Texas-Houston-5599 San Felipe Lease - 5599 San Felipe Ltd. and Pinnacle Global Group Inc.
GEOQUEST CENTER
HOUSTON, TEXAS
OFFICE LEASE AGREEMENT
BETWEEN
5599 SAN FELIPE, LTD.
("LESSOR")
AND
PINNACLE GLOBAL GROUP, INC.
("LESSEE")
JANUARY 19, 1999
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LEASE AGREEMENT
THE STATE OF TEXASss.
ss.
COUNTY OF HARRISss.
THIS LEASE AGREEMENT made and entered into on this the 19th day of
January, 1999 between 5599 SAN FELIPE, LTD. (hereinafter called "Lessor") whose
address for purposes hereof is 5599 San Felipe, Suite 106, Houston, Texas 77056,
and PINNACLE GLOBAL GROUP, INC. (hereinafter called "Lessee") whose address for
purposes hereof is 5599 San Felipe, Suite 301, Houston, Texas, 77056 prior to
the commencement of the lease term and thereafter shall be the leased premises
in the Building;
WITNESSETH:
1. LEASED PREMISES. Subject to and upon the terms and conditions
hereinafter set forth, and each in consideration of the covenants and
obligations of the other hereunder, Lessor does hereby lease, demise and let to
Lessee and Lessee does hereby lease and take from Lessor those certain premises
(hereinafter sometimes called the "Premises") in the building located at 5599
San Felipe (hereinafter sometimes called the "Building") in the City of Houston,
Harris County, Texas, such Premises being more particularly described as
follows:
A total of approximately Six Thousand Five Hundred Thirty (6,530) net
rentable square feet located on the fifth (5th) floor of the Building,
as reflected on the floor plan of such Premises attached hereto and made a part
hereof as Exhibit A and initialed for identification by both parties.
2. NET RENTABLE AREA. The term "net rentable area", as used herein, shall
refer to (i) in the case of a single tenant floor, all floor area measured from
the inside surface of the inner glass or (with respect to the basements)
exterior wall of the Building to the inside surface of the opposite outer wall
excluding only the areas ("service areas") within the outside walls on the
particular floor used for building stairs, fire towers, elevator shafts, flues,
vents, stacks, vertical pipe shafts and vertical ducts, but including any such
service areas which are for the specific use of the particular tenant such as
special stairs or elevators, plus a proportionate part of the areas ("extra
areas") used for building elevator, mechanical, electrical and plumbing room and
the central plant serving the Building, the truck dock, the bridge connecting
the Building with the Garage, fire control stations, and ground floor lobby,
basement, and (ii) in the case of a floor to be occupied by more than one
tenant, all floor areas within the demising walls (measured from the mid-point
of the demising walls and in the case of exterior walls, measured as defined in
(i) above), plus a proportionate part of areas ("common areas") devoted to
lobbies, corridors, elevator foyers, restrooms, electrical, telephone and
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mechanical rooms, janitor closets, vending areas and other similar facilities
for the use of all tenants on the particular floor . The Lessee's proportionate
part of extra areas shall be based upon the ratio of the Lessee's net rentable
area (excluding "extra areas") to the aggregate net rentable area (excluding
"extra areas") of the Building. The Lessee's proportionate part of common areas
shall be based upon the ratio of the Lessee's net rentable area (excluding
"common" and "extra areas") to the aggregate net rentable area (excluding
"common" and "extra areas") on such floor. No deductions shall be made in
determining net rentable areas for columns or projections necessary to the
Building. The net rentable area in the Premises has been calculated on the basis
of the foregoing definition and is hereby stipulated for all purposes hereof to
be 6,530 square feet, whether the same shall be more or less as a result of
variations resulting from actual construction and completion of the Premises for
occupancy so long as such work is done substantially in accordance with the
terms and provisions hereof. FOR THE PURPOSES OF THIS LEASE, LESSEE'S PROPORTION
OF THE BUILDING SHALL BE 1.4%.
3. TERM. (a) Subject to and upon the terms and conditions set forth
herein, or in any exhibit or addendum hereto, this lease shall continue in force
for a term of sixty (60) months beginning on THE EARLIER TO OCCUR OF SUBSTANTIAL
COMPLETION OF THE PREMISES OR the 1st day of June 1999, and ending on the 31st
day of May 2004.
(b) As more fully defined in Schedule 1 hereto, in the event the Premises
should not be ready for occupancy by the commencement date stated in Section
3(a) for any reason, Lessor shall not be liable or responsible for any claims,
damages or liabilities in connection therewith or by reason thereof, and the
term of this lease shall commence at the time that the Premises are ready for
occupancy by Lessee. Should the term of this lease commence on a date other than
that specified in Section 3(a), Lessor and Lessee will, at the request of
either, execute a declaration specifying the beginning date of the term of this
lease. In such event, rental under this lease shall not commence until said
revised commencement date, and the stated term in this lease shall thereupon
commence and the expiration date shall be extended so as to give effect to the
full stated term. IN THE EVENT, DUE TO LESSOR'S FAULT AND NOT "FORCE MAJEURE",
THE PREMISES ARE NOT SUBSTANTIALLY COMPLETE, AS DEFINED IN SCHEDULE 1 ATTACHED
HERETO, BY JUNE 7, 1999, LESSOR SHALL CREDIT LESSEE ONE (1) DAY OF FREE RENT FOR
EACH DAY SUBSTANTIAL COMPLETION OF THE PREMISES IS DELAYED. AN "ACT OF GOD" OR
"FORCE MAJEURE" IS DEFINED FOR THE PURPOSES OF THIS LEASE AS STRIKES, LOCKOUTS,
SIT-DOWNS, MATERIAL OR LABOR RESTRICTIONS BY ANY GOVERNMENTAL AUTHORITY, UNUSUAL
TRANSPORTATION DELAYS, RIOTS, FLOODS, WASHOUTS, EXPLOSIONS, EARTHQUAKES, FIRE,
STORMS, WEATHER (INCLUDING WET GROUNDS OR INCLEMENT WEATHER WHICH PREVENTS
CONSTRUCTION), ACTS OF THE PUBLIC ENEMY, WARS, INSURRECTIONS AND ANY OTHER CAUSE
NOT REASONABLY WITHIN THE CONTROL OF LESSOR AND WHICH BY THE EXERCISE OF DUE
DILIGENCE LESSOR IS UNABLE, WHOLLY OR IN PART, TO PREVENT OR OVERCOME.
4. USE. The Premises shall be used and occupied by Lessee (and its
permitted assignees and sublessees) solely as general, administrative and
executive offices (including such ancillary uses in connection therewith as
shall be reasonably required by Lessee in the operation of its business);
provided, that in no event shall any of the following be permitted in the
Premises: (i) offices or agencies of a foreign government or political
subdivisions thereof; (ii) offices of any governmental
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bureau or agency of the United States or any state or political subdivision
thereof; (iii) personnel agencies; or (iv) customer service offices of any
public utility company. The following uses shall not be permitted in the
Premises except to the extent they are ancillary to an otherwise permitted use:
(v) data processing activities; (vi) health care activities; (vii) schools or
other training or educational uses; (viii) clerical support services; (ix)
reservation centers for airlines or travel agencies; (x) retail or restaurant
use; (xi) studios for radio, television of other media; or (xii) storage, WITH
THE EXCEPTION OF LESSEE'S FILES, FIXTURES, EQUIPMENT, AND SUPPLIES. The Premises
shall not be used for any purpose which would, in Lessor's reasonable opinion,
lower the first-class character of the Building or any part thereof, create
unreasonable or excessive elevator or floor loads, interfere with any of the
operations of the Building or any part thereof or the proper and economic
heating, air-conditioning, cleaning or other servicing of the Building or any
part thereof or unreasonably interfere with the use of the other areas of the
Building by any other lessees.
5. BASE RENTAL. (a) Commencing THE EARLIER TO OCCUR OF SUBSTANTIAL
COMPLETION OR June 1, 1999, Lessee agrees to pay a base annual rental (herein
called "Base Rental") as follows:
ANNUAL RATE PER NET
PERIOD RENTABLE SQUARE FEET MONTHLY
Lease Years 1 - 5 $18.80 ($10,230.33)
"Lease Year" as used herein means a period of one (1) year, with the first Lease
Year commencing on the commencement date of this lease.
(b) The Lessee shall also pay, as additional rent, all such other
sums of money as shall become due from and payable by Lessee to Lessor under
this lease. The Lessor shall have the same remedies for default in the payment
of additional rent as are available to Lessor in the case of a default in the
payment of Base Rental. Such Base Rental together with any adjustment of rent
provided for herein then in effect shall be due and payable in twelve (12) equal
installments on the first day of each calendar month during the term of this
lease and any extensions or renewals thereof, and Lessee hereby agrees to so pay
such rent to Lessor at Lessor's address as provided herein (or such other
address as may be designated by Lessor from time to time) monthly in advance
without demand. FOR THE PURPOSES OF THIS LEASE, LESSEE SHALL HAVE TEN (10) DAYS
FOLLOWING WRITTEN NOTICE OR INVOICE BEFORE SUCH AMOUNT DUE IS CONSIDERED LATE.
If the term of this lease commences on other than the first day of a month or
terminates on other than the last day of a month, then the installments of Base
Rental and any additional rent for such month or months shall be prorated and
the installment or installments so prorated shall be paid in advance. A five
percent (5%) late penalty per month shall be added to all past due installments
of rent.
6. BASE YEAR. There is established under this lease a "Base Year" which
for these purposes is the calendar year 1999. In the event that the Actual
Operating Expenses (hereinafter defined) of Lessor's operation of the Project
(hereinafter defined) during the first calendar year after
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the Base Year shall differ from the Actual Operating Expenses of Lessor therefor
during the Base Year, Lessee shall pay its share of the year's increases in the
Actual Operating Expenses for such year utilizing the hereinafter described
procedures. If Actual Operating Expenses for any year after the Base Year are
less than the Base Year's Actual Operating Expenses, Lessee shall not be
obligated for rental in excess of the Base Rental stated in Section 5. LESSOR
SHALL CAP THE CONTROLLABLE OPERATING EXPENSES AT TEN PERCENT (10%) PER ANNUM.
THIS CAP DOES NOT INCLUDE EXPENSES FOR TAXES, INSURANCE AND UTILITIES.
7. OPERATING EXPENSES. (a) "Actual Operating Expenses," as said term is
used herein, shall consist of all REASONABLE AND CUSTOMARY operating expenses of
the Project (which term means and includes the Building, Garage, bridge
connecting the Building to the Garage, and the tract or tracts of land on which
they are located) which shall be computed on the accrual basis and shall consist
of all costs by Lessor to maintain all facilities in operation during any year
and such additional facilities in subsequent years as may be determined by
Lessor to be necessary or generally beneficial for the Project. All operating
expenses shall be determined in accordance with generally accepted accounting
principles which shall be consistently applied. The term "operating expenses" as
used herein shall mean all REASONABLE AND CUSTOMARY expenses, costs and
disbursements (but not replacement of capital investment items except as
specifically provided below nor specific costs especially billed to and paid by
specific tenants) of every kind and nature which Lessor shall pay or become
obligated to pay because of or in DIRECT connection with the ownership,
management and operation of the Project including but not limited to the
following
(1) Wages and salaries and related expenses and benefits of all on-site
and off-site employees engaged DIRECTLY in the supervision,
operation and maintenance, or access control, of the Project and
personnel who may provide traffic control relating to ingress and
egress to and from the Project to the adjacent public streets and
the costs (based upon fair market rental rates) of a management
office in the Project.
(2) All supplies, tools, equipment and materials used in operation and
maintenance of the Project.
(3) Cost of all utilities for the Project including the cost of water
and power, heating, lighting, air conditioning and ventilating for
the Project (excluding those costs separately paid by specific
tenants).
(4) Cost of all maintenance and service agreements for the Project and
the equipment therein, including, but not limited to, access control
service, window cleaning, elevator maintenance, landscaping and
janitorial services.
(5) Cost of all insurance relating to the Project including, but not
limited to, the cost of casualty and liability insurance, worker's
compensation, group and health insurance and rental abatement
insurance applicable to the Project and Lessor's personal property
used in connection therewith.
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(6) All taxes and assessments and governmental charges with respect to
the Project whether federal, state, county or municipal, and whether
they be by taxing districts or authorities presently taxing the
Premises or by others, subsequently created or otherwise, and any
other taxes and assessments attributable to the Project or its
operation. It is agreed that Lessee shall be responsible for ad
valorem taxes on its personal property and on the value of leasehold
improvements to the extent that same exceed building standard
allowances (HEREINAFTER CALLED "BUILDING STANDARD" AS DEFINED IN
EXHIBIT C).
(7) Cost of repairs and general maintenance of the Project (excluding
repairs and general maintenance paid by proceeds of insurance or by
Lessee or other third parties, and alterations attributable solely
to preparation of space for occupancy by tenants of the Building
other than Lessee).
(8) Amortization (together with reasonable financing charges) of the
cost of supplying and installation of capital investment items which
are intended for the purpose of reducing operating costs or which
may be required by governmental authority. All such costs shall be
amortized over the reasonable life of the capital investment items
with the reasonable life and amortization schedule being determined
in accordance with generally accepted accounting principles and in
no event to extend beyond the reasonable life of the Building. In
the case of installations for the purpose of reducing operating
costs, Lessor shall, upon request, provide a REASONABLY DETAILED
cost justification for its practicality.
(9) Lessor's central accounting costs and audit fees attributable to the
Project.
(10) The cost of payment and performance of the Lessor's obligations with
respect to all of the above expenses in connection with the bridge
connecting the Project to the Garage and the driveways serving the
Project.
(11) A management cost recovery equal to any and all reasonable fees paid
by Lessor for property management services to the Project.
(12) Cost of assessment against the Project by the San Felipe Green
Subdivision for maintaining the esplanades and private easements.
NOTWITHSTANDING THE FOREGOING, "ACTUAL OPERATING EXPENSES" SHALL NOT INCLUDE ANY
OF THE FOLLOWING EXCLUSIONS:
(1) REPAIRS OR OTHER WORK OCCASIONED BY FIRE, WINDSTORM OR OTHER
CASUALTY OF AN INSURABLE NATURE OR BY THE EXERCISE OF THE RIGHT OF
EMINENT DOMAIN;
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(2) LEASING COMMISSIONS, ATTORNEY'S FEES, COSTS AND DISBURSEMENT AND
OTHER EXPENSES INCURRED IN CONNECTION WITH NEGOTIATIONS OR DISPUTES
WITH TENANTS, OTHER OCCUPANTS, OR PROSPECTIVE TENANTS OR OTHER
OCCUPANTS;
(3) EXPENSES INCURRED IN RENOVATING OR OTHERWISE IMPROVING OR
DECORATING, PAINTING OR REDECORATING SPACE FOR TENANTS OR OTHER
OCCUPANTS OR VACANT SPACE;
(4) LESSOR'S COSTS OF ELECTRICITY AND OTHER SERVICES SOLD TO TENANTS AND
FOR WHICH LESSOR IS ENTITLED TO BE REIMBURSED BY TENANTS AS AN
ADDITIONAL CHARGE OR RENTAL OVER AND ABOVE THE BASIC RENT PAYABLE
UNDER THE LEASE WITH SUCH TENANT;
(5) EXCEPT AS OTHERWISE PROVIDED HEREIN, COSTS INCURRED BY LESSOR FOR
ALTERATIONS WHICH ARE CONSIDERED CAPITAL IMPROVEMENTS AND
REPLACEMENTS UNDER GENERALLY ACCEPTED ACCOUNTING PRINCIPLES;
(6) EXPENSES IN CONNECTION WITH SERVICES OR OTHER BENEFITS OF A TYPE
WHICH ARE NOT PROVIDED TO LESSEE BUT WHICH ARE PROVIDED TO ANOTHER
TENANT OR OCCUPANT;
(7) COSTS INCURRED DUE TO VIOLATION BY LESSOR OR ANY TENANT OF THE TERMS
AND CONDITIONS OF ANY LEASE;
(8) OVERHEAD AND PROFIT INCREMENT PAID TO SUBSIDIARIES OR AFFILIATES OF
LESSOR FOR SERVICES ON OR TO THE REAL PROPERTY, TO THE EXTENT ONLY
THAT THE COSTS OF SUCH SERVICES EXCEED COMPETITIVE COSTS OF SUCH
SERVICES WERE THEY NOT SO RENDERED BY A SUBSIDIARY OR AFFILIATE;
(9) INTEREST ON DEBT OR AMORTIZATION PAYMENTS ON ANY MORTGAGE OR
MORTGAGES, AND RENTAL UNDER ANY GROUND OR UNDERLYING LEASES OR
LEASE;
(10) LESSOR'S GENERAL PARTNERSHIP OVERHEAD;
(11) ANY COMPENSATION PAID TO CLERKS, ATTENDANTS, OR OTHER PERSONS IN
COMMERCIAL CONCESSIONS OPERATED BY LESSOR;
(12) ALL ITEMS AND SERVICES FOR WHICH LESSEE REIMBURSES LESSOR OR PAYS
THIRD PERSONS;
(13) ADVERTISING AND PROMOTIONAL EXPENDITURES;
(14) ANY COSTS, FINES OR PENALTIES INCURRED DUE TO VIOLATIONS BY LESSOR
OF ANY GOVERNMENTAL RULE OR AUTHORITY.
(15) THE COST OF CORRECTING DEFECTS IN THE STRUCTURE OF THE BUILDING OR
PREMISES;
(16) SALARIES OF OFFICERS AND EXECUTIVES OF LESSOR ABOVE THE GRADE OF
BUILDING MANAGER;
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(17) THE COST OF ANY WORK OR SERVICE PERFORMED FOR ANY FACILITY OTHER
THAN THE BUILDING, THE GARAGE, THE LAND OR THE PREMISES;
(18) THE COST OF ANY ITEMS FOR WHICH LESSOR IS REIMBURSED BY INSURANCE OR
OTHERWISE TO THE EXTENT SUCH REIMBURSEMENT;
(19) ALL PENALTIES, INTEREST, FINES, LEGAL FEES AND RELATED EXPENSES
INCURRED DUE TO LESSOR'S FAILURE OR DELAY IN COMPLIANCE WITH ITS
OBLIGATIONS OR APPLICABLE LAWS, REGULATIONS, ORDINANCES AND THE
LIKE;
(20) THE COST OF REMOVAL OR CONTAINMENT OF ANY ASBESTOS OR
POLYCHLORINATED BIPHENYL (PCB'S) OR ANY OTHER HAZARDOUS OR TOXIC
SUBSTANCES.
(b) "Forecast Operating Expenses", as that term is used herein,
shall mean the Actual Operating Expenses as reasonably projected by Lessor for
any calendar year after the Base Year. "Lessee's Share", as that term is used
herein, shall mean a fraction, the numerator of which is the number of net
rentable square feet in the Premises and the denominator of which is the greater
of 95% of the net rentable area in the Building or the total net rentable area
leased to and occupied by tenants of the Building. For each calendar year after
the Base Year, a REASONABLY DETAILED statement of the projected amount of
Lessee's Share of Forecast Operating Expenses shall be furnished by Lessor to
Lessee no less than thirty (30) days prior to the beginning of said calendar
year. Concurrently with each installment payment of Base Rental, Lessee shall
pay to Lessor one-twelfth (1/12th) of Lessee's Share of Forecast Operating
Expenses for each calendar year after the Base Year.
(c) If Lessee's Share of Actual Operating Expenses for any calendar
year after Base Year is greater than payments theretofore made by Lessee on
account of Lessee's Share of Forecast Operating Expenses, Lessee shall pay to
Lessor within thirty (30) days after Lessee's receipt of the annual statements
referred to in (e) below the amount of such excess. However, if Lessee's Share
of Actual Operating Expenses for such calendar year is less than payments
theretofore made by lessee on account of Lessee's Share of Forecast Operating
Expenses, Lessor shall pay to Lessee within thirty (30) days after Lessee's
receipt of such statement the amount of such difference.
(d) Any sums payable by Lessee under this Section 7 shall be deemed
additional rent.
(e) Within one hundred fifty (150) days (or as soon thereafter as
reasonably practicable) after the expiration of a calendar year all or any
portion of which is within the term hereof, Lessor shall deliver to Lessee a
written statement itemized in reasonable detail and certified to by Lessor,
showing Actual Operating Expenses for the calendar year in question and a
statement of Lessee's Share of Actual Operating Expenses.
(f) Notwithstanding any other provision herein to the contrary, it
is agreed that in the event the Building is not fully occupied during any year
or in the event all of the Building is not provided with building standard
services during any year, an adjustment (the "Operating Expense
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Adjustment") shall be made in computing the Actual Operating Expenses for such
year so that the Actual Operating Expenses shall be computed for such year as
though the building had been fully occupied during such year.
(g) Lessee at its expense shall have the right at any reasonable
time within 24 months after the end of EACH calendar year to audit Lessor's
books and records relating to operating expenses for any calendar year.
8. SECURITY DEPOSIT. Lessee hereby agrees to pay Lessor a security deposit
of Two Thousand Five Hundred Fifty Seven and 58/100 Dollars ($2,557.58) payable
on the date this lease is executed by Lessee. Upon the occurrence of any event
of default by Lessee, Lessor may, from time to time, without prejudice to any
other remedy, use the security deposit paid to Lessor by Lessee as herein
provided to the extent necessary to make good any arrears of rent or any
additional rent, or any other damage, injury, expense or liability caused to
Lessor by such event of default, any
remaining balance of such security deposit to be returned by Lessor to Lessee
within THIRTY (30) DAYS after the termination of this lease, ALONG WITH A
DETAILED ACCOUNTING OF ANY DEDUCTION THEREFROM. However, the security deposit
shall not be considered an advance payment of rental or a measure of Lessor's
damages in case of default by Lessee.
9. UTILITIES. Lessor agrees to use reasonable efforts to cause public
utilities to furnish the electricity, gas and water utilized in operating any
and all facilities serving the Premises.
10. WATER; HVAC; MAINTENANCE; LIGHTING; CLEANING; ELECTRICITY; ELEVATOR
SERVICE; BUILDING DIRECTORY. Lessor agrees to furnish (the cost of which is part
of operating expenses of the Project) Lessee while occupying the Premises:
(a) Hot and cold water at those points of supply provided for
general use of other Lessees in the Building; central heat and air
conditioning in season, at such temperatures and in such amounts as are
considered by Lessor to be standard, but such service at times during week
days other than normal business hours for the Building, on Saturday
afternoons, Sundays and holidays to be furnished only upon the WRITTEN
request of Lessee, who shall bear the entire cost thereof, SUCH COST NOT
TO EXCEED LESSOR'S ACTUAL COST FOR SAID SERVICE WHICH CURRENTLY IS $53.00
PER HOUR; routine maintenance and electric lighting service for all extra
areas, service areas, and common areas of the Building in the manner and
to the extent deemed by lessor to be standard. FOR THE PURPOSES OF THIS
LEASE, NORMAL BUSINESS HOURS ARE DEFINED AS 7:00 AM TO 6:00 PM MONDAY
THROUGH FRIDAY AND FROM 8:00 AM TO 12:00 PM ON SATURDAY. HOLIDAYS ARE AS
FOLLOWS: NEW YEAR'S DAY, MEMORIAL DAY, INDEPENDENCE DAY, LABOR DAY,
THANKSGIVING DAY AND CHRISTMAS DAY. IN THE EVENT A HOLIDAY FALLS ON A
SATURDAY OR SUNDAY, THE BUILDING HOLIDAY SHALL BE THE NATIONALLY
RECOGNIZED DAY EITHER PRECEDING OR FOLLOWING SUCH HOLIDAY. IF OVERTIME
HVAC IS REQUESTED BY LESSEE IMMEDIATELY FOLLOWING NORMAL BUSINESS HOURS
(I.E. AFTER 6:00 PM MONDAY THROUGH FRIDAY, OR SATURDAY AFTER 12:00 PM),
THEN THE REQUESTED OVERTIME HVAC CAN BE
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MADE IN ONE (1) HOUR INCREMENTS. IF OVERTIME HVAC IS REQUESTED BY LESSEE
NOT IMMEDIATELY FOLLOWING NORMAL BUSINESS HOURS (I.E. SUNDAY AFTERNOON),
THEN THE REQUESTED OVERTIME HVAC MUST BE FOR A FOUR (4) HOUR MINIMUM.
(b) Janitor services on a five (5) day week basis; provided,
however, if any of Lessee's floor coverings or other improvements are
other than building standard, Lessee shall pay the additional ACTUAL
cleaning cost attributable thereto plus fifteen percent (15%) for
management cost recovery as additional rent. Lessee shall pay said
additional rent WITHIN THIRTY (30) DAYS OF RECEIPT OF a statement therefor
by Lessor, and Lessee's failure to pay shall constitute default hereunder.
(c) STANDARD 110 VOLT electrical facilities to furnish sufficient
power for typewriters, voice writers, PRINTERS, COPIERS, FACSIMILE
MACHINES, calculating machines and other machines of similar low
electrical consumption (total electrical power requirement not to exceed
6.0 WATTS per square foot of net rentable area INCLUSIVE OF BUILDING
STANDARD LIGHTING); but not including electricity required for duplicating
and electronic data processing equipment, special lighting in excess of
building standard, and any other item of electrical equipment, the
electrical power requirement of which (singly) is more than 0.5 kilowatts
at rated capacity or requires a voltage other than 120/208 volts single
phase; and provided that if the installation or operation of said
electrical equipment requires additional air conditioning capacity above
that provided by the building standard system, then the additional air
conditioning installation and operating costs will be the obligation of
Lessee.
(d) All building standard fluorescent bulb replacement in all areas
INCLUDING THE LEASE PREMISES and all incandescent bulb replacement in
public areas, toilet and rest room areas and stairwells.
(e) Non-exclusive elevator service to the leased Premises during
normal business hours; and at least one elevator serving the leased
Premises available for use at all times.
To the extent that the services described above require electricity, gas
or water supplied by public utilities, Lessor's obligations shall require only
that Lessor use reasonable efforts to cause the utilities to furnish the same
and shall be subject to any curtailment of utilities supplied. Failure by Lessor
to any extent to furnish the foregoing defined services, or any cessation
thereof, shall not render Lessor liable in any respect for damages to either
person or property, nor be construed as an eviction of Lessee, nor work an
abatement of rent, nor relieve Lessee from fulfillment of any covenant or
agreement hereof. Additionally, should any of the equipment or machinery used in
connection with the Project break down, or for any cause cease to function
properly, Lessee shall have no claim for rebate or abatement of rent or damages
on account of an interruption in service occasioned thereby or resulting
therefrom.
HOWEVER, IF ANY CONDITION PROHIBITS LESSEE FROM USING ALL OR A PORTION OF
THE PREMISES, FOR ITS INTENDED PURPOSE AND SUCH CONDITION EXISTS FOR THREE (3)
CONSECUTIVE DAYS AFTER LESSEE PROVIDES
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WRITTEN NOTICE OF THE CONDITION TO LESSOR, THEN ALL RENT SHALL ABATE AS TO THAT
PORTION OF THE PREMISES THAT IS RENDERED UNTENANTABLE FOR THE PURPOSE OF OFFICE
SPACE AND CONTINUE FOR SO LONG AS THE CONDITION EXISTS; PROVIDED, HOWEVER, IF
THE CONDITION CONTINUES FOR THIRTY (30) CONSECUTIVE DAYS, LESSEE SHALL HAVE THE
RIGHT TO TERMINATE THIS LEASE UPON WRITTEN NOTICE TO LESSOR (WHICH NOTICE MAY
ONLY BE GIVEN AFTER THE EXPIRATION OF THIRTY (30) DAY PERIOD), IN WHICH EVENT
LESSEE WILL VACATE THE PREMISES AS SOON AS REASONABLY POSSIBLE AND THEREUPON
LESSEE WILL BE RELIEVED FROM ALL OBLIGATIONS ARISING AFTER SUCH VACATION OF THE
PREMISES.
11. KEYS AND LOCKS. Lessor agrees to furnish, at Lessee's cost, NINETEEN
(19) keys for each corridor door entering the Premises. Additional keys will be
furnished at a charge by Lessor on an order signed by Lessee or Lessee's
authorized representative. All such keys shall remain the property of Lessor. No
additional locks shall be allowed on any door of the Premises without Lessor's
permission, and Lessee shall not make, or permit to be made any duplicate keys,
except those furnished by Lessor. Upon termination of this lease, Lessee shall
surrender to Lessor all keys of the Premises, and give Lessor the explanation of
the combination of all locks for safes, safe cabinets and vault doors, if any,
in the Premises.
12. GRAPHICS. Lessor agrees to provide and install, at Lessee's cost, all
letters or numerals at the entrance to the Premises. Lessor also agrees to
provide and install, at Lessee's expense, a listing of Lessee's name and office
number on the Building Directory Board. No signs, numerals, letters or other
graphics shall be used or permitted on the exterior of, or which may be visible
from outside the Premises unless approved in writing by Lessor. LESSEE IS HEREBY
ENTITLED TO HAVE UP TO TWO (2) STRIPS ON THE BUILDING DIRECTORY BOARD, AT
LESSEE'S COST.
13. PEACEFUL ENJOYMENT. Lessor covenants that Lessee shall, and may
peacefully have, hold and enjoy the Premises, subject to the other terms hereof,
provided that Lessee pays the rental and other sums herein recited to be paid by
Lessee and performs all of Lessee's covenants and agreements herein contained.
It is understood and agreed that this covenant and any and all other covenants
of Lessor contained in this lease shall be binding upon Lessor and its
successors only with respect to breaches occurring during its and their
respective ownerships of the Lessor's interest hereunder.
14. REPAIRS BY LESSOR. Unless otherwise stipulated herein, Lessor shall
not be required to make any improvements to or repairs of any kind or character
on the Premises during the term of this lease, except such repairs as may be
deemed necessary by Lessor for normal maintenance operations. The obligation of
Lessor to maintain and repair the Premises shall be limited to building standard
items. Special leasehold improvements shall, at Lessee's written request, be
maintained by Lessor at Lessee's expense, at a cost or charge equal to the costs
incurred in such maintenance plus an additional charge to cover overhead NOT TO
EXCEED FIFTEEN PERCENT (15%).
15. PAYMENTS BY LESSEE. Lessee agrees to pay all rent and sums provided to
be paid to Lessor hereunder at the times and in the manner herein provided.
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16. REPAIRS BY LESSEE. Subject to Section 43, hereof, at its own cost and
expense, Lessee agrees to repair or replace any damage or injury done to the
Building, or any part thereof, caused by Lessee or Lessee's agents, contractors,
employees, invitees, or visitors, provided, however, if Lessee fails to make
such repairs or replacement promptly, Lessor may, at its option, make repairs or
replacements, and Lessee shall repay the cost thereof to the Lessor WITHIN
THIRTY (30) DAYS OF RECEIPT OF INVOICE, subject to Section 43.
17. CARE OF THE PREMISES. Lessee agrees to not commit or allow any waste
or damage to be committed on any portion of the Premises and at the termination
of this lease, by lapse of time or otherwise, to deliver up said Premises to
Lessor in as good condition as at date of possession by Lessee, ordinary wear
and tear excepted, and upon such termination of this lease, Lessor shall have
the right to re-enter and resume possession of the Premises.
18. ASSIGNMENT OR SUBLEASE. In the event Lessee should desire to assign
this lease or sublet the Premises or any part thereof, Lessee agrees to give
Lessor written notice of such desire (and the proposed effective date thereof)
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 FIFTEEN (15) days following receipt of such notice within which to
notify Lessee in writing that Lessor elects either (i) to terminate this lease
as to the space so affected as of the date so specified by Lessee in which event
Lessee will be relieved of all further obligation hereunder as to such space, or
(ii) to permit Lessee to assign this lease or sublet such space, subject,
however, to written approval of the proposed assignee or sublessee by Lessor,
and further subject to the requirement that Lessee enter into written agreements
with Lessor, and with Assignee or Sublessee, that FIFTY PERCENT (50%) OF profit
realized by Lessee as a result of such assignment or sublease (meaning the
consideration agreed upon between Lessee and Assignee or the difference between
the rental rate agreed upon between Lessee and Sublessee and the rent then
required to be paid under this lease multiplied by the number of months in the
term of the sublease) shall, to the extent such profit is immediate, be due and
payable by Lessee to Lessor upon the execution of an assignment or sublease,
and, to the extent such profit is deferred, be payable to Lessor by Assignee or
Sublessee as it accrues, or (iii) to refuse to consent to Lessee's assignment of
this lease or sublease of such space and to continue this lease in full force
and effect as to the entire Premises. If Lessor should fail to notify Lessee in
writing of such election within the stated FIFTEEN (15) day period, Lessor shall
be deemed to have elected option (iii) above. No consent by Lessor to any
assignment or sublease shall be deemed to be consent to a use not permitted
under this lease, to any act in violation of this lease, or to any other or
subsequent assignment or sublease, and no assignment or sublease by Lessee shall
relieve Lessee of any obligation under this lease. Any attempted assignment or
sublease by Lessee in violation of the terms and covenants of Section 18 shall
be void. LESSOR SPECIFICALLY APPROVES THE ASSIGNMENT OR SUBLEASE OF ALL OR A
PORTION OF THE PREMISES TO AN AFFILIATE OR SUBSIDIARY OF LESSEE AT ANY TIME
DURING THE PRIMARY TERM, OR ANY RENEWAL PERIODS WITH WRITTEN NOTICE TO LESSOR
PROVIDED (I) USE OF THE PREMISES IS IN KEEPING WITH THE QUALITY OF OTHER USAGES
IN THE BUILDING AND (II) SUCH AFFILIATE OR SUBSIDIARY HAS AN EQUAL OR GREATER
FINANCIAL STANDING AS DOES LESSEE. WHERE LESSOR'S CONSENT IS REQUIRED, LESSOR
WILL NOT UNREASONABLY WITHHOLD OR DELAY SUCH CONSENT. SUBLESSEE'S AND
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ASSIGNEES SHALL HAVE ACCESS TO USE LESSEE'S DIRECTORY BOARD STRIPS, LESSEE'S
CONTRACT PARKING SPACES (AS ALLOTTED) AND AN ADDITIONAL MAILBOX AT AN ADDITIONAL
COST, IF AVAILABLE.
19. USE, ALTERATIONS, ADDITION, IMPROVEMENTS. Lessee agrees that it shall
not permit the Premises to be used for any purpose other than that stated in the
use clause hereof, or make or allow to be made any alterations or physical
additions in or to the Premises, or place signs on the Premises which are
visible from outside the Premises, or place safes, vaults or other heavy
furniture or equipment within the Premises, without first obtaining the written
consent of Lessor. Any and all such alterations, physical additions, or
improvements, when made to the Premises by Lessee, shall at once become the
property of Lessor and shall be surrendered to Lessor upon termination of this
lease by lapse of time or otherwise; provided, however, this clause shall not
apply to movable
equipment or furniture owned by Lessee. Lessee agrees specifically that no food,
or cooking equipment will be installed within the Premises without the written
consent of Lessor, WHICH SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED.
20. LEGAL USE AND VIOLATIONS OF INSURANCE COVERAGE. Lessee agrees to not
occupy or use, or permit any portion of the Premises to be occupied or used for
any business or purpose which is unlawful, disreputable or deemed to be
extra-hazardous on account of fire, or permit anything to be done which would in
any way increase the rate of fire or liability or any other insurance coverage
on the Building and/or its contents, including but not limited to the use,
storage, disposal or transportation of hazardous materials other than drinking
cups, office supplies and similar substances commonly found in commercial office
buildings in quantities or concentrations that do not violate any legal
requirement.
21. LAWS, REGULATIONS AND RULES OF THE BUILDING. Lessee covenants to
comply with all laws, ordinances, rules and regulations (state, federal,
municipal and other agencies or bodies having any jurisdiction thereof) relating
to the use, condition or occupancy of the Premises. Lessee will comply with the
rules adopted and altered by Lessor from time to time for the safety, care and
cleanliness of the Premises and Building and Project and for preservation of
good order therein, all of which will be sent by Lessor to Lessee in writing and
shall be thereafter carried out and observed by Lessee.
22. ENTRY FOR REPAIR AND INSPECTION. Lessee agrees to permit Lessor or its
agents or representatives to enter into and upon any part of the Premises at all
reasonable hours to inspect the same, clean or make repairs, alterations or
additions to the Project, as Lessor may deem necessary or desirable. In
connection with any repairs, maintenance, improvements or alterations, in or
about the Project, Lessor may erect scaffolding and other structures reasonably
required, and during such operations may enter upon the Premises and take into
and upon or through the Premises, all materials required to make such repairs,
maintenance, alterations or improvements, and may close public entry ways, other
public areas, restrooms, stairways or corridors, and Lessee shall not be
entitled to any abatement or reduction of rent by reason thereof. LESSOR SHALL
CONDUCT ALL SUCH REPAIRS, ETC. SO AS TO MINIMIZE INTERFERENCE OR INCONVENIENCE
TO LESSEE.
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23. NUISANCE. Lessee agrees to conduct its business and control its
agents, employees, invitees, and visitors in such manner as not to create any
nuisance, or interfere with, annoy or disturb any other tenant or Lessor in its
operation of the Building.
24. SUBORDINATION TO MORTGAGE. Lessor covenants and agrees with Lessee
that (a) This lease is subject and subordinate to each mortgage (an "Underlying
Mortgage") and each underlying financing or ground lease (an "Underlying Lease")
which may now or subsequently affect Lessor's interest in the Building. In the
event of the enforcement by the holder of any Underlying Mortgage of the
remedies provided for by law or by such Underlying Mortgage, or in the event of
the termination of an Underlying Lease, Lessee shall, upon request of any person
succeeding to the interest of such holder or upon the request of the lessor
under such Underlying Lease, automatically become the lessee of such successor
in interest or such lessor, as the case may be, without change in the terms or
provisions of this lease; provided, that neither such successor in interest nor
such lessor shall be (i) bound by any payment of the Base Rent or Lessee's
Proportionate Share for more than one month in advance except prepayment in the
nature of security for the performance by Lessee of its obligations under this
lease; (ii) bound by any amendment or modification of this lease made without
the consent of such successor in interest or such lessor; or (iii) liable for
any act or omission of a prior lessor under this lease.
(b) Anything in Section 24(a) to the contrary notwithstanding, the
subordination of this lease to any future Underlying Mortgage or Underlying
Lease shall be conditioned upon the holder of each Underlying Lease and
Underlying Mortgage executing an agreement providing that upon the holder of
same succeeding to Lessor's interest because of a default by Lessor, the holder
shall not terminate this lease so long as Lessee shall comply with its
obligations hereunder, subject to the conditions specified in Section 24(a)(i) -
(iii) above.
25. ESTOPPEL CERTIFICATE. Within ten (10) business days after request
therefor by Lessor, Lessee shall:
(a) execute estoppel certificates addressed to (i) any mortgagee or
prospective mortgagee of Lessor, (ii) any purchaser or prospective
purchaser of all or any portion of, or interest in, the Building, or (iii)
any investor in the Building, certifying to the best of Lessee's knowledge
(i) that this Lease is unmodified and in full force and effect (or if
there have been modifications, identifying such modifications and
certifying that the Lease, as modified, is in full force and effect); (ii)
the dates to which the Base Rental has been paid; (iii) that the Lessor is
not in default under any provision of this Lease (or if Lessor is in
default, specifying each such default); (iv) the address to which notices
to Lessee shall be sent; and (v) other matters as such mortgagee(s),
purchaser(s) or investor may reasonably require; and
(b) deliver to Lessor such information regarding the net worth and
financial condition of Lessee as Lessor may reasonably request in
connection with such mortgage, sale or investments.
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26. LEASEHOLD IMPROVEMENTS. (a) Lessee shall comply with the provisions of
Schedule 2 attached hereto entitled "Construction of Initial Leasehold
Improvements." After receipt of the approved "Tenant Construction Agreement"
containing the pricing for the leasehold improvements , Lessor will partition
and prepare said Premises in accordance therewith; however, Lessor shall not be
required to install any partitions or improvements which are not in conformity
with the plans and specifications for the Building or which are not approved by
Lessor or Lessor's architect, and Lessor shall be responsible only for the costs
and expenses described in Schedule 3 and only to the extent that they do not
exceed the respective allowances indicated in Schedule 3. All installations in
excess thereof shall be for Lessee's account, and Lessee shall pay, as
additional rent hereunder, to Lessor an amount equal to Lessor's actual cost
therefor, including associated architectural and engineering fees, if any, plus
a management cost recovery fee of FIVE PERCENT (5%) to cover overhead within
THIRTY (30) days after being invoiced therefor. Additionally, Lessee shall pay
all ad valorem taxes and increased insurance premiums that are payable on
account of any of the leasehold improvements that are in addition to those items
(or the quantities thereof) described on Schedule 3 hereto. Failure by Lessee to
pay any sums described in Section 26(a) or the Schedules hereto in full within
THIRTY (30) days after its receipt of an invoice therefor will constitute
failure to pay rent when due and an event of default by Lessee hereunder, giving
rise to all remedies available to Lessor under this lease and at law for
nonpayment of rent. It is stipulated that time is of the essence in connection
with Lessee's compliance with the terms of Schedule 2.
(b) Lessee shall not be deemed to be the agent or representative of
Lessor in making any such alterations, physical additions or improvements to the
Premises, and shall have no right, power or authority to encumber any interest
in the Project in connection therewith other than Lessee's leasehold estate
under this Lease. However, should any mechanics' or other liens be filed against
any portion of the Project or any interest therein (other than Lessee's
leasehold estate hereunder) by reason of Lessee's acts or omissions or because
of a claim against Lessee or its contractors, Lessee shall cause the same to be
cancelled or discharged of record by bond or otherwise within ten (10) days
after notice by Lessor. If Lessee shall fail to cancel or discharge said lien or
liens, within said ten (10) day period, which failure shall be deemed to be a
default hereunder, Lessor may, at its sole option and in addition to any other
remedy of Lessor hereunder, cancel or discharge the same and upon Lessor's
demand, Lessee shall promptly reimburse Lessor for all costs incurred in
cancelling or discharging such lien or liens.
27. LIMITATION OF LESSOR'S PERSONAL LIABILITY. Lessee specifically agrees
to look solely to Lessor's interest in the PROJECT for the recovery of any
judgment from Lessor, it being agreed that Lessor (and its partners and
shareholders) shall never be personally liable for any such judgment. The
provision contained in the foregoing sentence is not intended to, and shall not,
limit any right that Lessee might otherwise have to obtain injunctive relief
against Lessor or Lessor's successors in interest, or any other action not
involving the personal liability of Lessor to respond in monetary damages or
from assets of Lessor or any partner of Lessor other than Lessor's interest
PINNACLE.WPD
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<PAGE>
in the PROJECT or any suit or action in connection with enforcement or
collection of amounts which may become owing or payable under insurance policies
maintained by Lessor.
28. PARKING. (a) LESSOR shall at all times during the term of this lease
agreement PROVIDE parking rights for fourteen (14) unreserved parking spaces
AND FIVE (5) RESERVED
PARKING SPACES in the parking garage adjacent to the Building (the "Garage"). No
specific spaces in the Garage are to be assigned to Lessee EXCEPT THOSE RESERVED
PARKING SPACES SPECIFIED HEREIN, but Lessor will issue to Lessee the aforesaid
number of parking stickers, each of which will authorize parking in the Garage
of a vehicle on which the sticker is displayed, or Lessor will provide a
reasonable alternative means of identifying and controlling vehicles authorized
to park in the Garage. Lessor may designate the area or areas of the Garage
within which each such vehicle may be parked, and Lessor may change such
designations from time to time. Lessor may make, modify and enforce rules and
regulations relating to the parking of vehicles in the Garage, and Lessee will
abide by and cause its agents, employees and invitees to comply with such rules
and regulations. Lessor may provide parking for visitors to the Building in an
area designated by lessor and in a capacity determined by Lessor to be
appropriate for the Building. Lessor reserves the right to charge and collect a
fee for parking in the visitor parking area in an amount determined by Lessor to
be appropriate. Lessor, at its sole discretion, may change the designated area
for the visitor parking and the fee to be charged for its use. NOTWITHSTANDING
ANYTHING TO THE CONTRARY, LESSOR RESERVES THE RIGHT TO REDESIGNATE AND RELOCATE
ANY RESERVED PARKING SPACE LOCATED ON LEVEL ONE OF THE GARAGE TO ANOTHER LEVEL,
ONLY IN THE EVENT THAT LESSOR REQUIRES ADDITIONAL VISITOR PARKING SPACES IN THE
GARAGE ON LEVEL ONE.
(b) As the Basic Parking Charge, Lessee covenants and agrees to pay
Lessor during the initial term of this Lease, as additional rental hereunder,
$35.00 for each of the unreserved parking spaces leased hereunder AND $65.00 FOR
EACH OF THE RESERVED PARKING SPACES LEASED HEREUNDER, such sum to be payable
monthly in advance on the first day of each and every calendar month during the
lease term, and a pro rata portion of such sum shall be payable for the first
and last partial calendar month of the term of this lease in the event the lease
term commences on a date other than the first day of a calendar month. Lessee's
obligation to pay the Basic Parking Charge shall be considered an obligation to
pay rent for all purposes hereunder and shall be secured in like manner as is
Lessee's obligation to pay rent. Default in payment of such Basic Parking Charge
(after notice as hereinafter provided) shall be deemed a default in payment of
rent. FOR THE PURPOSES OF THIS LEASE, LESSOR WILL ABATE THE MONTHLY PARKING
CHARGES FOR THE FIRST TWENTY FOUR (24) MONTHS OF THE LEASE TERM FOR THE
UNRESERVED PARKING CHARGES ONLY. THERE IS NO ABATEMENT OF PARKING CHARGES FOR
THE RESERVED SPACES.
29. CONDEMNATION. Lessor and Lessee mutually covenant and agree that if
the Premises is taken or condemned for any public purpose to such an extent as
to render the Premises untenantable, this lease shall, at the option of either
party, forthwith cease and terminate. All proceeds from any taking or
condemnation of the Premises shall belong to and be paid to Lessor.
30. DAMAGES FROM CERTAIN CAUSES. Lessor and Lessee mutually covenant and
agree that Lessor shall not be liable or responsible to Lessee for any loss or
damage to any property or person
PINNACLE.WPD
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<PAGE>
occasioned by theft, fire, act of God, public enemy, injunction, riot, strike,
insurrection, war, court order, requisition or order of governmental body or
authority, or any cause beyond Lessor's reasonable control, or SUBJECT TO THE
PROVISIONS OF SECTION 10 HEREOF, for any damage or inconvenience which may arise
through repair or alteration of any part of the Project, or failure to make any
such repairs, PROVIDED THAT THE ACTION OR INACTION OF LESSOR IS REASONABLE.
32. LESSOR'S RIGHT TO RELET. In the event of default by Lessee in any of
the terms or covenants of this lease or in the event the Premises are abandoned
or vacated for thirty (30) consecutive days by Lessee, Lessor and Lessee
mutually covenant and agree that Lessor shall have the right, but not the
obligation, to relet same for the remainder of the term provided for herein, and
if the rent received through reletting does not at least equal the rent provided
for herein, Lessee shall pay and satisfy the deficiency between the amount of
the rent so provided for and that received through reletting, including, but not
limited to, the REASONABLE cost of reletting and related commissions,
renovating, altering and decorating for a new occupant. Nothing herein shall be
construed as in any way denying Lessor the right, in the event of abandonment of
the Premises or other breach of this lease by Lessee, to treat the same as an
entire breach and at Lessor's option to terminate this lease and/or immediately
seek recovery for the entire breach of this lease and any and all damages which
Lessor suffers thereby; HOWEVER, LESSOR SHALL USE REASONABLE EFFORTS TO MITIGATE
DAMAGES IN SUCH EVENT, INCLUDING ATTEMPTING TO RELET THE PREMISES.
33. HOLDING OVER. In the event of holding over by Lessee after expiration
or termination of this lease without the written consent of Lessor, Lessor and
Lessee mutually covenant and agree that Lessee shall pay as liquidated damages
ONE HUNDRED FIFTY PERCENT (150%) OF the then existing base rental and additional
rental, CALCULATED ON A DAILY BASIS. No holding over by Lessee after the term of
this lease shall be construed to extend the lease; in the event of any
unauthorized holding over, Lessee shall indemnify Lessor against all claims for
damages by any other tenant to whom Lessor may have leased all or any part of
the Premises effective upon the termination of this
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<PAGE>
lease. Any holding over with the consent of Lessor in writing shall thereafter
constitute this lease a lease from month to month.
34. FIRE CLAUSE. In the event of a fire in the Premises, Lessor and Lessee
mutually covenant and agree that Lessee shall immediately give notice thereof to
Lessor. If the Premises, through no fault or neglect of Lessee, its agents,
employees, OR invitees , shall be partially destroyed by fire or other casualty
so as to render the Premises untenantable, the rental provided for herein shall
abate thereafter until such time as the Premises are made tenantable as
REASONABLY determined by Lessor (but in no event shall Lessor's obligation
exceed Building Standard Improvements). In the event of the destruction of the
Premises without fault or neglect of Lessee, its agents, employees, OR invitees
, or if from any cause the same shall be so damaged that Lessor shall decide not
to rebuild OR THE DAMAGE CAN NOT BE RESTORED WITHIN ONE HUNDRED TWENTY (120)
DAYS OF THE DATE OF CASUALTY, then Lessor or Lessee may terminate this lease and
all rent owed up to the time of such damage, destruction or termination shall be
paid by Lessee and thenceforth this lease shall cease and come to an end.
35. ATTORNEYS FEES. In any action or proceeding brought by Lessor or
Lessee regarding the performance of any of the terms, covenants, agreements or
conditions contained in this lease, Lessor and Lessee mutually covenant and
agree that the prevailing party shall be entitled to recover from the other
party its reasonable attorney's fees, investigations costs and court costs.
36. AMENDMENTS. This lease may not be altered, changed or amended, except
by an instrument in writing signed by both parties hereto.
37. ASSIGNMENT BY LESSOR. Lessor shall have the right to transfer and
assign, in whole or in part, all its rights and obligations hereunder and in the
Building and property referred to herein, and in such event and upon such
transfer (any such transferee to have the benefit of, and be subject to, the
provisions of Sections 13 and 27 hereof) no further liability or obligation
shall thereafter accrue against Lessor hereunder or under any agreement relating
to this lease.
38. DEFAULT BY LESSEE. If default shall be made in the payment of any sum
to be paid by Lessee under this lease, and default shall continue for ten (10)
days, or default shall be made in the performance of any of the other covenants
or conditions which Lessee is required to observe and to perform, and such
default shall continue for twenty (20) days AFTER WRITTEN NOTICE TO LESSEE, or
if the interest of Lessee under this lease shall be levied on under execution or
other legal process, or if any petition shall be filed by or against Lessee to
declare Lessee a bankrupt or to delay, reduce or modify Lessee's debt or
obligations, or if any petition shall be filed or other action taken to
reorganize or modify Lessee's capital structure if Lessee be a corporation or
other entity, or if Lessee be declared insolvent according to law, or if any
assignment of Lessee's property shall be made for the benefit of creditors, or
if a receiver or trustee is appointed for Lessee or its property, or if Lessee
shall abandon or vacate the Premises during the term of this lease or any
renewals or extensions thereof, or if Lessee is a corporation and Lessee shall
cease to exist as a corporation in good standing under the laws of the State of
Texas or if Lessee is a partnership or other entity and shall be dissolved or
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<PAGE>
otherwise liquidated, then Lessor may treat the occurrence of any one or more of
the foregoing events as a breach of this lease (provided that no such levy,
execution, legal process or petition filed against Lessee shall constitute a
breach of this lease if Lessee shall vigorously contest the same by appropriate
proceedings and shall remove or vacate the same within thirty (30) days from the
date of its creation, service or filing) and thereupon, at Lessor's option, may
have any one or more of the following described remedies in addition to all
other rights and remedies available at law or in equity:
(a) Lessor may terminate this lease and forthwith repossess the
Premises and be entitled to recover forthwith as damages a sum of money
equal to the total of (i) the cost of recovering the Premises, (ii) the
unpaid rent earned at the time of termination, plus interest thereon at
the LOWER OF THE maximum non-usurious rate OR TWELVE PERCENT (12%) per
annum from the due date, (iii) the balance of the rent for the remainder
of the term less the fair market rental value of the Premises for said
period and (iv) any other sum of money and damages owed by Lessee to
Lessor.
(b) Lessor may terminate Lessee's right of possession (but not the
lease) and may repossess the Premises by forcible entry or detainer suit
or otherwise, without demand or notice of any kind to Lessee and without
terminating this lease, in which event Lessor may, but shall be under no
obligation to do so, relet the same for the account of Lessee for such
rent and upon such terms as shall be satisfactory to Lessor. For the
purpose of such reletting Lessor is authorized to decorate or to make any
repairs, changes, alterations or additions in or to the Premises that may
be necessary or convenient, and (i) if Lessor shall fail or refuse to
relet the Premises, or (ii) if the same are relet and a sufficient sum
shall not be realized from such reletting after paying the unpaid basic
and additional rent due here under plus interest at the LOWER OF THE
maximum non-usurious rate OR TWELVE PERCENT (12%) thereon, the cost of
recovering possession, and all of the costs and expenses of such
decorations, repairs, changes, alterations and additions and the expense
of such reletting and of the collection of the rent accruing therefrom to
satisfy the rent provided for in this lease to be paid, then Lessee shall
pay to Lessor as damages a sum equal to the amount of the rental reserved
in this lease for such period or periods, or if the Premises have been
relet, the Lessee shall satisfy and pay any such deficiency upon demand
therefor from time to time and Lessee agrees that Lessor may file suit to
recover any sums falling due under the terms of Section 38(b) from time to
time, and that no delivery to or recovery of any portion due Lessor
hereunder shall be any defense in any action to recover any amount not
theretofore reduced to judgment in favor of Lessor, nor shall such
reletting be construed as an election on the part of Lessor to terminate
this lease unless a written notice of such intention be given to Lessee by
Lessor. Notwithstanding any such reletting without termination, Lessor may
at any time thereafter elect to terminate this Lease for such previous
breach.
39. NON-WAIVER. Failure of Lessor to declare any default immediately upon
occurrence thereof, or delay in taking any action in connection therewith, shall
not waive such default, but
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Lessor shall have the right to declare any such default at any time and take
such action as might be lawful or authorized hereunder, either in law or in
equity.
40. CASUALTY INSURANCE. Lessor shall maintain fire and extended coverage
insurance on the base building portion of the Building and on Building Standard
Improvements within the Premises. Said insurance shall be maintained with an
insurance company authorized to do business in Texas, in amounts desired by
Lessor (but no less than 80% of the insurable value of the insurable portion of
the Building (exclusive of foundations), including replacement cost endorsement)
and at the expense of Lessor (which expense shall be an operating expense
pursuant to Section 7(a)(5) of this lease) and payments for losses thereunder
shall be made solely to Lessor and Lessor's mortgagees. Lessee shall maintain,
at its expense, fire and extended coverage insurance on all of its personal
property, including removable trade fixtures, located in the Premises and on all
additions and leasehold improvements to the Premises which exceed Building
Standard. If the annual premiums to be paid by Lessor shall exceed the standard
rates because Lessee's operations, contents of the Premises, or leasehold
improvements with respect to the Premises beyond Building Standard, result in
extra-hazardous exposure or increased costs, Lessee shall promptly pay the
excess amount of the premium upon request by Lessor.
41. LIABILITY INSURANCE. Lessor shall, at its expense (which expense shall
be an operating expense pursuant to Section 7(a)(5) of this lease), maintain a
policy or policies of comprehensive general liability insurance with the
premiums thereon fully paid on or before the due date, issued by and binding
upon some solvent insurance company, such insurance to afford minimum protection
(such insurance to inure to the benefit of Lessor only, and not to Lessee) of
not less than $1,000,000 in respect of personal injury or death in respect of
any one occurrence and of not less than $250,000 for property damage in any one
occurrence. Lessee shall, at its expense maintain a policy or policies of
comprehensive general liability insurance with the premiums thereon fully paid
on or before the due date, issued by and binding upon some solvent insurance
company, such insurance to afford Lessee minimum protection of not less than
$1,000,000 in respect of personal injury or death in respect of any one
occurrence and of not less than $250,000 for property damage in any one
occurrence.
Lessee shall furnish to Lessor and maintain on deposit with Lessor,
duplicate insurance policies or certificates of insurance evidencing Lessee's
compliance with the insurance provisions hereof.
42. HOLD HARMLESS. Lessor shall not be liable to Lessee, or to Lessee's
agents, servants, employees, customers or invitees for any injury or damage to
person or property caused by any act, omission or neglect of Lessee, its agents,
servants, or employees, and Lessee agrees to indemnify and hold Lessor harmless
from all liability and claims for any such damage or bodily injury. Lessee shall
not be liable to Lessor, or to Lessor's agents, servants, employees, customers
or invitees for any damage to person or property caused by any act, omission or
neglect of Lessor, its agents, servants or employees, and Lessor agrees to
indemnify and hold Lessee harmless from all claims for such damage or bodily
injury.
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43. WAIVER OF SUBROGATION RIGHTS. Anything in this lease to the contrary
notwithstanding, Lessor and Lessee each hereby waive any and all rights of
recovery, claim, action or cause of action, against the other, its agents,
officers, or employees, for any loss or damage that may occur to the Premises,
or any leasehold improvements thereto, or said Building of which the Premises
are a part, or any improvements thereto, or any personal property of such party
therein, by reason of fire, the elements, or any other cause which could be
insured against under the terms of standard fire and extended coverage insurance
policies referred to in Section 40 hereof, regardless of cause or origin,
including negligence of the other party hereto, its agents, officers or
employees, and agrees that no insurer under such policies shall hold any right
of subrogation against such other party.
44. NAME OF BUILDING. Lessor may change the name of the Building at any
time without notice to Lessee and Lessee shall not use the name of the Building
for any purpose other than its mailing address.
45. NOTICES. Any notice which may or shall be given under the terms of
this Lease shall be in writing and shall be either delivered by hand, delivered
by a commercially recognized express mail or messenger service, or sent by
United States Mail, certified or registered, return receipt requested, postage
prepaid, to the addresses noted for the respective parties. Such addresses may
be changed from time to time by either party by giving written notice as
provided herein. Notice shall be deemed given upon the date of delivery if by
hand or messenger service (or attempted delivery if such delivery is
unsuccessful), as evidenced by the records of the express mail or messenger
service or the return receipt, as applicable.
47. SURVIVAL. All of Lessee's AND LESSOR'S covenants and obligations
contained in this Lease shall survive the expiration or earlier termination of
this Lease. No provision of this Lease providing for termination in certain
events shall be construed as a limitation or restriction of Lessor's rights and
remedies at law or in equity available upon a breach by Lessee of this Lease.
This lease shall be binding upon and inure to the benefit of the
successors and assigns of Lessor, and shall be binding upon and inure to the
benefit of Lessee, its successors, and, to the extent
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assignment may be approved by Lessor hereunder, Lessee's assigns. The pronouns
of any gender shall include the other genders, and either the singular of the
plural shall include the other.
All rights and remedies of Lessor under this lease shall be cumulative and
none shall exclude any other rights or remedies allowed by law; and this lease
is a Texas contract, and all of the terms hereof shall be construed according to
the laws of the State of Texas.
48. REAL ESTATE BROKERS. Lessee represents to Lessor that Lessee has not
dealt with any broker in connection with this Lease, other than The Staubach
Company on behalf of Lessee and Tanglewood Property Management Company on behalf
of Lessor.
49. TELECOMMUNICATIONS. (a) Lessor reserves the right as promulgated by
state and federal laws, rules and regulations to oversee and manage the
telecommunication issues, equipment and cabling in the Building. Lessee will
notify Lessor of any telecommunication needs, requirement and issues as required
or deemed necessary by the Lessee. The Lessor will not unreasonably delay any
request by the Lessee regarding any telecommunications issues or needs. The
Lessor will not unreasonably deny or discriminate regarding entry to the
Building by any telecommunications provider, but will seek a fair and reasonable
agreement based on available space in the Building; health, safety and
engineering issues and other issues that directly effect the Building and the
Building's tenants.
(b) Lessor reserves the right now or in the future to install a
minimum point of entry cable facility and a cable/fiber riser system within the
Building and require all telecommunication providers to equally utilize this
location or area depending on the space available and utilize the cable or fiber
riser system as each telecommunications provider chronologically seeks to enter
the Building. If the telecommunications providers currently have equipment and
cabling in the Building riser when the Lessor institutes the Building cable
facility, the Lessor will give that telecommunications provider(s) ninety (90)
days written notice that the Lessor will be completing a new cable riser
facility in the Building and that the telecommunications provider will be
required to move to the minimum point of entry and connect to the Building's
cable riser system.
(c) Lessee agrees to indemnify and hold the Lessor, Lessor's
partners, agents, employees
and contractors harmless from all liabilities and damages regarding
telecommunication services as well as the telecommunications riser facility
installed or present in the Building by any telecommunications company or
provider.
(d) Telecommunications will evolve and increase in need during the
term of this Lease agreement. The Lessor will use best efforts to accommodate
all reasonable needs and requirements of all tenants and all telecommunications
providers.
50. RENEWAL OPTION. (a) As long as Lessee is not in uncured default in the
performance of its covenants under this lease of which Lessor has given Lessee
written notice, Lessee is hereby granted the option to renew the term of this
lease for one (1) additional period of five (5) years, the
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"Renewal Term" to commence at the expiration of the initial term of this lease.
Lessee shall exercise its option to renew as follows: Lessee shall deliver
written notice to Lessor at least six (6) months prior to the expiration of the
current term of this lease that Lessee may exercise its renewal option. Within
thirty (30) days of Lessor's receipt of Lessee's written notice, Lessor shall
notify Lessee in writing of the Market Base Rental Rate (hereinafter defined)
that Lessee shall pay during such renewal term. Within forty five (45) days
after receipt of such written notice from Lessor, Lessee shall, if it elects,
deliver written notice to Lessor of its election to exercise its renewal option
hereunder. If Lessee does not respond within such forty five (45) day period,
Lessee's right to renew hereunder shall terminate. All terms of this lease shall
apply to such renewal option, except (i) the Base Rental (hereinafter defined)
during the Renewal Term shall be the then prevailing Market Base Rental Rate at
the time Lessee exercises the respective renewal option, (ii) Lessee shall not
have an option to renew this lease beyond the expiration of the Renewal Term,
(iii) Lessee shall not have the right to assign its renewal rights to any
sublessee or assignee of the Premises nor may a sublessee or assignee exercise
such renewal right, and (iv) the leasehold improvements will be provided in
their then existing condition (i.e. on an "as-is" basis) at the time the Renewal
Term commences.
(b) As used in this lease, the term "Market Base Rental Rate" shall
mean the net effective rate per square foot of net rentable area at which a
willing lessor and a willing lessee would agree to lease comparable space to
that for which the Market Base Rental Rate is being determined in comparable
office buildings in the West Loop/Galleria area of Houston, Texas, which rate
shall take into account all relevant economic and non-economic factors,
including but not limited to: the credit-worthiness, and other qualities of such
lessee, the quality of the management of the building in question, the amount of
space being offered for lease, the location within the building of such offered
space, whether the space being offered is a full floor or a portion of a
multi-tenant floor, the quality and finish of the offered space as it then
exists, the age and quality of such building, the lease term and renewal
options, the scheduled or actual commencement date, add-on factors, basis for
paying operating expenses, and market inducements, such as free rent, moving
expenses, and architectural, construction and lease assumption allowances.
(c) Whenever Lessee is to pay the Market Base Rental Rate for space
under the terms of this lease, Lessee shall, in addition, pay its share of the
Forecast Operating Expenses (hereinafter defined) utilizing the hereinafter
defined procedures. The Base Year shall be the calendar year that the Market
Base Rental Rate is determined for that calendar year.
51. NON-DISTURBANCE AGREEMENT. Lessor will use its best efforts to obtain
a Non-Disturbance Agreement from its lender in a form similar to the one
attached. During the term of this Lease, should Lessee request a Non-Disturbance
Agreement, Lessee agrees to pay Lessor the fee for such requested form as
specified in Paragraph 52 below.
52. FEES FOR LESSEE REQUESTED FORMS. During the term of this Lease, Lessee
may request certain specific forms which may be necessary for the Lessor to
prepare, review, consent or approve.
The fees for such forms are as follows:
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FORM FEE PER OCCURRENCE
Subordination and Non-Disturbance Agreement................ $300.00
Landlord's Waiver & Consent................................ $150.00
Sub-Lease Agreement........................................ $300.00
Miscellaneous Amendments (Lessee Name Change,.............. $300.00
Early Termination, or any document that does not
create income for the Lessor)
Review of remodeling plans for any modification of......... $ 20.00
the Premises not already covered during the initial per sheet
improvement of the Premises.
53. SIGNAGE. Upon execution of this Lease, Lessee shall have the right to
place its name on the exterior monument located in the surface parking lot.
Lessee hereby agrees to pay Lessor a one time charge of $3,000.00 prior to any
installation. Lessee hereby agrees to pay for all installation costs associated
with the installation of such signage on the monument. Prior to installation,
the lettering height, design, and location of such must be submitted to the
Lessor for approval, which shall not be unreasonably withheld or delayed.
IN TESTIMONY WHEREOF, the parties hereto have executed this lease as of
the date aforesaid.
LESSOR: LESSEE:
5599 SAN FELIPE, LTD., PINNACLE GLOBAL GROUP, INC.,
a Texas limited partnership a Texas corporation
By: San Felipe Tower, Inc.,
a Delaware corporation,
the sole general partner
By: LOUIS B. TRENCHARD III By: RE GARRISON II
Name: Louis B. Trenchard III Name: RE GARRISON II
Title: President Title: PRESIDENT AND CEO
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SCHEDULE 1
TERM-SUBSTANTIAL COMPLETION
The term shall commence upon the first to occur of (i) Substantial
Completion of the Premises, (ii) occupancy of the Premises by Lessee (the first
of such dates being herein called the "Term Commencement Date"), and, except as
otherwise provided herein or in any exhibit or addendum hereto, shall continue
in full force for a period of sixty (60) months thereafter (the last day of the
term of this lease being herein referred to as the "Term Expiration Date"). The
parties estimate that the Term Commencement Date will occur on or about June 1,
1999 (the "Scheduled Term Commencement Date"). If the Premises are not
Substantially Complete by the Scheduled Term Commencement Date for any reason,
Lessor shall not be liable for any claims, damages or liabilities in connection
therewith or by reason thereof, but the Term Commencement Date shall be
determined as provided above. LESSEE SHALL RECEIVE ONE (1) DAY OF RENTAL
ABATEMENT FOR EACH DAY BEYOND JUNE 7, 1999 THAT SUBSTANTIAL COMPLETION IS
DELAYED (EXCEPT IF DUE TO LESSEE DELAYS OR FORCE MAJEURE). If Substantial
Completion occurs prior to the Scheduled Term Commencement Date, Lessee shall
take occupancy at that time and the term shall commence. In either circumstance
the Term Expiration Date shall be determined as provided above to provide for
the lease being effective for its full term of months. Lessor shall provide
Lessee with as much notice as circumstances allow of the date when Lessor
expects to achieve Substantial Completion, based upon the progress of the work.
Should the Term Commencement Date be a date other than the Scheduled Term
Commencement Date, either Lessor or Lessee, at the request of the other, shall
execute a declaration specifying the Term Commencement Date.
"Substantial Completion" shall mean (and the Premises shall be deemed
"Substantially Complete") when (i) installation of all leasehold improvements
has occurred, (ii) Lessee has access to the BUILDING'S ELEVATOR AND elevator
lobby on the floor where the Premises are located, and (iii) Building services
are ready to be furnished to the Premises (or could be furnished to the Premises
if all the leasehold improvements were completed). Substantial Completion shall
be deemed to have occurred notwithstanding a requirement to complete "punchlist"
or similar corrective work. The existence of construction work in other portions
of the Building or the Project shall not affect the determination of the date of
Substantial Completion of the Premises.
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SCHEDULE 2
CONSTRUCTION OF INITIAL LEASEHOLD IMPROVEMENTS
Notwithstanding anything to the contrary, Lessee is leasing the Premises in an
"as-is" condition with no modifications required by the Lessor, except Lessor
shall modify the Premises according to the plans submitted by Lessee attached
hereto as Lessee's working drawings ("Lessee's Work") and known as Exhibit "A".
Lessor's monetary obligation to perform such modifications shall not exceed the
allowance listed in Schedule 3 attached hereto.
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SCHEDULE 3
MONETARY MATTERS
Lessor shall be responsible for costs and expenses incurred in connection with
the Lessee Work shown on Exhibit "A" in an amount not to exceed $12.00 per
rentable square foot, estimated or $78,360.00, for the Premises only
(hereinafter known as "Lessor's Contribution"). Lessor's contribution shall be
used exclusively for leasehold improvements and architectural services
associated with such improvements. IF ANY PORTION OF THE ALLOWANCE REMAINS
UNUSED, LESSEE SHALL HAVE THE RIGHT TO USE THE OVERAGE ON VOICE/DATA CABLING
COSTS UP TO A MAXIMUM OF $1.00 PER RENTABLE SQUARE FOOT.
If the cost of the Leasehold Improvements exceeds Lessor's Contribution, Lessor,
upon written request of Lessee, shall finance up to an additional $2.00 per
rentable square foot to be paid over the primary term of the Lease at an
interest rate of ten percent (10%) per annum in equal monthly payments, paid as
an addition to the Base Rent amount. The parties shall execute a memorandum of
Rent Adjustment to memorialize the actual monthly Base Rent amount upon
Substantial Completion of the Leasehold Improvements.
Should Lessee not fully expend Lessor's Contribution , Lessee shall not be
entitled to any off-set against rent.
Should Lessee's leasehold improvements exceed Lessor's contribution, then such
overage shall be (i) due and payable to Lessor within thirty (30) days after
delivery of a written invoice to Lessee and (ii) subject to the construction
supervision fee as stated in Paragraph 26 of the Lease.
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EXHIBIT "A THROUGH C"
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