EXHIBIT 10.28
SECOND AMENDMENT TO LEASE AGREEMENT
This Second Amendment to Lease Agreement (this "Second Amendment") is
entered into by and between TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national
banking association ("Landlord") and HOWELL CORPORATION, a Delaware corporation
("Tenant").
W I T N E S S E T H:
WHEREAS, Landlord and Tenant entered into that certain Lease Agreement
dated December 13, 1993 (the "Original Lease"), wherein Landlord leased to
Tenant approximately 45,527 square feet of Net Rentable Area (the "Initial
Office Space") located on the fifteenth (15th) and sixteenth (16th) floors of
the building (the "Building") located at 1111 Fannin in the City of Houston,
Harris County, Texas and 2,000 square feet of Net Rentable Area (the "Storage
Space") on the basement level of the Building; and
WHEREAS, Landlord and Tenant amended the Original Lease pursuant to
the terms and conditions of that certain First Amendment to Lease Agreement
dated October 20, 1995 (the "First Amendment") (the Original Lease, as amended
by the First Amendment, is herein referred to as the "Lease"); and
WHEREAS, Landlord and Tenant desire to further amend the Lease in
accordance with the terms and conditions set forth below;
NOW, THEREFORE, for and in consideration of the duties, covenants and
obligations of each to the other hereunder, the Leased Premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
confessed and acknowledged, Landlord and Tenant hereby agree to amend, and do
hereby amend, the Lease as follows (all terms defined in the Lease shall, when
used herein, have the same meanings as set forth in the Lease unless otherwise
defined herein):
1. The annual Base Rental payable for the Leased Premises pursuant
to Section 2.01 of the Lease shall be as follows:
(a) Commencing on January 15, 1996 and continuing through April 14,
1999, (i) Eleven and No/100 Dollars ($11.00) per square foot of Net Rentable
Area within the Office Space and (ii) Six and No/100 Dollars ($6.00) per square
foot of Net Rentable Area within the Storage Space, payable in monthly
installments equal to Forty-Seven Thousand Five Hundred Thirty and 92/100
Dollars ($47,530.92) each, and
(b) For the period commencing on April 15, 1999 and continuing
through April 14, 2005, (i) Thirteen and No/100 Dollars ($13.00) per square foot
of Net Rentable Area within the Office Space and (ii) Six and No/100 Dollars
($6.00) per square foot of Net Rentable Area within the Storage Space, payable
in monthly installments equal to Fifty-Five Thousand Nine Hundred Ninety-One and
08/100 Dollars ($55,991.08) each.
2. Section 10.01 of the Lease is hereby deleted in its entirety and
the following shall be substituted in its place:
"10.01 Expansion Option. (a) Tenant shall have the additional
option ("First Expansion Option"), by providing written notice thereof to
Landlord (the "First Expansion Election Notice") at any time between April 1.
1996 and October 1, 1996, to include under this Lease an additional 4,000 to
5,000 square feet of Net Rentable Area on the fifteenth (15th) Floor of the
Building. The amount of additional space to be included under this Lease
pursuant to the First Expansion Option shall be identified by Tenant in the
First Expansion Election Notice. The actual space to be included under this
Lease pursuant to the First Expansion Option shall be designated by Landlord,
provided, however, it shall be internally contiguous and contiguous to the then
existing Leased Premises and shall have a reasonable configuration (the "First
Expansion Space"). Landlord and Tenant shall then enter into an amendment to
this Lease to cover such First Expansion Space on the same terms and provisions
then in effect under this Lease, except as otherwise provided hereunder and
except that (i) the annual Base Rental rate for the First Expansion Space shall
be adjusted to reflect the lesser of (A) the Prevailing Rental Rate as of the
date such First Expansion Space will be made available to Tenant or (B) the
annual Base Rental Rate set forth in this Lease, (ii) Landlord shall not be
required to provide (but may do so at its option and with Tenant's consent) any
improvement allowance, abatement of Rent, or other incentives, inducements or
allowances, (iii) Tenant shall be entitled to one additional (1) unreserved
parking permit per 680 square feet of Net Rentable Area leased pursuant to such
First Expansion Option, at the prevailing market rate therefor as of the
addition of such First Expansion Space to the Leased Premises, and thereafter
adjust in accordance with any such changes to such market charges, (iv) Tenant
shall not have the right to assign its expansion rights to any sublessee of the
Leased Premises, nor may any such sublessee exercise such expansion rights, and
(v) the First Expansion Space will be provided in its then existing condition
(on an "as is" basis; provided, however, Landlord shall remove and dispose of
any Existing Asbestos located in the First Expansion Space, other than the
Existing Asbestos located on the perimeter columns of the First Expansion
Space). The First Expansion Space shall be made available to Tenant between
October 1, 1996 and February 1, 1997. Tenant's obligation to commence paying
Rent on such First Expansion Space shall commence on the earliest to occur of
(1) Tenant's occupancy of such First Expansion Space for the purpose of
conducting business therefrom, or (2) sixty (60) days following the delivery of
such First Expansion Space by Landlord to Tenant. Landlord shall, at Landlord's
cost and expense, be required to make any alterations to the First Expansion
Space and the Building which are required by law in order to provide such space
to Tenant (i.e. corridors, access, etc.)
(b) Tenant shall have the additional option ("Second Expansion
Option"), by providing written notice thereof to Landlord (the "Second Expansion
Election Notice")at any time between March 1, 1997 and September 1, 1997, to
include under this Lease an additional 4,000 to 5,000 square feet of Net
Rentable Area on the fifteenth (15th) Floor of the Building. The amount of
additional space to be included under this Lease pursuant to the Second
Expansion Option shall be identified by Tenant in the Second Expansion Election
Notice. The actual space to be included under this Lease pursuant to the Second
Expansion Option shall be designated by Landlord, provided, however, it shall be
internally contiguous and contiguous to the then existing Leased Premises and
shall have a reasonable configuration (the "Second Expansion Space"). Landlord
and Tenant shall then enter into an amendment to this Lease to cover such Second
Expansion Space on the same terms and provisions then in effect under this
Lease, except as otherwise provided hereunder and except that (i) the annual
Base Rental rate for the Second Expansion Space shall be adjusted to reflect the
lesser of (A) the Prevailing Rental Rate, as of the date such Second Expansion
Space will be made available to Tenant or (B) the annual Base Rental Rate set
forth in this Lease, (ii) Landlord shall not be required to provide (but may do
so at its option and with Tenant's consent) any improvement allowance, abatement
of Rent, or other incentives, inducements or allowances, (ii) Tenant shall be
entitled to one additional (1) unreserved parking permit per 680 square feet of
Net Rentable Area leased pursuant to such Second Expansion Option at the
prevailing market rate therefor as of the addition of such Second Expansion
Space to the Leased Premises, and thereafter adjust in accordance with any such
changes to such market charges, (iii) Tenant shall not have the right to assign
its expansion rights to any sublessee of the Leased Premises, nor may any such
sublessee exercise such expansion rights, and (iv) the Second Expansion Space
will be provided in its then existing condition (on an "as is" basis; provided,
however, Landlord shall remove and dispose of any Existing Asbestos located in
the Second Expansion Space, other than the Existing Asbestos located on the
perimeter columns of the Second Expansion Space). The Second Expansion Space
shall be made available to Tenant between September 1, 1997 and January 1, 1998.
Tenant's obligation to commence paying Rent on such Second Expansion Space shall
commence on the earliest to occur of (1) Tenant's occupancy of such Second
Expansion Space for the purpose of conducting business therefrom, or (2) sixty
(60) days following the delivery of such Second Expansion Space by Landlord to
Tenant. Landlord shall, at Landlord's cost and expense, be required to make any
alterations to the Second Expansion Space and the Building which are required by
law in order to provide such space to Tenant (i.e corridors, access, etc.)
(c) In the event Tenant exercises its right under either the First
Expansion Option or the Second Expansion Option, but objects to Landlord's
determination of the Prevailing Rental Rate, then the Prevailing Rental Rate
shall be determined in accordance with the procedure set forth in Section
12.02(l) of this Lease.
(d) Notwithstanding anything in this Section 10.01 to the contrary,
Tenant's First Expansion Option and Second Expansion Option shall terminate if
this Lease or Tenant's right to possession of the Leased Premises is terminated,
or if Tenant fails to timely exercise the First Expansion Option or the Second
Expansion Option; provided, however, Tenant's failure to timely exercise the
First Expansion Option shall not result in a termination of the Second Expansion
Option."
3. The Lease is hereby amended by deleting Section 11.01-
Preferential Right thereof in its entirety.
4. EXHIBIT B attached to the First Amendment is hereby deleted in
its entirety and EXHIBIT B attached hereto shall be substituted in its place.
5. Landlord agrees to pay to Trione & Gordon ("Landlord's Broker") a
real estate brokerage commission as set forth in a separate listing agreement
between Landlord and Landlord's Broker and Landlord agrees to pay Montgomery,
Conine & Robinson and McDade, Smith & Co. (collectively, "Tenant's Broker") a
real estate brokerage commission as set forth in a separate commission agreement
dated October 20, 1993, by and between Landlord and Tenant's Broker. Landlord
and Tenant hereby represent and warrant each to the other that they have not
employed any other agents, brokers or other such parties in connection with this
Second Amendment, and each agrees that they shall hold the other harmless from
and against any and all claims of all other agents, brokers or other such
parties claiming by, through or under the respective indemnifying party.
6. Except as expressly provided herein, the Leased Premises shall be
governed by the same terms and conditions as set forth in the Lease. The Lease
as hereby amended is hereby ratified and affirmed and, except as expressly
amended hereby, all other items and provisions of the Lease remain unchanged and
continue to be in full force and effect. The terms of this Second Amendment
shall control over any conflicts between the terms of the Lease and the terms of
this Second Amendment.
7. The Lease, as amended by this Second Amendment, constitutes the
entire agreement and understanding between the parties hereto relating to the
subject matter hereof and all prior agreements, proposals, negotiations,
understandings and correspondence between the parties in this regard, whether
written or oral, are hereby superseded and merged herewith.
IN WITNESS WHEREOF, this Second Amendment may be executed by the
parties hereto on separate multiple counterparts, each of which shall be deemed
to be an original, executed to be effective as of the 21st day of November, 1995
(the "Effective Date").
"Landlord"
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION,
a national banking association
By: /s/ Robert P. Gauss
Name: Robert P. Gauss
Title: Vice President
"Tenant"
HOWELL CORPORATION,
a Delaware corporation
By: /s/ Paul N. Howell
Name: Paul N. Howell
Title: President
EXHIBIT B
CONSTRUCTION OF INITIAL LEASEHOLD IMPROVEMENTS
Landlord shall cause the Initial Leasehold Improvements to be
constructed in the Additional Office Space in accordance with this EXHIBIT B.
The "Initial Leasehold Improvements" consist of all improvements and tenant
finish desired by Tenant in the Additional Office Space.
ARTICLE I
Design of the Initial Leasehold Improvement
1.1 Design Professionals. All plans and specifications relating to the
Initial Leasehold Improvements shall be prepared by architects and engineers
selected and employed by Tenant and approved by Landlord. Tenant may employ
other consultants of its selection to assist with the design and construction of
the Initial Leasehold Improvements, Tenant's architects, engineers, and other
consultants shall be afforded access to all work in progress at the Building or
in the Additional Office Space. Landlord has approved Kirksey and Partners
Architects as Tenant's design professionals.
1.2 Approval of Space Plans. Tenant shall have prepared and submit to
Landlord for approval a set of preliminary plans (the "Proposed Space Plans") in
the form of a schematic design providing a conceptual layout and description of
the Initial Leasehold Improvements. Within ten (10) business days after
delivery of the Proposed Space Plans to Landlord, Landlord shall either approve
the Proposed Space Plans or notify Tenant of the item(s) of the Proposed Space
Plans that Landlord disapproves and the reason(s) therefor. If Landlord
disapproves the Proposed Space Plans, Tenant shall revise and resubmit same to
Landlord for approval (the "Revised Space Plans"). Within five (5) business
days after delivery of the Revised Space Plans to Landlord, Landlord shall
either approve the Revised Space Plans or notify Tenant of the item(s) of the
Revised Space Plans which Landlord disapproves and the reason(s) therefor. If
Landlord disapproves the Revised Space Plans, Tenant shall further revise and
resubmit same to Landlord for approval, which process shall continue until the
plans are approved. Landlord shall have five (5) business days after delivery
of the each set of Revised Space Plans to either approve the Revised Space Plans
or notify Tenant of the item(s) of the Revised Space Plans which Landlord
disapproves and the reason(s) therefor. The Proposed Space Plans or Revised
Space Plans, as approved by Landlord, are hereinafter referred to as the
"Approved Space Plans".
1.3 Approval of Construction Documents. Upon Landlord's approval of the
Approved Space Plans, Tenant shall have prepared, by a licensed architect and
engineer acceptable to Landlord in Landlord's sole and absolute discretion,
construction drawings (in accordance with the Approved Space Plans) and
specifications including complete sets of detailed architectural, structural,
mechanical, electrical and plumbing working drawings (the "Proposed Construction
Documents") for the Initial Tenant Improvements and shall deliver the Proposed
Construction Documents to Landlord for approval. Within ten (10) business days
after delivery of the Proposed Construction Documents to Landlord, Landlord
shall either approve the Proposed Construction Documents or notify Tenant of the
item(s) of the Proposed Construction Documents that Landlord disapproves and the
reason(s) therefor. If Landlord disapproves the Proposed Construction
Documents, Tenant shall revise and resubmit same to Landlord for approval (the
"Revised Construction Documents"). Within five (5) business days after delivery
of the Revised Construction Documents to Landlord, Landlord shall either approve
the Revised Construction Documents or notify Tenant of the item(s) of the
Revised Construction Documents which Landlord disapproves and the reason(s)
therefor. If Landlord disapproves the Revised Construction Documents, Tenant
shall further revise and resubmit same to Landlord for approval, which process
shall continue until the plans are approved. Landlord shall have five (5)
business days after delivery of each set of Revised Construction Documents to
either approve the Revised Construction Documents or notify Tenant of the
item(s) of the Revised Construction Documents which Landlord disapproves and the
reason(s) therefor. The Proposed Construction Documents or Revised Construction
Documents, as approved by Landlord, are hereinafter referred to as the "Approved
Construction Documents".
1.4 Information and Approval Standards. Within three (3) days after any
written request submitted from time to time by Tenant or its architects,
engineers, or other consultants, Landlord shall furnish any plans,
specifications, drawings, samples, or other materials or information within
Landlord's possession reasonably related to the design and construction of the
Initial Leasehold Improvements. Tenant acknowledges, however, that Landlord's
approval of the Approved Construction Documents shall in no manner indicate that
Landlord believes the Approved Construction Documents are in compliance with
applicable codes, law and regulations.
1.5 Base Building. Landlord shall be responsible for the costs to rectify
any failure of the base Building (including, without limitation, the bathrooms
on the 15th floor of the Building), Base Building systems (including elevators
and elevator buttons), or "shell," portions of the Additional Office Space (as
opposed to the Initial Leasehold Improvements, either those existing or to be
installed by Landlord) to comply with applicable governmental laws, regulations,
codes and ordinances in effect on the Effective Date. Landlord represents and
warrants that there are no restrictions affecting the Building which are
applicable to the construction and installation of the Initial Leasehold
Improvements. In addition, Landlord shall be responsible for all costs of
construction of the ceiling and above, including, without limitation, the
ceiling tile and grid, lighting including wiring and switching, HVAC inclusing
ductwork, diffusers and thermostats (collectively, the "Landlord Work").
ARTICLE II
Construction
2.1 Employment of Contractors. The Landlord will enter into a contract
agreement with an unaffiliated third-party contractor, for the construction of
the Initial Leasehold Improvements in accordance with the Approved Construction
Documents. Landlord shall be solely responsible for all payments and other
liabilities or obligations to, and any liens or claims asserted by, contractors
or other persons employed by Landlord in connection with the Initial Leasehold
Improvements.
2.2 Selection of Contractors. Intentionally Deleted.
2.3 Construction Contract(s). Construction of the Initial Leasehold
Improvements shall be accomplished by Landlord in accordance with the Approved
Construction Documents under the terms of a single Construction Contract (herein
so-called). Landlord shall provide Tenant a copy of the Construction Contract
not less than ten (10) days prior to the scheduled commencement of construction.
The Construction Contract shall:
(a) Provide for a guaranteed maximum cost for the entire cost of the
work.
(b) Separately state and account for the costs and any associated fee
for the modifications to the Base Building, Base Building systems and "shell"
portions of the Leased Premises, which costs and fees shall be the
responsibility of Landlord pursuant to Section 1.5 above and shall not be part
of Tenant's Construction Costs.
(c) Require insurance coverage in amounts and types mutually and
reasonably acceptable to Landlord and Tenant.
(d) Provide that both Landlord and Tenant shall have the right to
disapprove the employment of any subcontractor.
(e) Provide for a schedule and sequence of construction activities
and completion reasonably acceptable to Tenant.
(f) Otherwise be in a form mutually and reasonably acceptable to
Landlord and Tenant including warranties of construction in a good and
workmanlike manner that shall survive the Completion Date for not less than one
(1) year.
(g) Not be amended without tenant's prior written consent.
(h) Separately state and account for the cost and any associated fees
relating to the removal and disposal of the asbestos containing materials in the
Additional Office Space, such cost and expense to be paid by Landlord and shall
not be deemed part of Tenant's Construction Costs (as hereinafter defined).
(i) Separately state and account for the cost and any associated fees
relating to the cost of construction of the Landlord Work.
ARTICLE III
Completion
3.1 Completion Date. The "Completion Date" means the date on which
Tenant's architect issues a certificate of Substantial Completion for all
Initial Leasehold Improvements in the Additional Office Space in compliance with
the following procedures and standards:
(a) When Landlord believes that the Initial Leasehold Improvements in
the Additional Office Space have been substantially completed in accordance with
the Approved Construction Documents, Landlord, Tenant, and Tenant's architect
shall walk through and inspect the Initial Leasehold Improvements in the
Additional Office Space.
(b) The Initial Leasehold Improvements in the Additional Office Space
shall be considered substantially completed if they conform to the Approved
Construction Documents and are capable of being occupied for their intended
purpose exclusive of touch-up, minor finish, and similar so-called "punch-list"
items that do not unreasonably interfere with occupancy or Tenant's business
activities. The "punch-list" items shall be completed within sixty (60) days of
the Completion Date.
(c) Tenant's architect shall attach to each certificate of
Substantial Completion a list of all punch-list items needed to achieve final
completion. Landlord shall complete all punch-list items identified in any
Substantial Completion certificate as soon as possible.
(d) If Landlord and Tenant disagree as to any particular matters of
architectural judgment, and such dispute cannot be resolved by Landlord's and
Tenant's respective architects, then the issue shall be submitted to an
independent architect selected by Landlord's and Tenant's respective architects
for resolution, and the determination of such independent architect shall be
binding on both parties.
3.2 Early Occupancy. Tenant may take early occupancy of all or a portion
of the Additional Office Space if permitted under applicable law once the
Completion Date has occurred.
ARTICLE IV
Schedule & Delays
4.1 Completion Schedule. Landlord shall use its diligent efforts to cause
the Additional Office Space to be Substantially Complete no later than January
15, 1996, subject to Tenant Delay.
4.2 Tenant Delays. "Tenant Delay" means any of the following:
(a) Delays in obtaining any building permits or certificates of
occupancy attributable to errors or omissions by Tenant's architects or
engineers.
(b) Delays resulting from change orders (authorized by Tenant) to the
Approved Construction Documents or the Construction Contract executed in
accordance with the provisions of this EXHIBIT B.
(c) Delays attributable to the nonavailability or excess procurement
time for specifically fabricated materials or equipment specifically identified
by Landlord as having the potential to cause a Tenant Delay in the Approved
Construction Documents or as part of the bidding process for the Construction
Contract.
(d) Any other delay in the completion of the Initial Leasehold
Improvements caused by Tenant, its employees, contractors or agents (including,
without limitation, Tenant's design professionals).
Any Tenant Delay must be claimed by written notice to Tenant within ten (10)
days after the beginning of the circumstances that constitutes a Tenant Delay.
Failure to deliver the written notice within the required time waives the
particular Tenant Delay. Notwithstanding the above, subsections (a) through (d)
of this Section 4.2 shall only be considered Tenant Delays to the extent such
items actually delay the Leasehold Improvements Completion Date and such delay
is not attributable to a delay resulting from Landlord's actions or omissions.
ARTICLE V
Costs & Allowances
5.1 Tenant's Construction Cost. "Tenant's Construction Costs" means the
total amount actually paid by Landlord under the Construction Contract(s) for
the Initial Leasehold Improvements, including labor, material, and fees, and as
increased or decreased pursuant to any change order executed by Landlord and
Tenant in accordance with the provisions of this EXHIBIT B.
5.2 Construction Administration Fee. Intentionally Deleted.
5.3 Architectural and Engineering. Tenant shall pay all architectural and
engineering fees and expenses associated with the preparation of the Approved
Space Plans and the Approved Construction Documents.
5.4 Allowances. Tenant shall receive an allowance (the "Improvement
Allowance") in an amount up to Eighty-Two Thousand and No/100 Dollars
($82,000.00) to be applied to the payment and/or reimbursement of the Tenant's
Construction Costs. Landlord shall maintain and make available to Tenant
accurate records of any and all disbursements of the Improvement Allowance for
payment of Tenant's Construction Costs, along with draw requests signed by the
contractor(s) and other bills or invoices.
5.5 Final Accounting of Allowances. Within thirty (30) days after the
Completion Date, Landlord shall furnish Tenant a final accounting of the
disbursement of the Improvement Allowance. In the event the Improvement
Allowance is not fully advanced by Landlord, Tenant may (a) utilize the
remainder for improvements to the fifteenth (15th) floor common area, provided
such improvements are approved by Landlord or (b) receive a credit against the
next Rent payable under the Lease equal to one-half (1/2) of the unadvanced
portion of the Improvement Allowance. Any costs and expenses incurred by
Landlord in connection with the construction of any Tenant requested
improvements to the fifteenth (15th) floor common area shall be promptly
reimbursed by Tenant, subject to Tenant's right to apply the unadvanced portion
of the Improvement Allowance against any such costs and expenses as set forth in
the immediately preceding sentence. If the aggregate amount of the cost and
expense of the Tenant's Construction Costs which are paid by Landlord are
greater than the Improvement Allowance, the excess shall be paid by Landlord and
Tenant shall elect by notice in writing to Landlord to either: (y) promptly
reimburse Landlord for such excess amount or (z) increase the Base Rental by the
amount necessary to fully amortize such excess amount in equal monthly
installments at the rate of ten percent (10%) per annum over the remainder of
the term of the Lease, beginning with the first payment of that is due and
payable to Landlord after the Leasehold Improvements Deemed Completion Date. In
the event Tenant fails to deliver written notice of its election of either (y)
or (z) above prior to the Leasehold Improvements Completion Date, Tenant shall
be deemed to have elected (y) above and Tenant shall make payment of such excess
amount within fifteen (15) days after receipt from Landlord of an invoice
setting forth such excess amount.
ARTICLE VI
Other Provisions
6.1 Changes. Tenant may make changes in the Approved Construction
Documents or the Construction Contract(s) only if Tenant signs a change order
requesting the change, and then only if the change is consistent with applicable
codes and laws and does not materially impact the mechanical, electrical,
plumbing or structural components of the Building. Landlord may require changes
in the Approved Construction Documents or Construction Contract(s) only if
necessary to comply with applicable building codes and other laws, and then only
if Landlord and Tenant sign a change order. The terms "Approved Construction
Documents" and "Construction Contract" shall be deemed to include only changes
authorized by a change order signed by Landlord and Tenant in accordance with
this Section.
6.2 Warranty. TENANT ACKNOWLEDGES THAT THE INITIAL LEASEHOLD IMPROVEMENTS
WILL BE CONSTRUCTED BY A CONTRACTOR UNAFFILIATED WITH LANDLORD AND THAT
ACCORDINGLY, EXCEPT AS OTHERWISE SET FORTH IN THIS LEASE, LANDLORD HAS MADE AND
WILL MAKE NO WARRANTIES TO TENANT AS TO THE QUALITY OF CONSTRUCTION OF THE
INITIAL LEASEHOLD IMPROVEMENTS OR OF THE CONDITION OF THE INITIAL LEASEHOLD
IMPROVEMENTS UPON COMPLETION THEREOF, EITHER EXPRESS OR IMPLIED, AND THAT
LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED WARRANTY THAT THE ADDITIONAL
OFFICE SPACE IS OR WILL BE SUITABLE FOR TENANT'S INTENDED COMMERCIAL PURPOSE,
Landlord agrees, however, that if any defect in the Initial Leasehold
Improvements is discovered, Landlord will diligently pursue and seek to enforce
any warranties and/or to pursue any other liability of the General Contractor,
any subcontractor which performed defective work or supplied or installed
defective materials, the manufacturer of any defective materials incorporated
therein, and any other person or entity which provided defective labor, material
or professional services in connection with the Initial Leasehold Improvements;
provided, however, that in no event shall Landlord be obligated to institute any
litigation or other legal process in connection therewith. If for any reason
Tenant is dissatisfied with Landlord's efforts to enforce any such warranties or
liabilities, or if Landlord determines that Landlord has exhausted its
obligation to pursue such claims without obtaining a rectification of the
defect, then upon Tenant's request Landlord will assign to Tenant any and all
warranties and causes of action for such defective labor, materials or
professional services; provided, however, that all such warranties and causes of
action shall automatically revert to Landlord upon the expiration or earlier
termination of this Lease.
6.3 Authorized Construction Representative. Tenant and Landlord shall
furnish the other party with a written list of such party's authorized
construction representative for the Initial Leasehold Improvements. Only the
authorized construction representative so designated is authorized to sign any
change order, disbursement request for any Allowance, receipt, or other document
on behalf of such party related to the Initial Leasehold Improvements, and
without the signature of such an authorized construction representative, no such
document shall be binding upon the respective party. Each party may from time
to time change its authorized construction representative by giving the other
party written notice of the addition or change. Tenant's initial designated
representatives are Allyn Skelton and Ric Robinson. Landlord's initial
designated representative is Robert Gauss.