Texas-Houston-16511 Space Center Boulevard Lease - Space Assets II Inc. and Cyberonics Inc.
LEASE AGREEMENT
BETWEEN
SPACE ASSETS II, INC.
AND
CYBERONICS, INC.
<PAGE>
TABLE OF CONTENTS
<CAPTION>
Page
----
1. LEASED PREMISES ....................................................... 1
2. TERM .................................................................. 2
3. USE.................................................................... 3
4. RENT................................................................... 3
5. RENT ADJUSTMENTS ...................................................... 4
6. PAYMENT OF RENT ....................................................... 6
7. PARKING AND SERVICE AREAS ............................................. 7
8. FURNITURE, FIXTURES AND PERSONAL PROPERTY ............................. 7
9. SIGNS ................................................................. 7
10. SERVICES TO BE PROVIDED BY LESSOR...................................... 8
11. REPAIRS, MAINTENANCE AND IMPROVEMENTS BY LESSOR ....................... 9
12. FORCE MAJEURE.......................................................... 10
13. REPAIRS AND CARE OF PREMISES BY LESSEE................................. 11
14. MECHANIC'S LIENS....................................................... 11
15. NUISANCE OR HAZARDOUS USE.............................................. 12
16. TAXES AND INSURANCE.................................................... 12
17. QUIET ENJOYMENT........................................................ 13
18. ALTERATION............................................................. 13
19. ASSIGNMENT AND SUBLETTING.............................................. 13
20. ABANDONMENT............................................................ 14
21. FIRE AND OTHER CASUALTY................................................ 15
22. CONDEMNATION........................................................... 15
23. HOLD HARMLESS.......................................................... 15
24. DEFAULT BY LESSEE...................................................... 16
25. DEFAULT BY LESSOR...................................................... 17
26. ATTORNEY'S FEES........................................................ 17
27. NON-WAIVER............................................................. 17
28. RULES AND REGULATIONS.................................................. 17
29. ASSIGNMENT BY LESSOR................................................... 17
30. LIABILITY OF LESSOR.................................................... 18
31. BUILDING MORTGAGE...................................................... 18
32. HOLDING OVER........................................................... 19
33. SEVERABILITY........................................................... 19
34. NOTICES................................................................ 20
35. OBLIGATIONS OF SUCCESSORS.............................................. 20
36. ENTIRE AGREEMENT....................................................... 21
37. SECTION HEADINGS....................................................... 21
38. CHANGES, DELETIONS AND ADDITIONS TO CONTRACT .......................... 21
39. ESTOPPEL............................................................... 21
40. BROKER'S COMMISSION.................................................... 21
EXHIBITS
A1 - A3 LEASED PREMISES
B - PROPERTY METES AND BOUNDS DESCRIPTION
C - RULES AND REGULATIONS
<PAGE>
LEASE AGREEMENT
STATE OF TEXAS Section
COUNTY OF HARRIS Section
THIS LEASE AGREEMENT ("Lease") made and entered into as of the 19th Day
of August, 1997, by and between SPACE ASSETS II, INC., a Delaware
corporation, hereinafter called "Lessor", and CYBERONICS, INC., a Texas
corporation, hereinafter called "Lessee".
SECTION 1. LEASED PREMISES
A. Subject to and upon the terms, provisions and conditions hereinafter
set forth, and each in consideration of the duties, covenants and obligations of
the other hereunder, Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, 42,954 net Rentable Square Feet, as hereinafter defined, of office
space on the first, fifth and sixth floors as detailed in the attached Exhibits
A1, A2 and A3 ("Leased Premises"), in the building known as Space Center II,
(hereinafter called the "Building") located at 16511 Space Center Boulevard,
Houston, Harris County, Texas, upon that real property ("Land") more fully
described in Exhibit "B" attached hereto.
The rental due hereunder shall be computed as provided herein on the basis
of rentable area, measured in square feet ("Rentable Square Feet") as determined
by architectural measurement of the existing Building drawings, and in
accordance with the Building Owners and Managers Association (BOMA) standard
(ANSI Z65.1-1996). The resulting usable area and rentable area of the Leased
Premises is as follows:
<CAPTION>
NET USABLE AREA NET RENTABLE AREA ILLUSTRATED BY EXHIBIT
------------------ ----------------- ----------------------
First Floor 3,526 Square Feet 4,132 Square Feet A1
Fifth Floor 17,826 Square Feet 19,411 Square Feet A2
Sixth Floor 17,826 Square Feet 19,411 Square Feet A3
Totals 39,178 Square Feet 42,954 Square Feet
The foregoing Rentable Square Feet shall be subject to verification by
Lessee on or before August 15th, 1997.
B. Lessee shall have the right to expand into the entirety of the 4th
Floor of the Building at any time during a six (6) month period commencing
January 1st, 1998 upon thirty (30) days prior written notice to Lessor given on
or before May 31st, 1998. During said six month period ending June 30th 1998,
Lessor agrees to hold the 4th Floor off of the market and to not enter into
lease negotiations with any third party. At the termination of the six month
period, and as long as this Lease is in effect, if Lessee has not exercised its
right to expand into the 4th Floor, Lessee shall then have a continuing right of
first refusal to lease all of the 4th Floor, or in the event Lessor elects to
lease less than the entire floor, that portion of the 4th Floor Lessor has
elected to lease. Should Lessee exercise the right of expansion or the right
of first refusal to expand on the 4th Floor, terms and conditions of the
expansion shall be the same as the Lease except that the lease term of said
expansion shall be coterminous with the Lease and, if said expansion occurs
after the six (6) month period, the improvement allowance of $20.00 per square
foot shall be prorated based on the remaining months of the Lease (i.e. if 36
months remain, the improvement allowance shall be 36/60th of $20.00 or $12.00).
Under Lessee's right of first refusal, Lessee
<PAGE>
shall have five (5) business days to respond to Lessor's written
notice of intent to lease to a third party. The commencement of the
expansion term for the 4th Floor and the payment of rent for expanded 4th
Floor space shall occur at the earliest of ninety (90) days from the written
notice by Lessee of its intent to expand or the date of satisfactory
completion of the structural final inspection by the City of Houston Building
Department of the expanded premises.
C. At any time after January 1st, 1998, Lessee shall have the continuing
right of first refusal to expand into any remaining unleased space on any floor
of the Building. Should Lessee exercise its right of first refusal to expand
into available space, terms and conditions of the expansion shall be the same as
the Lease except that the lease term of said expansion shall be coterminous with
the Lease and the improvement allowance of $20.00 per square foot shall be
prorated based on the remaining months of the Lease (i.e. if 36 months remain,
the improvement allowance shall be 36/60th of $20.00 or $12.00). Under Lessee's
right of first refusal, Lessee shall have five (5) business days to respond to
Lessor's written notice of intent to lease to a third party. The commencement
of the expansion term for available space shall occur at the earliest of ninety
(90) days from the written notice by Lessee of its intent to expand or the date
of satisfactory completion of the structural final inspection by the City of
Houston Building Department of the expanded premises.
SECTION 2. TERM
A. With respect to the Leased Premises including the 1st and 6th Floors,
as described in Section 1, this Lease shall continue in force for a term
("Term") of sixty (60) months, beginning October 1st, 1997 ("First Commencement
Date"), and expiring at midnight on September 30th, 2002 ("Expiration Date").
With respect to the Leased Premises including the 5th Floor, as described
in Section 1, this Lease shall continue in force for a term ("Term") of fifty
eight (58) months, beginning December 1st, 1997 ("Second Commencement Date"),
and expiring at midnight on September 30th, 2002 ("Expiration Date").
B. Provided Lessee is not in default of any of the terms and provisions of
this Lease, Lessee shall have an option to renew this Lease for one (1)
additional term of five (5) years upon giving at least six (6) months prior
written notice to Lessor of exercise of such renewal option. The Base Rent for
each year of the Renewal Term shall be at the then prevailing fair market rent
for comparable lease space in the greater Clear Lake Area of Houston, Texas. In
no event shall the Base Rent for the Renewal Term be less than the Base Rent
paid during the initial Lease Term. The Basic Operating Costs for the renewal
term shall be actual operating costs for the calendar year 2002. A
refurbishment allowance of $3.00 per rentable square foot shall be granted for
leasehold improvements to Leased Premises subject to renewal under the
provisions of this renewal option.
C. The Leased Premises are now scheduled for, or under construction, and
Lessor is desirous of having same completed as soon as possible. If, however,
the Leased Premises are not ready for occupancy by the time of said Commencement
Date(s) for any reason or cause, Lessor shall not be liable or responsible for
any claims, damages or liabilities in connection therewith or by reason thereof;
and this Lease shall be effective only from the time(s) that the Leased Premises
have been prepared and are ready for the occupancy of Lessee as defined by the
later of: satisfactory completion of the structural final inspection by the City
of Houston Building Department, said inspection not to be requested until
substantial completion of construction punch list items as compiled by Lessee
and Lessor in conjunction with the architect and construction general contractor
for the Leased Premises, or October 31st, 1997 with respect to the Leased
Premises including the 1st and 6th Floors and March 31st, 1998 with respect to
the Leased Premises including the 5th Floor, which date(s) shall be the revised
Commencement Date(s) of
2
<PAGE>
this Lease, but in no event later than the date on which Lessee commences
occupancy of the Leased Premises for the conduct of Lessee's business. In
such event, Base Rent shall not commence until said revised Commencement
Date(s), and the stated Term(s) in this Lease shall thereupon commence and
the Expiration Date shall be extended so as to give effect to the full stated
Term(s).
D. Notwithstanding the fact that the Lease term will commence at a date
subsequent to the execution of this instrument, the parties intend that both of
them shall have vested rights immediately upon the signing of this instrument,
and that this instrument shall be fully binding and in full force and effect
from and after the execution hereof.
E. At such time as Lessee occupies at least three full floors of Floors
Two through Six, and for the balance of the initial five year term, Lessee
shall have the option to extend the initial term(s) of this Lease by no less
than twelve (12) months and no more than thirty six (36) months, such extension
period to be designated in Lessee's written notice.
SECTION 3. USE
The Leased Premises are to be used and occupied by Lessee for general
office purposes, business and commercial use, scientific research and
development, and high technology manufacturing utilizing clean room environments
and related uses and shall be used for no other purpose, without the prior
written consent of Lessor, which shall not be unreasonably withheld or delayed.
In the event that any person or governmental authority alleges in any legal
proceeding or by a notice given pursuant to any law that Lessee does not have
the right to use the Leased Premises for the purposes being used, Lessor agrees
to join in the defense of Lessee's right to use the Leased Premises for such
purpose provided Lessee pays all costs of such defense. Should a court ruling
or order or permanent injunction be issued determining that Lessee may not use
the Leased Premises for such purpose or permanently enjoining Lessee from such
use, Lessee shall immediately cease all such activities enjoined.
SECTION 4. RENT
A. For the period from the First Commencement Date until March 31st, 1998,
as rent ("Base Rent") for the Lease and use of the Leased Premises including the
1st and 6th Floor, as described in Section 1, and the attached facilities,
Lessee will pay Lessor or Lessor's assigns, at the management office of Lessor,
or Lessor's Managing Agent, or at such other address as Lessor may from time to
time designate, without demand and without deduction, abatement or set-off,
except as otherwise set forth herein, an amount calculated at Sixteen Dollars
($16.00) per net rentable square foot per year, said rate being equivalent to
the sum of Three Hundred and Seventy Six Thousand and Six Hundred and Ninety Two
Dollars ($376,692.00) per year payable in equal monthly installments of Thirty
One Thousand and Three Hundred and Ninety One Dollars ($31,391.00) on or before
the first day of each calendar month, in advance, in lawful money of the United
States.
For the period from April 1st, 1998 to the Expiration Date, as rent ("Base
Rent") for the Lease and use of the Leased Premises including the 1st , 5th and
6th Floor, as described in Section 1, and the attached facilities, Lessee will
pay Lessor or Lessor's assigns, at the management office of Lessor, or Lessor's
Managing Agent, or at such other address as Lessor may from time to time
designate, without demand and without deduction, abatement or set-off, except as
otherwise set forth herein, an amount calculated at Sixteen Dollars ($16.00) per
net rentable square foot per year, said rate being equivalent to the sum of Six
Hundred and Eighty Seven Thousand and Two Hundred and Sixty Four Dollars
($687,264.00) per year payable in equal monthly installments of Fifty Seven
Thousand and Two Hundred and Seventy Two Dollars
3
<PAGE>
($57,272.00) on or before the first day of each calendar month, in advance,
in lawful money of the United States. The Base Rents shall be subject to
adjustments as hereinafter provided.
B. The amount of Ninety Four Thousand and One Hundred & Seventy Three
Dollars ($94,173.00) is payable on the execution date of this Lease for the Base
Rent for the first month of occupancy and a security deposit in an amount equal
to two months Base Rent. If Lessee performs all of its obligations hereunder,
an amount equal to one month's Base Rent shall be returned to Lessee at the end
of twelve (12) months from Lease Commencement. The remainder of said deposit
shall be returned to Lessee within ten (10) days after the expiration of the
Term hereof, providing Lessee is not in monetary default at the expiration of
the Term.
SECTION 5. RENT ADJUSTMENTS
The Base Rent payable by Lessee during each lease year shall be adjusted in
accordance with this Section 5.
A. Definitions
(1) The term "Operating Costs" shall mean all reasonable and customary
operating expenses of the Building, parking garage and other facilities
appurtenant thereto, which shall be computed on the accrual basis and which
shall include all expenses, costs, and disbursements of every kind and nature
which Lessor shall pay or become obligated to pay because of, or in connection
with, the ownership and operation of the Land and Building, parking garage and
attached facilities, including, but not limited to, the following:
(a) All taxes, impositions, assessments, and all other
governmental charges, if any, which are levied, assessed or imposed
upon or become due and payable in connection with, or as a lien
upon, the Land, the Building, the parking garage, or facilities
used in connection therewith, or the operation thereof, (excepting
federal and state taxes on income) including taxes levied by
present or any future taxing authorities and all taxes of
whatsoever nature that are imposed in substitution for or in lieu
of any of the taxes, impositions, assessments or other charges
included in this definition of taxes; provided, however, taxes
shall not include the portion of any ad valorem taxes against the
Leased Premises that are paid by Lessee as a separate charge
pursuant to Section 19 of this Lease.
(b) Wages and salaries of all employees engaged in the
operation and maintenance of the Land, Building, and parking garage
including taxes, insurance and benefits relating thereto; prorated
if such employee is not exclusively employed at the Building;
(c) All supplies and materials used in the operation and
maintenance of the Building;
(d) Costs of water, sewage, power, heating, lighting,
air conditioning, ventilating, and other utilities furnished in
connection with the operation of the Building (excluding any such
cost billed to specific lessees);
(e) Costs of all maintenance and service agreements on
equipment, including, but not limited to, security service, access
control services, alarm services, window cleaning, janitorial
service and elevator maintenance;
4
<PAGE>
(f) Costs of casualty, rental interruption and liability
insurance applicable to the Building and related facilities and
Lessor's personal property used in connection therewith;
(g) Costs of repairs and general maintenance of the
interior, parking areas, and landscaping of the Land and the
Building, excluding repairs and general maintenance paid by the
proceeds of insurance or any lessee or other third parties, and
alterations attributable solely to lessees of the Building other
than Lessee;
(h) Management fees not to exceed a sum equal to
five percent (5%) of the Base Rents derived from the Building; and
(i) A reasonable amortization charge on account of
any capital expenditures incurred to effect a reduction in
operating expenses of the Building and related facilities; and
Expressly excluded from the definition of the term Operating Costs are:
(i) Replacement of capital investment items (except as provided in
Section 5.A(i) hereof;
(ii) Rental and similar commissions, other than those set forth in
Section 5.A(h) hereof, advertising, appraiser and legal expenses;
(iii) Depreciation;
(iv) Specific costs billed to and paid by specific lessees;
(v) Principal, interest, and other costs directly related to
financing; and
(vi) Ground Rent.
Notwithstanding anything to the contrary contained in the Lease,
Operating Costs shall also exclude; compensation or bonuses paid to officers
or executives of Lessor, administrative wages and salaries, depreciation or
accelerated cost recovery of the Building or any equipment, furniture or
property attached to or installed in the Building, capital expenditures,
ground rents, interest or amortization of mortgages, taxes measured solely by
the net income of Lessor from the operation of the Building, costs of
maintaining Lessor's corporate existence, legal expenses, franchise taxes,
travel expenses, leasing costs or brokerage commissions, advertising costs or
renting commissions, greater than five percent (5%) annual increase in
management fees or employees' salaries or benefits or both, costs in
connection with art work or interior decoration of the Building, costs to
correct original construction defects, costs for improving any other tenant's
space, any repair or other work necessitated by condemnation, fire or other
casualty, services or benefits provided to some tenants but not to Lessee,
and any costs or fines due to Lessor's violation of any governmental rule or
authority.
For the purposes herein, the term "Basic Operating Costs" shall be deemed
to be the actual operating costs for calendar year 1998.
(2) The term "Lessee's Share" shall mean the proportion that the
Rentable Square Feet of the Leased Premises bears to the total Rentable
Square Feet of the Building. (which shall be deemed to be 144,346 square
feet). For the purpose of this Lease, Lessee's share shall be deemed to be
16.3% for occupancy of the 1st and 6th Floors, as described in Section 1, and
29.8% for occupancy of the 1st, 5th and 6th Floors, as described in Section 1.
5
<PAGE>
(3) The term "Lease Year" shall mean the twelve (12) month period
commencing January 1st and ending December 31st of each year. If any of the
factors included in Basic Operating Costs are not payable, billed or
otherwise due so as to allow an accurate calculation of said factors on a
calendar year basis (e.g., ad valorem taxes and long-term contracts), then
Lessor in its reasonable discretion, may estimate and prorate said factors on
a calendar year basis; and said factors shall be properly adjusted by Lessor
when they actually become due and payable.
(4) The term "Monthly Escalation Payments" shall mean the
escalations owed or to be owed by Lessee as herein provided and paid to
Lessor in monthly installments.
B. In addition to the Base Rent as provided in Section 4, Lessee
shall be obligated to pay Lessor, as additional rent, Lessee's share
of Operating Costs in excess of Basic Operating Costs, if any.
C. Lessor shall have the right to collect Monthly Escalation
Payments in such amounts as are estimated by Lessor in its reasonable
discretion which shall be based on the amount by which the prior
year's actual expenses exceed Basic Operating Costs. The Monthly
Escalation Payments shall be due and payable at the same time as the
Base Rent is due and payable under Section 4 above.
Lessor shall, within the period of one hundred twenty (120)
days after the close of the Lease Year, give written notice thereof to
Lessee, which notice shall also contain or be accompanied by a
statement, prepared in accordance with generally accepted accounting
principles with copies of invoices or other supporting documentation,
of the Operating Cost of Lessor's operation of the Building during the
preceding Lease Year, and by a computation of such additional rent.
For any years in which the Building is not fully occupied, Operating
Costs that vary based upon occupancy shall be computed and prorated as
if Building were 95% occupied. Failure of Lessor to give Lessee said
notice within said time period shall not be a waiver of Lessor's right
to collect said additional rent. When the Lessor presents Lessee with
the statements of amounts due by Lessee for any escalation set out
herein, Lessee shall, within (30) days after receipt of said
statement, pay Lessor the difference between its proportionate share
of said escalation and amount of Monthly Escalation Payments made by
Lessee attributable to said escalation; or Lessee shall receive a
credit therefor, if Lessee's proportionate share is less than the
amount of Monthly Escalation Payments collected by Lessor, said credit
to be applied to future Monthly Escalation Payments.
Lessee shall have the right to audit the Operating Costs and in
the event such audit indicates an overstatement of amounts owed by
Lessee of more than five percent (5%), the cost of said audit shall be
paid by Lessor.
SECTION 6. PAYMENT OF RENT
A. Lessee hereby covenants and agrees to pay promptly, when due,
all Base Rent, adjusted as herein provided, and Additional Rent and
any other charges payable by Lessee under the provisions of this
Lease; and Lessee further covenants and agrees that all such rent or
other charges due and unpaid as of the date of termination of this
Lease shall be deemed due and payable on such termination date.
Lessee specifically agrees that the covenants recited in this Section
shall survive the expiration or termination of the Term of this Lease.
B. In addition to the Base Rent, Additional Rent, Operating Cost
and Monthly Escalation Payments, Lessee agrees to pay to Lessor as
additional rent, all charges for any services, goods, or materials
furnished by Lessor at Lessee's written request which are not required
to be furnished by Lessor under this Lease Agreement as well as all
other sums payable by Lessee hereunder. Any monthly Base Rent,
Additional Rent or Monthly Escalation Payments to be paid
6
<PAGE>
to Lessor not received in advance on or before the fifth (5th) day of
each month; or any charge for goods, services, or materials not
received within thirty (30) days after receipt of written notice from
Lessor rendering a statement to Lessee shall be charged a late charge
at the maximum rate permitted by law per day from date due until paid.
Failure to pay charges when due subjects Lessee to default (Section
27). All such additional charges are considered rent hereunder.
C. Lessor will not provide monthly statements for Base Rent or
other recurring charges due by Lessee to Lessor. Lessee is
responsible for assuring that monthly charges are received by Lessor
in advance on or before the first of each month.
SECTION 7. PARKING AND SERVICE AREAS
Subject to the terms hereof Lessor shall have control over the
parking of automobiles and other vehicles and shall designate parking
areas and building service areas. Lessor shall lease to Lessee and
Lessee shall lease from Lessor total covered parking spaces in the
Building parking garage at a ratio of 4 spaces per 1,000 square feet
of rentable area. There shall be no additional rent for parking
spaces over and above the Base Rent as provided for in Section 4.
Lessor shall provide reserved parking spaces at a ratio of 0.25 spaces
per 1,000 square feet of rentable area, to be designated by Lessor,
from the total spaces leased, reserved by name for Lessee's designated
employees or customers in an assigned area on Level 2 of the parking
garage. Reserved parking on Level 2 shall be assigned to Lessee in
contiguous blocks, where possible, and as close to the entrance to the
Level 2 elevator lobby as available space permits.
In the event Lessee exercises any expansion option, the total
number of covered parking spaces to be provided shall increase at a
rate of 4 spaces per 1,000 square feet leased and the number of
reserved spaces shall increase at a rate of .25 spaces per 1,000
square feet leased.
Lessor agrees to place signage in the front visitor parking lot
and at the entrance to the parking garage directing visitors into the
parking garage, said signage to aid visitors in the event of
unavailable parking in the front visitor lot.
SECTION 8. FURNITURE, FIXTURES AND PERSONAL PROPERTY
Lessee may remove its trade fixtures, office supplies, movable
office furniture, and business and telephone equipment not attached to
the Building provided: (a) such removal is made prior to the
termination of the term of this Lease (subject to the special rights
of holdover set forth in Section 32 as to which removal shall only be
required prior to expiration of the holdover period); (b) Lessee is
not in default of any monetary obligation or covenant under this Lease
at the time of such removal; and (c) Lessee promptly repairs all
damage caused by such removal. All other property at the Leased
Premises on the roof or above the ceiling grid, and any alterations or
additions to the Leased Premises (including wall-to-wall carpeting,
paneling or other wall covering) and any other article attached or
affixed to the floor, wall or ceiling of the Leased Premises (other
than Lessee's manufacturing and other specialty equipment, provided
Lessee shall repair any damage other than ordinary wear and tear
caused by such removal) shall become the property of Lessor and shall
remain upon and be surrendered with the Leased Premises as a part
thereof at the termination of this Lease by lapse of time or otherwise.
SECTION 9. SIGNS
A. Lessee shall have signage on the interior building directory and on the
entrance doors to Lessee's suite. In addition, Lessee shall have signage on the
entirety of both sides of the south Building exterior monument marker. Costs
for said interior directory and exterior monument marker signage shall be the
responsibility of Lessor. Signage above the entrance to the Building
7
<PAGE>
shall be available to Lessee at such time as Lessee leases the
entirety of the 6th and 5th floors of the Building. Costs for said
entrance signage shall be the responsibility of Lessee. All exterior
building signage shall be subject to approval by the Clear Lake City
Community Association, where applicable, and to the mutual agreement
and reasonable approval of both Lessor and Lessee and in conformance
with the existing style and quality of Building signage. Lessor
specifically approves the use of Lessee's corporate logo and trademark
in connection with the signage permitted hereunder.
B. Except as permitted pursuant to Section 9.A. no sign, symbol
or identifying mark shall be put on the Land, Building, in the halls,
elevators, staircases, entrances, parking areas, or upon the doors or
walls, or in or around the Leased Premises so that it may be seen from
elevator lobbies, other tenant's premises, or outside the Building or
common areas, without prior written approval of Lessor which shall not
be unreasonably withheld or delayed. All signs or lettering shall
conform in all respects to the sign and/or lettering criteria
established by Lessor. All signage (including, without limitation,
any changes thereto) is, however, subject to applicable restrictive
covenants including, without limitation, the rights of Clear Lake
City Community Association to approve or disapprove same.
SECTION 10. SERVICES TO BE PROVIDED BY LESSOR
Lessor agrees to furnish Lessee, while occupying the Leased
Premises, the following services:
A. Electricity for ordinary office uses equivalent to at least
six (6) watts per rentable square foot;
B. Elevator service;
C. Janitorial services on a five-day a week basis; the work of
the building janitorial contractor shall not be hindered by Lessee
after 5:00 p.m. and such work may be done at any time when offices are
vacant. Lessee shall have the right to enter into a contract for
certain janitorial services, in coordination with Lessee's janitorial
services, for that portion of the Leased Premises which is subject to
special cleanliness standards (collectively referred to as
"Laboratories and Manufacturing Facilities") as designated by Lessee.
In such event the janitorial contractor shall be subject to Lessor's
prior approval, which shall not be unreasonably withheld, delayed or
conditioned.
D. Hot and cold water at those points of supply provided for
general use of all lessees in the Building;
E. Air conditioning and heating as reasonably required for
comfortable use and occupancy (subject to governmental regulations)
under normal office conditions from 7:30 a.m. to 6:00 p.m. Monday
through Friday and 8:00am to 1:00pm on Saturdays, and without charge,
at any other times as may be requested by Lessee;
F. Lamp and ballast replacement in ceiling mounted fluorescent
fixtures installed by Lessor as building standard;
G. Security for the Building and its appurtenances as may be
deemed necessary by Lessor;
H. Interior Building Directory with listing of Lessee's major functional
departments.
8
<PAGE>
If there is an interruption in electricity, air-conditioning,
elevator service, water or sewer or any other utility which results in
Lessee being unable to conduct business in the Premises, there shall
be an abatement in rent during such period. If such interruption
continues for ten (10) consecutive business days, Lessee may, at its
option, cancel this Lease by providing Lessor notice in writing.
Notwithstanding any other term or provision hereof, Lessee shall
pay to Lessor monthly, as additional rent, any charges as may be
metered separately for electric service utilized by Lessee.
SECTION 11. REPAIRS, MAINTENANCE AND IMPROVEMENTS BY LESSOR
A. Lessor shall provide for the cleaning and maintenance of the
public portions of the Building, including painting and landscaping
surrounding the Building, in keeping with the standard first class
office buildings in the Houston, Texas area. Unless otherwise
expressly stipulated herein, Lessor shall not be required to make any
improvements or repairs of any kind or character to the Leased
Premises and public portions during the term of this Lease, except
such maintenance and/or repairs as may be deemed necessary by Lessor
in normal maintenance operations, which shall include repairs to the
exterior walls, corridors, windows, roof and other structural elements
and equipment of the Building, and such additional maintenance as may
be necessary because of damage caused by persons other than Lessee,
its agents, employees, invitees or visitors.
B. Lessor, its officers, agents and representatives, mortgagee
and insurance underwriters, subject to any security regulations
imposed upon Lessee by any governmental authority, shall have the
right to enter all parts of the Leased Premises upon no less than
twenty-four (24) hours notice, except in emergencies and for routine
daily janitorial services, at all reasonable hours to inspect, clean,
make repairs, alterations and additions to the Building or the Leased
Premises which it may deem necessary or desirable, or to provide any
service which it is obligated to furnish Lessee; and Lessee shall not
be entitled to any abatement or reduction of rent by reason thereof.
Notwithstanding the foregoing, any entry to the Laboratories and
Manufacturing Facilities shall only occur in compliance with the
applicable regulatory standards and, in the absence of an emergency
involving a threat to health or safety, upon prior notice to Lessee.
C. Lessor covenants, that to the best of Lessor's knowledge, the
Building and the Premises comply with all the requirements of all
municipal, county, state, federal and other applicable governmental
authorities then in effect or promulgated prior to the commencement of
this Lease, including without limitation the Americans with
Disabilities Act (ADA) and the comparable laws of the State of Texas.
Lessor shall, at Lessor's cost, take appropriate and timely action to
maintain the Building and the Premises in compliance with all
municipal, county, state, federal and other applicable regulations
hereafter imposed by order of any governmental agency or any other
authority during the term of the Lease and any extensions thereof.
D. Lessor shall provide an allowance ("Improvement Allowance")
for Lessee's construction of, and improvements to, the Leased
Premises comprising 42,954 square feet, at the rate of Twenty Dollars
($20.00) per rentable square foot for a total amount of Eight Hundred
and Fifty Nine Thousand and Eighty Dollars ($859,080.00). In the
event Lessee exercises its expansion option with respect to the 4th
Floor, Lessee shall be provided an additional improvement allowance in
the amount of Twenty Dollars ($20.00) per rentable square foot,
subject to the proration provisions of Section 1.B. Said improvements
and construction to be in accordance with construction plans as
approved by Lessee and Lessor and as prepared by an architect selected
by Lessee and approved by Lessor. Costs for said construction plans
and architectural services shall be paid from the Improvement
Allowance. The Improvement Allowance may be used for leasehold
improvements including; materials, labor, architectural
9
<PAGE>
fees, modular office furniture and any other equipment or system which
becomes a permanent part of the Leased Premises. Any portion of the
Improvement Allowance not used for improvements to the Leased Premises
may be used for Lessee's moving expenses, provided that said moving
expenses paid from the Improvement Allowance do not exceed $15,000, or
to supplement the above stated improvement allowance as granted to
Lessee under the terms of expansion into the 4th Floor, comprising
19,411 square feet, providing that Lessee has given its notice or
exercised its right of first refusal no later than 30 June 1998.
Lessor shall competitively bid the construction to the Leased Premises
against the approved construction plans with a minimum of three
qualified general contractors acceptable to both Lessor and Lessee.
Selection of a general contractor shall be agreed to by both Lessor
and Lessee. Lessor shall not charge any supervision or management
costs to the construction.
E. Lessor agrees to refurbish the main entrance lobby to the
Building and the restrooms on the 1st, 5th and 6th Floors at a cost to
Lessor not to exceed $150,000.00 ("Lobby Allowance"). Lessor shall
retain the services of an interior design architect for the purposes
of design changes including but not limited to; lobby entrance doors,
lobby flooring, lobby walls, lobby ceiling and lighting, lobby
directory, lobby guard station, main hallway corridor, elevator cabs
and fixture, lighting and wall finishes in the restrooms on the 1st,
5th and 6th Floors. Said improvements to the 1st, 5th and 6th Floor
restrooms shall be made in compliance with the Americans with
Disabilities Act ("ADA") and the comparable laws of the State of
Texas. All costs for architectural and design fees for lobby and
restroom renovation shall be included in, and paid from, the Lobby
Allowance. Plans and materials for lobby and restroom renovation
shall be approved by Lessor and Lessee, said approval based on
preliminary plans to be available by September 1st, 1997. Projected
completion of lobby and restroom renovation shall be December 5th,
1997. In the event such improvements are not completed by December
5th, 1997, Lessee shall have the right to complete such improvements
and be reimbursed for any and all costs expended by Lessee in
connection therewith. If Lessor does not reimburse Lessee within
forty five (45) days after written notice from Lessee, Lessee may
reduce it payments of Base Rent until such amount has been reimbursed.
F. Lessee and Lessor each acknowledge that the Lessee desires to
occupy the 1st Floor and the 6th Floor during the month of October,
1997, and in any event no later than October 31st, 1997, and that
Lessee and Lessor also desire to complete the lobby renovations
addressed by Section 11.E. above by December 5th, 1997, and that
failure of either party to act promptly could delay completion.
Lessee and Lessor agree that each will act with diligence to plan the
space, agree upon the space plans, agree upon necessary revisions to
the space plans, agree upon the construction drawings, agree upon
necessary revisions to the construction drawings, and agree upon
identity of the contractor. After completion of the initial space
plans, Lessor and Lessee agree that each will use all reasonable
efforts, when a response is required, to respond within three (3)
business days. Lessor agrees that once the contractor has been
selected, the Lessor will cause such contractor to commence
construction and proceed diligently to completion.
G. Lessor agrees to aggressively coordinate and control the
appearance of other third party tenant's 1st Floor lobby exposure to
insure a professional appearance consistent with other Class A
buildings in the Clear Lake area.
SECTION 12. FORCE MAJEURE
It is understood and agreed that with respect to any services to
be furnished, or obligations to be performed, by Lessor to Lessee,
Lessor shall in no event be liable for failure to furnish or perform
the same when prevented from doing so by strike, lockout, breakdown,
accident, order or regulation of or by any governmental authority, or
failure of supply or inability by the exercise of reasonable diligence
to obtain supplies, parts, or employees necessary to furnish such
services, or because of war or other emergency, or for any cause
beyond Lessor's
10
<PAGE>
reasonable control, or for any cause due to any act or neglect of
Lessee or its servants, agents, employees, licensees, or any person
claiming by, through or under Lessee. Upon interruption of services
to Lessee , under the provisions of this Section, which results in
Lessee being unable to conduct business in the Leased Premises, Lessee
shall be entitled to an abatement of rent during such period of
interruption.
SECTION 13. REPAIRS AND CARE OF PREMISES BY LESSEE
Lessee agrees, at its own cost and expense, to repair or replace
any damage or injury done to the Building, or any part thereof, caused
by Lessee, Lessee's agents, employees, licensees, or invitees;
provided, however, if Lessee fails to make such repairs or
replacements promptly, Lessor may, at its option, make such repairs or
replacements and Lessee shall pay the cost, after written notice,
thereof to Lessor on demand. Lessor further agrees to maintain and
keep the interior of the Leased Premises in good repair and condition
at Lessee's expense. Lessee agrees not to commit or allow any waste
or damage to be committed on any portion of the Leased Premises or the
Building, and to maintain the Leased Premises in as good condition as
on date of possession by Lessee, ordinary wear and tear alone
excepted. Upon such termination of this Lease, subject to the
provisions of Section 32, Lessor shall have the right to re-enter and
resume possession of the Leased Premises.
Furthermore, no abatement, diminution, reduction of rent charges
or other compensation shall be claimed by or allowed by Lessee or to
any person claiming under any circumstances whether for any
inconvenience or discomfort otherwise arising from the making of
alterations, changes, additions, improvements, or repairs to the
Building or by virtue or by cause by present or future government of
laws, ordinance, requirements, orders, rules, regulations except (i)
in the event Lessee is actually prevented from utilizing a portion of
the Leased Premises as a result thereof and (ii) in the event such
action creates a physical barrier which prevents access to the Leased
Premises or causes an intrusion into the Leased Premises.
SECTION 14. MECHANIC'S LIENS
Lessee shall not suffer or permit any mechanic's lien to be filed
against the Leased Premises or any portion of the Building or premises
of which the Leased Premises are a part by reason of work, labor,
services, or materials supplied or claimed to have been supplied to
the Lessee; and nothing in this Lease contained shall be deemed or
construed in any way as constituting the consent or request of the
Lessor, expressed or implied, by inference or otherwise, to any
contractor, subcontractor, laborer or materialman for the performance
of any labor or furnishing of any materials or any specific
improvement, alteration or repair of or to the Leased Premises which
are a part, or any part thereof, nor of giving the Lessee any right,
power or authority to contract for, or permit the rendering of, any
services or the furnishing of any materials that would give rise to
the filing of any mechanic's lien against the Leased Premises or any
portion of the Building or premises of which the Leased Premises are a
part. If any such mechanic's lien shall at any time be filed against
the Leased Premises or any portion of the Building or premises of
which the Leased Premises are a part, the Lessee covenants that it
will promptly take and diligently prosecute appropriate action to have
the same discharged and will pursue such action at the Lessee's cost
and expense to the ultimate disposition thereof, and upon its failure
to do so, the Lessor, in addition to any other right or remedy that it
may have, may take such action as may be reasonably necessary to
protect its interest; and any amounts paid by the Lessor in connection
with such action, and all reasonable legal and other expenses of the
Lessor in connection therewith, including reasonable attorney's fees,
court costs and other necessary disbursements, with interest thereon
at the maximum rate permitted by law from the date of payment, shall
be repaid by the Lessee to the Lessor on demand.
11
<PAGE>
SECTION 15. NUISANCE OR HAZARDOUS USE
Lessee will not use, occupy, or permit the use or occupancy of the
Leased Premises for any purpose which is directly or indirectly
forbidden by law, ordinance or governmental or municipal regulation or
order, or which may be dangerous to life, limb, or property; or permit
the maintenance of any public or private nuisance, or do or permit any
operation which might emit offensive odors or conditions into other
portions of the Building; or use any apparatus which might make undue
noise or set up vibrations in the Building; or permit anything to be
done which would increase the fire and extended coverage insurance
rates on the Building or contents; or permit anything to be done or
not to be done which would shorten the normal useful life of any
building system beyond that typical for first class office buildings
in Houston, Texas; and if there is any increase in such rates by acts
of Lessee, then Lessee agrees to pay such increase promptly upon
demand therefor by Lessor. Lessor acknowledges that a portion of the
Leased Premises will be used for manufacturing under controlled,
sterile conditions, but involving the use of various chemicals such as
nitrogen and alcohol, and agrees such activities are not violative of
the foregoing provisions.
SECTION 16. TAXES AND INSURANCE
A. Lessor shall pay all ad valorem taxes and assessments on the
building.
Lessor shall maintain fire and extended coverage insurance on the
Building, in amounts desired by Lessor. Lessor shall likewise
maintain a policy or policies of commercial general liability
insurance in such amounts as it may desire. If the annual premiums to
be paid by Lessor exceed the standard rates because Lessee's
operations result in additional risk or exposure as determined by
Lessor's insurance carrier, then Lessee shall promptly pay the excess
amount of the premium upon request by Lessor and provided evidence of
such additional premium is given to Lessee.
B. Notwithstanding the Language of Section 16A. of this Lease,
Lessor may, at its sole option, elect to self-insure the Building,
provided the party obligated to make such self-insurance payments
shall have a net worth of at least One Hundred and Fifty Million
Dollars ($150,000,000.00).
C. Lessee shall pay all taxes assessed against its furniture,
equipment, fixtures, or other property in or on the Leased Premises.
Lessee shall, at all times during the term of this Lease, at its
own expense, maintain a policy or policies of insurance with premiums
fully paid in advance, issued by and binding upon a solvent insurance
company, insuring all of Lessee's personal property located in the
Leased Premises and the improvements placed upon the Leased Premises
by Lessee (including all items covered by Lessee's plans as approved
by Lessor) against all risks of direct physical damage or loss for the
full replacement value thereof. Lessee also shall maintain a policy
or policies of commercial general liability insurance with premiums
fully paid in advance, issued by and binding upon a solvent insurance
company, such insurance to afford minimum protection of not less than
$1,000,000 per occurrence and $2,000,000 aggregate combined single
limit for personal injury, death, property damage liability.
The policy or policies of insurance to be maintained by Lessee
shall name Lessor as an Additional Insured; be endorsed to provide
Waiver of Subrogation in favor of Lessor; and shall contain an
endorsement that such policies cannot be cancelled, amended or
modified as to Lessor without thirty (30) days prior written notice to
Lessor. Lessee shall deliver duplicate original policies or
certificates of insurance in form satisfactory to Lessor prior to
entry upon the Leased Premises and not less than twenty (20) days
prior to the expiration of old insurance policies.
12
<PAGE>
D. Anything in this Lease to the contrary notwithstanding, Lessor and
Lessee each hereby waive any and all rights of recovery, claims, actions or
causes of action against the other, its agents, officers and employees for
any loss or damage that may occur to the Building or any part thereof, or to
any of the personal property of such parties therein by reason of fire, the
elements, or any other cause which is insured against under the terms of the
policies of fire and extended coverage insurance and/or public liability
insurance carried by either Lessor or Lessee in respect thereof, to the
extent and only to the extent, of any proceeds actually received by Lessor
and Lessee, respectively, with respect thereto, regardless of its cause or
origin, including negligence of either party hereto, its agents, officers, or
employees, and each party covenants that no insurer shall hold any right of
subrogation against the other party. Lessor will not be responsible for any
lost or stolen personal property, equipment, money or jewelry from Lessee's
area or public areas regardless of whether such loss occurs when the area is
locked against entry or not.
SECTION 17. QUIET ENJOYMENT
Lessor covenants that it will put Lessee in actual possession of the
Leased Premises at the Commencement Date of the Term aforesaid, and that
Lessee, on paying the said rent and performing the covenants herein agreed to
be by it performed, shall and may peaceably and quietly have, hold and enjoy
the Leased Premises for said term. If for any reason, the Leased Premises
are not ready for occupancy by Lessee on the Commencement Date, this Lease
shall not be affected thereby, and Lessor shall not be liable to Lessee by
reason thereof, but no rent shall be payable for the period during which the
Leased Premises are not ready for occupancy. All claims for damage arising
from any such delay are hereby waived and released by Lessee.
SECTION 18. ALTERATION
Lessee agrees that it will not make or allow to be made any alterations,
physical additions or improvements in or to the Leased Premises, which would
affect the basic building systems or structural integrity without first
obtaining the written consent of Lessor and without first furnishing Lessor
fifteen (15) days advance written notice outlining in detail the proposed
changes or alterations. In any instance where Lessor grants such consent,
Lessor may grant such consent upon the condition that Lessee's contractors,
laborers and materialmen must work in harmony with and not interfere with any
other work being conducted on behalf of Lessor or any other lessee of the
Building. Said consent shall not be unreasonably withheld or delayed by
Lessor.
SECTION 19. ASSIGNMENT AND SUBLETTING
A. Neither Lessee nor Lessee's legal representatives or successors in
interest by operation of law or otherwise shall assign this Lease or sublease
the Leased Premises or any part thereof or mortgage, pledge or hypothecate
its leasehold interest therein without the prior express written permission
of Lessor, any attempt to do so by Lessee or Lessee's successors in interest
shall be void and of no effect. Said permission and consent shall not be
unreasonably withheld or delayed. Lessor agrees and acknowledges that any
transfer of this lease by Lessee as a result of merger or consolidation of
Lessee shall not constitute an assignment for the purpose of this Lease.
B. If Lessee should desire to assign this Lease or sublet the Leased
Premises or any portion thereof, Lessee shall give Lessor written notice of
such desire at least thirty (30) days in advance of the date on which Lessee
desires to make such assignment or sublease. Lessor shall then have a period
of thirty (30) days following receipt of such notice within which to notify
Lessee in writing that Lessor elects either (1) to permit Lessee to assign or
sublet the Leased Premises or any portion thereof, subject, however, to
subsequent written approval of the
13
<PAGE>
proposed assignee or sublessee by Lessor or (2) to refuse to consent to
Lessee's assignment or subletting of the Leased Premises or any portion
thereof and to continue this Lease in full force and effect as to the entire
Leased Premises. If Lessor should fail to notify Lessee of such election
within said thirty (30) day period, Lessor shall be deemed to have elected
option (2) above. Lessor and Lessee specifically agree that, in the event of
any approved assignment or subletting, the rights of any such assignee or
sublessee of Lessee herein to the use and occupancy of the Leased Premises
shall be subject to all of the terms, conditions and provisions of this
Lease, including, without limitation, restrictions on use and the covenant to
pay Base Rent, Monthly Escalation Payments, Operating Costs and other sums
due. Lessor may collect Base Rent, Monthly Escalation Payments, Operating
Costs and other sums due directly from such assignee or sublessee and apply
the amount so collected to the rents herein reserved. No such consent to or
recognition of any such assignment or subletting shall constitute a release
of Lessee or any guarantor or Lessee's performance hereunder, from further
performance by Lessee or such guarantor of covenants undertaken to be
performed by Lessee herein, and Lessee and such guarantor will remain liable
and responsible for all rents and other obligations herein imposed upon
Lessee.
C. Notwithstanding anything to the contrary contained herein, this Lease
may be subleased without Lessor's consent to Lessee's customers or
subcontractors working with Lessee in the Premises. In the event Lessee
subleases all or a portion of the Premises to Lessee's customers or
subcontractors, Lessee will not be required to comply with Section 19A or
Section 19B. Lessee will remain liable and responsible for all rents and
other obligations herein imposed upon Lessee.
D. Consent by Lessor to a particular assignment or sublease or other
transaction shall not be deemed a consent to any other subsequent
transaction. If this Lease be assigned or if the Leased Premises be subleased
(whether in whole or in part) or in the event of the mortgage, pledge or
hypothecation of the leasehold interest without the prior express written
permission of Lessor, Lessor may nevertheless collect rent from the assignee,
sublessee, mortgagee, pledgee, or party to whom the leasehold interest was
hypothecated, or other occupant and apply the net amount collected to the
rent payable hereunder, but no such transaction or collection of rent or
application thereof by Lessor shall be deemed a waiver of these provisions or
a re1ease of Lessee from the further performance by Lessee of its covenants,
duties and obligations hereunder. One-half (1/2) of any rent or other
consideration payable to Lessee, after deduction of all costs associated with
such transaction, under any permitted assignment or sublease, in excess of
the Base Rent set forth in this Lease and one-half (1/2) of any additional
rent payable to Lessee in excess of the Monthly Escalation Payments set forth
in this Lease, shall be payable to the Lessor.
SECTION 20. ABANDONMENT
If the Leased Premises are abandoned by Lessee, coupled with the
non-payment of rent, Lessor shall have the right, but not the obligation, to
relet same for the remainder of the period covered hereby, and if the rent
received through such reletting is not at least equal to the rent provided
hereunder, Lessee shall pay and satisfy any deficiencies between the amount
of the rent required pursuant to this Lease and the amount received through
reletting, plus Lessee shall pay all expenses incurred by any such reletting
including, but not limited to, the cost of renovating, altering, and
decorating for a new lessee. Nothing herein shall be construed as in any way
of denying Lessor the right, in case of abandonment, vacation of the Leased
Premises or other breach of this Lease by Lessee to treat the same as an
entire breach and act of default herein and at Lessor's option immediately
sue for the entire breach of this Lease and any and all damages occasioned
Lessor thereby.
14
<PAGE>
SECTION 21. FIRE AND OTHER CASUALTY
The parties hereto mutually agree that if the Leased Premises are
partially or totally destroyed or damaged by fire or other casualty covered
by the fire and extended coverage insurance to be carried by Lessor under the
terms hereof, the Lessor shall, repair and restore the Leased Premises as
soon as it is reasonably practicable, to substantially the same condition in
which the Leased Premises were before such damage; provided, however, that in
the event the Leased Premises are so destroyed or damaged that repairs cannot
be commenced within thirty (30) days and completed within ninety (90) days
thereafter, then this Lease shall be terminable, as of the date of the
occurrence of the damage or destruction by either party hereto by serving
written notice upon the other and, provided further that in any event if
repairs have not been commenced within ninety (90) days from the date of said
damage and thereafter completed within a reasonable time, in no case to
exceed six (6) months, this Lease may be immediately terminated by Lessee as
of the date of occurrence of the damage or destruction, by serving notice
upon the Lessor.
In the event the Leased Premises are completely destroyed or so damaged
by fire or other casualty covered by the fire and extended coverage insurance
to be carried by Lessor under the terms hereof that it cannot reasonably be
used by Lessee for the purposes herein provided and this Lease is not
terminated as above provided, then there shall be a total abatement of rent
until the Leased Premises are made usable. In the event the Leased Premises
can be only partially used by Lessee for the purposes herein provided, then
there shall be a partial abatement in the rent corresponding to the time and
extent which the Leased Premises cannot be used by Lessee.
SECTION 22. CONDEMNATION
If all of the Leased Premises or the use or occupancy thereof shall be
taken as a result of the exercise of the power of eminent domain, this Lease
shall terminate as of the date Lessee is deprived of possession thereby. If
such a substantial portion of the Leased Premises or the use or occupancy
thereof or such a substantial portion of the Building or the adjoining
parking areas and driveways used by the Building are so taken so that
Lessee's use of the Leased Premises, or the balance of the Leased Premises
then remaining, is substantially handicapped, impeded or impaired, either
Lessor or Lessee shall have the right to terminate this Lease by written
notice to the other within thirty (30) days after the date of such taking.
In the event of any taking, Lessor shall be entitled to any and all
compensation, damages, income, rent and awards with respect thereto except
for any award specified by the condemning authority for any property that
Lessee has the right to remove upon termination of this Lease. Lessee shall
have no claim against Lessor for the value of any unexpired term of this
Lease. In the event of a partial taking of the Leased Premises which does
not result in a termination of this Lease, the Base Rent and additional rent
thereafter to be paid shall be equitably reduced.
SECTION 23. HOLD HARMLESS
The Lessee will indemnify and hold Lessor harmless and Lessor will
indemnify and hold Lessee harmless from and against all fines, suits, claims,
demands, damages, expenses, liabilities and actions (including costs and
expenses of defending against such claims) resulting or alleged to result
from any breach, violation or non-performance of any covenant or condition
hereof or from the use or occupancy of the Leased Premises by the other party
or the other party's agents, employees, licensees, or invitees. Neither
party shall be liable to the other or their agents, employees, licensees, or
invitees for any damage to person or property resulting from any act or
omission or negligence of any co-lessee or co-lessor, visitor or other
occupant(s) of the Building, except to the extent Lessor's or Lessee's own
negligence may contribute thereto.
15
<PAGE>
SECTION 24. DEFAULT BY LESSEE
The term "Act of Default" refers to the occurrence of any one or more of
the following: (i) failure of Lessee after ten (10) days after receipt of
written notice from Lessor of Lessee's default to pay when due any Base Rent,
Monthly Escalation Payments, and/or additional rent, or any charges for any
services, goods, or materials furnished by Lessor at Lessee's request, or
other amount required to be paid under this Lease (such failure of Lessee to
pay such sums shall hereinafter be referred to as "Monetary Default"; (ii)
failure of Lessee after thirty (30) days after receipt of written notice from
Lessor of Lessee's default, other than a Monetary Default, in the performance
of any Lessee's obligations, covenants or agreements; (iii) the adjudication
of Lessee to be a bankrupt; (iv) the filing by Lessee of a voluntary petition
in bankruptcy, receivership, or other related or similar proceedings; (v) the
making by Lessee of a general assignment for the benefit of creditors; (vi)
the appointment of a receiver of Lessee's interest in the Leased Premises in
any action, suit, or proceeding by or against Lessee's interest in the Leased
Premises or by or against Lessee; (vii) any other voluntary or involuntary
proceeding instituted by or against Lessee under any bankruptcy or similar
laws, unless the occurrence of any such involuntary receivership or
proceeding is cured by the same being dismissed or stayed within ninety (90)
days thereafter, or (viii) any attempted sale under execution or other legal
process of the interest of the Lessee in the Leased Premises.
If any Act of Default occurs, Lessor at any time thereafter prior to the
curing of such Act of Default and without waiving any other right available
to Lessor herein, at law or in equity, may terminate this Lease. Lessor may
with notice and with court proceedings, re-enter and repossess the Leased
Premises, and remove all persons and property therefrom, and Lessee hereby
waives any claim arising by reason thereof or by reason of issuance of any
distress warrant or writ of sequestration and agrees to hold Lessor harmless
from any such claims. If Lessor elects to terminate this Lease, it may treat
the Act of Default as an entire breach of this Lease, and Lessee immediately
shall become liable to Lessor for damages for the entire breach in the amount
equal to the amount by which (i) the Total Base Rent, as adjusted by the
Monthly Escalation Payments which would be payable by Lessee during the
unexpired balance of the Term, and all other payments due for the balance of
the Term is in excess of (ii) the fair market rent value of the Leased
Premises for the balance of the Term as of the time of default, both
discounted at the rate of six percent (6%) per annum to the then present
value. Such amount shall be due and payable upon Lessor's notice to Lessee
of termination of the Lease and shall bear interest until paid at the maximum
rate permitted by law. If Lessor elects to terminate Lessee's right to
possession of the Leased Premises without terminating this Lease, Lessor may
lease the Leased Premises or any part thereof for the account of Lessee to
any person or persons, for such rent and upon such terms and other conditions
as Lessor deems practical, and Lessee shall be liable to Lessor for the
amount, if any, by which the total Base Rent and all other payments herein
provided for the unexpired balance of the Term exceed the net amount, if any,
received by Lessor from such reletting, being the gross amount so received by
Lessor less the cost of repossession, reletting, remodeling, and other
expenses. Such sum or sums shall be paid by Lessee in monthly installments on
the first day of each month of the Term. In no case shall Lessor have any
obligation to, or be liable for failure to, relet the Leased Premises or
collect the rent due under such reletting. If Lessor elects to terminate
Lessee's right to possession without terminating this Lease, Lessor shall
have the right at any time thereafter to terminate this Lease, whereupon the
foregoing provisions with respect to termination will thereafter apply. If
an Act of Default occurs or in case of any holding over or possession by
Lessee of the Leased Premises after the expiration or termination of this
Lease, except as permitted pursuant to Section 32, Lessee shall reimburse
Lessor on demand for all costs incurred by Lessor in connection therewith
including, but not limited to, reasonable attorney's fees, court costs, and
related costs plus interest thereon at the rate of fifteen percent (15%) per
annum from the date such costs are paid by Lessor.
16
<PAGE>
SECTION 25. DEFAULT BY LESSOR
The term "Lessor's Act of Default" shall mean the failure of Lessor for
seventy two (72) hours, after receipt of written notice from Lessee of
Lessor's default, to diligently cure or to use reasonable efforts to cure
Lessor's default in making any payment or in the performance of any of
Lessor's obligations, covenants or agreements under this Lease or under any
subsequent rental agreements, if any. After any Lessor's Act of Default
occurs, Lessee shall have the right, without limiting any other rights it may
have under this Lease or at law, at Lessee's expense, to do whatever is
reasonably necessary to cure Lessor's Act of Default and, in so doing and to
the extent necessary, shall have the right of access to portions of the
Building normally under the control of Lessor. Lessee shall have the right
to deduct from or set-off against Lessee's Base Rent, Annual Escalation
Payments and other amounts payable by Lessee to Lessor hereunder or under any
subsequent rental agreements, if any, all payments made and costs incurred by
Lessee by reason of or in curing or beginning or attempting to cure Lessor's
Act of Default, and such deduction or set-off shall be accompanied by a
statement setting forth, in reasonable detail, all costs incurred by Lessee
and deducted from the Base Rent, Annual Escalation Payments and other amounts
payable by Lessee to Lessor hereunder.
SECTION 26. ATTORNEY'S FEES
In the event that any action shall be commenced by either party hereto
arising out of, or concerning this Lease or any right or obligation derived
therefrom, then in addition to all other relief at law or in equity, the
prevailing party shall be entitled to recover reasonable attorney's fees and
costs as fixed by the court.
SECTION 27. NON-WAIVER
Neither acceptance of rent by Lessor nor failure by Lessor to complain of
any action, non-action or default of Lessee, whether singular or repetitive,
shall constitute a waiver of any of Lessor's rights hereunder. Waiver by
Lessor or Lessee of any right or any default of the other party shall not
constitute a waiver of any right for either a subsequent default of the same
obligation or any other default. No act or thing done by Lessor or its
agents shall be deemed to be an acceptance or surrender of the Leased
Premises and no agreement to accept a surrender of the Leased Premises shall
be valid unless it is in writing and signed by a duly authorized officer or
agent of Lessor. Receipt by Lessor of Lessee's keys to the Leased Premises
shall not constitute an acceptance or surrender of the Leased Premises.
SECTION 28. RULES AND REGULATIONS
Lessee shall comply with the rules and regulations incorporated in
Exhibit C, attached hereto and made a part hereof. Lessor shall have the
right at all times to change such rules and regulations or to amend them in
any reasonable manner as may be deemed advisable to Lessor, all of which
changes and amendments will be sent by Lessor to Lessee in writing and shall
be thereafter carried out and observed by Lessee.
SECTION 29. ASSIGNMENT BY LESSOR
Lessor shall have the right to assign or transfer in whole or in part,
every feature of its rights and obligations hereunder and in the Building and
Leased Premises. Such assignments or transfers may be made to a corporation,
trust, trust company, individual or group of individuals, and howsoever made
shall be in all things respected and recognized by Lessee. Upon any such
assignment, the assigning Lessor shall be released from all liability
hereunder, except for any existing Lessor default.
17
<PAGE>
SECTION 30. LIABILITY OF LESSOR
It is expressly understood and agreed that the obligations of Lessor
under this Lease shall be binding upon Lessor and its successors and assigns
and any future owner of the Building only with respect to breaches occurring
during its and their respective ownership of the Building. In addition,
Lessee specifically agrees to look solely to Lessor's interest in the
Building and insurance policies for the recovery of any judgment from Lessor
pursuant to this Lease, it being agreed that neither Lessor nor any successor
or assign of Lessor nor any future owner of the Building shall ever be
personally liable for any such judgment.
SECTION 31. BUILDING MORTGAGE
Lessor represents and warrants that as of the date of this Lease, no
mortgage or deed of trust is of record against the Building. This Lease
shall automatically be subject and subordinate to any first or second lien
and/or mortgage or deed of trust which may hereafter encumber the Land or
the Building of which the Leased Premises form a part and to all renewals,
modifications, consolidations, replacements and extensions thereof if, at the
time such mortgage is executed or within sixty (60) days thereafter, the
Lessor, the Lessee and the mortgagee execute a mutually acceptable
subordination, non-disturbance and attornment agreement.. In confirmation of
such subordination, however, Lessee shall, at Lessor's request, execute
promptly any appropriate certificate or instrument that Lessor may request in
accordance with the terms of this Lease, as may be reasonably required to
further effect such subordination. The Lessee shall promptly furnish
Mortgagee with a Lessee's estoppel letter, at any time and from time to time
as reasonably requested by Mortgagee or Lessor, such estoppel letter to set
forth the rental rates, terms, any options, acceptance and occupancy of
Leased Premises, offsets and the like. In the event of the enforcement by the
trustee or the beneficiary under such mortgage or deed of trust of the
remedies provided for by law or by such mortgage or deed of trust, Lessee
will automatically become the Lessee of such successor in interest without
change in the terms or other provisions of this Lease; provided, however,
that such successor in interest shall not be bound by any payment of rent or
additional rent for more than one month in advance. Upon request by such
successor in interest or Lessor, Lessee shall promptly execute and deliver an
instrument or instruments confirming the attornment herein provided for.
The Lessee understands and acknowledges that (i) Lessor shall execute a
conditional assignment of this Lease in favor of any first mortgagee or
beneficiary under a first or second mortgage or deed of trust on the Building
("Mortgagee"); (ii) notwithstanding said assignment, all rental payments
under this Lease shall be paid in accordance with the terms of this Lease
until and unless Lessee is notified to the contrary in writing by Mortgagee;
(iii) under the conditions of said assignment and after the date thereof, it
is expressly agreed that, unless the written consent of Mortgagee be first
obtained, no rents are to be collected more than fifteen (15) days in advance
of the due date thereof, and no alterations, modifications, amendments,
terminations, waivers, consents, approvals or other actions whatsoever are to
be made or become effective with respect to this Lease; and (iv) the interest
of the Lessor in this Lease shall be assigned to Mortgagee solely as
additional security for the loan and Mortgagee assumes no duty, liability or
obligation under this Lease, either by virtue of said assignment or by any
subsequent receipt or collection or rents hereunder.
Lessee will give written notice to Mortgagee of any substantial default
under the Lease by Lessor by mailing a copy of same by certified United
States mail, postage prepaid, return receipt requested, to such address as
may be specified by Mortgagee; and, in such event, Mortgagee shall be
permitted to cure or begin to cure any such default within the period of time
during which Lessor would be permitted to cure or begin to cure such default
as set forth in this Lease, but in any event Mortgagee shall have a period of
thirty (30) days after receipt of said notification in which to cure or begin
to cure such default; provided, however, in the event
18
<PAGE>
Mortgagee is unable to cure or begin to cure said default by the exercise of
reasonable diligence within such thirty (30) day period, Mortgagee shall have
such additional period of time as may be reasonably required for it to remedy
such default with diligence and continuity.
Generally, the subordination and non-disturbance agreement shall provide that
(1) Lessee's possession of the Leased Premises under the Lease or any
extension or renewals thereof, shall not be diminished or interfered with by
the Mortgagee or the holder of the Deed of Trust in the exercise of the
Mortgagee's rights under the Mortgage or in the exercise by the holder of the
Deed of Trust of its rights under the Deed of Trust; (2) Lessee's occupancy
of the Leased Premises including any additional space added to the Leased
Premises shall not be disturbed by Mortgagee or the holder of the Deed of
Trust in the exercise of any of its rights during the term of the Lease or
any renewals thereof and (3) Mortgagee or the holder of the Deed of Trust
will not join Lessee as a party defendant in any action or proceeding for the
purpose of terminating Lessee's interest and estate under the Lease because
of any default under the Mortgage or the Deed of Trust.
SECTION 32. HOLDING OVER
Upon the termination of this Lease for any reason, Lessee shall
immediately surrender and vacate the Leased Premises, and Lessor shall have
the right to re-enter and resume possession of the Leased Premises. If
Lessee should remain in possession of the Leased Premises after the
termination of this Lease without the execution by Lessor and Lessee of a new
lease, then Lessee shall be deemed to be occupying the Leased Premises as a
tenant at sufferance subject to all the covenants of this Lease except the
amount of rent, which rent for any such holdover period shall be one hundred
and ten percent (110%) the Total Monthly Rent (including, without limitation,
Base Rent, Monthly Escalation Payments and parking charges) being paid by
Lessee immediately prior to the Expiration Date; and Lessee shall indemnify
Lessor and hold Lessor harmless from any claims which may be asserted by any
third party who is unable to enter or occupy the Leased Premises because of
Lessee's holdover occupancy thereof. No holding over by Lessee after the
term of this Lease, either with or without the consent and acquiescence of
Lessor, shall operate to extend this Lease.
Notwithstanding the foregoing, Lessee shall have the right to hold over
pursuant to the terms of this Lease as to approximately 19,411 rentable
square feet identified as the 5th Floor ("Approved Hold Over Space"). Such
right shall arise upon Lessee's written notice to Lessor prior to termination
of this Lease that Lessee is exercising this right. Upon the giving of such
notice Lessee shall be obligated for all obligations hereunder as to such
Approved Hold Over Space provided such occupancy by Lessee be terminated by
Lessee upon six (6) months written notice or by Lessor upon twelve (12)
months written notice of its election to cancel. The Approved Hold Over
Space rental rate will be 110% of the rental rate of this Lease. If Lessee
elects to retain Approved Hold Over Space, it shall be subjected to all terms
and conditions of the Lease, except as modified hereby.
SECTION 33. SEVERABILITY
This Lease shall be construed in accordance with the laws of the State of
Texas. Any suit for the enforcement of this Lease shall be brought in the
court of Harris County, Texas, which shall have exclusive venue, except when
it becomes necessary, for jurisdictional purposes, to bring suit against
Lessee in another state of the United States. If any clause or provision of
this Lease is illegal, invalid, or unenforceable, under present or future
laws effective during the term hereof, then it is the intention of the
parties hereto that the remainder of this Lease shall not be affected
thereby, and it is also the intention of both parties that in lieu of each
clause or provision that is illegal, invalid or unenforceable, there be added
as a part of this Lease a clause or
19
<PAGE>
provision as similar in terms to such illegal, invalid, or unenforceable
clause or provision as may be possible and be legal, valid and enforceable.
SECTION 34. NOTICES
Whenever in this Lease it shall be required or permitted that notice or
demand be given or served by either party to this Lease to or on the other,
such notice or demand shall be given or served and shall be deemed to have
been given or served upon receipt of Certified or Registered Mail, or express
courier, postage prepaid, addressed as follows:
TO LESSOR:
Space Assets II, Inc.
Attention: President
USX Realty Development
600 Grant Street, Room 2656
Pittsburgh, PA 15219-4776
With copies to: USX Corporation
Attorney-Real Estate
Room 1538 - USX Tower
600 Grant Street
Pittsburgh, PA l5219-4776
USX Realty Development
Attention: General Manager - Southwest
5200 East McKinney Rd., Suite 100
Baytown, Texas 77520
TO LESSEE (prior to Commencement Date):
Cyberonics, Inc.
17448 Highway Three, Suite 100
Webster, Texas 77598
Attention: Facilities Manager
TO LESSEE (after Commencement Date):
Cyberonics, Inc.
16511 Space Center Boulevard, Suite 600
Houston, Texas 77058
Attention: Facilities Manager
Such addresses may be changed from time to time by either party by serving
notices as provided above. All notices shall be effective when received by
the party to whom addressed.
SECTION 35. OBLIGATIONS OF SUCCESSORS
The Lessor and Lessee agree that all the provisions hereof are to be
construed as covenants and agreements as though the words imparting such
covenants were used in each separate section hereof, and that, except as
restricted by the provisions hereof, shall bind and inure to the benefit of
the parties hereto, their respective heirs, legal representatives, successors
and assigns.
20
<PAGE>
SECTION 36. ENTIRE AGREEMENT
This Lease and any attached addenda or exhibits signed by the parties
constitute the entire agreement between Lessor and Lessee. No prior written
or contemporaneous oral promises or representations shall be binding. This
Lease shall not be amended, changed, or extended except by written instrument
signed by both parties hereto.
SECTION 37. SECTION HEADINGS
The section headings in this Lease are for Lessor's and Lessee's
convenience only and neither limit or amplify the provisions of this Lease.
Lessee agrees, at Lessor's request, to execute a recordable Memorandum of
this Lease.
SECTION 38. CHANGES, DELETIONS AND ADDITIONS TO CONTRACT
As noted, changes, deletions or additions, on any and all pages of this
Lease agreed on by both parties become a part of this Lease for all purposes.
SECTION 39. ESTOPPEL
Lessee will, at such time or times as Lessor may request, sign a
certificate stating whether this Lease is in full force and effect; whether
any amendments or modifications exist; whether there are any defaults
hereunder, and such other information and agreements as may be reasonably
requested in accordance with the terms of this Lease.
SECTION 40. BROKER'S COMMISSION
Each of the parties represents and warrants that there are no claims for
brokerage commissions or finder's fees in connection with the execution of
this Lease except to Clear Lake Asset Management, Inc. and Jesse J. Tollett &
Company, and each of the parties agrees to indemnify the other against, and
hold it harmless from, all liabilities arising from any such claim
(including, without limitation, the cost of counsel fees in connection
therewith).
IN WITNESS WHEREOF, the parties hereto have executed this Lease Agreement
on the date indicated below.
EXECUTED in multiple counterparts, together with Exhibits A, B and C,
each of which shall have the force and effect of an original, on this the
19th day of August, 1997.
LESSOR:
SPACE ASSETS II, INC.
By: /s/ A. E. FERRARA, JR.
--------------------------
A. E. Ferrara, Jr.
President
LESSEE:
CYBERONICS, INC.
By: /s/ ROBERT P. CUMMINS
--------------------------
Robert P. Cummins
Chief Executive Officer
21
<PAGE>
EXHIBIT "B"
PROPERTY METES AND BOUNDS DESCRIPTION
of a 2.4148 Acre Tract of Land
In the Sarah Deel League, Abstract No. 13
Harris County, Texas
(SPACE CENTER II)
Being a 2.4148 acre tract of land in the Sarah Deel League, Abstract No. 13,
Harris County, Texas, and being a portion of unrestricted Reserve "E" of
Armand Section One as per plat recorded in Volume 268, Page 141 of the Harris
County Map Records and being a portion of those lands sold to Tiffany Bay,
Ltd., as described in deed recorded under Harris County Clerk's File
No. G 432149 and G 459791 and a portion of that land sold to Bay Colony, Ltd.,
as described in deed recorded under Harris County Clerk's File No. F 886937 and
a portion of that 2.1905 acre tract of land sold to G. Phillip Albright,
Trustee, as described in deed recorded under Harris County Clerk's File
No. H 591231 and all of that 0.3566 acre tract sold to G. Phillip Albright and
Walker L. Nichols, Jr. as described in deed recorded under Harris County
Clerk's File No. H 849875 and being more particularly described by metes and
bounds as follows with bearings based on said deed.
BEGINNING at a 5/8 inch iron rod found marking the most northerly cut-back
corner of the intersection of the northeasterly right-of-way line of Space
Center Boulevard, 100.00 feet wide, with the southeasterly right-of-way line
of Skywalker Drive, 60.00 feet wide; said point also marking the western most
corner of the herein described tract and said Reserve "E";
THENCE along the southeasterly right-of-way line of said Skywalker Drive,
N 23 DEG. 14' 14" E, 260.00 feet to a point marking the westerly north corner
of the herein described tract;
THENCE departing the southeasterly right-of-way line of said Skywalker Drive,
S 66 DEG. 45' 44" E, 206.00 feet to a point for corner;
THENCE S 23 DEG. 14' 16" W, 10.00 feet to a point for corner;
THENCE S 66 DEG. 45' 44" E, 191.04 feet to a point for corner;
THENCE S 23 DEG. 14' 17" W, a distance of 257.93 feet to a 5/8 inch iron rod
found marking the south corner of the herein described tract and a point in
the northeasterly right-of-way line of said Space Center Boulevard as
established by right-of-way deed recorded under Harris County Clerk's File
No. H 429026; said point being in a curve concave to the northeast;
THENCE westerly 74.34 feet along the northeasterly right-of-way line of said
Space Center Boulevard and along the arc of said curve concave to the
northeast having a radius of 1334.35 feet, a central angle of 03 DEG. 11' 31"
and whose chord bears N 68 DEG. 21' 30" W, 74.33 feet to a 5/8 inch iron rod
found marking the point of tangency of said curve concave to the northeast;
THENCE continuing along the northeasterly right-of-way line of said Space
Center Boulevard, N 66 DEG. 45' 44" W, 312.74 feet to a 5/8 inch iron rod
found marking the southerly cut-back corner of the intersection of the
northeasterly right-of-way line of Space Center Boulevard with the
southeasterly right-of-way line of said Skywalker Drive;
THENCE along the cut-back N 21 DEG. 45' 45" W, 14.14 feet to the POINT OF
BEGINNING and containing 2.4148 acres of land.
<PAGE>
EXHIBIT "C"
SPACE CENTER II
RULES AND REGULATIONS
1. Lessee will refer all contractors, contractors' representatives
and installation technicians rendering any service for Lessee to Lessor
for Lessor's supervision and/or approval before performance of any such
contractual services. This shall apply to all work performed in the
Building including, but not limited to, installation of telephones,
telegraph equipment, electrical devices and attachments, and
installations of any and every nature affecting floors, walls,
woodwork, trim, windows, ceilings, equipment or any other physical
portion of the Building. None of this work shall be done by Lessee
without Lessor's written approval.
2. The work of the janitor or cleaning personnel shall not be
hindered by Lessee after 5:00 p.m. and such work may be done at any
time when the offices are vacant. The windows, doors, and fixtures may
be cleaned at any time. Lessee shall provide adequate waste and
rubbish receptacles, cabinets, bookcases, map cases, etc. necessary to
prevent unreasonable hardship to Lessor in discharging its obligation
regarding cleaning service. This rule is subject to and subordinate to
the provisions of Section 10.C. of the Lease.
3. Movement in or out of the Building of furniture or office
equipment, or dispatch or receipt by Lessee of any merchandise or
materials which requires the use of elevators or stairways, or movement
through the Building entrances or lobby shall be restricted to the
hours designated by Lessor from time to time. All such movement shall
be as directed by Lessor and in a manner to be agreed upon between
Lessee and Lessor by pre-arrangement before performance. Such
pre-arrangement initiated by Lessee shall include determination by
Lessor and subject to its decision and control of the time, method, and
routing of movement. Limitations are imposed by safety or other
concerns which may prohibit any article, equipment or any other item
from being brought into the Building. Lessee expressly assumes all
risk of damage to any and all articles so moved, as well as injury to
any person or persons or the public engaged or not engaged in such
movement, including equipment, property, and personnel of Lessor if
damaged or injured as a result of any acts in connection with carrying
out this service for Lessee from the time of entering property to
completion of the work; and Lessor shall not be liable for the act or
acts of any person or persons so engaged in, or any damage or loss to
any property of persons resulting directly or indirectly from any act
in connection with such service performed by or for Lessee.
4. Except as expressly permitted by provisions of Section 9 of the
Lease, no sign or signs will be allowed in any form on the exterior of
the Building or any windows inside or outside of the Building and no
sign or signs, except in uniform location and uniform style fixed by
Lessor, will be permitted in the public corridors or on corridor doors
or entrances to Lessee's space. All signs may be contracted for by
Lessor for Lessee at the rate fixed by Lessor from time to time and
Lessee will be billed and pay for such service accordingly. Written
consent from Lessor is an absolute prerequisite for any such sign or
signs any Lessee may be so permitted to use.
5. Lessee shall not place, install or operate on the Leased Premises
or in any part of the Building, any engine, or stove, or conduct
mechanical operations or cook thereon or therein, or place or use in or
about the Leased Premises any explosives, gasoline, kerosene, oil,
acids, caustics, or any other inflammable, explosive or hazardous
material without the written consent of Lessor first had and obtained,
except as permitted by provisions of Sections 3 and 15 of the Lease.
<PAGE>
6. Lessor will not be responsible for any lost or stolen personal
property, equipment, money, or jewelry from Lessee's area or public
room regardless of whether such loss occurs when the area is locked
against entry or not.
7. No birds or animals with the exception of seeing eye or hearing
assistance dogs shall be brought in or about the Leased Premises.
8. Lessor may permit entrance to Lessee's office by use of pass keys
by contractors, or service personnel supervised or employed by Lessor
only with prior notice and consent of Lessee.
9. None of the entries, passages, elevator doors, hallways, or
stairways, shall be blocked or obstructed, or any rubbish, litter,
trash or material of any nature placed, emptied or thrown into these
areas, or such areas be used at any time except for access or egress by
Lessee, Lessee's agents, employees, or invitees.
10. Lessor desires to maintain high standards of environment, comfort
and convenience for its lessees. It will be appreciated if any
undesirable conditions or lack of courtesy or attention by its
employees be reported directly to Lessor.
11. Smoking is prohibited inside the building. This includes the
common area hallways, restrooms, elevators, and inside any Leased
Premises.