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EXHIBIT 10.38
HORIZON SEISMIC INC
(US) OFFICE, WESTHEIMER,
HOUSTON, USA
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STANDARD OFFICE LEASE FORM
(WITH BASE YEAR)
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") is entered as of the ____ day of
_______________ 1994 between PINCAY OAKS, INC. ("Landlord"), and HORIZON
EXPLORATION, LIMITED ("Tenant" ).
ARTICLE 1 LEASE PREMISES, TERM, AND USE
1.01. Leased Premises.
(a) Upon the terms, provisions and conditions hereof, Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord the premises
reflected on the floor plans set forth in Exhibit "A" hereto in the building
known as WESTHEIMER CENTRAL PLAZA ("Building") and located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇. References in this Lease to the "Complex" shall
mean the Building, the parking garage ("Garage") adjacent to and servicing the
Building and all other facilities, parking areas, improvements, structures, and
landscaping areas relating to or servicing the Building and Garage and located
on or installed in or to be located on or installed in the land ("Land")
described in Exhibit "B" hereto. Such premises, together with any other space
in the Complex leased by Tenant pursuant hereto, are herein called the "Leased
Premises."
(b) The "Rentable Area" of the Leased Premises is hereby
stipulated and agreed for all purposes to be 2,874 square feet.
1.02. Term. Subject to the terms, provisions and conditions hereof,
this Lease shall continue in force for a term ("Term") of SIXTY-THREE (63)
calendar months, beginning on the 1ST day of SEPTEMBER, 1994 (such commencement
date being subject to adjustment as provided in Sections 3.03(b) and (c), and
being hereinafter called the "Commencement Date") and ending on the 30TH day of
NOVEMBER, 1999.
1.03. Use. Tenant (and its permitted assignees and sublessees, if
any) will occupy and use the Leased Premises solely for general business office
purposes of a lawful nature and for no other purpose.
ARTICLE 2 RENTAL
2.01. Base Rental. Tenant shall pay an annual base rental ("Base
Rental") in the sum of $ * and No/100 Dollars ($ * ) per year payable in
equal monthly installments of * and * /100 Dollars ($ * ). The Base
Rental includes the Tenant's proportionate share of the Base Year (hereinafter
defined) Basic Operating Costs.
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MONTHS MONTHLY ANNUALLY
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*09/1/94 - 11/30/94 Abated Abated
12/01/94 - 11/30/95 2,395.00 28,740.00
12/01/95 - 11/30/99 2,514.75 30,177.00
2.02. Tenant's Share of Basic Operating Costs.
(a) Tenant shall also pay Tenant's Share (hereinafter defined) of
any increases in the Basic Operating Costs (hereinafter defined) for the
Complex in excess of the Basic Operating Expenses for the "Base Year." The
Base Year is hereby stipulated and agreed for all purposes to be 1994. Prior
to the commencement of each calendar year during the Term, Landlord shall
provide a then current estimate of annual Basic Operating Costs, and thereafter
Tenant shall pay, as additional rental, in monthly installments in accordance
with Section 2.04, Tenant's Share of the difference between estimated annual
Basic Operating Costs and the Base Year Basic Operating Costs for the calendar
year in question.
(b) As soon as possible after the conclusion of each calendar year
of the Term, Landlord shall furnish to Tenant a statement of actual Basic
Operating Coats for such year, and within thirty (30) days thereafter an
appropriate cash adjustment shall be made between Landlord and Tenant to
reflect any overpayment or underpayment of Rent (hereinafter defined) because
of any difference between Landlord's estimate of, and the actual, Basic
Operating Costs. In the event of the termination of the Term at a time other
than the end of a calendar year, Landlord may provide to Tenant after such
termination a statement specifying any changes in the then current estimate of
Basic Operating Costs, and within thirty (30) days thereafter an appropriate
cash adjustment shall be made between Landlord and Tenant to reflect any
underpayment or overpayment of Rent for the portion of such calendar year
preceding the termination of the Term. As soon as possible after the
conclusion of the calendar year in which the Term is terminated, Landlord shall
provide Tenant with the statement of the actual Basic Operating Costs, and a
cash settlement shall be made between Landlord and Tenant in accordance with
the first sentence of this Section 2.02(b).
(c) "Tenant's Share" shall mean the amount by which the Basic
Operating Costs exceed the Base Year Basic Operating Costs for any year or
partial year during the Term which is based upon the proportion which the
Rentable Area of the Leased Premises bears to ninety-five percent (95%) of the
Rentable Area of the Building or to the total Rentable Area leased in the
Building if such total is greater than 95% of the Building Rentable Area.
(d) "Basic Operating Costs" shall mean the operating expenses of
the Complex and all expenditures by Landlord to own, maintain and operate the
Complex. All operating expenses shall be determined on an accrual basis in
accordance with generally accepted accounting principles which shall be
consistently applied. Such operating expenses shall include all expenses,
costs and disbursements of every kind and nature which Landlord shall pay or
become obligated to pay because of or in connection with the ownership,
operation, and maintenance of the Complex, including, but not limited to, the
following:
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(1) Wages and salaries of all employees engaged in direct
operation and maintenance of the Complex, employer's social security taxes,
unemployment taxes or insurance and any other taxes which may be levied on such
wages and salaries, and the cost of disability and hospitalization insurance
and pension or retirement benefits for such employees;
(2) Cost of leasing or purchasing all supplies, tools,
equipment and materials used in the operation, maintenance and ownership of the
Complex;
(3) Cost of all utilities for the Complex, including the
cost of water and power, sewage, heating, lighting, air-conditioning and
ventilating for the Complex;
(4) Cost of all maintenance and service agreements for
the Complex and surrounding grounds, including but not limited to janitorial
service, security service, equipment leasing, energy management system leasing,
landscape maintenance, alarm service, window cleaning and elevator maintenance;
(5) Cost of all insurance relating to the Complex,
including, but not limited to, casualty insurance, rental insurance and
liability insurance applicable to the Complex and Landlord's personal property
used in connection therewith as well as any deductible sum required by any such
policies;
(6) All taxes and assessments and governmental charges
(including but not limited to mortgage taxes and other taxes and assessments
passed on to Landlord by a mortgagee holding a lien on the Complex), whether
federal, state, county or municipal and whether they be by taxing districts or
authorities presently taxing the Leased Premises or by others, subsequently
created or otherwise and any other taxes, association dues and assessments
attributable to the Complex or its operation excluding, however, income taxes,
estate and inheritance taxes, excess profit taxes, franchise taxes, taxes
imposed on or measured by the income of Landlord from operation of Complex,
sales and other taxes imposed on amounts paid by Tenant hereunder (including,
without limitation, sales taxes imposed on the Parking Charge, as hereinafter
defined), and taxes imposed on account of a transfer of ownership of the
Complex or the Land;
(7) Cost of repairs and general maintenance (excluding
such repairs and general maintenance paid by insurance proceeds or by Tenant or
other third parties and alterations attributable solely to tenants of the
Building other than Tenant);
(8) Legal expenses and accounting expenses incurred with
respect to the Complex;
(9) Fees for management services, whether provided by an
independent management company, by Landlord or by any affiliate of Landlord;
(10) Costs in order to comply with new or revised federal
or state laws or municipal ordinances or codes or regulations promulgated under
any of the same; and;
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(11) Amortization of the cost of installation of capital
investment items which are primarily for the purpose of reducing (or avoiding
increases in) operating costs or which may be required by governmental
authority. The costs of such capital investment items under this Section
2.2(d)(11) shall include costs incurred in financing the purchase of such
items, including loan fees and interest. All costs of such capital investment
items shall be amortized over the reasonable life of such items with the
reasonable life and amortization schedule being determined in accordance with
generally accepted accounting principles and in no event to extend beyond the
reasonable life of the Complex.
Basic Operating Costs shall not include (i) expenditures classified as capital
expenditures for Federal income tax purposes (except as set forth in Section
2.02(d)(11), (ii) costs for which Landlord is entitled to specific
reimbursement by Tenant, any other tenant of the Building, or any other third
party, (iii) allowances specified in the Work Letter (hereinafter defined) for
expenses to be incurred by Landlord for improvements to Leased Premises, (iv)
leasing commissions, and all noncash expenses (including depreciation), and (v)
debt service on any indebtedness secured by the Complex (except debt service on
indebtedness to purchase or pay for items specified as permissible Basic
Operating Costs under Section 2.02(d)(1) through (11)).
(12) Notwithstanding any other provision herein to the
contrary, it is agreed that in the event the Building is not fully occupied
during any year or any portion of any year of the Term, an adjustment shall be
made in computing the Basic Operating Costs for that year so that the Basic
Operating Costs shall be increased for that year to the amount that, in
Landlord's judgment, would have been incurred had the total Rentable Area of
the entire Building been fully occupied during the entirety of that year. It
is the intent of this Section that Landlord shall not be required to bear any
portion of the Basic Operating Costs which exceed the Base Year Basic Operating
Costs for any year or partial year of the Term.
(e) Tenant, at its expense, shall have the right, upon giving
reasonable notice, to audit Landlord's books and records relating to any
increased or additional rental payable hereunder for any periods within two (2)
years prior to such audit; or at Landlord's sole discretion, Landlord will
provide an audit or report prepared by a certified public accountant, which
audit or report for purposes of this Lease shall be conclusive.
2.03. Parking. Landlord hereby agrees to make available to Tenant
and Tenant hereby agrees to pay for and take, during the full term of this
Lease, TWO (2) contract assigned parking permits and SEVEN (7) contract
unassigned parking permits (hereinafter collectively called the "Initial
Parking Permits") in the Complex parking garage (hereinafter called the
"Garage"), upon the following terms and conditions:
(1) Tenant shall pay as rental ("Parking Rentals") for
the Initial Parking Permits the rates charged from time to time by the operator
of the Garage, plus all taxes applicable thereto. The initial monthly rate for
each of the Initial Parking Permits for assigned parking shall be $ N/A plus
taxes, and for unassigned parking shall be $ N/A plus taxes. Said rentals
shall be
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due and payable to Landlord as additional Rent on the first day of each
calendar month during the term of this Lease.
2.04. Payment of Rent. The term "Rent" as used herein shall mean
the Base Rental, the Tenant's Share of any increases in the Basic Operating
Costs over the Base Year Basic Operating Costs, the Parking Rentals and all
other amounts provided for in this Lease to be paid by Tenant, all of which
shall constitute rental in consideration for this Lease and the leasing of the
Leased Premises. The Rent shall be due and payable in advance in monthly
installments on the first day of each calendar month during the Term hereof, in
legal tender of the United States of America to Landlord at the address shown
in Section 5.16 or to such other person or at such other address as Landlord
may from time to time designate in writing. The Rent shall be paid without
notice, demand, abatement, deduction or offset except as otherwise expressly
provided for in Sections 5.01 and 5.02. In no event shall the Landlord accept
or be bound by any payment of Rent more than thirty (30) days in advance. If
the Term commences or ends on any day other than the first or last day of a
calendar month, then the installment of Base Rental and the Parking Rentals for
such partial month shall be appropriately prorated. If the Term commences or
ends at any time other than the first day of a calendar year, the Tenant's
Share of any increases in the Basic Operating Costs over the Base Year Basic
Operating Costs shall be prorated for such year according to the number of days
of the Term during such year. In no event shall Base Rental or monthly
installments thereof be less than the amounts specified in Section 2.01.
2.05. Security Deposit. Landlord hereby acknowledges receipt of
$2.395.00 representing December 1994, the first month's rental paid in advance,
and an amount of $2,395.00 representing Tenant's deposit ("Security Deposit")
as security for the full and faithful performance by Tenant of the terms,
conditions, and covenants of this Lease which are to be performed and kept by
Tenant. Landlord may apply any portion of the Security Deposit as may be
necessary to cure an Event of Default (hereinafter defined) by Tenant
hereunder, including (but not limited to) the failure of Tenant to pay Rent or
any other charges which accrue in favor of Landlord hereunder. In the event
Tenant fails to repair damages caused or occasioned by Tenant, including
damages caused by the removal of fixtures allowed to be removed under Section
4.07, Landlord may apply any portion of the Security Deposit as may be
necessary to make such repairs. Any remaining balance of the Security Deposit
shall not be considered as an advance payment of Rent or a measure of
Landlord's damages in case of default by Tenant. Landlord's deduction of the
amounts owed by Tenant to Landlord from the Security Deposit shall in no event
release Tenant from being in default under the terms of the Lease. Tenant
agrees to hold harmless any Landlord's Mortgagee (as defined in Section 4.10)
for the failure to return Tenant's Security Deposit.
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ARTICLE 3 LANDLORD'S SERVICES
3.01. Services to be Furnished by Landlord.
(a) Landlord shall use all reasonable efforts to furnish, subject
to the Building Rules and Regulations (hereinafter defined) and Tenant's
performance of its obligations hereunder, the following services:
(1) Air-conditioning and heating in season, during Normal
Building Operating Hours (hereafter defined), at such temperatures and in such
amounts as are considered by Landlord to be standard;
(2) Hot and cold water at those points of supply provided
for lavatory and drinking purposes only;
(3) Janitor service in and about the Building and the
Leased Premises five (5) days per week, and periodic window washing; however,
Tenant shall pay, as additional Rent upon presentation of a statement therefor
by Landlord, the additional costs attributable to the cleaning of improvements
within the Leased Premises other than Building Standard (hereinafter defined)
improvements;
(4) Elevators for access to and egress from the Leased
Premises;
(5) Electricity and proper facilities to furnish
sufficient electrical power during Normal Building Operating Hours for normal
office machines and other machines of low electrical consumption, but not
including electricity or air conditioning required for electronic data
processing equipment, special lighting in excess of Building Standard, or any
other item of electrical equipment which singly consumes more than 0.5
kilowatts per hour at rated capacity or requires a voltage other than 120 volts
single phase; and
(6) Replacement of fluorescent lamps in Building Standard
light fixtures installed by Landlord and incandescent bulb or fluorescent lamp
replacement in public toilet and restroom areas and stairwells.
(b) Equipment and personnel to limit access to the Building after
normal business hours; provided, however, Landlord shall have no responsibility
to prevent, and shall not be liable to Tenant for, and shall be indemnified by
Tenant against, liability or loss to Tenant, its agents, employees and visitors
arising out of losses due to theft, burglary, or damage or injury to persons or
property caused by persons gaining access to the Building or the Leased
Premises, and Tenant hereby releases Landlord from all liability relating
thereto. Landlord shall furnish one (1) cardkey for each six hundred fifty
(650) square feet of Rentable Area of the Leased Premises, any additional
cardkeys will be furnished at a charge by Landlord on an order signed by Tenant
or Tenant's authorized representative. All such cardkeys shall remain the
property of Landlord. No additional locks shall be allowed on any door of the
Leased Premises without Landlord's
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permission, and Tenant shall not make or permit to be made any duplicates of
such cardkeys, except those furnished by Landlord. Upon termination of this
Lease, Tenant shall surrender to Landlord all the cardkeys for the Leased
Premises, and give to Landlord the explanation of the combination of all locks
for safes, safe cabinets, and vault doors, if any, in the Leased Premises.
(c) "Normal Building Operating Hours" shall be from 7:00 a.m. to
6:00 p.m. Monday through Friday, and 8:00 a.m. to 1:00 p.m. Saturday, exclusive
of Sundays and "holidays." "Holidays" shall refer, without limitation, to New
Year's Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, Friday following Thanksgiving Day, Christmas Day, and other
holidays commonly observed by a majority of the tenants of the Building. If
the holiday occurs on Saturday or Sunday, the Friday preceding or the Monday
following may, at Landlord's discretion, be observed as a holiday.
(d) Failure by Landlord to any extent to furnish services
hereunder or any cessation thereof shall not render Landlord liable in any
respect for damages to either person or property, nor be construed as an
eviction of Tenant, nor work an abatement of Rent, nor relieve Tenant from
fulfillment of any covenant or agreement hereof. Should any of such services
be interrupted, Landlord shall use reasonable diligence to restore the same
promptly, but Tenant shall have no claim for rebate of Rent, damages, or
eviction on account thereof.
(e) Tenant shall pay to Landlord, monthly as billed, as Additional
Rent hereunder, such charges as may be separately metered or as Landlord may
compute for (i) any utility services utilized by Tenant for computers, data
processing equipment or other similar electrical equipment; (ii) extra
lighting; (iii) air-conditioning, heating and other services in excess of that
stated in Sections 3.01 (a)(1) and (5) hereof; or (iv) other air-conditioning,
heating and services not standard for the Building or provided at times other
than Normal Building Operating Hours. Landlord may elect to estimate the
charges specified to be paid by Tenant under this Section 3.01(e) and ▇▇▇▇ such
charges to Tenant monthly in advance, in which event Tenant shall pay such
estimated charges and when the actual amounts of such charges are determined by
Landlord an appropriate cash adjustment shall be made between Landlord and
Tenant to reflect any underpayment or overpayment of such charges because of
any difference between Landlord's estimate of, and the actual amount of such
charges. Tenant shall pay all costs associated with providing separate utility
meters to the Leased Premises. In the event separate utility meters are
provided to the Leased Premises, Landlord may elect to have all charges for the
utilities separately metered to the Leased Premises billed directly to the
Tenant.
3.02. Access by Tenant Prior to Commencement of Term. Landlord, at
its discretion, may permit Tenant and its employees, agents and suppliers to
enter the Leased Premises prior to the Commencement Date to enable Tenant to do
such things as may be required by Tenant to make the Leased Premises ready for
Tenant's occupancy. If such permission is granted, such parties will not
interfere with or delay the performance of any activities by Landlord or other
occupants of the Building. Landlord may withdraw such permission upon
twenty-four (24) hours notice to Tenant if Landlord determines that any such
interference or delay has been or may be caused. Any such entry into the
Leased Premises shall be at Tenant's risk and Landlord shall not
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be liable in any way for personal injury, death, or property damage which may
be suffered in or about the Leased Premises or the Building by Tenant or its
employees, agents, contractors, suppliers or workmen, and Tenant hereby
indemnifies Landlord therefrom.
3.03. Construction of Improvements to be made by Landlord.
(a) The Leased Premises shall be delivered to Tenant at the
Commencement Date in its current condition with only the additional leasehold
Improvements and tenant finish, if any, set forth and described on Exhibit "C"
attached hereto. The cost of installation of improvements to the Leased
Premises requested by Tenant (calculated at Landlord's actual cost plus an
additional charge of 15% to cover overhead) shall be for Tenant's account and
at Tenant's cost (and Tenant shall pay ad valorem taxes thereon), which cost
shall be payable by Tenant to Landlord as a part of the Rent hereunder promptly
upon being invoiced therefor, and failure by Tenant to pay such cost in full
within thirty (30) days after the date of billing shall constitute failure to
pay Rent when due and an Event of Default by Tenant hereunder giving rise to
all remedies available to Landlord under this Lease.
(b) Subject to Section 3.03(c), if on the Commencement Date
specified in Section 1.02 any of the work described in Exhibit "C" that is
required to be performed by Landlord at Landlord's expense has not been
substantially completed as reasonably determined by Landlord, or if Landlord is
unable to tender possession of the Leased Premises to Tenant on the
Commencement Date, then the Commencement Date (and commencement of installments
of Rent) shall be postponed until such work to be performed in the Leased
Premises at Landlord's expense is substantially completed as reasonably
determined by Landlord or until Landlord is able to tender possession of the
Leased Premises to Tenant, as the case may be, and such postponement shall
operate to extend the expiration date specified in Section 1.02 hereof in order
to give full effect to the stated duration of the Term. The deferment of
installments of Rent and postponement of the Commencement Date pursuant to this
Section 3.03(b) shall be Tenant's exclusive remedy for Landlord's delay of
completion of improvements to the Leased Premises or failure to tender
possession of the Leased Premises to Tenant, and Tenant shall have no claim
against Landlord because of any such delay in completion of Improvements or
failure to deliver the Leased Premises.
(c) No delay in the completion of the Leased Premises resulting
from (i) delay or failure on the part of Tenant in furnishing information or
other matters required in Exhibit "C", (ii) changes ordered by Tenant in the
Tenant's Plans (hereinafter defined), (iii) improvements to the Leased Premises
constructed by Landlord at Tenant's request and expense pursuant to Section
4.05 and Exhibit "C", and/or (iv) delay or failure on the part of Tenant to pay
any amounts required to be paid by Tenant for construction or improvements to
the Leased Premises, shall delay the Commencement Date, expiration date, or
commencement of payment of Rent. If prior to the Commencement Date Tenant
shall enter into possession of all or any part of the Leased Premises, (other
than an entry with Landlord's consent pursuant to Section 3.02) then the Term,
the payment of monthly installments of Rent and all other obligations of Tenant
to be performed during the Term shall commence on, and the Commencement Date
shall be deemed for all
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purposes to be, the date of such entry, and the total amount of Rent shall be
increased accordingly, provided that no such early entry shall operate to
change the expiration date provided herein.
(d) Tenant shall not make or allow to be made (except as otherwise
provided in this Lease) any alterations or physical additions (including
fixtures) in or to the Leased Premises, or place safes, vaults or other heavy
furniture or equipment within the Leased Premises, without first obtaining the
written consent of Landlord. Tenant shall deliver to Landlord a copy of the
"as-built" plans and specifications for all alterations or physical additions
so made in or to the Leased Premises, and shall reimburse Landlord for the cost
incurred by Landlord to update its current architectural plans for the
Building. Tenant agrees specifically that no food, soft drink or other vending
machine will be installed within the Leased Premises without the prior written
consent of Landlord.
(e) All alterations, physical additions, or improvements in or to
the Leased Premises (including fixtures) shall, when made, become the property
of Landlord and shall be surrendered to Landlord upon termination of this
Lease, whether by lapse of time or otherwise; provided, however, this clause
shall not apply to moveable equipment or furniture owned by Tenant.
(f) Tenant shall indemnify and hold harmless Landlord from and
against all costs (including attorneys' fees and costs of suit), losses,
liabilities, or causes of action arising out of or relating to any alterations,
additions or improvements made by Tenant to the Leased Premises, including but
not limited to any mechanics' or materialmen's liens asserted in connection
therewith.
(g) Tenant shall not be deemed to be the agent or representative
of Landlord in making any such alterations, physical additions or improvements
to the Leased Premises, and shall have no right, power or authority to encumber
any interest in the Complex in connection therewith other than Tenant's
leasehold estate under this Lease. However, should any mechanics' or other
liens be filed against any portion of the Complex or any interest therein
(other than Tenant's leasehold estate hereunder) by reason of Tenant's acts or
omissions or because of a claim against Tenant or its contractors, Tenant shall
cause the same to be cancelled or discharged by record of bond or otherwise
within ten (10) days after notice by Landlord. If Tenant shall fail to cancel
or discharge said lien or liens, within said ten (10) day period, which failure
shall be deemed to be a default hereunder, Landlord may, at its sole option and
in addition to any other remedy of Landlord hereunder, cancel or discharge the
same and upon Landlord's demand, Tenant shall promptly reimburse Landlord for
all costs incurred in cancelling or discharging such lien or liens.
(h) NOTWITHSTANDING THE FOREGOING OR ANY OTHER PROVISION HEREIN TO
THE CONTRARY, TENANT WAIVES THE IMPLIED WARRANTY OF SUITABILITY.
3.04. Repair and Maintenance by Landlord. Landlord shall not be
required to make any improvements or repairs of any kind or character to the
Leased Premises or the Complex, except
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such repairs as may be required to the Building corridors and lobbies and
structural members of the Building, and such repairs as may be deemed necessary
solely by Landlord for normal maintenance operations for the Complex (see
Article 3 Landlord's Services). This Section 3.04 shall not apply in the case
of damage or destruction by fire or other casualty (as to which Section 5.02
shall apply), or damage resulting from an eminent domain taking (as to which
Section 5.01 shall apply).
ARTICLE 4 TENANT'S COVENANTS
4.01. Payments by Tenant. Tenant agrees to timely pay the Rent and
all rents and sums provided to be paid to Landlord hereunder at the times and
in the manner herein provided and to at all times occupy and conduct business
in the Leased Premises.
4.02. Certain Taxes. Tenant shall pay all ad valorem taxes on all
improvements installed in the Leased Premises that are in excess of those
installed by Landlord from time to time as Building Standard or in excess of
the items to be installed by Landlord at Landlord's cost under Exhibit "C" or
specified in the Section 3.03(a) hereof.
4.03. Repairs by Tenant. Tenant shall, at its cost, repair or
replace any damage to the Building, or any part thereof, caused by Tenant or
Tenant's agents, employees, invitees or visitors; provided if Tenant fails to
make such repairs or replacements promptly, Landlord may, at its option, make
such repairs or replacements and the cost thereof shall be payable by Tenant on
demand as a part of The Rent hereunder, and failure of Tenant to pay such costs
within ten (10) days shall constitute a failure to pay Rent when due and an
Event of Default by Tenant hereunder.
4.04. Care of the Leased Premises. Tenant shall maintain the Leased
Premises in a clean, attractive condition, and not commit or allow any waste or
damage to be committed on or to any portion of the Leased Premises, and at the
expiration or termination of this Lease shall deliver up the Leased Premises to
Landlord in as good condition as at date of possession by Tenant, ordinary wear
and tear excepted.
4.05. Tenant Floor Plans. Tenant shall cooperate with Landlord in
the preparation of space plans and working drawings ("Space Plans") for the
Leased Premises as specified in Exhibit "C." Within fifteen (15) days after
Landlord delivers the Space Plans to Tenant, Tenant shall deliver to Landlord
Tenant's written approval of the Space Plans together with any and all changes
to the Space Plans requested by Tenant. Additionally, within said fifteen (15)
day period, Tenant shall deliver to Landlord any and all plans and
specifications of additional work for the Leased Premises requested by Tenant
(Tenant's Plans), as further specified in Exhibit "C." Should Tenant fail to
deliver Tenant's approval of the Space Plans and the Tenant's Plans for
additional improvements within said fifteen (15) day period, Tenant shall pay
to Landlord one day's Base Rental for each day's delay in such delivery. Upon
receipt of Tenant's approval of the Space Plans and receipt of the Tenant's
Plans, Landlord will partition and prepare the Leased Premises in accordance
therewith. However, Landlord shall not be required to install any
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partitions or improvements to the Leased Premises which exceed the tenant
finish items and work specified in Exhibit "C" or which are not otherwise
approved by Landlord. Tenant may, at Tenant's expense, order changes in the
Tenant's Plans prior to or during construction with the prior consent of
Landlord. However, any delay in completion of the Leased Premises caused by
changes in the Tenant's Plans ordered by Tenant shall not delay the
Commencement Date as further provided in Section 3.03(c) hereof.
4.06 Assignment or Sublease.
(a) Tenant shall not assign this Lease or Sublease the Leased
Premises or any part thereof or mortgage, pledge or hypothecate its leasehold
interest or grant any concession or license within the Leased Premises (any
such assignment, Sublease, mortgage, pledge, hypothecation, or grant of a
concession or license being hereinafter referred to in this Section 4.06 as a
"Transfer") without the prior express written permission of Landlord, and any
attempt to effect a transfer without such permission of Landlord shall be void
and of no effect. Tenant acknowledges that any assignment or sublease is also
subject to the prior written consent of any Landlord's Mortgagee (as defined in
Section 4.10). In order for Tenant to make a Transfer, Tenant must request in
writing Landlord's permission within at least sixty (60) days in advance of the
date on which Tenant desires to make a Transfer, after which Landlord shall
then have a period of thirty (30) days following receipt of such notice within
which to notify Tenant in writing that Landlord elects (i) to terminate this
Lease as to the space so affected as of the date so specified by Tenant in
which event Tenant will be relieved of all further obligations hereunder as to
such space, (ii) to permit Tenant to assign or sublet such space, subject,
however, to prior written approval of the proposed assignee or Sublessee by
Landlord, or (iii) to refuse consent to Tenant's requested transfer and to
continue this Lease in full force and effect as to the entire Leased Premises.
If Landlord shall fail to notify Tenant in writing of such election within said
thirty (30) day period, Landlord shall be deemed to have elected option (iii)
above. If Landlord elects to exercise option (ii) above, Tenant agrees to
provide at its expense, direct access from any sublet space or concession area
to a public corridor of the Building. The prohibition against a Transfer
contained herein shall be construed to include a prohibition against any
Transfer by operation of law.
(b) Notwithstanding that the prior express written permission of
Landlord to a Transfer may have been obtained under the provisions of Section
4.06(a), the following shall apply:
(1) In the event of an assignment or Sublease, Tenant
shall (i) cause the assignee or Sublessee to expressly assume in writing and to
agree to perform all of the covenants, duties and obligations of Tenant
hereunder, and such assignee or Sublessee shall be jointly and severally liable
therefor along with Tenant; (ii) cause such assignee or Sublessee to grant
Landlord an express first and prior contract lien and security interest in the
same manner as the lien granted by Tenant to Landlord under Section 5.03
hereof; (iii) subordinate to Landlord's statutory lien and the aforesaid
contract lien and security interest any liens or other rights which Tenant may
claim with respect to any fixtures, equipment, goods, merchandise or other
property owned by or leased to the proposed assignee or Sublessee or other
party intending to occupy the
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Leased Premises; and (iv) agree with Landlord that in the event that the rent
or other consideration due and payable by a Sublessee or assignee under any
such permitted Sublease or assignment exceeds the Rent for the portion of the
Leased Premises so transferred, then Tenant shall pay Landlord as additional
rental hereunder all such excess rental and other consideration immediately
upon receipt thereof by Tenant from such transferee.
(2) A signed counterpart of all instruments relative to a
Transfer (executed by all parties to such transaction with the exception of
Landlord) shall be submitted by Tenant to Landlord prior to or
contemporaneously with the request for Landlord's written consent thereto (it
being understood that no such instrument shall be effective without the written
consent of Landlord);
(3) No usage of the Leased Premises different from the
usage herein provided to be made by Tenant shall be permitted, and all of the
terms and provisions of this Lease shall continue to apply after a Transfer;
and
(4) In any case where Landlord consents to a Transfer,
Tenant will nevertheless remain directly and primarily liable for the
performance of all the covenants, duties and obligations of Tenant hereunder
(including, without limitation, the obligation to pay all Rent herein provided
to be paid), and Landlord shall be permitted to enforce the provisions of this
Lease against the undersigned Tenant or any transferee, or both, without demand
upon or proceeding in any way against any other persons.
(c) If Tenant is a corporation then any transfer of this Lease by
merger, consolidation or dissolution or any change in ownership or power to
vote a majority of the voting stock in Tenant outstanding at the time of
execution of this Lease shall constitute a Transfer for the purposes of this
Lease; provided, however, that acquisition of all stock of a corporate Tenant
by any corporation, the stock of which is registered pursuant to the Securities
Act of 1933 or the merger of a corporate Tenant into such a corporation, the
stock of which is so registered, shall not be deemed to be a violation of
Section 4.06(a). For purposes of this Section 4.06(c), the term "voting stock"
shall refer to shares of stock regularly entitled to vote for the election of
directors of the corporation involved.
(d) If Tenant is a general partnership having one or more
corporations as partners or if Tenant is a limited partnership having one or
more corporations as general partners, the provisions of Section 4.06(c) shall
apply to each of such corporations as if such corporations alone had been the
Tenant hereunder. If Tenant is a general or limited partnership, joint
venture, or other form of association, the transfer of a majority of the
ownership interests therein shall constitute a Transfer for the purposes of
this Lease.
(e) The consent by Landlord to a particular Transfer shall not be
deemed a consent to any other subsequent Transfer. If this Lease, the Leased
Premises or the Tenant's leasehold interest therein, or if any portion of the
foregoing is transferred, or if the Leased Premises are occupied in whole or in
part by anyone other than Tenant without the prior consent of Landlord
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as provided herein, Landlord may nevertheless collect rent from the transferee
or other occupant and apply the net amount collected to the Rent payable
hereunder, but no such transaction or collection of rent or application thereof
by Landlord shall be deemed a waiver of the provisions hereof or a release of
Tenant from the further performance by Tenant of its covenants, duties and
obligations hereunder.
4.07. Alterations, Additions, Improvements. Tenant will make no
alteration, change, improvement, repair, replacement or addition to the Leased
Premises without the prior written consent of Landlord. Tenant may remove its
trade fixtures, office supplies and movable office furniture and equipment not
attached to the Building provided (i) such removal is made prior to the
termination or expiration of the Term; (ii) Tenant is not then in default in
the timely performance of any obligation or covenant under this Lease; and
(iii) Tenant promptly repairs all damage caused by such removal. All other
property and the Leased Premises and any alteration or addition to the Leased
Premises and any other articles attached or affixed to the floor, wall, or
ceiling of the Leased Premises is a part of the property of Landlord and shall
be surrendered with the Leased Premises as part thereof at the termination or
expiration of this Lease, without payment or compensation therefor. If,
however, Landlord so requests in writing, Tenant will, prior to termination or
expiration of this Lease, remove any and all alterations, additions, fixtures,
equipment and property placed or installed by Tenant or installed by Landlord
at Tenant's expense in the Leased Premises and will repair any damage caused by
such removal.
4.08. Compliance with Laws and Usage; Liens. Tenant, at its cost,
shall comply with all federal, state, municipal and other laws and ordinances
applicable to the Leased Premises and the business conducted therein by Tenant,
and with the Building Rules and Regulations; will not engage in any activity
which would cause landlord's fire and extended coverage insurance to be
cancelled or the rate thereof to be increased (or, at Landlord's option, will
pay any such increase); and will not commit any act which is a nuisance or
annoyance to Landlord or to other tenants in the Building or which might, in
the exclusive judgment of Landlord, appreciably damage Landlord's goodwill or
reputation, or tend to injure or depreciate the value of the Complex. Tenant
has no authority to encumber the Complex or Leased Premises with any lien, and
Tenant shall not suffer or permit any such lien to exist. Should any such lien
hereafter be filed, Tenant shall promptly discharge the same at its sole cost.
4.09. Access by Landlord. Tenant shall permit Landlord or its
agents or representatives to enter into and upon any part of the Leased
Premises at all reasonable hours to inspect same; to clean; to make repairs,
alterations or additions thereto, as Landlord may deem necessary or desirable;
to show the Leased Premises to prospective purchasers or tenants; or for any
other purpose deemed reasonable by Landlord; and Tenant shall not be entitled
to any abatement or reduction or Rent by reason thereof.
4.10. Landlord's Mortgagee. Tenant agrees with Landlord and with
the Mortgagee of any mortgage or the beneficiary of any Deed of Trust now or
hereafter constituting a lien on the Complex or the Leased Premises
("Landlord's Mortgagee") that any Landlord's Mortgagee shall have the right at
any time to elect, by notice in writing given to Tenant, to make this Lease
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superior to the lien of such mortgage or Deed of Trust and upon the giving of
such notice to Tenant, this Lease shall be deemed prior and superior to the
mortgage or Deed of Trust in respect to which such notice is given; and at
Landlord's Mortgagee's request Tenant shall execute a recordable instrument
establishing this Lease as superior to such lien; or Landlord's Mortgagee may,
by like notice, make this Lease subordinate to such mortgage or Deed of Trust.
If Landlord's Mortgagee shall elect to make this Lease subordinate to such
mortgage or Deed of Trust, the same shall be self-operative and no further
certificate or instrument of subordination need be required by any Mortgagee.
In confirmation of such subordination, however, Tenant shall execute promptly
any reasonable certificate or instrument that Landlord may request. Tenant
further agrees that any Landlord's Mortgagee, without notice Tenant, may demand
the payment of Rent and performance of this Lease at any time. Tenant hereby
constitutes Landlord as Tenant's attorney-in-fact to execute such certificate
or instrument for and on behalf of Tenant. In the event of the enforcement by
Landlord's Mortgagee of the remedies provided for by law or by such mortgage or
Deed of Trust, Tenant will, upon request of any person or party succeeding to
the interest of Landlord as a result of such enforcement, automatically become
the Tenant of such successor in interest without change in terms or other
provisions of such Lease provided, however, that such successor in interest
shall not be (i) bound by any payment of Rent for more than one month in
advance except payments in the nature of security for the performance by Tenant
of its obligations under this Lease; (ii) subject to any offset, defense or
damages arising out of a default or any obligations any preceding Landlord; or
(iii) bound by any amendment or modification of this Lease made without the
written consent of such Trustee or such beneficiary or such successor in
interest. Upon request by such successor in interest, Tenant shall execute and
deliver reasonable instruments confirming the attornment provided for herein.
4.11. Estoppel Certificate. At Landlord's request from time to
time, Tenant will promptly, without further consideration, execute an Estoppel
Certificate addressed to Landlord's Mortgagee or to such party as Landlord may
designate certifying to such notice provisions and other matters as Landlord's
Mortgagee or as the other party designated by Landlord may reasonably request.
At Landlord's request from time to time, Tenant will promptly execute, without
further consideration, a certificate stating the commencement and expiration
dates of the Term, the rental then payable hereunder, that there are no
defaults on the part of Landlord or claims against Landlord hereunder (or if
there are any, stating the same with particularity), and such other information
pertaining to this Lease as Landlord may reasonably request, addressed to such
party as Landlord may designate.
ARTICLE 5 MUTUAL COVENANTS
5.01 Condemnation, Loss or Damage. If the Leased Premises,
Building, or any part thereof shall be taken or condemned for any public
purpose (or conveyed in lieu or in settlement thereof) to such an extent as to
render the remainder of the Building or Leased Premises, in the opinion of
Landlord, not reasonably suitable for occupancy, this Lease shall, at the
option of either party, forthwith cease and terminate, and all proceeds from
any taking or condemnation of the Building and the Leased Premises shall belong
to and be paid to Landlord. If this Lease is not so terminated, Landlord shall
repair any damage resulting from such taking, to the extent
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and in the manner provided in Section 5.02, and Base Rental hereunder shall be
abated to the extent the Leased Premises are rendered untenantable during the
period of repair and thereafter be adjusted on an equitable basis considering
the areas of the leased Premises taken and remaining.
5.02 Fire or Other Casualty; Certain Repairs.
(a) In the event of a fire or other casualty in the Leased
Premises, Tenant shall immediately give notice thereof to Landlord. If the
Leased Premises shall be partially destroyed by fire or other casualty so as to
render the Leased Premises untenantable in whole or in part in the opinion of
Landlord, the Base Rental provided for herein shall ▇▇▇▇▇ as to the portion of
the Leased Premises rendered untenantable until such time as the Leased
Premises are made tenantable as determined by Landlord and Landlord agrees to
commence and prosecute such repair work promptly and with reasonable diligence,
or if such destruction results in the Leased Premises being untenantable in
substantial part for a period reasonably estimated by Landlord to be six (6)
months or longer after Landlord's insurance settlement, or in the event of
total or substantial damage or destruction of the Building where Landlord
decides not to rebuild, then all Rent owed up to the date of such damage or
destruction shall be paid by Tenant and this Lease shall terminate upon notice
thereof to Tenant. Landlord shall give Tenant written notice of its decisions,
estimates or elections under this Section 5.02 within sixty (60) days after any
such damage or destruction.
(b) Should Landlord elect to effect any repairs under Sections
5.01 or 5.02(a), Landlord shall only be obligated to restore or rebuild the
Leased Premises to a Building Standard condition, and then only to the extent
that insurance proceeds are actually available to Landlord therefor. In the
event the Base Rental or any portion of the Base Rental is abated under
Sections 5.01 or 5.02(a), the expiration date of the Term specified in Section
1.02 shall be extended for the period of such abatement.
5.03. Security Interest. In consideration for the mutual benefits
arising under this Lease, and as security for Tenant's performance of all its
obligations under this Lease, Tenant hereby grants to Landlord a lien and
security interest in and on all property of Tenant now or hereafter placed in
or upon the Leased Premises, and such property shall be and remain subject to
such lien and security interest of Landlord for payment of all Rent and other
sums agreed to be paid by Tenant herein. The provisions of this Section 5.03
shall constitute a security agreement under the Texas Uniform Commercial Code
so that Landlord shall have and may enforce a security interest on all property
of Tenant now or hereafter placed in or on the Leased Premises, including but
not limited to all fixtures, machinery, equipment, furnishings and other
articles of personal property now or hereafter placed in or upon the Leased
Premises by Tenant. Landlord may at its election at any time file a copy of
this Lease as a financing statement. Landlord, as secured party, shall be
entitled to all of the rights and remedies afforded to a secured party under
the Texas Uniform Commercial Code, which rights and remedies shall be in
addition to and cumulative to the Landlord's liens and rights provided by law
or by the other terms and provisions of this Lease. Promptly upon request, and
without further consideration, Tenant agrees
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to execute as debtor such additional financing statement or statements as
Landlord may now or hereafter reasonably request in order that Landlord's
security interests may be protected pursuant to the Texas Uniform Commercial
Code. Unless otherwise provided by law and for the purpose of exercising any
right pursuant to this Section, Landlord and Tenant agree that reasonable
notice shall be met if such notice is given by ten (10) days' written notice,
certified mail, return receipt requested, to Landlord or Tenant at the
addresses for notice specified herein.
5.04. Holding Over. If Tenant should remain in possession of the
Leased Premises after the termination or expiration of the Term without the
execution by Landlord and Tenant of a new lease, then Tenant shall be deemed to
be occupying the Leased Premises as a tenant-at-sufferance, subject to all the
covenants and obligations of this Lease, except that the daily Rent shall be
twice the per day Rent in effect immediately prior to such expiration or
termination, but such holding over shall not extend the Term.
5.05. Assignment by Landlord. Landlord shall have the right to
transfer and assign, in whole or in part, all its rights and obligations
hereunder and in the Building and property referred to herein, and upon any
such transfer of assignment, no further liability or obligation shall
thereafter accrue against Landlord hereunder.
5.06. Recourse Limitation. Tenant specifically agrees to look
solely to Landlord's interest in the Building for the recovery of any judgment
from Landlord, it being agreed that Landlord shall never be personally liable
for any such judgment. The provision contained in the foregoing sentence shall
not limit any right that Tenant might otherwise have to obtain injunctive
relief against Landlord, or any other action not involving the liability of
Landlord to respond in monetary damages from assets other than Landlord's
interest in the Building.
5.07. Control of Common Areas and Parking Facilities by Landlord.
All automobile parking areas including (without limitation), the Garage,
driveways, entrances and exits thereto, and other facilities furnished by
Landlord, including all parking areas, truck way or ways, loading areas,
pedestrian walkways, ramps, landscaped areas, stairways and other areas and
improvements provided by Landlord for the general use, in common, of tenants,
their officers, agents, employees, invitees, licensees, visitors and customers
shall be at all times subject to the exclusive control and management of
Landlord, and Landlord shall have the right from time to time to establish,
modify and enforce reasonable rules and regulations (herein called the
"Building Rules and Regulations") with respect to all facilities and areas
mentioned in this Section; the initial Building Rules and Regulations are set
out in Exhibit "D" hereto and are of equal dignity herewith.
5.08. Default by Tenant.
(a) Each of the following occurrences relative to Tenant shall
constitute an "Event of Default:"
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(1) Failure or refusal of Tenant to make the timely
payment of any Rent payable under this Lease when and as the same shall become
due and payable;
(2) Failure of Tenant to occupy and conduct business in,
or the abandonment or vacating of the Leased Premises or any significant
portion thereof;
(3) The filing or execution or occurrence of a petition
in bankruptcy or other insolvency proceeding by or against Tenant or any
guarantor of Tenant's obligations hereunder; or petition or answer seeking
relief under any provision of the Bankruptcy Act; or as assignment for the
benefit of creditors or composition; or a petition or other proceeding by or
against the Tenant for the appointment of a trustee, receiver or liquidator of
Tenant or any of Tenant's property; or a proceeding by any governmental
authority for the dissolution or liquidation of Tenant or any guarantor of
Tenant;
(4) Failure by Tenant in the performance or compliance
with any of the agreements, terms, covenants or conditions provided in this
Lease, other than those referred to in (1), (2) or (3) above, for a period of
ten (10) days after notice from Landlord to Tenant specifying the items in
default; or
(5) The occurrence of any other event herein provided to
be an Event of Default.
(b) This Lease and the Term and estate hereby made are subject to
the limitation that if and whenever any Event of Default shall occur, Landlord
may, at its option and without further written notice to Tenant, in addition to
all other remedies given hereunder or by law or equity, do any one or more of
the following:
(1) Terminate this Lease, in which event Tenant shall
immediately surrender possession of the Leased Premises to Landlord;
(2) Enter upon and take possession of the Leased Premises
and expel or remove Tenant and any other occupant therefrom with or without
having terminated the Lease; and
(3) Apply all or any portion of the Security Deposit to
cure such Event of Default; and
(4) Without any prior notice to Tenant, alter locks and
other security devices at the Leased Premises so that Tenant will not have
access to the Leased Premises. Landlord may take these actions without
incurring any liability and without relinquishing Landlord's right to Rent or
any other right given to Landlord hereunder or by operation of law; Tenant
hereby waiving any right to claim damage for such re-entry expulsion.
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(c) Any right to receive notice of Landlord's intent to exercise
any of the remedies for an Event of Default is hereby waived. Any right to
cure before Landlord may exercise any of the remedies for an Event of Default
is hereby waived.
(d) Exercise by Landlord of any one or more remedies shall not
constitute an acceptance of surrender of the Leased Premises by Tenant, it
being understood that such surrender can be effected only by the written
agreement of the Landlord and Tenant, with the prior written consent of any
Landlord's Mortgagee (as defined in Section 4.10).
(e) If Landlord terminates this Lease by reason of an Event of
Default, Tenant shall pay to Landlord the sum of all Rent and other
indebtedness accrued hereunder to the date of such termination, the amounts
stated in Section 5.08(g) hereof, plus, as liquidated damages, an amount equal
to the then present value of the Rent and all other indebtedness as would
otherwise have been required to be paid by Tenant to Landlord during the period
following the termination of the Term measured from the date of such
termination to the date of expiration stated in section 1.02, less the then
present fair market rental value of the Leased Premises for such period;
because of the difficulty of ascertaining the fair market rental value of the
Leased Premises and the costs and time associated with reletting the Leased
Premises, the Landlord and Tenant stipulate that such fair market rental value
shall in no event be deemed to exceed seventy-five percent (75%) of the then
present value of the Rent reserved for such period.
(f) If Landlord repossesses the Leased Premises without
terminating the Lease, then Tenant shall pay to Landlord all Rent and other
indebtedness accrued to the date of such repossession, plus Rent and other sums
required to be paid by Tenant during the remainder of the Term, diminished by
any net sums thereafter received by Landlord through reletting the Leased
Premises during said period (after deducting expenses incurred by Landlord as
provided below); reentry by Landlord will not affect the obligations of Tenant
for the unexpired Term. Tenant shall not be entitled to any excess of any Rent
obtained by reletting over the Rent herein reserved. Actions to collect
amounts due by Tenant may be brought on one or more occasions, without the
necessity of Landlord's waiting until expiration of the Term.
(g) In case of an Event of Default, to the extent the same were
not paid or deducted, as appropriate, under Section 5.08(e) or (f), Tenant
shall also pay to Landlord: (i) broker's fees incurred by Landlord in
connection with reletting the whole or any part of the Leased Premises; (ii)
the cost of removing and storing Tenant's or any other occupant's property;
(iii) and the cost of repairing, altering, remodeling or otherwise putting the
Leased Premises into condition acceptable to a new tenant or tenants; and (iv)
all reasonable expenses incurred by Landlord in enforcing Landlord's remedies,
including reasonable attorney's fees and court costs.
(h) Upon termination or repossession of the Leased Premises for an
Event of Default, Landlord shall not be obligated to relet or attempt to relet
the Leased Premises, or any portion thereof, or to collect rental after
reletting, but Landlord shall have the option to relet or attempt to relet. In
the event of reletting, Landlord may relet the whole or any portion of the
Leased Premises for any period, to any tenant, and for any use and purpose.
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(i) If Tenant should fail to make any payment, perform any
obligation, or cure any default hereunder, Landlord, without obligation to do
so and without thereby waiving such failure or default, may make such payment,
perform such obligation, and/or remedy such other default for the account of
Tenant (and enter the Lease Premises for such purpose), and Tenant shall pay
upon demand all costs, expenses and disbursements (including reasonable
attorneys' fees) incurred by Landlord in taking such remedial action, plus
interest thereon at the highest rate of interest permitted by law.
5.09. Right to Relocate. Notwithstanding anything herein to the
contrary, Landlord shall in all cases retain the right and power to relocate
Tenant within the Building in space which is comparable in size and location
and suited to Tenant's use, such right and power to be exercised reasonably and
such relocation to be made at Landlord's sole cost and expense. Landlord shall
not be liable or responsible for any claims, damages, or liabilities in
connection with or occasioned by such relocation. Landlord's reasonable
exercise of such right and power shall include, but shall in no way be limited
to, a relocation to consolidate the rentable area occupied in order to provide
Landlord services more efficiently, or a relocation to provide contiguous
vacant space for a prospective tenant.
5.10. Non-Waiver. Neither acceptance of rent by Landlord nor
failure by Landlord to complain of any action, non-action or default of Tenant
shall constitute a waiver of any of Landlord's rights hereunder. Waiver by
Landlord of any right for any default of Tenant shall not constitute a waiver
of any right for either a subsequent default of the same obligation or any
other default.
5.11. Independent Obligations. The obligation of Tenant to pay all
Rent and other sums hereunder provided to be paid by Tenant and the obligation
of Tenant to perform Tenant's other covenants and duties hereunder constitute
independent unconditional obligations to be performed at all times provided for
hereunder, save and except only when an abatement thereof or reduction therein
is hereinabove expressly provided for and not otherwise. Tenant waives and
relinquishes all rights which Tenant might have to claim any nature of lien
against or withhold, or deduct from or offset against any Rent and other sums
provided hereunder to be paid Landlord by Tenant.
5.12 Time of Essence. In all instances where any act is required
at a particular indicated time or within an indicated period, it is understood
and stipulated that time is of the essence.
5.13. Remedies Cumulative. Landlord may restrain or enjoin any
breach or threatened breach of any covenant, duty or obligation of Tenant
herein contained without the necessity of proving the inadequacy of any legal
remedy or irreparable harm. The remedies of Landlord hereunder shall be deemed
cumulative and no remedy of Landlord, whether exercised by Landlord or not,
shall be deemed to be in exclusion of any other.
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5.14. Insurance, Subrogation, Liability, Indemnity, and Waiver.
(a) Tenant shall maintain at its sole expense fire and extended
coverage insurance with vandalism and malicious mischief endorsements and a
sprinkler leakage endorsement (where applicable), on all of its personal
property, including removable trade fixtures, located in the Leased Premises
and on non-Building Standard leasehold improvement and all additions and
improvements made by Tenant.
(b) Tenant shall, at its sole expense, maintain in effect at all
times comprehensive general liability insurance, including contractual
liability coverage, naming Landlord as an additional insured, issued by and
binding upon some solvent insurance company authorized to do business in Texas
and satisfactory to Landlord, with bodily injury limits of not less than
$100,000 for each occurrence and $300,000 in the aggregate and property damage
liability limits of not less than $100,000 for each occurrence and $300,000 in
the aggregate. Tenant shall provide to Landlord (i) copies of such insurance
policies prior to the Commencement Date of the Term, (ii) certificates of
renewal at least thirty (30) days prior to the expiration date of any such
policies, and (iii) copies of new policies at least thirty (30) days prior to
terminating, or changing insurance companies for, any such policies.
(c) Anything herein to the contrary notwithstanding each party
hereto hereby releases and waives all claims, rights of recovery and causes of
action that either party or any party claiming by, through or under such party
by subrogation or otherwise may now or hereafter have against the other party
or any of the other party's partners, directors, officers, employees or agents
for any loss or damage that may occur to the Complex, Leased Premises, Tenant
improvements or any of the contents of any of the foregoing by reason of fire
or other casualty, or any other cause except gross negligence or willful
misconduct (but including negligence of the parties hereto or their partners,
directors, officers, employees, or agents) that could have been insured against
under the terms of (i) any standard fire and extended coverage insurance
policies required under the terms of this Lease, or (ii) any other loss covered
by insurance required to be maintained under the terms of this Lease; provided,
however, that this waiver shall be ineffective against any insurer of Landlord
or Tenant to the extent that such waiver (i) is prohibited by the laws and
insurance regulations of the State of Texas or (ii) would invalidate any
insurance coverage of Landlord or Tenant. The waiver set forth in this Section
5.14(c) shall not apply to any deductibles on policies carried by Landlord nor
to any coinsurance penalty which Landlord might sustain.
(d) Except for any of the claims, rights of recovery and causes of
action that Landlord has released and waived pursuant to Section 5.14(c),
Tenant hereby releases, indemnifies, defends, and holds harmless Landlord and
Landlord's partners, agents, directors, officers, employees, invitees and
contractors, from all claims, losses, costs, damages or expenses (including,
but not limited to, attorneys' fees) resulting or arising from any and all
injuries or death of any person or damage to any property occurring during the
Term caused or alleged to have been caused by any act, omission, or neglect of
Tenant or Tenant's directors, officers, employees, agents, invitees or guests,
or any parties contracting with Tenant relating to the Leased Premises.
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(e) Tenant and Landlord agree that each shall not be responsible
or liable to the other or to their agents, customers or invitees, for bodily
injury (fatal or non-fatal) or property damage occasioned by the acts or
omissions of any other tenant or such tenant's employees, agents, contractors,
customers or invitees within the Complex, or for any loss or damage to any
property or persons occasioned by theft, fire act of God, public enemy,
injunction, riot, strike, insurrection, war, court order, requisition or order
of governmental body or authority, or any other cause beyond the control of
either party, or for any inconvenience or loss to either party in connection
with any of the repair, maintenance, damage, destruction, restoration or
replacement referred to in this Lease.
5.15. Venue; Governing Law. This Lease shall be governed by the
laws of the State of Texas. All monetary and other obligations of Landlord and
Tenant are performable exclusively in Houston, ▇▇▇▇▇▇ County, Texas.
5.16. Notice. Any notice which may or shall be given under the
terms of this Lease shall be in writing and shall be either delivered by hand
or sent by United States Registered or Certified Mail, postage prepaid, if for
Landlord to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇; or if for
Tenant (i) prior to the Commencement Date to ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ or (ii) subsequent to the Commencement Date to the Leased
Premises. Such addresses may be changed from time to time by either party by
giving notice as provided above. Notice shall be deemed given when delivered
(if delivered by hand) or when postmarked (if sent by mail).
5.17. Entire Agreement, Binding Effect, Severability. This Lease
and any written addenda and all exhibits hereto (which are expressly
incorporated herein by this reference) shall constitute the entire agreement
between Landlord and Tenant; no prior written or prior or contemporaneous oral
promises or representations shall be binding. This Lease shall not be amended,
changed or extended except by written instrument signed by both parties hereto.
The provisions of this Lease shall be binding upon and inure to the benefit of
the heirs, executors, administrators, successors and assigns of the parties,
but this provision shall in no way alter the restrictions on assignment and
subletting applicable to Tenant hereunder. If any provision of this Lease or
the application thereof to any person or circumstance shall at any time or to
any extent be held invalid or unenforceable, and the basis of the bargain
between the parties hereto is not destroyed or rendered ineffective thereby,
the remainder of the Lease or the application of such provision to person or
circumstances other than those as to which it is held invalid or unenforceable
shall not be affected thereby.
5.18. Right of Reentry. Upon the expiration or termination of the
Term for whatever cause, Landlord shall have the right to immediately reenter
and reassume possession of the Leased Premises and remove Tenant's property
therefrom, and Tenant expressly acknowledges such right.
5.19. Number and Gender; Captions; References. Pronouns, where used
herein, of whatever gender, shall include natural persons, corporations, and
associations of every kind and
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character, and the singular shall include the plural and vice versa where and
as often as may be appropriate. Article and section headings under this Lease
are for convenience of reference and shall not affect the construction or
interpretation of this Lease. Whenever the terms "hereof," "hereby," "herein,"
or words of similar import are used in this Lease, they shall be construed as
referring to this Lease in its entirety rather than to a particular section or
provision, unless the context specifically indicates to the contrary. Any
reference to a particular "Article" or "Section" shall be construed as
referring to the indicated article or section of this Lease.
5.20 Delinquent Payments; Handling Charge. Any payments required
of Tenant hereunder, whether as Rent or otherwise, shall bear interest from the
time due until paid at the maximum rate of interest permitted by law.
Furthermore, should Tenant fail to timely pay any installment of Rent
hereunder, Landlord shall have the option to charge Tenant, as additional Rent
hereunder, a fee equal to five percent (5%) of the delinquent installment to
reimburse Landlord for its cost and inconvenience incurred in dealing with
Tenant's delinquent payment. In no event, however, shall the charges imposed
under this Section 5.20 and elsewhere in this Lease, to the extent the same are
considered to be interest under applicable law, exceed the maximum rate of
interest allowable under applicable law.
5.21. Quiet Enjoyment. Tenant, on paying all sums herein called for
and performing and observing all of its covenants and agreements hereunder,
shall and may peaceably and quietly have, hold, occupy, use, and enjoy the
Leased Premises during the Term subject to the provisions of this Lease and
applicable governmental laws, rules, and regulations; and Landlord agrees to
warrant and forever defend Tenant's right to such occupancy against the claims
of any and all persons whomsoever lawfully claiming the same or any part
thereof, by, through, or under Landlord, but not otherwise, subject only to the
provisions of this Lease and all applicable governmental laws, rules, and
regulations.
5.22. Signs. No signs, symbols or identifying marks shall be placed
in or upon the Complex, in the halls, elevators, staircases, entrances, or
exterior of the Building or Garage, or upon the doors or walls of the Leased
Premises without prior written approval of Landlord. Landlord agrees to
provide and install, at Tenant's cost, all letters or numerals on doors in the
Leased Premises. All such letters and numerals shall be in the Building
Standard graphics, and no others shall be used or permitted on the Leased
Premises without written permission from Landlord.
5.23. Cancellation Option. Subject to the condition that Tenant
shall not at such time be in Default of the Terms or provisions of the Lease,
then Tenant (but not any assignee of Tenant or subtenant) shall have a one-time
right to cancel said Lease effective at the end of the thirty-ninth (39th)
month of the initial term, upon the fulfillment of the following conditions:
(1) the Tenant has given Landlord written notice not
later than expiration of month thirty-three (33) of
the Lease Term;
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(2) that Tenant shall pay as stipulated damages all
unamortized contributions by Landlord proposed
herein, including but not limited to leasehold
improvement allowances, commissions,
architectural/MEP allowances, to the extent such
allowances are utilized by Tenant, and unamortized
value of three (3) months of rental. Payment of said
penalty and stipulated damages shall be due
simultaneous with Tenant's notice to cancel the
Lease. For purposes of calculating such stipulated
damages, the exact amount of Landlord's expenditures
shall be treated as if such is a loan, fully
amortized over the Lease Term at ten percent (10%)
annual interest computed monthly.
EXECUTED in multiple counterparts, each of which shall have the force
and effect of an original on the date first above written.
PINCAY OAKS, INC.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: VICE-PRESIDENT
---------------------------------
"LANDLORD"
HORIZON EXPLORATION, LIMITED
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
"TENANT"
[Signature page to Lease Agreement dated , 1994 between PINCAY
OAKS, INC., as Landlord and HORIZON EXPLORATION, LIMITED, as Tenant.]
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EXHIBIT "A"
[MAP NOT SHOWN]
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EXHIBIT "B"
LEGAL DESCRIPTION
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
A tract of land containing 126,290 Square Feet, 2.8992 Acres which is part of a
55.2187 Acre tract conveyed to Casa ▇▇▇▇▇▇ Corporation of America from
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ Co., Ltd., a Limited Partnership, by Deed recorded in Volume
8267, Page 294 of the ▇▇▇▇▇▇ County Deed Record and being out of the Fort ▇▇▇▇▇
Survey, Abstract No. 1307 in the City of Houston, ▇▇▇▇▇▇ County, Texas, said
2.8992 Acre tract being more particularly described by Metes and Bounds as
follows: (All bearings refer to the plat of AEGEAN GARDENS as recorded in
Volume 290, Page 73, ▇▇▇▇▇▇ County Map Records).
COMMENCING at a 3/4 inch iron pipe found at the point of intersection of the
North Line of Westheimer Road, (120 feet wide), with the East line of ▇▇▇▇▇
Road (60 feet wide), said point also marks the Southwest corner of said 55.2187
Acre tract;
THENCE, N 89 57 min., 00 sec. E; along the North line of said Westheimer Road
and South line of said 55.2187 Acre tract, for a distance of 562.85 feet to a
5/8 inch iron rod set for the POINT OF BEGINNING and the Southwest corner of
this tract;
THENCE, N 00 08 min. 11 sec. E; for 570.41 feet on an "X" set in concrete for
the Northwest corner of this tract and lying on the South line of said Aegean
Gardens as a recorded in Volume 290, Page 73 of the Map Records of ▇▇▇▇▇▇
County;
THENCE, East, along the South line of said Aegean Gardens for 218.00 feet to a
5/8 inch iron rod set for the Northeast corner of this tract;
THENCE, S 00 08 min. 11 sec. W; along the East line of said 55.2187 Acre tract
for 579.22 feet to a 5/8 inch iron rod set for the Southeast corner of this
tract and lying on the North right-of-way line of said Westheimer Road;
THENCE, S 89 57 min. 00 sec. W; along the North right-of-way line of said
Westheimer Road and the South line of said 55.2187 Acre tract for 218.00 feet
to the POINT OF BEGINNING; and being the same property particularly described
in Deed dated September 11, 1981, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Trustee to the insured
herein.
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EXHIBIT "C"
The Leased Premises shall be tendered to Tenant on an "as-is"
condition, however, Landlord will extend to Tenant an allowance, not to exceed,
Four and 50/100 Dollars ($4.50) per rentable square foot to be used for the
remodel, refurbishment, permitting, architectural services, filing of required
engineering drawings, and management supervision fee, (not to exceed five
percent (5%) of actual construction/refurbishment costs).
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EXHIBIT "D"
BUILDING RULES AND REGULATIONS
1. Sidewalks, doorways, vestibules, halls, stairways and other similar
areas shall not be used for the disposal of trash, be obscured by
tenants or to used by tenants for any purpose other than entrance to
and exit from the Leased Premises and for going from one part of the
Building to another part of the Building.
2. Plumbing fixtures shall be used only for the purposes for which they
are designed, and no sweepings, rubbish, rags or other unsuitable
materials shall be disposed into them. Damage resulting to any such
fixtures from misuse by a tenant shall be the liability of said
tenant.
3. Signs, advertisements or notices visible in or from public corridors
or from outside the Building shall be subject to Landlord's prior
written approval.
4. Movement in or out of the Building of furniture, office equipment or
any other bulky or heavy materials shall be restricted to such hours
as Landlord designates. Landlord will determine the method and
routing of said items so as to ensure the safety of all persons and
property concerned. Advanced written notice of intent to move such
items must be made to the Building management office.
5. All deliveries of furniture, office equipment or bulk freight shall be
coordinated in advance with Landlord, shall be performed subject to
Landlord's supervision and direction by use only of an elevator
designated by Landlord.
6. Building management shall have the authority to prescribe the weight
and manner that heavy furniture and equipment are positioned.
7. Corridor doors, when not in use, shall be kept closed.
8. Tenant space that is visible from public areas must be kept neat and
clean.
9. The disposal of trash or storage of materials in the hallways,
elevator lobbies, stairways and other common area of the Building is
prohibited.
10. No animals shall be brought into or kept in, on or about the Building.
11. Tenant shall not tamper with or attempt to adjust temperature control
thermostats in the Leased Premises. Landlord shall adjust thermostats
as required to maintain the Building standard temperature.
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12. Tenant will comply with any and all security procedures established by
Landlord from time to time.
13. Tenants shall lock all office doors leading to corridors and turn out
all lights at the close of their working day.
14. All requests for overtime air conditioning or heating must be
submitted in writing to the Building management office by 2:00 p.m. on
the day desired for weekday requests, by 2:00 p.m. Friday for weekend
requests and by 2:00 p.m. on the preceding business day for holiday
requests.
15. No flammable or explosive fluids or materials shall be kept or used
within the Building except in areas approved by Landlord, and Tenant
shall comply with all applicable building and fire codes relating
thereto.
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
reasonable judgement shall, from time to time, be required for the safety,
protection, care and cleanliness of the Building, and the operation thereof,
the preservation of good order therein and the protection and comfort of the
tenants and their agent, employees and invitees. Such rules and regulations,
when made and written notice thereof is given to a tenant, shall be binding
upon it in like manner as if originally herein prescribed.
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