OFFICE LEASE
This Lease is made this 4th day of May, 1998 by and between HOUSTON POST
OAK ASSOCIATES, LTD., a Texas limited partnership ("Landlord") and Boots & Coots
International Well Control, Inc. a Delaware corporation ("Tenant").
WITNESSETH:
1. BASIC LEASE PROVISIONS:
1.1 Project Name: 777 Post Oak
Address: 777 Post Oak
Houston, Texas 77056
Building: 777 Post Oak
Unit/Suite No.: 700 and 800
Floor(s): 7 and 8
1.2 Premises: 39,356 square feet of Net Rentable Area as reflected on
the floor plans attached hereto as Schedule 1. (Floors 7 and 8 are
comprised of 19,678 square feet of Net Rentable Area each.)
1.3 Tenant's Percentage Share: 22.34% (said Percentage Share shall be
adjusted in the event the Net Rentable Area of the Building is
increased or decreased) which is based upon Premises of 39,356
square feet of Net Rentable Area in a Building of 176,165 square
feet of Net Rentable Area.
1.4 Commencement Date Floor 7: The Commencement Date for Floor 7 is
July 1, 1998. Notwithstanding the foregoing, if Tenant occupies
all or any part of the Premises prior to July 1, 1998, the
Commencement Date shall be the date of such occupancy.
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Commencement Date Floor 8: The Commencement Date for Floor 8 is
September 1, 1998. Notwithstanding the foregoing, if Tenant
occupies all or any part of the Premises prior to September 1,
1998, the Commencement Date shall be the date of such occupancy.
If the Commencement Date for Floor 7 commences prior to Floor 8,
the Term of the Lease will be extended by one (1) additional
month.
The Commencement Dates are hereby subject to any unreasonable
Landlord delays.
1.5 Expiration Date: August 31, 2005.
1.6 Base Rent: The Base Rent Payable by Tenant pursuant to this Lease
shall be determined according to the following schedule:
<TABLE>
<CAPTION>
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Months Following the Amount Base Rent Rate Per Monthly Base
Commencement Date Square Foot of Net Rentable Area Rent
-------------------------------------------------------------------------
<S> <C> <C>
Month 1 $ 0.00 $ 0.00
Months 2 - 6 $18.50 $60,673.83
Months 7 $ 0.00 $ 0.00
Months 8 - 38 $18.50 $60,673.83
Months 39 - 62 $20.50 $67,233.17
Months 63 - 86 $21.50 $70,512.83
-------------------------------------------------------------------------
</TABLE>
1.7 Security Deposit: $60,673.83.
1.8 Permitted Use: The Premises are to be used and occupied by Tenant
(and its permitted assignees and subtenants)
solely for the purpose of general office space and
for no other purpose.
1.9 Trade Name: Boots & Coots International Well Control, Inc.
1.10 Renewal Option: One (1) five (5) year option(s), as more fully
described on Schedule 4.
1.11 Base Year for Operating Expenses and Taxes: 1998.
1.12 Calculation of Operating Expense Rent: See Paragraph 6.
1.13 Guarantor(s): None
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1.14 Address for payment of rent and notices:
Landlord: Tenant:
Houston Post Oak Associates, Ltd. Boots & Coots IWC, Inc.
c/o Songy Partners Realty, Ltd. 5777 Post Oak Boulevard,
777 Oak Boulevard, Suite 300 Suite 700
Houston, Texas 77056 Houston, Texas 77056
Attn: Property Manager Attn: ___________________
(713) 572-9100 (713) 621-7911
1.15 Broker: The Broker is Bert Keller with A. P. Keller, Inc. and
Landlord will bear the cost of the commission payable to Broker in
connection with this Lease. Landlord and Tenant warrant and
represent to each other that they have not consulted or negotiated
with any broker or finder with regard to the Premises or this
Lease other than Broker. If either party shall be in breach of the
foregoing warranty, such party shall indemnify the other against
any loss, liability and expense (including attorneys' fees and
court costs) arising out of claims for fees or commissions from
anyone having dealt with such party in breach.
2. DEFINITIONS: Unless the context otherwise specifies or requires, the
following terms will have the meanings set forth below:
2.1 COMMON AREAS: All areas and facilities outside the Premises and
within the exterior boundaries of the Project that are not leased
to other tenants and that are provided and designated by Landlord,
in its sole discretion from time to time, for the general use and
convenience of Tenant and other tenants of the Project and their
authorized representatives, entities, invitees and the general
public. Common Areas are areas within and outside of the Building
in the Project, such as common entrances, lobbies, pedestrian
walkways, patios, landscaped areas, sidewalks, service corridors,
elevators, restrooms, stairways, decorative walls, plazas, loading
areas, parking areas and roads.
2.2 NET RENTABLE AREA: As to any lease space in the Building, the area
of such space as measured and determined in accordance with the
standards published by the Building Owners and Managers
Association International, Publication ANSI Z 65.1-1980, as
amended from time to time.
2.3 OPERATING EXPENSES: All costs of operating, servicing,
administering, repairing and maintaining the Project (excluding
costs paid directly by Tenant and other tenants in the Project or
otherwise reimbursable to Landlord), the landscaping of Common
Areas of the Project and the parking lot or garage located within
the Project. All costs of operating, servicing, administering,
repairing and maintaining the Project include any
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reasonable and necessary costs of operation, maintenance and
repair, computed in accordance with generally accepted accounting
principles applied on a consistent basis ("GAAP"), and will
include, by way of illustration, but not limitation:
(a) all necessary costs of managing, operating and
maintaining the Project, including, without limitation,
wages, salaries, fringe benefits and payroll burden for
employees on-site at or below the level of area manager
utilized in the day to day operation of the Project; public
liability, flood, property damage and all other insurance
premiums paid by Landlord with respect to the Project
including any amounts that would be charged as premiums if
Landlord self-insures any of the insurance risks; water,
sewer, heating, electricity, air conditioning, ventilating
and all other utility charges (other than with respect to
utilities separately metered and paid directly by Tenant or
other tenants); the cost of contesting the validity or
amount of real estate and personal property taxes;
janitorial services; access control; window cleaning;
elevator maintenance; fire detection and security
services; gardening and landscape maintenance; trash,
rubbish, garbage and other refuse removal; pest control;
painting; facade maintenance; lighting; exterior and
partition (demising) wall repairs; roof repairs;
maintenance of all steam, water and other water retention
and discharging piping, fountains, pumps, weirs, lift
stations, catch basins and other areas and facilities
on-site; repair and repainting of sidewalks due to
settlement and potholes and general resurfacing and
maintenance of parking areas; sanitary control;
depreciation of machinery and equipment used in any of such
maintenance and repair activities; management fees; union
increases; road sidewalk and driveway maintenance; and all
other Project maintenance, repairs and insurance.
(b) the costs (amortized together with a reasonable finance charge in
accordance with GAAP) of any capital improvements: (A) made to the
Project by Landlord primarily for the purpose of reducing Operating
Expenses; or (B) made to the Project by Landlord primarily to comply with
any governmental law or regulation that was not in force at the
Commencement Date;
(c) the costs of supplies, materials, tools and equipment used in the
operation and maintenance of the Project;
(d) all taxes, assessments and governmental charges, whether or not
directly paid by Landlord, whether federal, state, county or municipal
and whether they be by taxing districts or authorities presently taxing
the Project or by others subsequently created or otherwise, and any other
taxes and assessments attributable to the Project or its operation,
excluding, however, federal and state taxes on income, death taxes,
franchise taxes, and any taxes imposed or measured on or by the income of
Landlord from the operation of the Project; provided, however, that if at
any time during the term of this Lease, the present method of taxation or
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assessment shall be so changed that the whole or any part of the taxes,
assessments, levies, impositions or charges now levied, assessed or
imposed on real estate and the improvements thereto shall be discontinued
and as a substitute therefor, or in lieu of an addition thereto, taxes,
assessments, levies, impositions or charges shall be levied, assessed
and/or imposed wholly or partially as a capital levy or otherwise on the
rents received from the Project or the rents reserved herein or any part
thereof, then such substitute or additional taxes, assessments, levies,
impositions or charges, to the extent so levied, assessed or imposed,
shall be deemed to be included within Operating Expenses to the extent
that such substitute or additional tax would be payable if the Project
were the only property of the Landlord subject to such tax. It is agreed
that Tenant will be responsible for ad valorem taxes on its personal
property and on the value of the leasehold improvements in the Premises
to the extent that the same exceed Building standard allowances (and if
the taxing authorities do not separately assess Tenant's leasehold
improvements, Landlord may make a reasonable allocation of the ad valorem
taxes assessed on the Project to give effect to this sentence).
Operating Expenses shall not include:
(a) depreciation on the Project or any Common Areas, except for amortization
charges related to the capital improvements set forth in Paragraph
2.3(b);
(b) costs of space planning, tenant improvements, marketing
expenses, finders fees and real estate broker commissions;
(c) any and all expenses for which Landlord is reimbursed
(either by an insurer, condemnor or other person or
entity), but only to the extent of such reimbursement, and
any and all expenses for which Landlord is reimbursed or
entitled to reimbursement by a tenant in the Project
pursuant to a lease provision in such tenant's lease;
(d) salaries for personnel above the grade of senior property
manager, senior controller, senior accountant and senior
engineer;
(e) costs in connection with services or benefits of a type
which are not provided to Tenant, but are provided to
another tenant or occupant; and
(f) Landlord's general overhead and administrative expenses not
directly allocable to the operation of the Project.
3. TERM AND PREMISES:
3.1 Lease of Premises: Landlord hereby leases to Tenant, and Tenant
hereby leases from Landlord, for the term and subject to the
agreements, covenants, conditions and
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provisions set forth in this Lease, to which Landlord and Tenant
hereby mutually agree, the premises (the "Premises") described in
Paragraphs 1.1 and 1.2 above.
3.2 Term. Subject to and upon the terms and conditions set forth
herein, or in any schedule hereto, the term of the Lease shall
commence on the Commencement Date and expire on the Expiration
Date.
3.3 Project: The Project shall consist of the tract or parcel of land
described on metes and bounds on Schedule 2 attached hereto and
made a part hereof for all purposes, the building (the "Building")
situated thereon, related pedestrian walkways, landscaping,
roadways, parking garage and other parking facilities, and such
additional facilities to service any of the foregoing in
subsequent years as may be necessary or desirable in Landlord's
discretion (the "Project"). Landlord may increase, reduce or
change the number, dimensions or locations of the walks,
buildings, mall areas, parking and other Common Areas and other
improvements located in the Project in any manner that Landlord,
in its sole discretion shall deem proper. Landlord further
reserves the right to make alterations and/or additions to and to
build or cause to be built additional stories on the Building in
which the Premises are situated and to add any buildings adjoining
the Premises or elsewhere in the Project. Landlord reserves the
right to install, maintain, use, repair and replace, pipes, ducts,
conduits and wires leading through the Premises and serving other
parts of the Project in a manner that will not materially
interfere with Tenant's use of the Premises. Landlord will also
have the right to increase and expand the size of the Project by
other structures to the Project. Landlord shall have the right to
change the Project's name without notice, to change the Project's
street address upon 90 days prior notice, to grant to any person
or entity the exclusive right to conduct any business or render
any service in or to the Project, provided such exclusive right
shall not operate to prohibit Tenant from using the Premises for
the purpose set forth in Paragraph 1.8, to retain at all times
master keys or passkeys to the Premises, and to place such signs,
notices or displays as Landlord reasonably deems necessary or
desirable upon the roof and exterior of the Project.
3.4 Relocation of Tenant: Intentionally deleted.
3.5 Initial Tenant Improvements: The Premises shall be delivered to
Tenant at the Commencement Date in the following condition: main
air distribution ducts in place to ceiling-hung VAV boxes and
perimeter air distribution duct to slot diffusers tied above the
grid; main "T's" of building standard ceiling grid installed with
secondary "T's" and tile stocked on floor; parabolic 2 x 4 light
fixtures provided on floor at one (1) per eighty (80) square feet
of Net Rentable Area; fire sprinkler system with primary lines and
all heads turned up and installed on a code approved grid; and
mini-blinds installed at all exterior windows with only the
additional leasehold improvements and Tenant finish, if any, set
forth and described on Schedule 3 attached hereto.
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4. COMMON AREAS:
4.1 Tenant's Right to Use Common Areas: Landlord grants Tenant and
its authorized representatives and invitees the non-exclusive
right to use the Common Areas with others who are entitled to use
the Common Areas subject to Landlord's rights as set forth in this
Lease.
4.2 Landlord's Control: Landlord has the right to:
(a) establish and enforce reasonable rules and regulations
applicable to all tenants concerning the maintenance, management,
use and operation of the Common Areas;
(b) close, if necessary, any of the Common Areas to prevent
dedication of any of the Common Areas or the accrual of any rights
of any person or of the public to the Common Areas;
(c) close temporarily any of the Common Areas for maintenance
purposes;
(d) select a person, firm or corporation which may be an entity
related to Landlord to maintain and operate any of the Common
Areas; and
(e) designate other lands outside the exterior boundaries of the
Project but which are contiguous to the Project to become part of
the Common Areas.
Notwithstanding the provisions of this Paragraph 4.2, in
exercising its rights hereunder, Landlord will provide reasonable
access to and from the Premises.
5. RENT:
5.1 Base Rent: Tenant will pay to Landlord as rent for the use and
occupancy of the Premises at the times and in the manner provided
below, Base Rent in the amount specified in Paragraph 1.6 above
payable in advance on the Commencement Date and on or before the
first day of each and every successive calendar month during the
term hereof without demand, setoff or deduction. Tenant agrees to
pay to Landlord contemporaneously with the execution of this
Lease, the amount of $60,673.83 which amount shall be applied to
August 1998 Base Rent.
5.2 Late Charge: All rent shall bear interest from the date due until
paid at the greater of (1) two percent (2%) above the "prime rate"
per annum of Chase Texas or its successor ("Chase") in effect on
said due date (or if the "prime rate" be discontinued, the base
reference rate then being used by Chase to define the rate of
interest charged to commercial borrowers) or (2) eighteen percent
(18%) per annum; provided, however,
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in no event shall the rate of interest hereunder exceed the
maximum non-usurious rate of interest (hereinafter called the
"Maximum Rate") permitted by the applicable laws of the State of
Texas or the United States of America, whichever shall permit the
higher non-usurious rate, and as to which Tenant could not
successfully assert a claim or defense of usury, and to the extent
that the Maximum Rate is determined by reference to the laws of
the State of Texas, the Maximum Rate shall be the weekly ceiling
(as defined and described in Chapter 303 of the Texas Finance
Code, as amended) at the applicable time in effect. Twice per
annum, Landlord shall provide Tenant with a gracious period of
three (3) days if Tenant is late paying its rent.
6. OPERATING EXPENSES:
6.1 Operating Expenses Rent: In addition to Base Rent, Tenant shall
pay Tenant's Percentage Share, as specified in Paragraph 1.3
above, of the Operating Expenses paid or incurred by Landlord in
such year in excess of the Operating Expenses for the Base Year
("Operating Expenses Rent"). All sums of money as shall become
due and payable by Tenant to Landlord under this Lease, including,
without limitation, Operating Expenses Rent shall be additional
rent which Tenant shall be obligated to pay. Landlord shall have
the same remedies for default in the payment of additional rent as
are available to Landlord in the case of a default in the payment
of Base Rent.
6.2 Controllable Expenses: Notwithstanding anything in this Lease to
the contrary, Landlord agrees, for purposes of computing Tenant's
Operating Expenses Rent, that any increase in total Controllable
Expenses in excess of ten percent (10%) in any given calendar year
shall be excluded in such computation. For purposes of this
Paragraph 6.2, Landlord and Tenant acknowledge and agree that
"Controllable Expenses" are defined as all Operating Expenses
except the following: (i) utilities, (ii) property taxes, (iii)
insurance and (iv) those items affected by labor costs, such as
janitorial services, in the event of an increase in the legal
minimum wage or a general increase in the wage level in the
Houston, Texas area.
6.3 Payment: During December of each calendar year or as soon
thereafter as practicable, Landlord will give Tenant written
notice of its estimate (line item and detailed support included)
of Operating Expenses Rent for the ensuing calendar year. On or
before the first day of each month during the ensuing calendar
year, Tenant will pay to Landlord 1/12th of such estimated
amounts, provided that if such notice is not given in December,
Tenant will continue to pay on the basis of the prior year's
estimate until the month after such notice is given. If at any
time or times it appears to Landlord that the amounts payable for
Operating Expenses Rent for the current calendar year will vary
from its estimate by more than 10%, Landlord, by written notice to
Tenant, will revise its estimate for such year, and subsequent
payments by Tenant for such year will be in an amount so that by
the end of such year Tenant will have paid a total sum equal
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to such revised estimate. Landlord will indicate in its notice to
Tenant the reasons Landlord believes its estimate varies by more
than 10%.
6.4 Statement: Within 120 days after the close of each calendar year
or as soon after such 120 day period as practicable, Landlord will
deliver to Tenant a statement of amounts of Operating Expenses
Rent payable under this Lease for such calendar year. If such
statement shows an amount owing by Tenant that is more than the
estimated payments for such calendar year previously made by
Tenant, Tenant will pay the deficiency to Landlord within 30 days
after delivery of the statement to Tenant. If the statement shows
an amount which is less than the estimated payments previously
paid by Tenant for the calendar year, provided Tenant is not then
in default, Landlord will remit the amount owed Tenant within 30
days after delivery of the statement to Tenant. Tenant has the
right, exercisable no more than once each calendar year on
reasonable notice and at a time reasonably acceptable to Landlord,
to cause an audit to be performed of Landlord's operations and/or
books and records pertaining to Operating Expenses for the
preceding 2 calendar years. Landlord, at Landlord's sole
discretion, may provide an audit prepared by a certified public
accountant in lieu of allowing Tenant to audit Landlord's
operations and/or books. Any such inspection and audit shall be at
Tenant's expense and shall be conducted in Landlord's office
during normal business hours by Tenant's accounting personnel or
by independent public accountants or other qualified consultants
and in no event will Landlord be obligated to permit any such
inspection or audit to be performed by a consultant or firm that
is compensated on a contingent fee or percentage of recovery
basis.
6.5 Proration: If for any reason other than the default of Tenant,
this Lease terminates on a day other than the last day of a
calendar year, the amount of Operating Expenses Rent payable by
Tenant applicable to the calendar year in which such termination
occurs will be prorated on the basis which the number of days from
the commencement of such calendar year to and including such
termination date bears to 365.
6.6 Computation: Tenant's Percentage Share of the Operating Expenses
is the proportion that the Net Rentable Area occupied by Tenant
bears to the Net Rentable Area of the Building, as determined by
Landlord. Notwithstanding any provision of this Paragraph 6.5 to
the contrary, if the Building is less than ninety-five percent
(95%) leased and/or occupied during any calendar year, an
adjustment shall be made in computing each component of the
Operating Expenses that varies with the rate of occupancy of the
Building (such as, but not limited to, utility and janitorial
expenses) so that Operating Expenses Rent shall be computed for
such year as though 95% of the Building had been leased and
occupied during such year.
6.7 Taxes Payable by Tenant: Tenant shall be directly responsible for
taxes upon, measured, by or reasonably attributable to the cost or
value of Tenant's equipment, furniture, fixtures and other
personal property located in the Premises or by the cost or
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value of any leasehold improvements made in or to the Premises by
or for Tenant other than the initial improvements to be installed
at Landlord's expense regardless of whether title to such
improvements is in Tenant or Landlord,
7. USE OF PREMISES:
7.1 Effect on Insurance: Tenant shall not use any portion of the
Premises for purposes other than those specified in Paragraph 1.8
and no use shall be made or permitted to be made upon the
Premises, nor acts done, which will increase the existing rate of
insurance upon the Project, or cause cancellation of insurance
policies covering said Project.
7.2 Continuous Operation: Tenant will not leave the Premises
unoccupied or vacant and will continuously conduct and carry on in
the Premises the type of business for which the Premises are
leased.
7.3 Miscellaneous Restrictions: Tenant will operate from the Premises
using the Trade Name set forth in Paragraph 1.9. Tenant will not
use the Premises for or permit in the Premises any offensive,
noisy, or dangerous trade, business, manufacture or occupation or
interfere with the business of any other tenant in the Project.
Tenant agrees not to cause, permit or suffer any waste or damage,
disfigurement or injury to the Premises or the fixtures or
equipment thereof or the Common Areas. Tenant will not use the
Premises for washing clothes or cooking and nothing will be
prepared, manufactured or mixed in the Premises which might emit
any offensive odor into the Project. Tenant will not obstruct the
sidewalks, mall or Common Areas in the Project or use the same for
business operations or advertising. Tenant will not use the
Premises for any purpose which would create unreasonable elevator
loads, cause structural loads to be exceeded or adversely affect
the mechanical, electrical, plumbing or other base building
systems. Tenant will at all times comply with the rules and
regulations of the Project attached hereto as Schedule 5, and with
such additional rules and regulations as may be adopted by
Landlord from time to time.
8. PARKING: Parking spaces for the Premises shall be governed by the terms
and provisions of Schedule 6 attached hereto and made a part hereof for
all purposes.
9. GRAPHICS: Landlord, at Tenant's sole cost and expense, will install and
maintain all letters or numerals on the entrance doors for the Premises.
All such letters and numerals shall be in the form specified by
Landlord, and no other shall be used or permitted on the Premises.
Tenant shall not place any signs within the Premises which are visible
from the outside the Premises without Landlord's prior written approval.
In addition, Landlord agrees that it will maintain Tenant's name
identity (in size, graphic style and material approved by Landlord in
its reasonable discretion and the purchase and installation of Tenant's
signage to be borne by Tenant) on the monument sign constructed by
Landlord at the street level entrance to the
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Building on Post Oak Boulevard. Tenant's name shall appear on the upper
half of the monument sign above the street address. Tenant's name will
be one of two names to appear on the upper half of the sign. If, as of
October 1, 1998, Tenant is the largest Tenant to have signed a Lease for
Lease Space for the Building, Tenant's name will appear first on the
monument sign.
10. ASSIGNMENT AND SUBLETTING; ENCUMBRANCE: Tenant shall not assign this
Lease or sublet any portion of the Premises without prior written
consent of the Landlord, which will not be unreasonably withheld or
delayed, it being understood that it shall be reasonable for Landlord,
among other things, to withhold consent if Landlord is not satisfied
with the financial responsibility, identity, reputation or business
character of the proposed assignee or sublessee. Any change in the
ownership of Tenant, if Tenant is a corporation or partnership, shall
constitute an assignment for purposes of this Paragraph 10.
Notwithstanding any consent by Landlord, Tenant and Guarantor(s), if
any, shall remain jointly and severally liable (along with each approved
assignee and sublessee, which shall automatically become liable for all
obligations of Tenant hereunder with respect to that portion of the
Premises so transferred), and Landlord shall be permitted to enforce the
provisions of this Lease directly against Tenant or any assignee or
sublessee without proceeding in any way against any other party. In the
event of an assignment, contemporaneously with the granting of
Landlord's consent, Tenant shall cause the assignee to expressly assume
in writing and agree to perform all of the covenants, duties and
obligations of Tenant hereunder and such assignee shall be jointly and
severally liable therefore along with Tenant. No usage of the Premises
different from the usage provided for in Paragraph 1.8 above shall be
permitted, and all other terms and provisions of the Lease shall
continue to apply after such assignment or sublease. Tenant shall not
make or consent to any conditional, contingent or deferred assignment of
some or all of Tenant's interest in this Lease without the prior written
consent of Landlord, which Landlord may withhold in its sole and
absolute discretion. Tenant shall not enter into, execute or deliver any
financing or security agreement that can be given priority over any
mortgage given by Landlord or its successors, and, in the event Tenant
does so execute or deliver such financing or security agreement, such
action on the part of Tenant shall be considered a breach of the terms
and conditions of this Lease and a default by Tenant entitling Landlord
to such remedies as are provided for in this Lease. Landlord shall have
the right to freely assign or transfer, in whole or in part, Landlord's
rights and obligations hereunder and in the Project and the Premises.
The prohibition against an assignment or sublease described in this
Section 10 shall be deemed to include a prohibition against Tenant's
mortgaging or otherwise encumbering its leasehold estate, as well as
against an assignment or sublease which may occur by operation of law,
each of which shall be ineffective and void and shall constitute an
event of default under this Lease unless consented to by Landlord in
writing in advance.
11. ORDINANCES AND STATUTES: From and after the Commencement Date, at
Tenant's sole cost, Tenant will comply with all statutes, ordinances and
requirements of all municipal, state and federal authorities now in
force, or which may hereafter be in force, pertaining to the Premises,
occasioned by or affecting the use thereof by Tenant. In addition,
Tenant shall be
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wholly responsible for any accommodations or alterations that are
required by applicable governmental codes, ordinances, rules,
regulations and laws to be made to the Premises from and after the
Commencement Date to accommodate disabled employees and customers of
Tenant, including, without limitation, compliance with the American with
Disabilities Act (42 U.S.C. Sections 1201 et seq.) ("ADA") and the Texas
Architectural Barriers Act (Tex.Rev.Civ.Stat. Art 9201) ("TABA"). The
commencement or pendency of any state or federal court abatement
proceeding affecting the use of the Premises shall, at the option of the
Landlord, be deemed a breach thereof.
12. MAINTENANCE, REPAIRS, ALTERATIONS:
12.1 Tenant's Obligations: Tenant acknowledges that to the best of its
knowledge the Premises are in good order and repair, unless
otherwise indicated herein, Tenant shall, at its own expense and
at all times, maintain the Premises in good and safe condition
and shall surrender the same, at termination hereof, in as good
condition as received, normal wear and tear excepted. Tenant, at
Tenant's expense, shall be responsible for all repairs required,
excepting the electrical wiring, plumbing and HVAC installations
and any other system or equipment upon the Premises, roof,
exterior walls, structural foundations, parking areas and other
Common Areas, which shall be repaired by Landlord and included in
Operating Expenses.
12.2 Limits an Alteration: Tenant may not make any structural
improvement or alteration to the Premises without the prior
written consent of Landlord. Tenant may not make an nonstructural
improvement or alteration of the Premises costing in excess of
$5,000 without the prior written consent of the Landlord. Prior
to the commencement of any repair, improvement, or alteration,
Tenant shall give Landlord at least 2 days written notice in
order that Landlord may post appropriate notices to avoid any
liability for liens. All alterations will be made by a licensed
contractor consented to by Landlord and performed in a good and
workmanlike manner as well as in accordance with all applicable
governmental codes, ordinances, rules, regulations and laws. All
materials shall be of a quality comparable to or better than
those in the Premises and shall be in accordance with plans and
specifications approved by Landlord.
12.3 Liens: Tenant will pay all costs of construction done by it or
caused to be done by it on the Premises as permitted by this
Lease, Tenant will keep the Project free and clear of all
construction, mechanic's, materialman's, laborer's and supplier's
liens, resulting from construction done by or for Tenant. The
interest of Landlord in the Premises and the Project shall not be
subject to liens for improvements made by Tenant. Any lien filed
by any contractor, materialman, laborer or supplier performing
work for Tenant shall attach only to Tenant's interest in the
Premises. Tenant agrees to indemnify, defend and hold harmless
Landlord from and against any and all costs and liabilities and
any and all mechanic's, materialman's or laborer's liens arising
out of or pertaining to any improvements or construction done by
Tenant. All persons and entities
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contracting or otherwise dealing with Tenant relative to the
Premises or the Project are hereby placed on notice of the
provisions of this Paragraph 12.3, and Tenant shall further
notify in writing such persons or entities of the provisions of
this Paragraph 12.3 prior to commencement of any Tenant work in
the Premises. If any construction, mechanic's, materialman's or
laborer's lien is ever claimed, fixed or asserted against the
Premises or any other portion of the Project in connection with
any such Tenant work, Tenant shall, within 10 days after receipt
by Tenant of notice of such lien, discharge same as a lien either
by payment or by posting of any bond as permitted by law. If
Tenant shall fail to discharge any such lien, whether valid or
not, within 10 days after receipt of notice from Landlord,
Landlord shall have the right, but not the obligation, to
discharge such lien on behalf of Tenant and all costs and
expenses incurred by Landlord associated with the discharge of
the lien, including without limitation, attorneys' fees, shall
constitute additional rent hereunder and shall be immediately due
and payable by Tenant.
12.4 Surrender of Premises: On the last day of the term hereof or on
any sooner termination, Tenant shall surrender the Premises to
Landlord in the same condition as when received, ordinary wear
and tear excepted, clear and free of debris. Tenant shall repair
any damage to the Premises occasioned by the installation or
removal of Tenant's trade fixtures, furnishings and equipment.
13. ENTRY AND INSPECTION: Tenant shall permit Landlord or Landlord's agents
to enter upon the Premises at reasonable times and upon reasonable
notice for the purpose of inspecting the same, performing any services
required of Landlord hereunder and showing the Premises to potential and
existing mortgagees and purchasers and prospective tenants of other
space in the Project. The foregoing notwithstanding, Landlord is not
required to give notice to Tenant if Landlord must enter the Premises
because of an emergency. Upon reasonable notice to Tenant, Tenant will
permit Landlord at any time within 180 days prior to the expiration of
this Lease, to permit potential tenants to inspect the Premises.
14. INDEMNIFICATION OF LANDLORD: Subject to Paragraph 17.6 below, Tenant
will indemnify, defend (by counsel reasonably acceptable to Landlord),
protect and hold Landlord and Landlord's agents, employees, officers,
directors, partners and shareholders harmless from and against any and
all claims, demands, losses, damages, costs and expenses (including
attorney's fees) or death of or injury to any person or damage to any
property whatsoever arising out of or relating to Tenant's breach or
default under this Lease, including, but not limited to Tenant's breach
of Paragraph 22 below or Tenant's use or occupancy of the Premises or
caused by Tenant or its agents, contractors, employees, licensees,
guests or invitees. Landlord shall not be liable to Tenant for any
damage by or from any act or negligence of any co-tenant or other
occupant of the Project or by any owner or occupant of adjoining or
contiguous property. Tenant agrees to pay for all damage to the Project
as well as all damage to tenants or occupants thereof caused by misuse
or neglect of said Premises, its apparatus or appurtenances or the
Common Areas, by Tenant or Tenant's employees, contractors, licensees,
guests, agents and invitees.
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<PAGE> 14
15. POSSESSION: If Landlord is unable to deliver possession of the Premises
on the estimated Commencement Date hereof, Landlord shall not be liable
for any damage caused thereby, nor shall this Lease be void or voidable,
but Tenant shall not be liable for any rent until possession is
delivered, at which time the term shall commence and the Expiration Date
shall be extended so as to give effect to the full stated term. Tenant
may terminate this Lease if possession is not delivered within 120 days
of the estimated Commencement Date.
16. LANDLORD'S INSURANCE: Landlord shall obtain and maintain throughout the
term of this Lease the following policies of insurance:
16.1 Casualty. Fire and extended coverage insurance on the Building
(excluding non-Building standard leasehold improvements) and on
all Building standard improvements; and
16.2 General Liability. Comprehensive general and contractual liability
insurance against claims for personal injury, death and property
damage occurring in or about the Building.
Said insurance shall be maintained with an insurance company authorized
to do business in Texas, in amounts desired by Landlord and at the
expense of Landlord (but with the same to be included in the operating
expenses of the Building as described in Paragraph 2.3) and payments for
losses thereunder shall be made solely to Landlord. If the annual
premiums to be paid by Landlord for casualty insurance shall exceed the
standard rates because of Tenant's operations within or contents of the
Premises or because the improvements to the Premises are above Building
standard, Tenant shall promptly pay the excess amount of the premium
upon request by Landlord (and if necessary, Landlord may allocate the
insurance costs of the Building to give effect to this sentence).
Alternatively, Landlord may meet its insurance coverage hereunder
through self-insurance coverage provided that the coverage thereunder is
substantially similar to the coverage which would otherwise have been
provided by a third party insurance carrier in order to comply with this
Paragraph 16. In the event Landlord elects to self-insure, Landlord
shall have the right to assess and include within Operating Expenses the
amount of the premium which would have been payable had Landlord
purchased such insurance.
17. TENANT'S INSURANCE: At all times during the term of this Lease, Tenant
shall, at its sole expense, procure and maintain the following types of
insurance coverage:
17.1 General Liability: Commercial general liability insurance against
any and all damages and liability, including attorneys' fees on
account or arising out of injuries to or the death of any person
or damage to property, however occasioned, in, on or about the
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<PAGE> 15
Premises in amounts not less than $1,000,000.00 for injury or
death of one or more persons in a single accident and $500,000.00
for damage to property;
17.2 Personal Property: Insurance adequate in amount to cover damage to
or replacement of, as necessary, the Premises including, without
limitation, leasehold improvements, trade fixtures, furnishings,
equipment, goods and inventory;
17.3 Employers Liability/Workers Compensation: Employer's liability
insurance and worker's compensation insurance providing statutory
state benefits for all persons employed by Tenant in connection
with the Premises as required by applicable law; and
17.4 Other Insurance: Such other insurance in such amounts as may be
required by Landlord against other insurable hazards as at the
time are commonly insured against in case of prudent owners of
comparable office projects in the area (Galleria/West Loop Area)
in which the Project is located.
17.5 Form of Insurance/Companies: All such insurance shall be in a form
satisfactory to Landlord and carried with companies reasonably
acceptable to Landlord that are licensed or authorized to do
business in the State of Texas, are in good standing with the
Department of Insurance in the State of Texas is located and have
a rating issued by an organization regularly engaged in rating
insurance companies (including specifically A.M. Best & Company)
of not less than one rating below the top rating. Tenant shall
provide Landlord with a Certificate of Insurance showing Landlord
and Landlord's managing agent as an additional insured. The
Certificate shall provide for a 10 day written notice to Landlord
in the event of cancellation or material change of coverage. Not
later than 30 days prior to the expiration of any coverage,
renewals of or replacements for such contracts of insurance shall
be delivered to Landlord, together with proof of payment of the
associated premiums. In the event Tenant shall fail to procure any
contract of insurance required under the terms hereof or any
renewal of or replacement for any contract of insurance that is
expiring or has been canceled, Landlord may, but shall not be
obligated to, procure such insurance on behalf of Tenant and the
cost thereof shall be payable to Landlord as additional rent
within 10 days following written demand therefor.
17.6 Waiver of Recovery and Subrogation: Notwithstanding anything in
this Lease or any insurance policy to be obtained under this Lease
to the contrary, Landlord and Tenant hereby waive any and all
rights of recover, claims, actions and causes of action against
each other, their respective agents, servants, employees,
officers, directors, shareholders, partners, architects,
contractors, subcontractors, attorneys, customers and invitees and
their respective insurance carriers for all liability for personal
injury or death and for all loss or damage that may occur to the
Premises, the Project, the contents of the Project and the
Premises, or any
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<PAGE> 16
personal property of such party therein by reason of fire, the
elements or any other cause which is insured against under the
terms of the liability, fire, extended coverage and other
insurance policies required to be obtained pursuant to this Lease
(or would have been insured under the terms of any such policy if
all insurance policies required to be obtained by the parties
hereto were in fact obtained), regardless of cause or origin of
such loss or damage, including, without limitation, SOLE, JOINT,
OR CONCURRENT NEGLIGENCE, SOLE, JOINT OR CONCURRENT GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF EITHER OR BOTH OF THE PARTIES
HERETO AND THEIR RESPECTIVE AGENTS, SERVANTS, EMPLOYEES, OFFICERS,
DIRECTORS, SHAREHOLDERS, PARTNERS, ARCHITECTS, CONTRACTORS,
SUBCONTRACTORS, ATTORNEYS, CUSTOMERS AND INVITEES; provided,
however, the waiver set forth in this Paragraph 17.6 shall not
apply to any deductibles on insurance policies carried by Landlord
or to any coinsurance penalty which Landlord might sustain. Each
party waives and covenants that no insurer shall hold (and hereby
waives on behalf of each such insurer) any right of subrogation
against such other party. The parties shall cause their respective
insurers to waive any right of subrogation in accordance with this
Paragraph 17.6.
18. UTILITIES AND SERVICES: Landlord shall use all reasonable efforts to
furnish (as part of Operating Expenses) heating, ventilation, air
conditioning, janitorial service, elevator service, hot and cold water
for reasonable and normal drinking and lavatory use, replacement light
bulbs and/or fluorescent tubes and ballasts for standard overhead
fixtures and sufficient electricity to operate (i) typewriters,
calculating machines, photocopying machines and other machines of
similar low electrical consumption (120/208 volts); provided, however,
total rated power consumption by said machines of low electrical
consumption shall not exceed one and one-half (1 1/2) watts per square
foot of Net Rentable Area in the Premises; and (ii) equipment of high
electrical consumption (277/480 volts); provided, however, total rated
power consumption by said equipment of high electrical consumption shall
not exceed three and one-half (3 1/2) watts per square foot of Net
Rentable Area in the Premises. Tenant shall pay to Landlord, monthly as
billed, such charges as may be separately metered or as Landlord's
engineer shall reasonably compute for any electrical service usage in
excess of that stated above. If Tenant's use of the Premises requires
separate metering and/or air conditioning in excess of Building
standard, the same shall be purchased and installed at Tenant's expense
and Tenant shall pay all operating costs relating thereto. In addition
to the above described services, Landlord shall provide equipment and
personnel to limit access to the Building after normal business hours;
provided, however, Landlord shall have no responsibility to prevent, and
shall not be liable to Tenant for, and shall be indemnified by Tenant
against, liability or loss to Tenant, its agents, contractors,
employees, licensees, guests and visitors arising out of losses due to
theft, burglary, or damage or injury to persons or property caused by
persons gaining access to the Building or the Premises, and Tenant
hereby releases Landlord from all liability relating thereto. Said
services and utilities shall be provided during normal business hours of
the Building which are currently Monday through Friday from 8:00 a.m. to
6:00 p.m. and Saturday from 8:00 a.m. to 1:00 p.m., excluding the normal
business holidays of New
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<PAGE> 17
Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day
and Christmas Day. Landlord, from time to time during the term of this
Lease, shall have the right to designate additional holidays, provided
that such additional holidays are commonly recognized by other office
buildings in the Galleria/Post Oak area of Houston, Texas. Utilities and
services required at other times shall be subject to a charge of $35.00
per hour or fraction thereof. Landlord shall not be liable for failure
to furnish any of the utilities described in this Paragraph 18 and
Tenant shall have no right to abatement of rental hereunder or to
termination of this Lease with respect to any such interruption nor
shall such failure constitute an eviction, nor shall Landlord be liable
under any circumstances for loss of or injury to property, however
occurring through or in connection with or incidental to the furnishing
of any of the services enumerated above.
19. CONDEMNATION: If 25% or more of the land area of the Project shall be
taken or condemned for public use or acquired under threat of
condemnation, Landlord may elect to terminate this Lease effective on
the date of taking; otherwise this Lease will remain in full force and
effect. If there is a taking of all of the Premises or a part thereof so
that the remaining part of the Premises is not suited for Tenant's
continued use, either party may elect to terminate this Lease effective
on the date of taking. If there is a taking of a portion of the Premises
and a part remains which is suitable for Tenant's use, this Lease shall,
as to the part taken, terminate as of the date the condemnor acquires
possession, and thereafter Tenant shall be required to pay such
proportion of the rent for the remaining term as the value of the
Premises remaining bears to the total value of the Premises at the date
of condemnation. The election to terminate this Lease as provided herein
must be exercised, if at all, within 60 days after the nature and extent
of the taking is determined, otherwise, this Lease will remain in full
force and effect. All sums which may be payable on account of any
condemnation shall belong solely to the Landlord, and Tenant shall not
be entitled to any part thereof, provided however, that Tenant shall be
entitled to retain any amount awarded to it for its trade fixtures or
moving expenses.
20. TRADE FIXTURES: Any and all improvements made to the Premises during the
term hereof shall unless Landlord requests that removal, belong to the
Landlord without compensation, allowance or credit to Tenant, except
movable trade fixtures of the Tenant which can be removed without
defacing the Premises or the Project.
21. DESTRUCTION OF PREMISES:
21.1 Partial Destruction: In the event of a partial destruction of the
Premises during the term hereof, from any cause covered by
insurance, Landlord must repair the same to the extent such
repairs can be made with the insurance proceeds made available to
Landlord and within 60 days under then existing governmental laws
and regulations. Such partial destruction shall not terminate this
Lease and Tenant shall be entitled to a proportionate reduction of
rent while such repairs are being made, based upon the extent to
which the making of such repairs shall interfere with the business
of Tenant
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<PAGE> 18
on the Premises. If such repairs cannot be made within said 60 day
period, Landlord, at his option, may make the repairs within a
reasonable time. If Landlord elects to make said repairs, this
Lease will continue in effect and the rent will be proportionately
abated as stated above. If the repairs cannot be made within 60
days with the available insurance proceeds and Landlord elects not
to make said repairs, this Least may be terminated at the option
of either party.
21.2 Material/Total Destruction: If the Building in which the Premises
are situated or the Project sustains damage of more than 1/3 of
the replacement cost thereof, Landlord may elect to terminate this
Lease whether the Premises are injured or not. A total destruction
of the Building in which the Premises are situated or the Project
shall terminate this Lease.
22. HAZARDOUS SUBSTANCES:
22.1 Definitions: For the purposes of this Agreement, the following
terms have the following meanings:
(a) "ENVIRONMENTAL LAW" means any law, statute, ordinance or
regulation pertaining to health, industrial hygiene or the
environment including, without limitation CERCLA (Comprehensive
Environmental Response, Compensation and Liability Act of 1980),
RCRA (Resources Conservation and Recovery Act of 1976) and SARA
(Superfund Amendments and Reauthorization Act of 1986).
(b) "HAZARDOUS SUBSTANCE" means any substance, material or waste
which is or becomes designated, classified or regulated as being
"toxic" or "hazardous" or a "pollutant" or which is or becomes
similarly designated, classified or regulated, under any
Environmental Law, including asbestos, petroleum and petroleum
products.
22.2 Tenant's Responsibilities: At its own expense, Tenant will
procure, maintain in effect and comply with all conditions of any
and all permits, licenses and other governmental and regulatory
approvals required for Tenant's use of the Premises. Tenant will
not cause or permit any Hazardous Substance to be brought upon,
kept or used in or about the Project by Tenant, its agents,
employees, contractors, licensees, guests or invitees without the
prior written consent of Landlord. Tenant will cause any and all
Hazardous Substances brought upon the Premises by Tenant to be
removed from the Premises and transported solely by duly licensed
haulers to duly licensed facilities for final disposal of such
materials and wastes. Tenant will, in all respects, handle, treat,
deal with and manage any and all Hazardous Substances in, on,
under or about the Premises in total conformity with all
applicable Environmental Laws and prudent industry practices
regarding management of such Hazardous Substances. Upon expiration
or earlier termination of the term of the Lease, Tenant will cause
all Hazardous Substances placed on, under or about the Premises by
Tenant or at Tenant's direction to be
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<PAGE> 19
removed and transported for use, storage or disposal in accordance
and compliance with all applicable Environmental Laws. Tenant will
not take any remedial action in response to the presence of any
Hazardous Substances in or about the Premises or the Project, nor
enter into any settlement agreement, consent decree or other
compromise in respect to any claims relating to any Hazardous
Substances in any way connected with the Promises without first
notifying Landlord of Tenant's intention to do so and affording
Landlord ample opportunity to appear, intervene or otherwise
appropriately assert and protect Landlord's interests with respect
thereto.
22.3 Indemnification: If the Premises or the Project become
contaminated in any manner for which Tenant is liable or otherwise
become affected by any release or discharge of a Hazardous
Substance, Tenant shall immediately notify Landlord of the release
or discharge of the Hazardous Substance, and Tenant shall
indemnify, defend (by counsel reasonably acceptable to Landlord)
and hold harmless Landlord and Landlord's agents, employees,
officers, directors, partners and shareholders from and against
any and all claims, damages, fines, judgments, penalties, costs,
liabilities or losses (including, without limitation, a decrease
in value of the Project or the Premises, damages caused by loss or
restriction of rentable or usable space, or any damages caused by
adverse impact on marketing of the space, and any and all sums
paid for settlement of claims, attorneys' fees, consultant fees
and expert fees) arising during or after the term of this Lease
and arising as a result of such contamination, release or
discharge. This indemnification includes, without limitation, any
and all costs incurred because of any investigation of the site or
any cleanup, removal or restoration mandated by federal, state or
local agency or political subdivision.
23. EVENTS OF DEFAULT: If one or more of the following events ("Event of
Default") occurs, such occurrence constitutes a breach of this Lease by
Tenant:
23.1 Abandonment/Vacation: Tenant abandons or vacates the Premises
without giving Landlord ten (10) days prior written notice or
removes furniture, fixtures or personal property except in the
normal course of business; or
23.2 Rent: Tenant fails to pay any monthly Base Rent or Operating
Expenses Rent, if applicable, as and when the same becomes due and
payable, and such failure continues for more than 10 days; or
23.3 Other Sum: Tenant fails to pay any other sum or charge payable by
tenant hereunder as and when the same becomes due and payable, and
such failure continues for more than 30 days after Landlord gives
written notice thereof to Tenant; or
23.4 Other Provisions: Tenant fails to perform or observe any other
agreement, covenant, condition or provision of this Lease to be
performed or observed by Tenant as and when performance or
observance is due, and such failure continues for more than
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<PAGE> 20
30 days after Landlord gives written notice thereof to Tenant, or
if the default cannot be cured within said 30 day period and Tenant
fails promptly to commence with due diligence and dispatch the
curing of such default or, having so commenced, thereafter fails to
prosecute or complete with due diligence and dispatch the curing of
such default within 60 days; or
23.5 Insolvency: Tenant (a) files or consents by answer or otherwise to
the filing against it of a petition for relief or reorganization or
arrangement or any other petition in bankruptcy or liquidation or
to take advantage of any bankruptcy or insolvency law of any
jurisdiction; (b) makes an assignment for the benefit of its
creditors; (c) consents to the appointment of a custodian,
receiver, trustee or other officer with similar powers of itself or
of any substantial part of its property; or (d) takes action for
the purpose of any of the foregoing; or
23.6 Receiver: A court or governmental authority of competent
jurisdiction, without consent by Tenant, enters an order appointing
a custodian, receiver, trustee or other officer with similar powers
with respect to it or with respect to any substantial power of its
property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in
bankruptcy or insolvency law of any jurisdiction, or ordering the
dissolution, winding up or liquidation of Tenant, or if any such
petition is filed against Tenant and such petition is not dismissed
within 60 days; or
23.7 Attachments: This Lease or any estate of Tenant hereunder is levied
upon under any attachment or execution and such attachment or
execution is not vacated within 60 days.
23.8 Assignment/Sublease: Tenant assigns this Lease or subleases all or
any portion of the Premises without Landlord's Prior written
consent.
23.9 Failure to Perform: Except for failure covered in subsection 23.2
and 23.3 above, Any failure by Tenant to observe and perform any
provision of this Lease to be observed or performed by Tenant where
such failure continues for thirty (30) days after written notice to
Tenant, provided that if such failure cannot be cured within said
thirty (30) day period, Tenant shall not be in default hereunder so
long as Tenant commences curative action within such thirty (30)
day period, diligently and continuously pursues the curative action
and fully and completely cures the failure within sixty (60) days
after such written notice to Tenant.
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<PAGE> 21
24. REMEDIES OF LANDLORD ON DEFAULT:
24.1 Remedies: Upon any Event of Default, Landlord may exercise any one
or more of the following described remedies, in addition to all
other rights and remedies provided at law or in equity:
(a) Terminate this Lease by written notice to Tenant 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 (including attorneys' fees and costs of
suit), (ii) the cost of removing and storing any personal property,
(iii) the unpaid rent earned at the time of termination, plus
interest thereon at the rate described in Paragraph 5.2, (iv) the
present value (discounted at the rate of eight percent (8%) per
annum) of the balance of the rent for the remainder of the lease
term less the present value (discounted at the same rate) of the
fair market rental value of the Premises for said period, taking
into account the period of time the Premises will remain vacant
until a new tenant is obtained, and the cost to prepare the
Premises for occupancy and the other costs (such as leasing
commissions and attorneys' fees) to be incurred by Landlord in
connection therewith, and (v) any other sum of money and damages
owed by Tenant to Landlord under this Lease.
(b) Elect to receive liquidated damages in an amount equal to the
monthly Base Rent and monthly Operating Expenses Rent payable
hereunder for the month during which this Lease is terminated times
12, which amount shall be in lieu of the payment of damages
Landlord may suffer by reason of such termination, but which shall
not be in lieu of or reduce in any way any amount due from Tenant
(including accrued rent) or damages incurred by Landlord due to
breach by Tenant of any covenant or other obligation herein
(whether or not liquidated) which accrued prior to the termination
of this Lease. Nothing contained in this Lease shall limit or
prejudice the right of Landlord to prove for and obtain in any
proceedings to enforce Landlord's rights hereunder, including
without limitation, any proceedings for bankruptcy or insolvency by
reason of the termination of this Lease, proceedings equal to the
maximum allowed by any statute or rule of law in effect at the time
when, and governing the proceedings in which, the damages are to be
proved, whether or not the amount be greater, equal to, or less
than the amount of the loss or damages referred to above.
(c) Terminate Tenant's right of possession (but not this Lease) and
may repossess the Premises by forcible entry and detainer suit or
otherwise, without thereby releasing Tenant from any liability
hereunder and without demand or notice of any kind to Tenant and
without terminating this Lease. Landlord shall use reasonable
efforts under the circumstances to relet the Premises on such terms
and conditions as Landlord in its sole discretion may determine
(including a term different than the term of this Lease, rental
concessions, alterations and repair of the Premises); provided,
however,
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<PAGE> 22
Landlord hereby reserves the right (i) to lease any other
comparable space available in the Building or in any adjacent
building owned by Landlord prior to offering the Premises for
lease, and (ii) to refuse to lease the Premises to any potential
tenant which does not meet Landlord's standards and criteria for
leasing other comparable space in the Building. Landlord shall not
be liable, nor shall Tenant's obligations hereunder be diminished
because of, Landlord's failure or refusal to relet the Premises or
collect rent due in respect of such reletting. For the purpose of
such reletting Landlord shall have the right to decorate or to make
any repairs, changes, alterations or additions in or to Premises as
may be reasonably necessary or desirable. In the event that (i)
Landlord shall fail or refuse to relet the Premises, or (ii) the
Premises are relet and a sufficient sum shall not be realized from
such reletting (after first deducting therefrom, for retention by
Landlord, the unpaid rent due hereunder earned but unpaid at the
time of reletting plus interest thereon at the rate specified in
Paragraph 5.2, the cost of recovering possession (including
attorneys' fees and costs of suit), all of the costs and expenses
of such decorations, repairs, changes, alterations and additions,
the expense of such reletting and the cost of collection of the
rent accruing therefrom) to satisfy the rent, then Tenant shall
pay to Landlord as damages a sum equal to the amount of such
deficiency. Any such payments due Landlord shall be made upon
demand therefor from time to time and Tenant agrees that Landlord
may file suit to recover any sums falling due under the terms of
this Paragraph 24.1(c) from time to time. No delivery to or
recovery by Landlord of any portion due Landlord hereunder shall be
any defense in any action to recover any amount not theretofore
reduced to judgement in favor of Landlord, nor shall such reletting
be construed as an election on the part of Landlord to terminate
this Lease unless a written notice of such intention be given to
Tenant by Landlord. Notwithstanding any such termination of
Tenant's right of possession of the Premises, Landlord may at any
time thereafter elect to terminate this Lease. In any proceedings
to enforce this Lease under this Paragraph 24.1(c), Landlord
shall be presumed to have used its reasonable efforts to relet the
Premises, and Tenant shall bear the burden of proof to establish
that such reasonable efforts were not used.
(d) Alter any and all locks and other security devices at the
Premises, and if it does so Landlord shall not be required to
provide a new key or other access right to Tenant unless Tenant has
cured all Events of Default; provided, however, that in any such
instance, during Landlord's normal business hours and at the
convenience of Landlord, and upon the written request of Tenant
accompanied by such written waivers and releases as Landlord may
require, Landlord will escort Tenant or its authorized personnel to
the Premises to retrieve any personal belongings or other property
of Tenant not subject to the Landlord's lien or security interest
described in Paragraph 25, The provisions of this Paragraph 24.1(d)
are intended to override and control any conflicting provisions of
the Texas Property Code.
In the event that Landlord shall have taken possession of the
Premises pursuant to the authority herein granted, then Landlord
shall have the right to keep in place and
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<PAGE> 23
use all of the furniture, fixtures and equipment at the Premises,
including that which is owned by or leased to Tenant at all times
prior to any foreclosure thereon by Landlord or repossession
thereof by any lessor thereof or third party having a lien thereon.
Landlord shall also have the right to remove from the Premises
(without the necessity of obtaining a distress warrant, writ of
sequestration or other legal process and without being liable for
prosecution or any claim for damages therefor) all or any portion
of such furniture, fixtures, equipment and other property located
thereon and place same in storage at any place within the county in
which the Premises are located; and in such event, Tenant shall be
liable to Landlord for costs incurred by Landlord in connection
with such removal and storage and shall indemnify and hold Landlord
harmless from all loss, damage, cost, expense and liability in
connection with such removal and storage. Landlord shall also have
the right to relinquish possession of all or any portion of such
furniture, fixtures, equipment and other property to any person
("Claimant") claiming to be entitled to possession thereof who
presents to Landlord a copy of any instrument represented to
Landlord by Claimant to have been executed by Tenant (or any
predecessor of Tenant) granting Claimant the right under various
circumstances to take possession of such furniture, fixtures,
equipment or other property, without the necessity on the part of
Landlord to inquire into the authenticity of said instrument and
without the necessity of Landlord's making any nature of
investigation or inquiry as to the validity of the factual or legal
basis upon which Claimant purports to act; and Tenant agrees to
indemnify and hold harmless from all costs, expense, loss, damage
and liability incident to Landlord's relinquishment of possession
of all or any portion of such furniture, fixtures, equipment or
other to Claimant.
24.2 Non-Waiver. No action by the Landlord shall be deemed to imply or
constitute a waiver by Landlord of any of Landlord's rights under
this Lease unless such waiver is in writing and signed by Landlord
and acknowledges that such action taken by Landlord is an express
waiver of Landlord's rights. Furthermore, any such writing shall
not be deemed to be a continuing waiver of Landlord's rights and
shall be expressly limited to actions recited in any such waiver.
Landlord shall have the right to declare any default under the
Lease not waived in writing at any time and take such action as
might be lawful or authorized.
25. SECURITY DEPOSIT: The Security Deposit set forth in Paragraph 1.7, if any,
shall secure the performance of the Tenant's obligations hereunder.
Landlord may, but shall not be obligated to apply all or portions of the
Security Deposit on account of Tenant's obligations thereunder. In the
event that Landlord applies all or a portion of the Security Deposit to
tenant's obligations hereunder, Tenant shall be obligated, within 10
business days of receipt of notice from Landlord, to deposit cash with
Landlord in an amount sufficient to restore the Security Deposit to the
full amount stated in Paragraph 1.7 above. Failure to deposit such cash
shall be a default under the terms of this Lease, Provided Tenant is not in
default, any balance remaining upon termination shall be returned to
Tenant. Tenant shall not have the right to
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apply the Security Deposit in payment of the last month's rent. No interest
shall be paid by Landlord on the Security Deposit. In the event of a sale
of the Project, Landlord shall have the right to transfer the Security
Deposit to the purchaser, upon such transfer Landlord shall have no further
liability with respect thereto, and Tenant agrees to look solely to such
purchaser for the return of the Security Deposit. Landlord shall not be
required to keep the Security Deposit in a segregated account, and the
Security Deposit may be commingled with other funds of Landlord.
Notwithstanding the foregoing, the Security Deposit shall be returned to
the Tenant at the end of the 38th month so long as Tenant is not in default
and no event of default has existed.
26. LIEN FOR RENT: In addition to and independent of any lien in favor of
Landlord arising by operation of law, Tenant hereby grants to Landlord a
security interest to secure payment of all Base Rent and other sums of
money becoming due hereunder from Tenant, and to secure payment of any
damages or loss which Landlord may suffer by reason of the breach by Tenant
of any covenant, agreement or condition contained herein, upon all goods,
wares, equipment, fixtures, furnishings, inventory, improvements and other
personal property that is not encumbered of Tenant presently or which
hereafter may be situated in or on the Premises, and all proceeds
therefrom, and such property shall not be removed therefrom without the
consent of Landlord until any and all other sums of money then due to
Landlord hereunder, first shall have been paid and discharged, and all
covenants, agreements and conditions hereof have been fully complied with
and performed by Tenant. At any time and from time to time, Tenant agrees
to execute any UCC-1 Financing Statement (but not more than twice per
annum) or such other documents or instruments as Landlord may request to
perfect or confirm the security interest created by this Paragraph 26.
Upon any failure by Tenant to do so, Landlord may execute same for and on
behalf of Tenant as Tenant's attorney in fact. All exemption laws are
hereby waived by Tenant to the extent permitted by law. This lien and
security interest may be foreclosed with or without court proceedings, by
public or private sale, with or without notice (to the extent permitted by
law), and Landlord shall have the right to become purchaser upon being the
highest bidder at such sale. Landlord, as secured party, shall be entitled
to all the rights and remedies afforded a secured party under the Uniform
Commercial Code, which rights and remedies shall be in addition to and
cumulative of the Landlord's liens and rights provided by law or by the
terms and provisions of this Lease.
27. LIMITATION ON LANDLORDS PERSONAL LIABILITY: Tenant specifically agrees to
look solely to Landlord's interest in the Project for the recovery of any
judgment from Landlord, it being agreed that Landlord (and any officers,
shareholders, directors, partners or employees of Landlord) shall never be
personally liable for any such judgment,
28. ATTORNEY'S FEES: In the event Tenant defaults in the performance of any of
the terms, covenants, agreements or conditions contained in this Lease and
Landlord places the enforcement of this Lease or the collection of any rent
due or to become due hereunder or recovery of the possession of the
Premises in the hands of an attorney, Tenant agrees to pay Landlord
reasonable attorneys' fees and costs. If there is any legal action or
proceeding
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between Landlord and Tenant to enforce any provision of this Lease or to
protect or establish any right or remedy of either Landlord or Tenant
hereunder, the unsuccessful party to such action or proceeding will pay to
the prevailing party all costs and expenses, including reasonable
attorneys' fees (including allocated costs of Landlord's in-house attorney)
incurred by such prevailing party in such action or proceeding and in any
appearance in connection therewith, and if such prevailing party recovers a
judgment in any such action, proceeding or appeal, such costs, expenses and
attorney's fees will be determined by the court handling the proceeding and
will be included in and as a part of such judgment.
29. SEVERABILITY: If any clause or provisions 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 shall be added as a part of this Lease, a
clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid
and enforceable.
30. NOTICES: All notices or other communications required or permitted
hereunder must be in writing, and be (i) personally delivered (including by
means of professional messenger service), (ii) sent by overnight courier,
with request for next Business Day delivery, or (iii) sent by registered or
certified mail, postage prepaid, return receipt requested, to the addresses
set forth in Paragraph 1.14. All notices sent by mail will be deemed
received 2 days after the date of mailing.
31. HOLDING OVER: Any holding over after the expiration or termination of this
Lease shall create a tenancy at sufferance relationship and Tenant shall be
required to pay a rental of 150% of the rent for the month of the Lease
preceding the month in which the expiration or termination occurred, and
otherwise in accordance with the terms hereof, as applicable. In the event
Tenant shall be or become a holdover tenant, Tenant shall also indemnify
Landlord against all claims for damages against Landlord as a result of
Tenant's possession of the Premises, including, without limitation, claims
for damages by any tenant to whom Landlord may have leased the Premises, or
any portion thereof, for a term commencing after the expiration or
termination of this Lease.
32. TIME: Time is of the essence of this Lease.
33. HEIRS, ASSIGNS, SUCCESSORS: This Lease is binding upon and inures to the
benefit of the assigns and successors in interest of Landlord and is
binding upon and inures to the benefit of Tenant and Tenant's heirs and
successors and, to the extent assignment may be approved by Landlord
hereunder, Tenant's assigns.
34. SUBORDINATION: This Lease is and shall always be subject and subordinate to
the lien of any mortgage, deed of trust, ground lease and/or security
agreement which are now or shall at
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any future time be placed upon the Project, the Premises or Landlord's
rights hereunder, and to any renewals, extensions, modifications or
consolidations thereof. This clause shall be self-operative and no further
instrument of subordination need be required by any holder of any such
mortgage, deed of trust, ground lease and/or security agreement. In
confirmation of such subordination, however, Tenant, at Landlord's request,
shall execute promptly any appropriate certificate or instrument that
Landlord may reasonably request. This Lease is further subject to and
subordinate to all matters of record in Harris County, Texas.
35. ESTOPPEL CERTIFICATE; FINANCIAL STATEMENTS:
35.1 Content: Tenant shall at any time, but not more than three (3) times per
annum, upon not less than 10 days' prior written notice from Landlord
execute, acknowledge and deliver to Landlord a statement in writing:
(a) certifying that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect), the amount
of any security deposit, and the date to which the rent and other charges
are paid in advance, if any; and
(b) acknowledging that there are not, to Tenant's knowledge, any uncured
defaults on the part of Landlord hereunder, or specifying such defaults if
any are claimed. Any such statement may be conclusively relied upon by a
prospective purchaser or encumbrancer to the Premises.
35.2 Failure to Deliver: At Landlord's option, Tenant's failure to deliver such
statement within such time shall be a material breach of this Lease or
shall be conclusive upon Tenant:
(a) that this Lease is in full force and effect, without modification
except as may be represented by Landlord;
(b) that there are no uncured defaults in Landlord's performance; and
(c) that not more than one month's rent has been paid in advance or such
failure may be considered by Lessor as a default by Tenant under this
Lease.
35.3 Financial Statements: Within 60 days after the end of each calendar year
during the term of this Lease and after the end of the term of this Lease
and if at any time Landlord desires to finance, refinance, or sell the
Premises, or any part thereof, Tenant hereby agrees to deliver to Landlord
and any lender or purchaser designated by Landlord, such financial
statements of Tenant, including, without limitation, income statement and
balance sheet, as may be reasonably required by such lender, purchaser or
Landlord, Such statements shall include the past 3 years' financial
statements of
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<PAGE> 27
Tenant. All such financial statements shall be received by Landlord
and such lender or purchaser in confidence and shall be used only
for the purposes herein set forth.
36. AUTHORIZATION: If Tenant executes this Lease as a corporation or
partnership, then Tenant and the person(s) executing this Lease on behalf
of Tenant, represent and warrant that such entity is duly qualified to do
business in the State of Texas and that the individuals executing this
Lease on Tenant's behalf are duly authorized to execute and deliver this
Lease on Tenant's behalf.
37. JOINT AND SEVERAL LIABILITY: In the event that more than one person or
entity executes the Lease as Tenant, all such persons and entities shall be
jointly and severally liable for all of Tenant's obligations hereunder.
38. FORCE MAJEURE: Landlord shall be excused for the period of any delay in the
performance of any obligations hereunder when prevented from doing so by
cause or causes beyond Landlord's absolute control which shall include,
without limitation, all labor disputes, civil commotion, civil disorder,
riot, civil disturbance, war, war-like operations, invasion, rebellion,
hostilities, military or usurped power, sabotage, governmental regulations,
orders, moratoriums or controls, fire or other casualty, inability to
obtain any material, services or financing or Acts of God.
39. RECORDING: Tenant shall not record this Lease, or any memorandum or short
form thereof, without the written consent and joinder of Landlord, which
may be unreasonably withheld.
40. ENTIRE AGREEMENT: The foregoing, along with the schedules attached hereto,
constitute the entire agreement between the parties and may be modified
only by a writing signed by both parties.
41. GOVERNING LAW: This Lease shall be construed in accordance with the laws of
the State of Texas.
42. ACKNOWLEDGMENT OF NON-APPLICABILITY OF DTPA: It is the understanding and
intention of the parties that Tenant's rights and remedies with respect to
the transactions provided for and contemplated in this Lease (collectively,
this "Transaction") and with respect to all acts or practices of Landlord,
past, present or future, in connection with this Transaction, are and shall
be governed by legal principles other than the Texas Deceptive Trade
Practices - Consumer Protection Act (the "DTPA"). Accordingly, Tenant
hereby (a) agrees that under Section 17.49(f) of the DTPA this Transaction
is not governed by the DTPA and (b) certifies, represents and warrants to
Landlord that (i) Tenant has been represented by legal counsel in
connection with this Transaction who has not been directly or indirectly
identified, suggested or selected by the Landlord and Tenant has conferred
with Tenant's counsel concerning all elements of this Lease (including,
without limitation, this Paragraph 42) and this Transaction and (ii) the
Premises will not be occupied by Tenant as Tenant's family residence.
Tenant's
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<PAGE> 28
legal counsel has also signed this Lease to confirm (i) that he has acted
as Tenant's counsel in the negotiation, preparation and entry by Tenant of
this Lease and in arriving at the legal conclusion that the DTPA is
inapplicable to this Transaction and (ii) that he has not been directly or
indirectly identified, suggested or selected by the Landlord in connection
with this Transaction. Tenant expressly recognizes that the total
consideration as agreed to by Landlord has been predicated upon the
inapplicability of the DTPA to this Transaction and that Landlord, in
determining to proceed with the entering into of this Lease, has expressly
relied on the inapplicability of the DTPA to this Transaction.
43. WAIVER OF THE RIGHT TO TRIAL BY JURY: LANDLORD AND TENANT HEREBY KNOWINGLY
AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR
PROCEEDING THAT LANDLORD OR TENANT MAY HEREINAFTER INSTITUTE AGAINST EACH
OTHER WITH RESPECT TO ANY MATTER ARISING OUT OF OR RELATED TO THIS LEASE OR
THE PREMISES.
44. REVIEW: Prior to its execution of this Lease, Tenant has had this Lease
reviewed by an attorney on behalf of Tenant, or has had the opportunity to
do so, and the parties hereto agree that based on the foregoing, this
Lease shall not be construed in favor of one party over the other based on
the drafting of this Lease.
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<PAGE> 29
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day
and year first above written.
"LANDLORD"
HOUSTON POST OAK ASSOCIATES, LTD., a
Texas limited partnership
By: Songy Partners Limited, a Florida
limited partnership, its General
Partner
By: SPL Florida, Inc., d/b/a SPL
Florida Post Oak, Inc., a
Florida Corporation, its
General Partner
By: /s/ DAVID B. SONGY
--------------------------
David B. Songy
President
"TENANT"
BOOTS & COOTS INTERNATIONAL WELL
CONTROL, INC., A DELAWARE CORPORATION
By: /s/ L.H. RAMMING
-------------------------------------
Name: L.H. RAMMING
-----------------------------------
Title: CHAIRMAN
----------------------------------
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