Exhibit 10.9
LEASE AGREEMENT
HOUSTON INTERWEB DESIGN, INC.
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AS TENANT
AND
PATRIOT SAINT JAMES II INVESTORS, L.P.
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AS LANDLORD
OCTOBER 15, 1997
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BASIC LEASE INFORMATION
Tenant: HOUSTON INTERWEB DESIGN, INC.
a TEXAS CORPORATION
Notification Address: 1770 ST. JAMES PLACE, SUITE
HOUSTON, TEXAS 77056
Attention: HARRY WHITE
Facsimile Number:
Landlord: PATRIOT SAINT JAMES II INVESTORS, L.P.,
a Delaware Limited partnership.
Notification Address: 3030 LBJ Freeway, Suite 1500, Dallas, Texas 75234
Attention: Leasing Director
Facsimile Number: (214) 888-8029
Building: SAINT JAMES II office building, located at 1770
ST. JAMES PLACE, HOUSTON, HARRIS COUNTY, TEXAS.
Premises: Suite No. 515, containing 1,274 square feet of
Net Rentable Area in the Building, as shown on
the floor plan attached to this Lease as
EXHIBIT A.
Term: The period beginning on the Commencement Date
and ending at 6:00 p.m. on the last day of the
thirty sixth full calendar month after the
Commencement Date. Thus, unless the Commencement
Date falls on the first day of a calendar month,
the Term will also include the initial partial
calendar month immediately following the
Commencement Date.
Base Rent: Months(1) Rate(2) Annual Amount(3) Month Installment
1 through 36 $ 13.00 $ 16,526.04 $ 1,380.17
(1) Full calendar months after the Commencement
Date. For any initial partial calendar month,
the monthly installment of Base Rent will be the
same as in the first full calendar month after
the Commencement Date.
(2) Per square foot of Net Rentable Area per annum.
(3) Expressed on an annualized basis even though
the applicable period may be longer or shorter
than twelve months.
Security Deposit: $ 1,380.17
Base Year: Calendar year 1997
Operating Costs Base Rate: The rate of Operating Costs per square foot of
Net Rentable Area in the Building for the Base
Year.
Tax Costs Base Rate: The rate of Tax Costs per square foot of Net
Rentable Area in the Building for the Base Year.
Utilities Costs Base Rate: The rate of Utilities Costs per square foot of
Net Rentable Area in the Building for the Base
Year.
Tenant Improvements: Any leasehold improvements installed in the
Premises as of the date of this Lease, together
with (and as altered by) the Work Letter
Improvements, if any.
Broker: NONE
THE BASIC LEASE INFORMATION IS PART OF THE LEASE.
EACH TERM IN THE LEFT COLUMN IS USED THROUGHOUT
THE LEASE AS A DEFINED TERM WITH THE MEANING
STATED IN THE BASIC LEASE INFORMATION.
LEASE AGREEMENT
I. PREMISES AND TERM
1.1 DEMISE OF PREMISES. Landlord demises to Tenant the Premises located in
the Building, which is situated on the land described in EXHIBIT B (together
with the Building and other improvements now or hereafter located thereon,
the "Property"), and covenants that subject to the terms and conditions of
this Lease, Tenant will quietly have, hold, and enjoy the Premises so long as
Tenant pays Rent as required by this Lease and otherwise performs and
complies with this Lease. Tenant accepts the Premises from Landlord in an "as
is" condition (save only for the Work Letter Improvements, if any) without
warranty of any kind except as may be expressly stated to the contrary in
this Lease, and agrees to surrender the Premises to Landlord in the condition
required by this Lease on the expiration of the Term or earlier termination
of this Lease. So long as Tenant occupies the Premises, Tenant will have the
nonexclusive right to use the lobbies, walks, parking facilities, drives, and
other areas of the Property made available by Landlord from time to time for
the common use of occupants of the Building.
1.2 TERM. The Term will commence on the date (the "COMMENCEMENT DATE")
that is the earlier of (a) the Substantial Completion Date (as defined in the
Work Letter attached as RIDER 1), or (b) the date on which tenant first
begins to occupy the Premises; and unless terminated earlier pursuant to this
Lease, the Term will expire at the time specified in the Basic Lease
Information. On receipt from Landlord, Tenant must execute a declaration in
the form of EXHIBIT C to confirm the date upon which the Commencement Date
occurred. Pending resolution of any objections Tenant may have to the date
reflected as the Commencement Date in the declaration, Rent must be paid
based on that date; and on resolution of Tenant's objections, an appropriate
reduction or increase (without interest or penalty) will be made in the next
Monthly Rent Installment due.
1.3 AREA CALCULATIONS. All calculations of Usable Area and Net Rentable
Area under this Lease will be made in accordance with the following
definitions:
(a) "USABLE AREA" means: (i) in the case of a full-floor space to be
occupied by a single tenant, the entire area of the floor measured from the
inside surface of the outer pane of glass and extensions of the plane thereof
in non-glass areas to the inside surface of the opposite outer pane of glass
and extensions of the plane thereof in non-glass areas, including all
On-Floor Common Area and excluding only Service Area and General Common Area;
and (ii) in the case of space on a floor to be occupied by more than one (1)
tenant, the area enclosed by the inside surface of the outer pane of glass
and extensions of the plane thereof in non-glass areas and by demising walls
(measured from the midpoint of demising walls), excluding only Service Area,
On-Floor Common Area, and General Common Area. No deduction will be made for
columns or projections necessary to the Building.
(b) "NET RENTABLE AREA" means: (i) in the case of a full-floor space
to be occupied by a single tenant, the Usable Area of the floor plus an
allocation of General Common Area; and (ii) in the case of space on a floor
to be occupied by more than one (1) tenant, the Usable Area of the space plus
an allocation of both General Common Area and On-Floor Common Area.
(c) "SERVICE AREA" means an area within vertical penetrations such as
(and measured from the midpoint of the walls enclosing) Building stairs,
elevator shafts, fire towers, flues, vents, stacks, vertical pipe shafts, and
vertical ducts, but excluding structural columns and areas for the specific
use of any tenant (such as special stairs or elevators).
(d) "ON-FLOOR COMMON AREA" means the total area on a floor of a
Building located within (and measured from the midpoint of the walls
enclosing or inside surface of the outer pane of glass enclosing) public
corridors, elevator foyers, rest rooms, mechanical rooms, janitor closets,
telephone, electrical and equipment rooms, and other similar facilities for
the use of all tenants on that floor. The total On-Floor Common Area of a
floor to be occupied by more than one (1) tenant will be allocated to the Net
Rentable Area of a particular space on that floor in proportion to the Usable
Area of that space relative to the total Usable Area on that floor.
(e) "GENERAL COMMON AREA" means the total area of the Building within
(and measured from the midpoint of the walls enclosing or from the inside
surface of the outer pane of glass enclosing, or extensions of the plane
thereof in non-glass areas) the Building's elevator machine rooms, main
mechanical rooms, loading dock facilities, telephone switch rooms, main
electrical rooms, public lobbies, engineering, security, postal and cleaning
areas, and other areas not leased or held for lease within the Building, but
which are necessary or desirable for the proper utilization of the Building
generally or to provide services to the Building generally. The total General
Common Area of the Building will be allocated to the Net Rentable Area of a
particular space in proportion to the Usable Area of that space relative to
the total Usable Area of the Building.
1.4 ADJUSTMENT OR NET RENTABLE AREA. The Net Rentable Area of the Premises
will not be adjusted as a result of variations resulting from initial
construction of any Work Letter Improvements. If the Net Rentable area of the
Premises or Building changes for any reason, any Rent calculations based on
Net Rentable Area will be adjusted accordingly effective as of Tenant's
receipt of written notice from Landlord of the adjustment and the reason
therefor. Tenant may object to errors in the adjustment by Landlord only if
Tenant notifies Landlord in writing within thirty (30) days thereafter of the
specific errors made by Landlord. Pending resolution of any such objections by
Tenant, Rent must be paid as adjusted by Landlord based on the change in Net
Rentable Area; and on resolution of Tenant's objections, an appropriate
reduction or increase (without interest or penalty) will be made in the next
Monthly Rent Installment due.
1.5 RELOCATION OF THE PREMISES. Upon written notice to Tenant, Landlord
may substitute for the Premises other space in the Building of substantially
the same Net Rentable Area as the Premises with leasehold improvements that
as nearly as practical, are substantially the same as the Tenant Improvements
initially installed in the Premises. Within ten (10) days after Landlord's
written request, Tenant must execute an amendment to this Lease whereby all
references to the Premises in this Lease are changed to refer to the space
substituted for the Premises, Base Rent is adjusted to reflect any resulting
change in Net Rentable Area, and all other provisions of this Lease remain
unchanged. Landlord will reimburse Tenant for all reasonable and documented
costs incurred to third parties as a direct and necessary result of Tenant's
relocation to the space substituted for the Premises, including expenses for
moving property, reconnecting equipment, and reprinting stationery.
1.6 ALTERATIONS OF THE PROPERTY. Landlord may (without unreasonable
interference with Tenant's use of the Premises) make alterations, additions,
or improvements to the Building and other parts of the Property from time to
time, enter upon the Premises as necessary therefor, and close or restrict
access to portions of the Building or other portions of the Property for any
reason. Landlord may change the name or address of the Building.
II. RENT
2.1 PAYMENT OF RENT. On or before the first day of each calendar month
throughout the Term, Tenant must pay Landlord in advance without demand or
notice the "MONTHLY RENT INSTALLMENT" consisting of the total of (a) the
monthly installment of Base Rent specified in the Basic Lease Information for
the applicable calendar month, (b) one-twelfth (1/12th) of the Base Rent
Adjustment as estimated by Landlord for the applicable calendar year, and (c)
any Monthly Parking Charge. On Tenant's execution of this Lease, Tenant must
pay Landlord one (1) month's Base Rent in the amount of the monthly
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installment of Base Rent in effect for the first calendar month of the Term
to be applied to the first full Monthly Rent Installment. If the Commencement
Date falls on other than the first day of a calendar month, then on the
Commencement Date Tenant must pay Landlord a prorated portion of one (1)
month's Monthly Rent Installment based on the number of days elapsed during
the Term in that month. All sums of money payable by Tenant to Landlord
pursuant to this Lease constitute rent, and all such sums, together with the
Monthly Rent Installments, are referred to generically in this Lease as
"RENT." Except as expressly stated to the contrary in this Lease, all
Rent is payable to Landlord without abatement, set-off, or counterclaim at
Landlord's Notification Address (or at any other address that Landlord may
designate in writing from time to time).
2.2 BASE RENT ADJUSTMENT. The "BASE RENT ADJUSTMENT" for each calendar
year will equal the product of (a) the Net Rentable Area of the Premises,
times (b) a rate per annum per square foot of Net Rentable Area equal to the
sum of (i) the excess, if any, of the rate of Operating Costs per square foot
of Net Rentable Area in the Building for the applicable calendar year over
the Operating Costs Base Rate, (ii) the excess, if any, of the rate of Tax
Costs per square foot of Net Rentable Area in the Building for the applicable
calendar year over the Tax Costs Base Rate, and (iii) the excess, if any, of
the rate of Utilities Costs per square foot of Net Rentable Area in the
Building for the applicable calendar year over the Utilities Costs Base Rate.
Effective on any change in the Net Rentable Area of the Premises or the
Building in accordance with this Lease, the calculation of the Base Rent
Adjustment will change accordingly. The Base Rent Adjustment will never lower
Base Rent below the amount specified in the Basic Lease Information. Prior to
January 1 of each calendar year after the Base Year (or as soon thereafter as
reasonably practical), Landlord will provide an estimate of the Base Rent
Adjustment for the forthcoming calendar year, and the Monthly Rent
Installments due thereafter will be adjusted to reflect the Base Rent
Adjustment so estimated by Landlord. By June 1 of each calendar year, or as
soon thereafter as reasonably practical, Landlord will furnish to Tenant a
statement (the "ANNUAL STATEMENT") showing in reasonable detail the
calculation of the Base Rent Adjustment for the immediately preceding
calendar year and comparing the actual Base Rent Adjustment to the estimated
Base Rent Adjustment actually paid by Tenant. If the estimated Base Rent
Adjustment paid is less than the actual Base Rent Adjustment reflected on the
Annual Statement, Tenant must pay Landlord the amount of the deficit in a
lump sum no later than thirty (30) days after receipt of the Annual
Statement. If the estimated Base Rent Adjustment paid is greater than the
actual Base Rent Adjustment reflected on the Annual Statement, Landlord will
allow Tenant equal monthly credits against the Monthly Rent Installments due
for the remainder of the then current calendar year in an aggregate amount
equal to the surplus, or if Landlord so chooses, Landlord will pay Tenant the
amount of the surplus in a lump sum within thirty (30) days after delivery of
the Annual Statement. In calculating any surplus or deficit owed for any
calendar year in which the Term expires, the Base Rent Adjustment will be
prorated in proportion to the number of days elapsed during the Term in that
calendar year.
2.3 OPERATING COSTS. "OPERATING COSTS" means all expenses and costs of any
kind incurred by Landlord in connection with the ownership, operation,
management, maintenance, or repair of the Property other than Tax Costs,
Utilities Costs, and Excluded Costs. Operating Costs include without
limitation, all of the following:
(a) Wages, salaries, fees, and all related expenses (including
without limitation, taxes, insurance, and benefits) of all personnel engaged
in the operation, management, maintenance, or repair of the Property.
(b) Costs of supplies, tools, equipment, and other materials,
including replacement parts and equipment, whether purchased, leased, used,
or consumed in the operation, maintenance, or repair of the Property.
(c) Costs of maintenance or service agreements for the Property,
including without limitation, access control service, window cleaning,
traffic control, janitorial service, landscape maintenance, and elevator
maintenance.
(d) Costs of operation, maintenance, or repair of interior and
exterior common or public areas of the Property, including without
limitation, sidewalks, driveways, parking areas, and landscaping.
(e) Legal or accounting costs for the Property, including without
limitation, a reasonable allocation of off-site costs and costs of annual
audits of Operating Costs, Tax Costs, and Utilities Costs by certified public
accountants, if performed.
(f) Costs of insurance carried by Landlord relating to the Property,
including without limitation, fire and casualty insurance (with extended,
all-risk, or other coverages), rental loss or business interruption
insurance, plus the cost of all deductible payments made by Landlord.
(g) Assessments, fees, or similar charges for the Property's share of
the cost of operating and maintaining common areas and facilities of any
office or business park in which the Property is located.
(h) Costs of complying with Laws applicable to the operation,
management, maintenance, or repair of the Property, including without
limitation, costs for licenses, permits, and inspection fees.
(i) Amortization in accordance with generally accepted accounting
principles of capital expenditures and reasonable financing charges for items
that are primarily for the purpose of (i) reducing or avoiding increases in
Operating Costs in Landlord's good faith estimate, (ii) promoting safety, or
(iii) complying with Laws imposed after the initial construction of the
Building. In addition to the foregoing, Landlord may include in Operating
Costs unamortized capital expenditures that in the aggregate are less than
two percent (2%) of the estimated amount of the total Operating Costs, Tax
Costs, and Utilities Costs for the applicable calendar year.
(j) Management fees and costs of a Property management office in the
Building or an allocation of the costs of an off-site central office
maintained for management of the Property.
2.4 TAX COSTS. "TAX COSTS" means all of the following that are not Excluded
Costs and that are imposed by Law on the Property or on Landlord in
connection with the ownership or operation of the Property: (a) general and
special ad valorem and other taxes, assessments, and charges; (b) any future
capital levy, rent, or other tax, assessment, or charge imposed in place of
or in addition to the ad valorem and other taxes, assessments, or other
governmental charges presently in effect; and (c) consulting, accounting,
legal fees, and other costs resulting from any challenge of ad valorem or
other taxes, assessments, or other governmental charges. If the Property is
not separately assessed, Landlord will allocate Tax Costs to the Property on
a reasonable basis.
2.5 UTILITIES COSTS. "UTILITIES COSTS" means all of the following that are
not Excluded Costs and that are incurred by Landlord in connection with the
ownership or operation of the Property; (a) costs and expenses for
consumption or use of public or private utility services for the Property,
including without limitation, water, steam, sewer, waste disposal, gas,
telecommunications, and electricity; and (b) amortization in accordance with
generally accepted accounting principles of capital expenditures and
reasonable financing charges for items that are primarily for the purpose of
(i) reducing or avoiding increases in Utilities Costs in Landlord's good
faith estimate, or (ii) complying with Laws imposed after the initial
construction of the Building.
2.6 EXCLUDED COSTS. "EXCLUDED COSTS" means all of the following:
(a) Except as expressly included in the definitions of Operating
Costs and Utilities Costs, capital expenditures as determined in accordance
with generally accepted accounting principles, depreciation and amortization,
and interest and other finance charges.
(b) Costs for the initial construction of the Property or for
improvements to leased premises.
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(c) Costs for the sale or financing of the Property, including
brokerage commissions, attorneys' and accountants' fees, closing costs, title
insurance premiums, and other similar costs.
(d) Leasing commissions, attorneys' fees, and other expenses in
connection with negotiations for leases or disputes with particular tenants.
(e) Repair or replacement costs paid with proceeds of insurance or
condemnation.
(f) Costs for which Landlord is reimbursed by any tenant or other
party, including without limitation, costs for furnishing any utilities or
services in addition to or in excess of those included in Building Standard
Services.
(g) Taxes attributable to the personal property or trade fixtures of any
tenant.
(h) Utilities or other costs that are payable directly to a third party
by any tenant.
(i) Taxes on net income, death taxes, franchise taxes, and taxes in
connection with any change of ownership of the Property.
(j) Penalties for late payment of taxes, utility bills, or other
amounts owned by Landlord except to the extent Landlord was in good faith
contesting payment.
2.7 ACCOUNTING PRINCIPLES. Operating Costs, Tax Costs, and Utilities Costs
will be computed on an accrual basis in accordance with generally accepted
accounting principles consistently applied. Tax Costs will accrue in the
calendar year levied or assessed except for Tax Costs attributable to special
taxes and assessments that are payable in installments, which will accrue
only to the extent of the installment payable each calendar year. Operating
Costs, Tax Costs, and Utilities Costs will be calculated on an annualized
basis for a full calendar year. In calculating Operating Costs, Tax Costs,
and Utilities Costs, costs that vary with occupancy (such as janitorial
service and utilities) will be appropriately adjusted to reflect the amount
that such variable costs would have been with occupancy at the greater of
ninety-five percent (95%) of the Net Rentable Area of the Building or the
actual occupancy of the Building throughout the applicable calendar year. All
rates per square foot of Net Rentable Area in the Building involved in
determining the Base Rent Adjustment will be calculated based on the greater
of ninety-five percent (95%) of the Net Rentable Area of the Building or the
actual occupancy of the Building throughout the applicable calendar year.
2.8 LATE PAYMENT OF RENT. Past-due Rent will bear interest from the date due
until paid at the rate per annum that is the lesser of (a) five percent (5%)
in excess of the "prime rate" or "base rate" of Bank One, Texas, National
Association (or its successor) from time to time (or if such rate is
discontinued, the rate charged by the bank to its most creditworthy
commercial borrowers), or (b) the maximum interest rate allowed by Law. Any
Rent or other sum required to be paid to Landlord on written demand will be
due and payable on Tenant's receipt of a bill, invoice, or other written
demand for payment from Landlord. If any Monthly Rent Installment is more
than five (5) days past due, or if any other payment of Rent or any other sum
is more than ten (10) days past due, Tenant must pay Landlord on written
demand a late charge that is the greater of $250.00 or five percent (5%) of
the amount of the Monthly Rest Installment or other Rent past due. Late
charges are intended to compensate Landlord for additional administrative
expenses associated with late payment. Any payment of past-due Rent will be
applied first to any late charges owed, then to any interest accrued, and
finally to the balance of Rend owed.
2.9 SECURITY DEPOSIT. Tenant must pay the Security Deposit to Landlord on
Tenant's execution of this Lease. Tenant will not receive any interest on the
Security Deposit. Landlord may commingle the Security Deposit with other
funds of Landlord. If a Tenant Default occurs, Landlord may (in addition to
any other remedies) apply the Security Deposit in whole or in part to pay any
Rent, damages, or other sums owed by Tenant. On written demand by Landlord
following such application, Tenant must pay Landlord a sufficient sum to
restore the Security Deposit to the full amount specified in the Basic Lease
Information. The Security Deposit is not an advance payment of Rent or a
measure of Landlord's damages for a Tenant Default. Upon full payment and
performance of this Lease by Tenant (including without limitation, final
payment of any deficiency in the Base Rent Adjustment owed by Tenant as
reflected in the final Annual Statement), Landlord will refund to Tenant any
balance of the Security Deposit remaining after deducting any Rent, damages,
or other sums owed by Tenant.
III. SERVICES FURNISHED BY LANDLORD
3.1 BUILDING STANDARD SERVICES. So long as Tenant occupies the Premises and
no Tenant Default has occurred, Landlord will furnish the following "BUILDING
STANDARD SERVICES":
(a) Central heating, ventilating, and air conditioning ("HVAC") in the
Premises in season between the hours (the "BUILDING HOURS") of 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 holidays observed by national banks in the city where the
Property is located.
(b) Electricity for routine lighting and the operation of general
office machines such as typewriters, dictating equipment, adding machines,
personal computers, copying machines, and the like that are designed to
operate at or below the rated voltage and current loads of the outlets,
circuits, and other electrical equipment initially installed in the Premises
as part of the Tenant Improvements and that do not consume, either singly or
in the aggregate, an amount of electrical power per square foot of Usable
Area materially in excess of the amount of electrical power per square foot
of Usable Area normally consumed in ordinary general office occupancy of the
Building.
(c) Building standard janitorial service in the Premises Monday
through Friday, exclusive of holidays observed by national banks in the city
in which the Property is located.
(d) Replacement as needed of Building standard fluorescent light bulbs
in the Premises.
(e) Initial issuance to Tenant of two (2) keys for each corridor door
to the Premises, and if Landlord provides electronic access control to
tenants of the Building generally, initial issuance to Tenant's employees in
the Premises of access cards for use in Building standard electronic access
card readers (not to exceed one (1) access card per 333 square feet of Net
Rentable Area in the Premises).
(f) Initial installation in Building standard graphics of Tenant's
name and suite number on the main exterior door of the Premises, and if
Landlord provides a tenant directory in the main Building lobby, one (1)
initial listing of Tenant's name on the tenant directory.
(g) Nonexclusive use of rest rooms with hot and cold water at
locations provided for the use of the Building's tenants generally.
(h) Nonexclusive use of passenger elevator service to the floor of the
Premises, with at least one (1) cab in service twenty-four (24) hours per day.
(i) Routine maintenance, replacement, and repair of the structural
components of the Building, of the mechanical, electrical, and plumbing systems
and equipment serving the Building generally, and of the interior and
exterior common areas of the Building, including the Building's ground floor
lobby, exterior lighting, landscaping, and irrigation on the Property, and
parking, driveway, and walkway areas on the Property.
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(j) Operation of equipment and/or employment of personnel for the
purpose of attempting to control access to the ground floor lobby of the
Building during other than Building Hours.
3.2 ADDITIONAL SERVICES. If Landlord chooses to do so, Landlord may make
additional services available to tenants of the Building. Unless the
additional services are furnished to office tenants of the Building
generally, Landlord will establish a Building standard charge to be billed to
the particular tenants that request or utilize the additional service. The
following additional services will be available for a Building standard
charge if requested by Tenant:
(a) If requested far enough in advance in accordance standard
procedures established for the Building, HVAC service during other than
Building Hours. The Building standard charge may include a minimum area and a
minimum number of hours of HVAC operation.
(b) Replacement of electronic access cards.
(c) If Landlord provides a tenant directory in the main Building lobby,
and to the extent space is available, additional or changed listings on the
tenant directory.
3.3 EXCESS OR SPECIAL SERVICE REQUIREMENTS. Landlord and Tenant agree that:
(a) If any equipment in the Premises generates excessive heat or
requires a range of ambient temperature and humidity outside of that afforded
by the operation of the Building's standard HVAC equipment at thermostat
settings that Landlord considers standard for the Building, Landlord may
require Tenant to cease using such equipment within ten (10) days after
written notice from Landlord. If Tenant fails to do so, Landlord may elect to
install supplemental HVAC and metering equipment, in which case Tenant must
pay the following costs to Landlord from time to time on written demand: (i)
the cost of the supplemental equipment and its design and installation plus a
Building standard charge to compensate Landlord for the additional
administrative burden; (ii) the cost of maintenance, replacement, and repair
of the supplemental equipment plus a Building standard charge to compensate
Landlord for the additional administrative burden; and (iii) costs of
electrical power consumed and chilled water as metered or otherwise
reasonably determined by Landlord, plus actual costs of accounting and
billing therefor.
(b) No equipment may be used that requires or uses electricity in
excess of the rated voltage and current loads of the outlets, circuits, and
other electrical equipment initially installed in the Premises as part of the
Tenant improvements, and Landlord may enter the Premises and disconnect such
equipment immediately without prior notice to Tenant. If any type or quantity
of equipment in the Premises consumes electrical power in an amount per
square foot of Usable Area that is materially in excess of the amount of
electrical power per square foot of Usable Area normally consumed in ordinary
general office occupancy of the Building, Landlord may require Tenant to
cease using such equipment within ten (10) days after written notice from
Landlord. If Tenant fails to do so, Landlord may elect to install
supplemental metering equipment, in which case Tenant must pay the following
costs to Landlord from time to time on written demand: (i) the cost of the
supplemental equipment and its design and installation plus a Building
standard charge to compensate Landlord for the additional administrative
burden; (ii) the cost of maintenance, replacement, and repair of the
supplemental equipment plus a Building standard charge to compensate Landlord
for the additional administrative burden; and (iii) metered costs of
electrical power consumed in excess of that included in Utilities Costs, plus
actual costs of accounting and billing therefor.
(c) If any improvements in the Premises or any of the fixture,
furnishings, fixtures, equipment, or other personal property in the Premises
requires janitorial services in excess of that reasonably considered standard
for the Building by Landlord, if additional janitorial service is required to
clean and store cooking, eating, and drinking utensils and equipment in the
Premises, or if additional janitorial service is required to properly dispose
of food, drink, or other wastes and debris in the Premises, Landlord may
refuse to provide such services (in which case Tenant must provide such
services at its cost in a manner reasonably satisfactory to Landlord), or
Landlord may elect to provide such services (in which case Tenant must pay
Landlord from time to time on written demand the additional cost of such
services plus a Building standard charge to compensate Landlord for the
additional administrative burden).
(d) If the Premises or any other part of the Property is damaged by any
act or omission of Tenant or its employees, agents, or contractors, Landlord
will make needed repairs or replacements, but Tenant must pay Landlord on
written demand the cost of the repairs and replacements in excess of
insurance proceeds actually received by Landlord, if any, plus a Building
standard charge to compensate Landlord for the additional administrative
burden. Landlord will have no obligation to begin such repair or replacement
work until Landlord receives all insurance proceeds and any funds due from
Tenant.
(e) All sums payable by Tenant pursuant to this Section are in addition
to the Base Rent Adjustment, which will be payable without reduction in
accordance with other applicable provisions of this Lease.
IV USE AND OCCUPANCY BY TENANT
4.1 USE. The Premises may be used and occupied only for general office
purposes and for no other purpose whatsoever. Tenant may not engage in or
cause, must ensure that none of its employees, agents, or contractors
engages in or causes, and must use good faith, reasonable efforts to ensure
that none of its customers or other visitors engages in or causes any of the
following in the Premises or elsewhere on the Property: (a) any action or the
placement of any object that is visible from the exterior of the Building or
from lobby or other common areas of the Property and that adversely affects
the appearance of the Property; (b) any emission of harmful or offensive
odors or fumes or any loud or disturbing noises; (c) any excessive load on
floors or other structural elements of the Building or on the mechanical,
electrical, and plumbing systems of the Building; (d) any fire or other
hazard that might adversely affect the availability or cost of insurance
carried by Landlord or other tenants; (e) any use, generation, storage,
treatment, transportation, or disposal of any Hazardous Material (except for
generally available office equipment and supplies that contain small
quantities or low concentrations of Hazardous Material so long as they are
properly used and stored within the Premises, properly disposed of by Tenant
at a location other than the Property, and do not by Law require any license
or permit); (f) any waste, nuisance, or other unreasonable interference with
or disturbance of Landlord's business or the occupancy of any other tenant of
the Property; (g) any criminal or other disreputable conduct that might
adversely affect the reputation of Landlord or the Property; (h) any
noncompliance with rules, procedures, or instructions of Landlord or its
employees, agents, or contractors relating to protection of life or personal
safety or to security or access control; or (h) any noncompliance with the
Building Rules attached as Exhibit D (or amendments or additions to such
rules hereafter promulgated by Landlord). "Hazardous Material" means any
toxic or hazardous waste, material, or substance or any other substance that
is prohibited, limited, or regulated as a health or environmental hazard or
pollutant under any Law, or that even if not so regulated, could or does pose
a hazard to the environment or to the health and safety of the occupants of
the Building or others.
4.2 COMPLIANCE WITH LAWS. Tenant at its cost must comply with, must cause
its employes, agents, and contractors to comply with, and must use good
faith, reasonable efforts to cause its customers and other visitors to comply
with all applicable codes, statutes, ordinances, regulations, and other
legal requirements of any government or governmental agency (collectively,
"Laws") relating to the use, condition, or occupancy of the Premises
(including without limitation, all Laws applicable to Tenant's business and
operations in the Premises). Without limiting the foregoing, Tenant at its
cost must comply with all requirements of the Americans with Disabilities Act
and implementing regulations applicable to the use, condition, or occupancy
of the Premises other than requirements relating solely to the physical
structure of (a) the Work Letter Improvements, if any, as initially installed
in the Premises by Landlord, (b) the roof, foundation, and exterior walls of
the Building, and (c) the common areas of the Property.
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4.3 MAINTENANCE OF THE PREMISES. Tenant must promptly report to Landlord any
damage to the Premises. Except to the extent included in Building Standard
Services, maintenance, replacement, and repair of all improvements and other
components of the Premises must be carried out by Tenant at its cost in a
good and workmanlike manner, using contractors approved by Landlord in
writing, and in a manner sufficient to keep the Premises and the improvements
therein in as good a condition as on the Commencement Date, reasonable wear
and tear excepted.
4.4 SIGNS AND ADVERTISING. Except for the entry letters and numerals
initially installed by Landlord as part of the Building Standard Services or
as specially provided to the contrary in a Rider to this Lease (if any), no
signs or other graphics relating to Tenant or its business that are visible
from the exterior of the Building or from Lobby or other common areas of the
Property may be installed anywhere on the Property. If Landlord elects to
permit any such signs or graphics, the size, location, and appearance thereof
must be satisfactory to Landlord in its discretion. Tenant may not use the
name of Landlord or of the Building or Property for any purpose other than to
identify the location of the Premises in Tenant's address.
4.5 ALTERATIONS, ADDITIONS, AND IMPROVEMENTS. Tenant may make no
alterations, additions, or improvements to the Premises or the Property
without the prior written consent of Landlord (which may be withheld in
Landlord's discretion). If Landlord consents, all alterations, additions, or
improvements must be completed without cost to Landlord, and Tenant must pay
Landlord on written demand the amount of all costs incurred by Landlord for
architects and engineers, permits, or other purposes related to the
alterations, additions, or improvement, plus a Building standard charge to
compensate Landlord for the additional administrative burden. Tenant must
comply with all reasonable requirements of Landlord relating to plans and
specifications, compliance with building codes and other Laws, employment and
bonding of contractors, insurance, compatibility with the Building's
mechanical, electrical, and plumbing systems, aesthetic considerations, and
other matters as determined by Landlord. All alterations, additions, or
improvements, including without limitation, all partitions, walls, railings,
carpeting, floor and wall coverings, and other fixtures (excluding Tenant's
trade fixtures) will become the property of Landlord when made, and will
remain upon the Premises at the expiration of the Term or earlier termination
of this Lease. Without limiting the foregoing, each of the following requires
Landlord's prior written consent: (a) installation of food, soft drink or
other vending machines; (b) removal or replacement of window coverings on
exterior windows initially installed in the Premises as part of the Tenant
Improvements, or the installation of additional window coverings, drapes, or
other window treatments; and (c) rekeying or other changes in the locks or
other access control devices on the exterior or interior doors of the
Premises, or duplication of any keys or electronic access cards furnished by
Landlord.
4.6 PERSONAL PROPERTY AND TRADE FIXTURES. Tenant may not remove any of the
following from the Premises: (a) HVAC systems, fixtures, or equipment; (b)
lighting fixtures or equipment; (c) carpeting and other attached floor
coverings, or raised flooring; (d) plumbing fixtures and equipment; (e)
paneling or millwork; (f) build-in shelving or cabinets; (g) drapes, blinds,
or other window treatments; and (h) equipment or appliances purchased or
installed by Landlord as part of the Work Letter Improvements. Except as
provided in the preceding sentence, any personal property or trade fixtures
installed in the Premises at Tenant's expense will remain Tenant's personal
property, and must be removed from the Property by Tenant on the expiration
of the Term or earlier termination of this Lease without damage to the
Premises or other parts of the Property. On the expiration of the Term or
earlier termination of this Lease Tenant must also deliver to Landlord all
keys, electronic access cards, and safe or vault combinations with respect to
the Premises, and leave the Premises in a clean condition free of waste,
refuse, or debris. If Tenant fails to do so, Landlord may retain, store, or
dispose of any trade fixtures or other personal property left in the Premises
however Landlord chooses without liability of any kind to Tenant, repair any
damage to the Premises or other parts of the Property caused by removal
thereof, change or rekey locks and other access control devices as necessary
throughout the Building to maintain security, and clean the Premises and
properly dispose of all such waste, refuse, or debris; and Tenant must pay to
Landlord on written demand all costs and expenses incurred by Landlord in
connection with the foregoing, plus a Building standard charge to compensate
Landlord for the additional administrative burden.
4.7 TAXES PAYABLE BY TENANT. Tenant must pay any documentary stamp tax,
transfer tax, sales or use tax, excise tax, or any other tax, assessment, or
charge (other than any income, franchise, or similar tax imposed directly on
Landlord or Landlord's net income from the Property) required to be paid on
account of (a) the execution of this Lease, (b) the use or occupancy of the
Premises by Tenant, (c) the sale or use of goods or services furnished by
Landlord directly to Tenant or at Tenant's request, (d) the Rent or other
payments due hereunder, or (e) the value of trade fixtures, furnishing,
equipment, or other personal property located on the Premises and owned by or
in the custody of Tenant. All such taxes, assessments, and charges must be
paid promptly as they become due prior to delinquency. Tenant will provide
Landlord with copies of paid receipts for such taxes, assessments, or charges
promptly after payment. Tenant must also pay on written demand from Landlord
any increase in ad valorem taxes or assessments on the Property as a result
of alternations, additions, or improvements made after the Commencement Date
(as separately assessed or as reasonably valued and allocated by Landlord).
4.8 PROTECTION AGAINST LIENS. No mechanics', materialmen's, or other type of
lien or claim may be filed against Landlord or the Property by, against,
through, or under Tenant or its contractors. If any such lien or claim is
filed, Tenant must either cause the lien or claim to be discharged with ten
(10) days after filing, or if all required approvals from the holders of
Mortgages on the Property are obtain and Tenant furnishes adequate security
to prevent any foreclosure proceedings against the Property, Tenant may in
good faith contest such lien or claim; otherwise, Landlord may, in addition
to any other right or remedy available to it, elect to discharge the lien or
claim by paying the amount alleged to be due or by giving appropriate
security. If Landlord discharges or secures the lien or claim, then Tenant
must reimburse Landlord on written demand for all sums paid and all costs
(including reasonable attorneys' fees and costs of litigation) incurred by
Landlord plus a Building standard charge to compensate Landlord for the
additional administrative burden. All of Tenant's contracts, purchase orders,
or similar documents relating to any labor or materials to be furnished for
the Premises must state that Tenant is solely responsible for payment and
that no lien may attach to the Property to secure any payment due.
4.9 ACCESS BY LANDLORD. Landlord and its agents and representatives may
enter the Premises at any time without notice to provide Building Standard
Services or in an emergency. At reasonable hours and after reasonable notice,
Landlord and its agents and representatives may enter the Premises to conduct
inspection, make repairs, alterations, or additions, and to show the Premises
to prospective tenants, subtenants, mortgagees, and purchasers.
V. TRANSFERS
5.1 TRANSFERS BY TENANT. Landlord and Tenant agree that:
(a) Without the prior written consent of Landlord in each instance
(which may be withheld in Landlord's discretion), Tenant may not do any of
the following (a "TENANT TRANSFER"): (i) assign this Lease or any estate or
interest therein, whether absolutely or collaterally as security for any
obligation; (ii) sublease any part of the Premises; (iii) permit any
assignment of this Lease or any estate or interest therein by operation of
Law, whether absolutely or collaterally as security for any obligation; (iv)
grant any license, concession, or other right of occupancy for any part of
the Premises; (v) permit the use of any part of the Premises by any
person other than Tenant and its agents and employees; (vi) assign or
otherwise transfer ownership of a majority of the assets of Tenant; or (vii)
merge or be consolidated into any other entity. In soliciting any Tenant
Transfer, Tenant must endeavor to obtain fair market value consideration. No
Tenant Transfer to any then current tenant or occupant of the Building will
ever be permitted. Any attempted Tenant Transfer without Landlord's prior
written consent will be void.
(b) If Tenant requests Landlord's consent to a Tenant Transfer,
Landlord may either (i) approve or disapprove the Tenant Transfer, or (ii)
terminate this Lease with respect to the part of the Premises affected by the
proposed Tenant Transfer. In connection with each Tenant Transfer request by
Tenant, Tenant must obtain and furnish
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to Landlord all documents, financial reports, and other information Landlord
reasonably requires in order to evaluate the proposed transferee. Landlord
will advise Tenant of Landlord's decision about the requested Tenant Transfer
within thirty (30) days after receipt of Tenant's written Tenant Transfer
request and all requested supporting materials. As a condition to giving its
consent to a Tenant Transfer, Landlord may require that any instrument to
effectuate the Tenant Transfer be in a form satisfactory to Landlord, that
the transferee assume the Lease, and that alterations to the Premises needed
to comply with Law be carried out without cost to Landlord in accordance the
provisions of this Lease relating to alterations of the Premises. If Landlord
refuses to consent to a requested Tenant Transfer, this Lease and the
obligations and liabilities of Tenant under this Lease will nonetheless
remain in full force and effect. The consent of Landlord to one Tenant
Transfer is never to be construed as waiving the requirement for Landlord's
consent to other Tenant Transfers, nor will any consent by Landlord or any
Tenant Transfer discharge or release Tenant from any obligations or
liabilities to Landlord under this Lease.
(c) Tenant must pay Landlord all cash or other proceeds of any Tenant
Transfer in excess of the Rent payable under this Lease, and Tenant hereby
assigns to Landlord all rights it may have or ever acquire to the excess
proceeds, which will be due and payable to Landlord on receipt by Tenant and
will be accompanied by an accounting of the sums owed, certified by Tenant.
No transferee of less than the entire Premises for the full Term as the result
of a Tenant Transfer will ever be entitled to exercise any renewal,
extension, expansion, termination, or other option provided in this Lease
(or in any Rider) or to the return of the Security Deposit. If a Tenant
default occurs after any Tenant Transfer, Landlord may, at its option,
collect Rent directly from the transferee, and Tenant hereby authorizes any
such transferee to pay Rent directly to Landlord at all times after receipt of
written notice from Landlord. No direct collection of Rent by Landlord from
any transferee following a Tenant Transfer will constitute a novation or
otherwise release Tenant from its obligations and liabilities under this
Lease.
5.2 TRANSFERS BY LANDLORD. Landlord has the unrestricted right to sell,
assign, mortgage, encumber, or otherwise dispose of all or any part of the
Property or any interest therein. Upon sale or other disposition of the
Property, Landlord will be released from obligations and liabilities
thereafter accruing under this Lease, and Tenant will attorn to Landlord's
successor and look solely to such successor for performance of the Lease
thereafter.
5.3 SUBORDINATION. This Lease is automatically subordinate to all present
and future mortgages, deeds of trust, deeds to secure debt, other security
instruments, or ground or land leases encumbering all or any part of the
Property ("MORTGAGES") and to all renewals, modifications, consolidations,
replacements, and extensions of any Mortgage. No other document is necessary
to subordinate this Lease to any Mortgage, but if Landlord so requests,
Tenant will promptly execute an appropriate document to confirm such
subordination. Upon request of any party succeeding to the interest of
Landlord as a result of enforcement of any Mortgage, Tenant will
automatically become the tenant of such successor in interest without change
in the terms this Lease except that such successor in interest will not be
(a) subject to any credits, offsets, defenses, or claims which Tenant may
have against any prior Landlord, (b) bound by any payment of Rent for more
than one (1) month in advance (except prepayments in the nature of security
for the performance by Tenant of its obligations under this Lease that are
actually received by such successor in interest), (c) bound by any amendment
or modification of this Lease made without the written consent of the holder
of the Mortgage (if such consent is required by the Mortgage), (d) liable for
any act, omission, or default of any prior landlord, or (e) required to make
any capital improvements to the Property or the Premises that Landlord may
have failed to complete. Notwithstanding the foregoing, the holder of any
Mortgage may elect at any time to subordinate its Mortgage to this Lease by
filing a document to such effect in the appropriate public real property
record and giving Tenant notice of such election.
5.4 ESTOPPEL CERTIFICATE. Within ten (10) days after written request from
Landlord, Tenant must (a) execute an estoppel certificate on a form provided
by Landlord certifying the status of such matters with respect to the Lease
as Landlord may request, and (b) furnish landlord the most recent available
audited financial statement (or if Tenant does not normally have audited
financial statements prepared, the most recent unaudited financial statement)
of Tenant and of any guarantor of this Lease. If Tenant fails to deliver a
requested estoppel certificate within the required 10-day period, Tenant will
be deemed to have agreed to the statements contained in the form provided by
Landlord.
VI. RISK MANAGEMENT
6.1 CASUALTY INSURANCE. Landlord must maintain fire and casualty insurance
with at least extended coverage on the Building and other improvements
included in the Property (excluding trade fixtures and personal property
owned by Tenant or in Tenant's custody or control) in amounts desired by
Landlord issued by an insurance company authorized to insure properties in
the state where the Property is located. Tenant will have no interest in the
proceeds of Landlord's insurance. If any improvements in the Premises have a
value substantially disproportionate to those found generally in the
Building, or if Tenant's use or occupancy poses any increased risk of loss
(without implying any consent to such use or occupancy), any resulting
increase in Landlord's premiums for such insurance must be paid by Tenant to
Landlord on written demand. Tenant at its own cost must maintain fire and
casualty insurance with at least extended coverage for the replacement cost
of all trade fixtures and personal property located on the Property and owned
by Tenant or in Tenant's custody or control, with business interruption
coverage for a period of at least six (6) months, issued by an insurance
company authorized to insure properties in the state where the Property is
located. Tenant must furnish Landlord certificates of insurance evidencing
the required fire and casualty insurance coverage prior to the Commencement
Date and thereafter prior to each policy renewal date.
6.2 WAIVER OF SUBROGATION AND CLAIMS. Landlord waives all claims, causes of
action, or other rights of recovery against Tenant and its employees, agents,
and contractors for any loss or damage to the Building and other improvements
included in the Property by reason of fire or other insurable risk of loss
(whether or not actually insured), regardless of cause or origin (including
negligence), and agrees that no insurer will have any right of subrogation to
Landlord. Tenant waives all claims, causes of action, or other rights of
recovery against Landlord and its employees, agents, and contractors for any
loss or damage to any trade fixtures and personal property located on the
Property and owned by Tenant or in Tenant's custody or control by reason of
fire or other insurable risk of loss (whether or not actually insured),
regardless of cause or origin (including negligence), and agrees that no
insurer will have any right of subrogation to Tenant. Each of Tenant and
Landlord will advise its fire and casualty insurers of the foregoing waiver
and ensure that such waiver is a part of each policy of fire and casualty
insurance that its carries.
6.3 CASUALTY DAMAGE. If any part of the premises is damaged by fire or
other casualty, Tenant will give prompt notice to Landlord. Landlord may, at
its option, terminate this Lease by so notifying Tenant in writing within
sixty (60) days after the date of a fire or other casualty if (a) the
casualty renders any substantial part of the Premises untenantable and the
repair time to restore the Premises to a tenantable condition (as reasonably
estimated my Landlord) will extend beyond the date that is one hundred eighty
(180) days after the date of the casualty, (b) the casualty renders any
substantial part of the Premises untenantable and at the time, less than two
(2) years remain until the expiration of the Term, (c) any part of the
Property is damaged to the extent that in Landlord's judgment, restoration is
not practical (whether or not the Premises have been damaged by the
casualty), or (d) the holder of any Mortgage requires application of any
insurance proceeds to reduce the Mortgage debt. If the damage by fire or other
casualty renders any substantial part of the premises untenantable and if the
repair time to restore the Premises to a tenantable condition (as reasonably
estimated by Landlord) will extend the date that is one hundred eighty (180)
days after the date of the casualty, Tenant may elect to terminate this Lease
by so notifying Landlord in writing within thirty (30) days after Tenant
receives Landlord's written estimate of the time required for restoration. If
the Lease is not so terminated by Landlord or Tenant, Landlord will promptly
begin and diligently pursue the work of restoring the Premises (including the
Tenant Improvements initially installed in the Premises) to substantially
their former condition as soon as reasonably possible. Landlord will not,
however, be required to restore any alterations, additions, or improvements
other than the initial Tenant Improvements or to spend any amount in excess
of the insurance proceeds
6
during the time and to the extent the Premises are untenantable as the result
of fire or other casualty, but such abatement will not extend the Term.
6.4 CONDEMNATION. If all or substantially all of the Property is condemned
or is sold in lieu of condemnation, then this Lease will terminate on the
date the condemning authority takes possession of the Property. If less than
all of the Property is so condemned or sold (whether or not the Premises are
affected) and in Landlord's judgment, the Property cannot be restored to an
economically viable condition, or if the holder of any Mortgage requires
application of condemnation proceeds to the reduction of the Mortgage debt,
Landlord may terminate this Lease by written notice to Tenant effective on
the date the condemning authority takes possession of the affected part of
the Property. If the condemnation or sale in lieu thereof will render any
substantial part of the Premises untenantable, Tenant may terminate this
Lease by written notice to Landlord effective on the date the condemning
authority takes possession of the affected part of the Premises. If this
Lease is not so terminated by Landlord or Tenant, Landlord will, to the
extent feasible, restore the Premises (including the Tenant Improvements
initially installed in the Premises) to substantially their former condition.
Landlord will not, however, be required to restore any alterations,
additions, or improvements other than the initial Tenant Improvements or to
spend any amount in excess of the condemnation proceeds actually received by
Landlord. Landlord will allow Tenant an equitable abatement of Rent during
the time and to the extent the Premises are untenantable as the result of any
condemnation or sale in lieu thereof, but such abatement will not extend
the Term. All condemnation awards and proceeds belong exclusively to
Landlord, and Tenant will not be entitled to, and expressly waives and
assigns to Landlord, all claims for any compensation for condemnation;
provided, however, if Tenant is permitted by applicable law to maintain a
separate action that will not reduce condemnation awards or proceeds to
Landlord, Tenant may pursue such separate action, but only for loss of
business, moving expenses, and Tenant's trade fixtures.
6.5 LIABILITY INSURANCE. Each of Landlord and Tenant must maintain separate
policies of commercial general liability insurance issued by an insurance
company authorized to transact business in the state where the Property is
located. The combined single limit of liability insurance coverage must be
at least $2,000,000, or such greater amount as Landlord may reasonably
require from time to time (so long as Landlord maintains at least the same
limit of coverage). Coverage in excess of $1,000,000 may be provided through
a policy of umbrella liability insurance. Tenant's liability insurance
policy must name Landlord as an additional insured and contain an
undertaking by the insurer not to cancel or change coverage materially
without first giving thirty (30) days' written notice to Landlord. Tenant
must furnish Landlord certificates of insurance evidencing the required
commercial general liability insurance coverage prior to the Commencement
Date and thereafter prior to each policy renewal date.
6.6 INDEMNIFICATION. Landlord and Tenant agree that:
(a) Tenant will indemnify, defend, and hold Landlord and its officers,
employees, agents, directors, shareholders, and partners harmless against any
loss, liability, damage, fine or other governmental penalty, cost, or expense
(including reasonable attorneys' fees and costs of litigation), or any claim
therefor, resulting from: (i) noncompliance with or violation of any Law
applicable to Tenant or its use and occupancy of the Premises; (ii) the use,
generation, storage, treatment, or transportation, or the disposal or other
release into the environment, of any Hazardous Material by Tenant or its
employees, agents, or contractors or as a result of Tenant's use and occupancy
of the Premises; (iii) injury to persons or loss or damage to property to
the extent caused by any negligent or wrongful act or omission of Tenant or
its employees, agents, and contractors, but only to the extent the loss or
damage would not be covered by property and casualty insurance of the type
and amount required to be carried by Landlord pursuant to this Lease (whether
or not actually so carried).
(b) Landlord will indemnify, defend, and hold Tenant and its officers,
employees, agents, directors, shareholders, and partners harmless against any
loss, liability, damage, fine or other governmental penalty, cost, or expense
(including reasonable attorneys' fees and costs of litigation), or any claim
therefor, resulting from: (i) Landlord's noncompliance with or violation of
any Law applicable to Landlord, but only to the extent such noncompliance or
violation is not based on the use or occupancy of the Premises by Tenant or
any other act or omission of Tenant or its employees, agents, or contractors;
(ii) the use, generation, storage, treatment, or transportation, or the
disposal or other release into the environment, of any Hazardous Material by
Landlord or its employees, agents, or contractors; (iii) injury to persons or
loss or damage to property to the extent caused by any negligent or wrongful
act or omission of Landlord or its employees, agents, and contractors, but
only to the extent the loss or damage would not be covered by property and
casualty insurance or the type and amount required to be carried by Tenant
pursuant to this Lease (whether or not actually so carried).
6.7 LIMITATIONS OF LIABILITY. Notwithstanding anything to the contrary in
this Lease, Landlord and Tenant agree that:
(a) None of the following will constitute a breach of the covenant of
quiet enjoyment, an actual or constructive eviction of Tenant, or a Landlord
Default: (i) the unavailability, curtailment, interruption, fluctuation,
inadequacy, or other defect in any of the services furnished or to be
furnished by Landlord pursuant to Article III of this Lease as a result of
any failure or malfunction of, or damage to any lines, equipment, or other
facilities on the Property or elsewhere, any act or omission of any utility
company, the requirements of any law, the unavailability of materials or
supplies, or any other circumstance outside of Landlord's reasonable control
so long as Landlord in good faith attempts to remedy such circumstances as
quickly as reasonably possible; (ii) any design or other defect in the
physical structure of the Building, in the mechanical, electrical, and
plumbing system of the Property, or in the Tenant Improvements or any other
improvements on the Property so long as Landlord in good faith attempts to
remedy the defect as quickly as reasonably possible; or (iii) any repairs,
replacements, maintenance, alterations, additions, or improvements to any
part of the Property so long as such activities are conducted without
unreasonable interference with Tenant's use of the Premises.
(b) Landlord will not be liable (whether in the event of a Landlord
Default or in any other circumstance whatsoever), and Tenant hereby waives and
releases all claim, causes of action, or other rights of recovery it may ever
had against Landlord for: (i) any negligent or other acts or omissions by
other tenants or occupants of the Property or their employees, agents,
contractors, customers, or visitors; (ii) loss or damage to property or
personal injury or death resulting from any negligent or other act or
omission of Landlord or its employees, agents, or contractors, relating to
the security of the Property; (iii) any loss of business or profits of Tenant
or other consequential damages; or (iv) exemplary, punitive, or other special
damages of any kind.
(c) None of Landlord's officers, employees, agents, directors,
shareholders, or partners will ever have any liability to Tenant under or in
connection with this Lease, and Tenant hereby waives and releases all claims,
causes of action, or other rights of recovery it may ever have against such
parties under or in connection with this Lease.
(d) Tenant agrees to look solely to Landlord's interest in the Property
for the recovery of any damages or other sums of money that Landlord may ever
owe Tenant under or in connection with this Lease, and Landlord will never be
personally liable for payment of any such damages or other sums of money, or
any judgment therefor.
6.8 ALLOCATION OF RISKS. TENANT ACKNOWLEDGES THAT IT HAS BEEN ADVISED TO HAVE
THE PROVISIONS OF THIS LEASE REVIEWED BY AN ATTORNEY OF ITS OWN CHOOSING AND
THAT IT HAD DONE SO OR KNOWINGLY ELECTED NOT TO DO SO. EACH OF THE WAIVERS,
RELEASES, AND OTHER LIMITATIONS ON LIABILITY OR CLAIMS PROVIDED IN THIS
ARTICLE OR ELSEWHERE IN THIS LEASE (INCLUDING WITHOUT LIMITATION, LIABILITY
OR CLAIMS BASED ON NEGLIGENCE OR OTHER FAULT) HAS BEEN KNOWINGLY AND
INTENTIONALLY MADE AND AGREED TO BY TENANT. THIS SECTION IS INTENDED TO
SATISFY ANY REQUIREMENT OF LAW THAT A WAIVER, RELEASE, OR OTHER LIMITATION OR
CLAIMS OR LIABILITY BASED ON NEGLIGENCE OR OTHER FAULT BE CONSPICUOUSLY
DISCLOSED.
VII. DEFAULT AND REMEDIES
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7.1 TENANT DEFAULT. The occurrence of any of the following will be a
"TENANT DEFAULT":
(a) Tenant fails to pay Monthly Rent Installment within five (5) days
after the date payment is due, or Tenant fails to pay any other Rent or other
sum owing from Tenant to Landlord under this Lease within ten (10) days after
the date of Tenant's receipt of a bill, invoice, or other written demand for
payment.
(b) Tenant fails to perform or comply with any provision of this Lease
not requiring the payment of Rent or other sums of money, and such failure
continues for more than fifteen (15) days after written notice from Landlord
of such failure; provided, however, if any such failure by Tenant cannot be
corrected within such 15-day period solely as a result of nonfinancial
circumstances outside of Tenant's control, and if Tenant has commenced
substantial corrective actions within such 15-day period and is diligently
pursuing such corrective actions, such 15-day period will be extended for
such additional time as is reasonably necessary to allow completion of
actions to correct Tenant's failure.
(c) Tenant fails to take occupancy of the Premises within fifteen (15)
days after the Commencement Date, or Tenant thereafter ceases to do business
in or abandons any substantial part of the Premises, whether or not Rent
continues to be paid.
(d) If Tenant or any guarantor of this Lease is other than a natural
person, the corporate, partnership, or other entity constituting Tenant or
such guarantor is dissolved, liquidated, or otherwise ceases to exist in good
standing under applicable Law.
(e) Tenant's leasehold estate is taken on execution or other process of
Law in any action against Tenant.
(f) Tenant or any guarantor of this Lease files a petition under any
chapter of the United States Bankruptcy Code, as amended, or under any
similar Law of any state, or a petition is filed against Tenant or any such
guarantor under the United States Bankruptcy Code, as amended, or under any
similar Law of any state and is not dismissed with prejudice within twenty
(20) days of filing, or a receiver or trustee is appointed for Tenant's
leasehold estate or for any substantial part of the assets of Tenant or any
such guarantor and such appointment is not dismissed with prejudice within
sixty (60) days, or Tenant or any such guarantor makes a general assignment
for the benefit of creditors.
(h) Any guarantor of this Lease fails or refuses to perform or comply
with such guarantor's guaranty of this Lease.
7.2 LANDLORD'S REMEDIES. If a Tenant Default has occurred, Landlord may (in
addition to any other rights or remedies available by Law) then or at any
time thereafter to do any one or more of the following at Landlord's option:
(a) LandLord, with or without terminating this Lease, may take any
reasonable action to remedy any failure of Tenant to comply with or perform
this Lease, and may enter the Premises as necessary to do so. Tenant must
reimburse Landlord on written demand for all costs so incurred plus a
Building standard charge to compensate Landlord for the additional
administrative burden.
(b) Landlord may terminate this Lease by express written notice of
termination to Tenant, enter and repossess the Premises by forcible entry or
detainer suit or as otherwise permitted by Law without additional demand or
notice of any kind to Tenant, and remove all persons or property therefrom
using such lawful force as may be necessary (and Tenant hereby waives any
claim for loss or damage by reason of such reentry, repossession, or
removal), in which case Landlord will be entitled to recover from Tenant (i)
the cost of repossessing the Premises (including without limitation,
reasonable attorneys' fees and costs of litigation), (ii) the anticipated
cost of any repairs, alterations, additions, and improvements to the
Premises, leasing inducements, and brokerage commissions for reletting the
Premises, (ii) all unpaid Rent owed at the time of termination, (iv) the
present value of the balance of the Rent for the remainder of the Term less
the present fair market rental value of the Premises for the same period
(taking into account all relevant factors, including market rent concessions
and the time necessary to relet the Premises and using a discount rate per
annum equal to the interest rate on U.S. Treasury obligations with a maturity
comparable to the length of the remainder of the Term), and (v) interest and
any other sum of money or damages owing by Tenant to Landlord. On termination
of this Lease, Landlord may elect to evict all subtenants and others in
possession, or on attornment of any subtenant to Landlord, to recognize such
sublease as a direct lease between the subtenant and Landlord.
(c) Landlord may terminate Tenant's right of possession (but not this
Lease), enter and repossess the Premises by forcible entry or detainer suit
or as otherwise permitted by Law without demand or notice of any kind to
Tenant and without terminating this Lease, and remove all persons or property
therefrom using such lawful force as may be necessary (and Tenant hereby
waives any claim for loss or damage by reason of such reentry, repossession,
or removal), in which case Landlord may (but will not be obligated to) relet
the Premises for the account of Tenant for such rent and upon such terms as
are satisfactory to Landlord, and without preference to any other space in
the Building. The rent actually received from such reletting of the Premises,
if any, will be applied to (i) the cost of repossessing the Premises
(including without limitation, reasonable attorneys' fees and costs of
litigation), (ii) the cost of any repairs, alterations, additions, and
improvements to the Premises, leasing inducements, and brokerage commissions
paid by Landlord for reletting the Premises (which Landlord is hereby
authorized to make), (iii) accrued unpaid Rent, and (iv) interest and any
other sum of money or damages owing by Tenant to Landlord. If at any time or
from time to time the rent actually received from such reletting of the
Premises, if any, is not sufficient to pay all such sums then accrued, the
deficiency will be due and payable from Tenant to Landlord on written demand.
Landlord may file suit to recover any such deficiency at any time or from
time to time without being obliged to wait until expiration of the Term, and
no recovery of any sum due Landlord will be a defense to recovery of any
amount not previously reduced to judgment. No reletting of the Premises will
be construed as an election on the part of Landlord to terminate this Lease,
which termination will occur, if at all, only by express written notice of
termination of Tenant. Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect to terminate this
Lease for any previous Tenant Default.
(d) In entering the Premises pursuant to this Section, Landlord may use
a duplicate or master key or lock combination or other lawful means, and may
thereafter change the locks to the Premises to preclude further access by
Tenant or others; and Tenant waives any requirement of Law to the contrary.
Thereafter, Landlord will not be obliged to permit Tenant or others to enter
the Premises; provided, however, during Landlord's normal business hours and
at the convenience of Landlord, and upon the written request of Tenant
accompanied by such written waivers and releases as Landlord may require,
Landlord will escort Tenant or its authorized personnel to the Premises to
retrieve any personal belongings or other property of Tenant not subject to
any lien or security interest in favor of Landlord.
(e) Even if this Lease is not terminated, Landlord may terminate all
rights of Tenant, if any, to receive any allowance, reimbursement payment, or
other concession under any provision of this Lease (or any Rider) and all
renewal, extension, expansion, cancellation, termination, or other options of
Tenant, if any, under any provisions of this Lease (or any Rider).
7.3 HOLDING OVER. If Tenant remains in possession after the expiration of
the Term or earlier termination of this Lease with the express written
consent of Landlord, Tenant will be a month-to-month tenant; otherwise, Tenant
will be a tenant at will. In either case, Tenant must pay a Monthly Rent
Installment each month throughout the holdover period equal to the greater of
(a) twice the Monthly Rent Installment that Tenant was obligated to pay
immediately preceding the start of the holdover period, or (b) the prevailing
market rent for the Premises as reasonably determined by Landlord. No holding
over by Tenant will extend the Term. If Tenant remains in possession as a
tenant at will, Tenant will indemnify, defend, and hold Landlord harmless
against any loss, liability, damage, cost, or expense (including attorneys'
fees and costs of litigation), or any claim therefor, resulting from any
inability or delay in delivering possession to any party to whom Landlord may
have agreed to lease any part of the Premises.
8
7.4 LIEN FOR RENT. In addition to any lien at Law, Tenant grants Landlord a
lien and security interest on all property of Tenant now or hereafter located
in the Premises (including proceeds thereof) to secure payment of the Rent
and full performance of this Lease by Tenant. Landlord has all rights for the
enforcement of such lien and security interest as are available under
applicable Law, including without limitation, rights under the Uniform
Commercial Code of the state where the Property is located and the right
after a Tenant Default to sell the property so encumbered at a public or
private sale, with or without having such property at the sale, after giving
Tenant reasonable notice of the time of any public sale or of the time after
which any private sale is to be made, at which sale Landlord may purchase
unless otherwise prohibited by Law. Unless otherwise required by Law, and
without excluding any other manner of giving Tenant reasonable notice, any
requirement of reasonable notice will be met if notice is given in the manner
prescribed in this Lease at least five (5) days before the time of sale. The
proceeds of any sale will be applied first to pay Landlord's costs and
expenses of accomplishing the sale (including reasonable attorneys' fees and
costs of litigation) and then to any other sums owing and unpaid to Landlord
under this Lease. Tenant agrees to execute as debtor such financing
statements as Landlord may reasonably request in order to perfect its
security interest. Landlord, at its election at any time, may file a copy of
this Lease (or a copy of the first page, this Section, and the signature page
of this Lease) as a financing statement.
7.5 LANDLORD'S DEFAULT. It will be a "LANDLORD DEFAULT" only if Landlord
fails to perform or comply with any provision of this Lease and the failure
continues for fifteen (15) days after written notice from Tenant to Landlord
(with a copy to the holder of any Mortgage if Tenant has been notified in
writing of the identity and address of such holder); provided, however, if
any such failure by Landlord cannot be corrected within such 15-day period
solely as a result of nonfinancial circumstances outside of the control of
Landlord, and if substantial corrective actions have commenced within such
15-day period and are being diligently pursued, such fifteen-day period will
be extended for such additional time as is reasonably necessary to allow
completion of actions to correct Landlord's failure. Except as otherwise
provided in this Lease, if a Landlord Default occurs, Tenant will be entitled
to all rights and remedies available by Law.
7.6 ATTORNEYS' FEES. In the event of litigation relating to a Tenant
Default or a Landlord Default, the defaulting party must pay all reasonable
attorneys' fees and expenses incurred by the nondefaulting party in enforcing
its rights under this Lease. In addition, if Tenant requests the consent of
Landlord to any matter or requests Landlord to take any other action
requiring legal services, Tenant must pay all reasonable attorneys' fees and
expenses so incurred by Landlord.
7.7. NON-WAIVER. The failure of a party to insist upon the strict
performance of any provision of this Lease or to exercise any remedy for
default will not be construed as a waiver. The waiver of any noncompliance
with this Lease will not keep subsequent similar noncompliance from being a
default. No waiver will be effective unless expressed in writing signed by
the waiving party, and no course of dealing will constitute a waiver or
otherwise modify the provisions of this Lease. No waiver will affect any
condition other than the one specified in the waiver and then only for the
time and in the manner stated. Landlord's receipt of any Rent or other sums
with knowledge of noncompliance with this Lease by Tenant will not be
considered a waiver of the noncompliance. No payment by Tenant of a lesser
amount than the full amount then due will be considered to be other than on
account of the earliest amount due. No endorsement or statement on any check
or any letter accompanying any check or payment will be considered an accord
and satisfaction, and Landlord may accept any check or payment without
prejudice to Landlord's right to recover the balance owing and to pursue any
other available remedies. No acceptance by Landlord of keys or possession of
the Premises will constitute a surrender or waive any Tenant Default or other
liability or obligation of Tenant under this Lease.
7.8 REMEDIES CUMULATIVE. Except as otherwise expressly stated in this
Lease, all rights and remedies in this Lease are in addition to such other
rights as may be available by Law. The exercise of one right or remedy will
not constitute an election to waive or forego any other right or remedy.
VIII. OTHER PROVISIONS
8.1 NOTICES. Any notice in connection with this Lease may be given by (a)
depositing written notice in the United States mail, postpaid and certified
and addressed to the party at its Notification Address with return receipt
requested, (b) delivering written notice by commercial messenger or overnight
private delivery service to the party at its Notification Address, or (c)
facsimile transmission of written notice to the party at its Notification
Address. Unless actually received earlier, written notice deposited in the
mail in the manner described above will be effective on the third business
day after it is so deposited, even if not received. Written notice given by
commercial messenger, overnight private delivery, or facsimile transmission
in the manner described above will be effective as of the time of receipt at
the Notification Address as evidenced by any confirmation of delivery
provided by the messenger or delivery service or by facsimile confirmation of
transmission. Each party may change its Notification Address by not less then
least ten (10) days' prior written notice to the other party.
8.2 BUILDING STANDARD CHARGES. The Building standard charge for any service
or other action is fifteen percent (15%) of the total costs and expenses paid
to others for necessary materials, equipment, and services (including legal,
architectural, engineering, and other consulting services), or at Landlord's
option, a reasonable fee or other charge uniformly established for the
Building to compensate Landlord for the additional work and administrative
burden.
8.3 BROKERS. Each of Landlord and Tenant represents and warrants to the
other that it has not entered into any agreement with, or otherwise had any
dealings with any broker or agent other than Broker as the result of which
any commission, fee, or other compensation of any kind will be payable by the
other party in connection with this Lease. Each party will indemnify, defend,
and hold the other party harmless against any loss, liability, damage, cost,
or expense (including reasonable attorneys' fees and costs of litigation), or
any claim therefor, resulting from the untruth or inaccuracy of the foregoing
warranty and representation made by such party. Any fee of commission owing
to Broker will be paid only in accordance with the terms of a separate
written agreement directly between Landlord and Broker.
8.4 AUTHORITY. Tenant warrants that as of the date of execution of this
Lease by Tenant, all consents or approvals (including approvals of any board
of directors or partners) required for Tenant's execution, delivery, and
performance of this Lease have been obtained, that Tenant has the right and
authority to enter into and perform this Lease, and that this Lease is valid
and binds Tenant. Landlord warrants that as of the date of execution of this
Lease by Landlord, all consents or approvals (including approvals of any
board of directors or partners) required for Landlord's execution, delivery,
and performance of this Lease have been obtained, that Landlord has the right
and authority to enter into and perform this Lease, and that this Lease is
valid and binds Landlord.
8.5 RECORDING AND CONFIDENTIALITY. Tenant agrees not to record this Lease
or any memorandum or affidavit thereof. Tenant may not disclose the terms of
this Lease to any third party except (a) legal counsel to Tenant, (b) any
assignee of Tenant's interest in this Lease or sublessee of Tenant, (c) as
required by Law or by subpoena or other similar legal process, or (d) for
financial reporting purposes.
8.6 INTERPRETIVE PROVISIONS. Landlord and Tenant agree that:
(a) This document, which consists of the Basic Lease information, this
Lease Agreement, and its attached Exhibits and Riders (which are identified
below the signatures of the parties), embodies the entire contract between
the parties, and supersedes all prior agreements and understandings between
the parties related to the Premises, including all lease proposals, letters
of intent, and similar documents. All representations, warranties, or
agreements of an inducement nature, if any, are merged with, and stated in
this document. This Lease is being executed in multiple counterparts, each of
which is an original for all purposes.
9
(b) This Lease may be amended or otherwise modified only by a written
instrument executed by both Landlord and Tenant. No consent or approval by
Landlord will be effective unless given in writing signed by Landlord or its
duly authorized representative. Any consent or approval by Landlord will
extend only to the matter specifically stated in writing.
(c) The captions appearing in this Lease are included solely for
convenience and will never be given any effect in construing this Lease. The
presumption that this Lease should be more strictly construed against
Landlord as the drafting party does not apply.
(d) If any provision of this Lease is invalid or unenforceable, the
remainder of this Lease will not be affected. Each separate provision of this
Lease will remain valid and enforceable to the fullest extent permitted by
Law.
(e) This Lease binds not only Landlord and Tenant, but also their
respective heirs, personal representatives, successors, and assigns (to the
extent assignment is permitted by this Lease).
(f) This Lease is governed by the Laws of the state where the Property
is located.
(g) All references to "days" in this Lease are to calendar days. All
references to "business days" in this Lease are to days that national banks
are open for business in the city where the Property is located. All
references to the "date of this Lease" are to the date appearing on the cover
page of this Lease, which is approximately the date on which Tenant executed
this Lease. Time is of the essence.
(h) Any liability or obligation of Landlord or Tenant under this Lease
accrued, arising, or based on any act, omission, or other circumstance during
the Term will survive the expiration of the Term or earlier termination of
this Lease, including without limitation, obligations and liabilities (i)
relating to the final adjustment of any estimated installments of the Base
Rent Adjustment to the actual Base Rent Adjustment to the actual Base Rent
Adjustment owed, (ii) relating to the condition of the Premises, and (iii)
arising under agreements in this Lease to indemnify, defend, or hold harmless.
(i) The relationship created by this Lease is that of Landlord and
tenant. Landlord and tenant are not partners or joint ventures, and neither
has any agency powers on behalf of the other. Tenant is not a beneficiary of
any other contract or agreement relating to the Property to which Landlord
may be a party, and Tenant has no right to enforce any such other contract or
agreement on behalf of itself, Landlord, or any other party.
8.7 EXECUTION AND EFFECTIVENESS. If the name of any Guarantor is reflected
in the Basic Lease Information, Landlord's obligations are conditioned upon
the receipt by Landlord of the Guaranty of Lease in the form attached as
Exhibit E duly executed by such Guarantor, failing which this Lease will be
null and void. Submission of this instrument for examination or signature by
Tenant does not constitute a reservation of or any option for lease. This
Lease will be effective only when fully executed and delivered by both
Tenant and Landlord.
IN WITNESS WHEREOF, the parties have executed this Lease.
LANDLORD: TENANT:
PATRIOT SAINT JAMES II INVESTORS, L.P. Houston Interweb Design, Inc.
- -------------------------------------- ------------------------------------
By: Saint James II Operating Corporation,
its General Partner
By: James L. Mertz, Jr. By: Harry White
------------------------------- -----------------------------
Name: James L. Mertz, Jr. Name: Harry White
------------------------------- -----------------------------
Title: Senior Vice President Title: President
------------------------------- -----------------------------
Exhibits:
- --------
A Floor Plan of Premises
B Description of Land
C Form of Commencement Date Certificate
D Building Rules
Riders:
- ------
1 Work Letter
2 Parking
3 Asbestos
4. Tax Contest Rights
10
EXHIBIT A
FLOOR PLAN OF PREMISES
[FLOOR PLAN]
EXHIBIT A
WORK LETTER
1. The "PLANS" consist of the following described drawings and
specifications prepared by ARCHITECTURAL AND ENGINEERING ASSOCIATES, INC.
(the "ARCHITECT"), which are hereby approved by Tenant and Landlord:
PRELIMINARY SPACE PLAN DRAWINGS FOR IMPROVEMENTS TO BE CONSTRUCTED TO
SUITE 515, PREPARED BY ARCHITECT AND DATED SEPTEMBER 17, 1997. IN
ADDITION, LANDLORD WILL PROVIDE A MAXIMUM OF SIX NEW DUPLEX, 110 VOLT
ELECTRICAL OUTLETS IN LOCATIONS DESIGNATED BY TENANT, REPLACE THE
EXISTING LIGHT LENSES WITH PARABOLIC LENSES AND PROVIDE FOR ONE
ADDITIONAL HVAC SUPPLY OUTLET IN THE WORK ROOM.
2. Landlord will promptly begin construction of the alterations, additions,
and improvements described in the Plans (the "WORK LETTER IMPROVEMENTS"), and
will pursue construction with reasonable diligence to completion.
Construction of Work Letter Improvements will be accomplished by contractors
selected and employed by Landlord.
3. Landlord will pay the fees and expenses of the Architect in connection
with preparation of the Plans and construction of the Work Letter
Improvements and the cost of constructing the Work Letter Improvements in
accordance with the Plans.
4. If Tenant requests any changes in the Plans, Tenant must submit revised
drawings and specifications for Landlord's approval. If Landlord approves the
changes, Landlord will incorporate the changes in the Work Letter
Improvements following Landlord's receipt of a change order executed by
Tenant. As a condition to Landlord's approval, Tenant must pay Landlord in
advance the full amount of all construction, architectural, and other costs
attributable to the change.
5. The "SUBSTANTIAL COMPLETION DATE" will be the date on which the Work
Letter Improvements are completed in all material respects in substantial
compliance with the Plans (including any changes thereto approved by a change
order executed by Landlord and Tenant) excepting only minor finish and
touch-up work that does not interfere in any material respect with the
occupancy of the Premises by Tenant. The Substantial Completion Date will be
reasonably determined by the Architect, whose good faith determination will
bind Landlord and Tenant. After the Substantial Completion Date, Landlord
will promptly complete any work required to complete the Work Letter
Improvements, and Landlord may enter the Premises for that purpose at any
time without prior notice to Tenant.
6. On the Commencement Date, Tenant must pay Landlord one (1) day's Base
Rent (at the rate initially in effect after the Commencement Date) for each
day that construction of the Work Letter Improvements was delayed by (a)
changes in the Plans requested by Tenant, (b) installation of nonstandard
equipment, materials, or finishes requiring an unusually long time to obtain
or install, or (c) any other act or omission of Tenant or its employees,
agents, or contractors.
7. The failure of Tenant to make any payment due under this Work Letter is a
failure to pay Rent under the Lease.
EXHIBIT "B"
ATTACHED TO AND MADE A PART
OF
OFFICE LEASE AGREEMENT
LEGAL DESCRIPTION OF THE LAND
Lot Four (4), SAN FELIPE GREEN, a subdivision of the Charles Sage Survey,
Abstract 697 in Harris County, Texas, being 3.1502 acres more or less out of
a 48.245 acre tract of land recorded as San Felipe Green in Volume 175 Page
92 of the Deed Records of Harris County, Texas, and further described as
follows:
STARTING at a point at the Northwest corner of San Felipe Green, said point
being on the South R.O.W. line of San Felipe Road and proceeding South 00
deg. 11 min. 37 sec. West a distance of 408.38 feet to a point for Northwest
corner and PLACE OF BEGINNING;
THENCE from the Place of Beginning South 00 deg. 11 min. 37 sec. West a
distance of 350.00 ft. with the West property line of San Felipe Green to a
point for corner;
THENCE South 89 deg. 59 min. 30 sec. East a distance of 390.00 ft. to a point
for corner on the West R.O.W. line of St. James Place;
THENCE North 00 deg. 11 min. 37 sec. East a distance of 236.69 feet with the
West R.O.W. line of St. James Place to an angle point;
THENCE a distance of 115.58 feet along a curve to the right having a radius
of 340.00 feet and a chord length of 115.03 feet at a bearing of North 9 deg.
55 min. 58 sec. East to a point for corner on the West R.O.W. line of St.
James Place;
THENCE North 89 deg. 59 min. 30 sec. West a distance of 409.45 feet to the
PLACE OF BEGINNING and thus describing a tract of land of 3.1502 acres or
137,224.77 square feet.
EXHIBIT C
FORM OF COMMENCEMENT DATE CERTIFICATE
OCTOBER 16, 1997
Patriot Saint James II Investors, L.P.
3030 LBJ Freeway, Suite 1500
Dallas, Texas 75234
Gentlemen:
Please refer to the Lease Agreement (the "Lease") dated October 15, 1997
between Patriot Saint James II Investors, L.P., ("Landlord") and the
undersigned ("Tenant") covering the Premises containing 1,274 square feet of
Net Rentable Area on the fourth floor of the Building located at 1770 St.
James Place, Houston, Harris County, Texas.
Landlord and Tenant agree that the Commencement Date of the Lease is
October 19, 1997.
Very truly yours,
TENANT:
Houston Interweb Design, Inc.
By: /s/ Harry White
----------------------------------
Name: Harry White
----------------------------------
Title: CEO
----------------------------------
AGREED AND ACCEPTED
this 17 day of November, 1997.
LANDLORD:
Patriot Saint James II INVESTORS, L.P.
By: Saint James II Operating Corporation,
its General Partner
By: /s/ James L. Mertz, Jr.
----------------------------------
Name: James L. Mertz, Jr.
----------------------------------
Title: Senior Vice President & COO
----------------------------------
NOT TO BE EXECUTED UNTIL THE COMMENCEMENT DATE
RIDER 2
PARKING
1. Tenant is authorized to park 6 vehicles in the parking facilities on the
Property (the "PARKING FACILITIES"). No specific parking spaces in the
Parking Facilities will be assigned to Tenant. Landlord will issue a parking
sticker and/or card for each vehicle of Tenant authorized to be parked in the
Parking Facilities, or Landlord will provide a reasonable alternate means to
identify authorized vehicles. Landlord may designate the area of the Parking
Facilities within which each authorized vehicle may be parked, and Landlord
may change such designations from time to time.
2. As part of each Monthly Rent Installment payable under this Lease, Tenant
must pay Landlord a "MONTHLY PARKING CHARGE" equal to $0.00 per month (plus
any applicable sales tax) times the number of vehicles authorized to be
parked in the Parking Facilities.
3. If parking in the Parking Facilities cannot be provided for the full
number of vehicles authorized in this Rider owing to fire or other casualty,
condemnation or sale in lieu thereof, or any other cause beyond the
reasonable control of Landlord, the Lease will continue without abatement of
Rent, and Landlord will use reasonable efforts to make available to Tenant
replacement unassigned surface or Parking Facilities parking spaces within a
reasonable distance from the Property, as determined by Landlord, until the
full number of vehicles authorized in this Rider can again be parked in the
Parking Facilities. The replacement parking spaces will be provided to Tenant
without change in the Monthly Parking Charge.
4. Landlord or the operator of the Parking Facilities may make, modify, and
enforce reasonable rules relating to the parking of vehicles in the Parking
Facilities. Tenant must abide by such rules and exercise reasonable efforts
to cause its employees, agents, contractors, customers, and visitors to
abide by such rules.
5. Landlord may alter the size of the Parking Facilities, restripe parking
spaces in the Parking Facilities, and designate or assign parking spaces in
the Parking Facilities or elsewhere on the Property for visitor parking,
reserved parking, or other purposes.
RIDER 3
ASBESTOS
Federal Laws require that in light of the age of the Building, certain areas
and materials of the Building are presumed to contain asbestos until proven
otherwise. Landlord has conducted a general assessment of the Building in
accordance with applicable Laws and is operating under an operations and
management plan (the "O&M PLAN") to manage locations of asbestos and
"presumed asbestos" in place. Tenant may review the O&M Plan on reasonable
advance notice to Landlord. Under applicable Laws and the O&M Plan, special
procedures must be followed in performing many ordinary activities such as
buffing floors, changing light bulbs, and changing smoke detector batteries,
and maintenance personnel must be trained in these procedures. Tenant must
comply (and must cause its employees and contractors to comply) with all Laws
and provisions of the O&M Plan insofar as they relate to Tenant's use and
occupancy of the Premises. Notwithstanding anything to the contrary in the
Lease, Tenant may not perform any remodeling, maintenance, repair, or
construction activities in the Premises that would violate the O&M Plan.
EXHIBIT D
BUILDING RULES
1. Sidewalks, doorways, vestibules, halls, stairways, elevator lobbies, and
other similar common areas of the Building may not be used for the storage of
materials or disposal of trash, obstructed by any tenant, or used by any
tenant for any purpose other than movement about the Building.
2. Plumbing fixtures may be used only for the purposes for which they are
designed, and no sweepings, rubbish, rags, or other unsuitable materials may
be disposed in them.
3. Movement in or out of the Building of furniture, office equipment, or any
other bulky or heavy materials is restricted to hours reasonably designated by
Landlord. Landlord will determine the method and routing of the movement of
such items to ensure the safety of persons and property, and Tenant will be
responsible for all associated costs and expenses. Written notice of intent to
move such items must be given to Landlord at least twenty-four (24) hours
before the time of the move.
4. All deliveries (other than of small hand-carried parcels) must be made
through the freight elevators. Passenger elevators are to be used only for the
movement of persons. Delivery vehicles are permitted only in areas designated
by Landlord for deliveries to the Building. No carts or dollies are allowed
through the main entrances of the Building or on passenger elevators without
the prior written consent of Landlord.
5. After-hours removal of hand-carried items must be accompanied by an
"Equipment Removal Form" or "Property Pass" provided by Landlord or by a
letter signed by an authorized representative of a tenant on the tenant's
letterhead. Each tenant must give landlord a list of persons authorized to
sign the Equipment Removal Form or Property Pass.
6. Landlord must approve the proposed weight and location of any safes and
heavy furniture and equipment, which must in all cases stand on supporting
devices approved by Landlord in order to distribute the weight.
7. Corridor doors that lead to common areas of the Building (other than
doors opening into the elevator lobby on floors leased entirely to a tenant)
must be kept closed at all times.
8. Each tenant must cooperate with Landlord to keep its premises neat and
clean. No tenant may employ any person for the purpose of cleaning other than
the Building's cleaning and maintenance personnel.
9. All freight elevator lobbies are to be kept neat and clean. The disposal
of trash or storage of materials in these areas is prohibited.
10. No birds, fish, or other animals may be brought into or kept in, on, or
about the Building (except for seeing-eye dogs).
11. Tenants may not tamper with or attempt to adjust temperature control
thermostats in their premises. Landlord will adjust thermostats as required
to maintain the Building standard temperature. Each tenant must use
reasonable efforts to keep all window blinds down and tilted at a 45 degree
angle toward the street to help maintain comfortable room temperatures and
conserve energy.
12. Each tenant will comply with all security procedures during business
hours, after hours, and on weekends. Landlord will give each tenant prior
notice of the security procedures.
13. Tenants must 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 Landlord by an authorized representative of the
tenant. Each tenant must give Landlord a list of persons authorized to
request overtime services. Any such request must be made 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. Requests made after that time may result in an additional charge to
such tenant, if acted upon by Landlord, but Landlord will have no obligation
to act on untimely requests.
15. No flammable or explosive fluids or materials may be kept or used within
the Building except in areas approved by Landlord, and each tenant must
comply with all applicable building and fire codes.
16. No machinery of any kind other than normal office equipment may be
operated by any tenant in its premises without the prior written consent of
Landlord.
17. Canvassing, peddling, soliciting, and distribution of hand bills in the
Building (except for activities within a tenant's premises that involve only
the tenant's employees) is prohibited. Tenants will notify Landlord if such
activities occur.
18. A "Tenant Contractor Entrance Authorization" form supplied by Landlord
is required for the following:
(a) Access to Building mechanical, telephone or electrical rooms (e.g.,
Southwestern Bell Telephone employees).
(b) After-hours freight elevator use.
(c) After-hours building access by tenant contractors. Tenants will be
responsible for contacting Landlord in advance for clearance of tenant
contractors.
19. Tenants must refer all contractors, contractors' representatives, and
installation technicians tendering any service to them to Landlord for
Landlord's supervision, approval, and control before the performance of any
contractual services. This provision applies to all work performed in the
Building (other than work under contract for installation or maintenance of
security equipment or banking equipment), including but not limited to,
installations of telephones, telegraph equipment, electrical devices and
attachments, and any and all installations of every nature affecting floors,
walls, woodwork, trim, windows, ceilings, equipment, and any other portion of
the Building.
20. Smoking is not permitted in the restrooms, stairwells, elevators, public
lobbies or public corridors.
21. Each tenant is responsible for removal of trash resulting from large
deliveries or move-ins. Such trash must be removed from the Building, and
Building facilities may not be used for dumping. Each tenant is responsible
for compliance with this rule by its contractors. If trash is not promptly
removed, Landlord may cause it to be removed at the tenant's sole cost plus a
building standard charge to be determined by Landlord to cover Landlord's
administrative costs.
22. Tenants may not install, leave, or store equipment, supplies, furniture,
or trash outside their premises.
23. Each tenant must provide Landlord with names and telephone numbers of
individuals who should be contacted in an emergency.
24. Tenants must comply with the Building's life safety program established
by Landlord, including without limitation, fire drills, training programs,
and fire warden staffing procedures, and must use reasonable efforts to cause
all tenant employees, invitees, and guests to comply with such program.
25. No ice, mineral or other water, towels, newspapers, or other products
may be delivered to any premises except by persons appointed or approved by
Landlord in writing.
26. If a tenant requires telegraphic, telephonic, annunciator, or other
communication service, Landlord will direct the electricians where and how
wires are to be introduced and placed, and none may be introduced or placed
except as Landlord may approve. Electrical current may not be used for space
heaters, cooking, or heating devices or similar appliances without
Landlord's prior written permission.
27. Nothing may be swept or thrown into corridors, halls, elevator shafts,
or stairways.
28. No portion of any tenant's premises may be used or occupied as sleeping
or lodging quarters, nor may personnel occupancy loads exceed limits
reasonably established by Landlord for the Building.
29. All communications to Landlord in connection with these rules may
be addressed to Landlord's property manager, and any approvals required of
Landlord under these rules may be obtained from or through Landlord's
property manager.
IF THERE IS A CONFLICT BETWEEN ANY OTHER PROVISIONS OF THE LEASE AND THESE
BUILDING RULES, THE OTHER PROVISIONS OF THE LEASE CONTROL.
Rider 4
TAX CONTEST RIGHTS - TEXAS
Tenant waives all present and future rights provided by Law, including all
present and future rights arising under the TEXAS PROPERTY TAX CODE, to (a)
receive notice from Landlord of any change in the amount of the assessment or
rate of taxation of the Property for purposes of any ad valorem real
or personal property taxes included in Tax Costs, or (b) to file, appear in,
or pursue any judicial or administrative protest, appeal or other challenge
of the amount of the assessment or the rate of taxation of the Property for
purposes of any ad valorem real or personal property taxes included in Tax
Costs. Notwithstanding anything to the contrary contained in the Lease, the
filing of appearance in, or pursuit of any such judicial or administrative
protest, appeal, or other challenge of the amount of the assessment or rate
of taxation of the Property by or on behalf of Tenant will immediately
constitute a Tenant Default. Tenant acknowledges that it has been advised to
have the provisions of this Rider reviewed by an attorney of its own choosing
and that it has done so or knowingly elected not to do so. The provisions of
this Rider have been knowingly, intentionally, and willingly agreed to by
Tenant.
FIRST AMENDMENT TO LEASE AGREEMENT
THIS FIRST AMENDMENT TO LEASE AGREEMENT (the "First Amendment") is made
as of July 31, 1998, by and between MACK-CALI TEXAS PROPERTY, L.P., as
successor in interest to Patriot Saint James II Investors, L.P., (hereinafter
"Landlord"), with an address of 3030 LBJ Freeway, Suite 1000, Dallas, Texas
75234, and Houston Interweb Design, Inc., (hereinafter "Tenant").
A. Tenant occupies the Leased Premises under the terms of that certain Lease
dated October 15, 1997 (the "Lease") between Landlord and Tenant for 1,274
square feet of Rentable Area contained in Suite 515 on the fifth floor of the
Building known as Saint James II, 1770 St. James Place, Houston, Harris
County, Texas.
B. Landlord and Tenant desire to add additional space to the Leased
Premises and make other related changes to the Lease.
NOW THEREFORE, in consideration of the mutual covenants herein contained
and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Landlord and Tenant agree as follows:
1. ADDITIONAL SPACE. Effective July 10, 1998 (the "Additional Space
Commencement Date"), Suite 420 containing 5,369 square feet of Net Rentable
Area (the "Additional Space"), as shown on Exhibit A attached hereto, shall
be added to the Leased Premises for the remainder of the Lease Term. After
this addition, the Leased Premises shall contain a total of 6,643 square feet
of Net Rentable Area.
2. BASE RENT. Effective on the Additional Space Commencement Date,
the Base Rent shown on the Basic Lease information page of the Lease shall be
modified to read as follows:
"$7,196.59 PER MONTH BEGINNING ON THE ADDITIONAL SPACE COMMENCEMENT DATE
THROUGH OCTOBER 19, 2000".
3. IMPROVEMENT ALLOWANCE. Landlord shall provide an allowance of
$1,500.00 to provide for the construction of permanent improvements to the
Leased Premises (the "Allowance"). The Allowance must be utilized by
December 29, 1998 or such Allowance shall no longer be available to Tenant.
4. BASE YEAR. The Base Year shall remain unchanged from the Lease as
Base Year 1997.
5. STORAGE SPACE. Tenant also leases from Landlord Suite B02 which
contains 276 square fee of Net Rentable Area in the basement of the Building,
as shown on Exhibit A-1 attached hereto, for use as storage space. Tenant
shall pay to landlord the sum of no/100 Dollars as rental for the basement
storage space. This amount shall be invoiced to Tenant in addition to the
monthly Base Rent shown in paragraph 2 above.
6. PARKING. Landlord shall furnish to Tenant parking in accordance
with Exhibit B, attached hereto.
7. CONTROLLING PROVISIONS: This First Amendment amends the Lease and in
the event of conflict between the First Amendment and the Lease, the terms of
the First Amendment to Lease shall control. Except as expressly amended
hereby, all terms and provisions of the Lease remain unchanged, and as
amended, the Lease continues in full force and effect. Terms used and not
otherwise defined in this Amendment have the same meanings as in the Lease
itself.
LANDLORD TENANT
MACK-CALI TEXAS PROPERTY, L.P. HOUSTON INTERWEB DESIGN, INC.
THROUGH ITS GENERAL PARTNER,
MACK-CALI SUB XVII, INC.
By: /s/ James L. Mertz, Jr. By: /s/ Harry White
----------------------------- -----------------------------
Name: James L. Mertz, Jr. Name: Harry White
Title: Vice President Title: President
[FLOOR PLAN]
EXHIBIT A-1
Floor Plan of Storage Space
[FLOOR PLAN]
EXHIBIT B
PARKING
1. Tenant is authorized to park (a) 23 vehicles in the general parking area
designated by Landlord in the parking facility on the Property (the
"Facilities"), and (b) 3 vehicles in the reserved parking area designated by
Landlord in the Facilities. No specific parking spaces in the Facilities will
be assigned to Tenant other than the three (3) spaces in the reserved parking
area designated in 1(b) above. Landlord will issue a parking sticker and/or
card for each vehicle of Tenant authorized to be parked in the Facilities, or
Landlord will provide a reasonable alternate means to identify authorized
vehicles. Landlord may designate the area of the Facilities within which each
authorized vehicle may be parked, and Landlord may change such designations
from time to time.
2. As part of each Monthly Rent Installment payable under this Lease, Tenant
must pay Landlord a "MONTHLY PARKING CHARGE" equal to the sum of (a) $0.00
per month (plus any applicable sales tax) times the number of vehicles
authorized to be parked in the general parking area of the Facilities, plus
(b) $_____ per month (plus any applicable sales tax) times the number of
vehicles authorized to be parked in the reserved parking area of the
Facilities.
3. If parking in the Facilities cannot be provided for the full number of
vehicles authorized in this Rider owing to fire or other casualty,
condemnation or sale in lieu thereof, or any other cause beyond the reasonable
control of Landlord, this Lease will continue without abatement of Rent, and
Landlord will use reasonable efforts to make available to Tenant replacement
unassigned surface or garage parking spaces within a reasonable distance from
the Property, as determined by Landlord, until the full number of vehicles
authorized in this Rider can again be parked in the Facilities. The
replacement parking spaces will be provided to Tenant without change in the
Monthly Parking Charge.
4. Landlord or the operator of the Facilities may make, modify, and enforce
reasonable rules relating to the parking of vehicles in the Facilities.
Tenant must abide by such rules and exercise reasonable efforts to cause its
employees, agents, contractors, customers, and visitors to abide by such
rules.
5. Landlord may alter the size of the Facilities, restripe parking spaces in
the Facilities, and designate or assign parking spaces in the Facilities or
elsewhere on the Property for visitor parking, reserved parking, or other
purposes.