance of any such work. This provision shall apply to all work
performed in the Building including, but not limited to, installations of
telephones, telegraph equipment, electrical devices and attachments, and
any and all installations of every nature affecting floors, walls,
woodwork, trim, windows, ceilings, equipment and any other physical
portion of the Building.
8. Movement in or out of the Building or furniture or office equipment, or
dispatch or receipt by tenants of any heavy equipment, bulky material or
merchandise which requires use of elevators or stairways, or movement
through the Building entrances or lobbies shall be restricted to such
hours as Landlord shall designate. All such movement shall be in a manner
to be agreed between the tenants and Landlord in advance. Such
prearrangement shall be
44
initiated by the tenant. The time, method, and routing of movement and
limitations for safety or other concern which may prohibit any article,
equipment or other item from being brought into the Building shall be
subject to Landlord's discretion and control. Although Landlord or its
personnel may participate in or assist in the supervision of such
movement, tenant assumes final responsibility for all risks as to damage
to articles moved and injury to persons or public engaged or not engaged
in such movement, including equipment, property and personnel of Landlord
if damages or injured as a result of acts in connection with carrying out
this service for tenant from time of entering the property to completion
of work. Landlord shall not be liable for acts of any person engaged in,
or any damage or loss to any of said property or persons resulting from
any act in connection with such service performed for a tenant.
9. The location, weight and supporting devices for any safes and other heavy
equipment shall in all cases be approved by Landlord prior to initial
installation or relocation.
10. No portion of any tenant's leased area shall at any time be used for
cooking, sleeping or lodging quarters. No birds, animals or pets of any
type, with the exception of guide dogs accompanying visually handicapped
persons, shall be brought into or kept in, on or about tenant's leased
area.
11. Tenants shall not make or permit any loud or improper noises in the
Building or otherwise interfere in any with other tenants or persons
having business with them.
12. Each tenant shall endeavor to keep its leased area neat and clean. Nothing
shall be swept or thrown into the corridors, halls, elevator shafts or
stairways, nor shall tenants place any trash receptacles in these areas.
13. Tenants shall not employ any person for the purpose of cleaning other than
the authorized cleaning and maintenance personnel for the building unless
otherwise approved in writing by Landlord.
14. To ensure orderly operation of the Building, Landlord reserves the right
to approve all concessionaires, vending machines operators or other
distributors of cold drinks, coffee, food or other concessions, water,
towels or newspapers.
15. Landlord shall not be responsible to the tenants, their agents, employees
or invitees for any loss of money, jewelry or other personal property from
the leased premises or public areas or for any damages to any property
therein from any cause whatsoever whether such loss or damage occurs when
an area is locked against entry or not.
16. Tenants shall exercise reasonable precautions in the protection of their
personal property from loss or damage by keeping doors to unattended areas
locked. Tenants shall also report any thefts or losses to the Building
Manager and security personnel as soon as reasonably possible
45
after discovery and shall also notify the Building Manager and security
personnel of he presence of any persons whose conduct is suspicious or
causes a disturbance.
17. Tenants, their employees, guests and invitees may be called upon to show
suitable identification and sign a building register when entering or
leaving the Building at times other than normal Building operating hours
and all tenants shall cooperate fully with Building security personnel in
complying with such requirements.
18. Tenants shall not solicit from or circulate advertising material among
other tenants of the Building except the regular use of the U.S. mail
service. Tenants shall notify Building Manager or the Building security
personnel promptly if it comes to their attention that any unauthorized
persons are soliciting from or causing annoyance to tenants, their
employees, guests or invitees.
19. Landlord reserves the right to deny entrance to the Building or remove any
person or persons from the Building in any case where the conduct of such
person or persons involves a hazard or nuisance to any tenant of the
Building or to the public or in the event of fire or other emergency,
riot, civil commotion or similar disturbance involving risk to the
Building, tenants or the general public.
20. Firearms of any caliber or make are strictly prohibited from being carried
or stored in the Building. Requests for an exception to this policy must
be submitted in writing to landlord prior to any introduction of a firearm
in the building and must detail the reasons for the requested exception.
Any exception permitting a person to carry or store a firearm in the
Building must be in writing signed by Landlord and shall contain such
conditions and provisions as Landlord may specify in its sole discretion.
Notwithstanding the grant of any exception, Landlord shall retain the
right to revoke such permission at any time and for any reason, including
without limitation, the unsafe, rude, offensive, alarming or reckless
display or carrying of the firearms.
21. The Building Standard Hours are presently scheduled to be from 6:00 a.m.
to 6:00 p.m., Monday through Friday and 8:00 a.m. to 1:00 p.m. Saturdays,
holidays excepted.
22. Smoking is prohibited in all public areas of the Building, including
without limitation, restrooms, corridors, lobbies, elevators, stairwells
and cross-walks.
23. Landlord reserves the right to rescind any of these rules and regulations
and to make such other and further rules and regulations as in its
judgment shall from time to time be needful for the safety, protection,
care and cleanliness of the Building, the operation thereof, the
preservation of good order therein and the protection and comfort of the
tenants and their agents, employees and invitees, which 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.
46
EXHIBIT "F"
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ BUILDING
TENANT PARKING AGREEMENT
BASIC PROVISIONS
TENANT: TERM:
FIVE (5) YEARS
TEXOIL, INC.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, Commencement Date:
Suite _____
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn:______________
Expiration Date:
NO. TYPE
10 Unreserved
MONTHLY PARKING CHARGES*
-0- Reserved $ 75.00
$112.00
*Subject to adjustment pursuant to SECTION 4
1. CONSIDERATION. In consideration of Tenant's obligation to pay the
Parking Charges and observe the other terms and conditions of this Parking
Agreement ("AGREEMENT"), ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ VENTURE ("LANDLORD") leases and rents
to Tenant and Tenant leases and rents from Landlord, up to the number and type
of parking spaces for the Term, as set forth in the Basic Provisions. Tenant may
lease additional parking spaces on a monthly basis subject to availability. The
parking spaces are located in the parking garage of the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Building ("PARKING GARAGE") that is operated by CENTRAL PARKING SYSTEM OF TEXAS,
INC. ("OPERATOR").
2. LOCATION. The reserved parking spaces are located in the Parking Garage
in locations determined by the Operator and may be changed from time to time
upon advance written notice to Tenant. Operator will use best efforts to prevent
others from using the reserved parking spaces, but neither Landlord nor Operator
assumes any obligation or liability to Tenant for unauthorized use of such
spaces, other than to attempt to have such vehicle removed within a reasonable
time after Operator receives notice by Tenant of such unauthorized use. The
unreserved parking spaces are located throughout the Parking Garage in areas
designated by Operator and will be available on a first-come, first-served
basis.
3. TERM, COMMENCEMENT AND EXPIRATION. The Term will commence on the
Commencement Date and will expire without notice on the Expiration Date, as set
forth in the Basic
47
Provisions. In the event Tenant is in default under the terms of the lease of
office space in the ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ may terminate this
Agreement at any time thereafter.
4. PARKING CARD. A magnetic access card ("PARKING CARD") will be issued
for each parking space leased, upon the receipt of ten dollars ($10.00) per
Parking Card as a security deposit, which will be refunded upon the return of
the Parking Card. The parking Cards are not transferable and entitle Tenant to
only one parking space per Parking Card.
Parking Charges are due and payable in advance, without notice, offset or
demand, beginning on the Commencement Date and continuing the first day of each
calendar month during the term of this Agreement. The Parking Charges may be
adjusted by landlord and/or Operator from time to time to reflect the prevailing
market rate; provided, however, Operator gives Tenant thirty (30) days prior
notice of such change. Tenant will be assessed Parking Charges for each Parking
Card in the possession of Tenant and no refunds, credits, or allowances will be
granted for absence, vacation, or other nonuse of the Parking Garage. Parking
Charges will not be prorated for partial months, unless the Commencement Date is
after the 15th day of the calendar month, in which case only the first month's
Parking Charges will be prorated to one-half of the monthly parking Charges.
The initial Parking Charges per month are subject to adjustment for
increases in the State tax rate for taxable items sold or leased (the "STATE TAX
RATE") and any increases in the State Tax Rate shall be "passed through" to the
Tenant and shall result in an increase in TENANT's Parking Charges per month.
Notwithstanding any provisions herein to the contrary, during the initial
term of the Lease and this Agreement, Tenant shall be charged $75.00 per parking
space for ten (10) unreserved parking spaces. Thereafter, and for any additional
parking spaces needed by Tenant, Tenant shall apply the rates generally charged
for each space in the parking garage.
5. REMEDIES. In the event Tenant is in default under the terms and
conditions of this Agreement, Landlord may immediately terminate this Agreement.
Landlord and Tenant agree that damages to landlord would be difficult to
ascertain and that because of the surplus of available parking spaces, a
reasonable estimate of damage is the present value of the remaining Parking
Charges based upon a six percent (6%) per year discount rate. Additionally,
Landlord may pursue any and all of the remedies that it may have in law and
equity.
6. WAIVER OF LIABILITY. Neither Landlord nor Operator assume any
responsibility whatsoever for any loss of or damage to the vehicles or their
contents. Tenant hereby waives any and all claims, liabilities and actions
against Landlord and Operator and agrees to indemnify and hold Landlord and
Operator harmless from all liabilities, claims, and actions against Landlord
and/or Owner for any damages, direct and indirect, arising or alleged to have
arising with respect to the performance or non-performance of this Agreement.
ALL VEHICLES SHOULD BE LOCKED AND VALUABLES REMOVED.
48
7. ASSIGNMENT. Upon written notification to Tenant by Landlord or
Operator, all rights, interests and obligations of Operator may be assigned to
another parking garage operator and Tenant agrees to look solely to such
successor or assignee for full performance of such obligations after the date of
notice.
8. RULES AND REGULATIONS. Tenant has received and reviewed a copy of the
Rules and Regulations covering the Parking Garage and agrees to abide by them.
The Rules and Regulations may be amended from time to time by Landlord and/or
Operator, in their sole judgment.
IN WITNESS WHEREOF, this Tenant Parking Agreement is executed effective as
of the Effective Date of the Lease to which this EXHIBIT is attached.
"LANDLORD" "TENANT"
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ VENTURE TEXOIL, INC., a Texas corporation
By: Cullen Center, Inc.,
A Venturer
BY BY
▇▇▇▇ ▇. ▇▇▇▇▇▇, President Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: President
By: Cullen Property Management
Corporation, a Venturer
Attorney for Tenant if Required
Pursuant to Section 19.29
BY
▇▇▇▇ ▇. ▇▇▇▇▇▇, President
49